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In Claims Don’t Let The Process “Thing” Get In The Way Of Doing The “Right” Thing

Making a check in the process won’t ensure the matter is done right

Mark Susterwas the founder of Koral, a Palo Alto company which was sold to Sales Force. There he was VP of Product Management and then left to become a member of a venture capital firm.  He is also author of a blog called Both Sides of the Table and recently wrote about Doing the Right Things is More Important than Doing Things Right. In this interesting article he discusses how sometimes companies get caught up in “things”, or process, without worrying about the outcome. Tasks become the driving force not the outcome.

“When you hire people in functional roles they want to show that they’re achieving results and results are easiest to measure by tasks accomplished.  But many CEO’s and management teams fail to set clear guidelines on what the company objectives are and make sure that everybody is driving toward the same goal.  It’s actually quite hard to lay out an annual company strategy that is articulate and underpinned by facts.

So many CEO’s just carry on being … CEO’s –>  fund raise, get media attention, attend conferences, hire staff, “set direction”, whatever.  But this leads to organizational drift because staff will continue to produce “work.”

Everybody should be able to answer the question, “why am I doing this?”  Otherwise they’re likely to be doing things right, but not the right things.”

I have written, and am a big proponent of, the importance of good process as a way to ensure good results. Putting a proper process in place is a road-map to help move claims to a prompt fair resolution. Nonetheless, doing and focusing on the process without making sure the outcome is sound is doing things right without doing the right thing.

It’s so easy in claims to focus on the process and not use the process as a means to the end

In a recent audit of a hospital system’s claims department I saw an excellent example of what happens when focusing on the doing things right resulted in something not being done right. The claims staff had been instructed, like most claim departments, to place notes in the file on various issues such as coverage, damages and liability. They had previously been cited for poor documentation so a priority was placed on ensuring notes were in the files.

While every file now contained a note, there was absolutely no independent thought to the claims handler’s comments. Almost all the notes had been cut-and-paste word for word from counsel emails. They even went so far to include the salutations and signature lines. One note I found was a complete doctor’s CV that went on for over 30 pages. This type of note taking added little to the claim file and provided no insight into the thought process and evaluation of their claims staff. It was another example where doing things right was not doing the right thing.

Another client required the claims staff to create detailed damage time lines regardless of the nature of the claim. Claims adjusters would spend hours completing outlines, and sometimes even outsourcing the reviews to others, whether the case needed the assessment or not. There was no review as to whether these time lines were adding value to the claims process. Instead of using the process as a tool it was turned into a requirement for the sake of doing a requirement.  Clearly the process was being done correctly it was just not the right thing to do all the time.

So the lesson learned is when focusing on process make sure the process is not the only thing that is being done.

How many of your processes are the “thing” getting in the way of doing the right thing?

Posted in Best Practices, SPOT on Issues.

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2 Responses

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  1. Guy Hoffman says

    Great post. I’m a big fan of process, but a bigger fan of people!

    While people without process can lead to chaos, unless people have the framework to know how to make decisions and are allowed to do so, the outcome will likely be suboptimal.

    I’m not sure that this comes as much from a company’s annual strategy as it does the company’s core values or raison d’être.

    Given the unique nature of claims, success requires the successful articulation of core values, understood by great people, executing against well-defined processes.

  2. John Lombardi says

    Mr. Lanzkowsky is correct when he states: “…doing and focusing on the process without making sure the outcome is sound is doing things right without doing the right thing.” However, the trick of course is aligning the process with a QA regimen that aligns an organization’s best practices and does not penalize someone for doing the “right thing.” It is vital that these best practices be quantified in an understandable, well defined, and objective manor.

    Within any organization there needs to be consistency between the best practices of the organization and the quality assurance processes that reinforce those best practices. Indeed the QA process itself needs to reinforce the best practices of the organization.

    An organization, particularly a claims organization that is responsible to both management and customers, needs to identify and define its best practices across its operations. Identifying best practices for claims workflow and processes is key. Insuring that those best practices are not solely process oriented but are also objectively quantifiable is vital.

    Once best practices are identified and quantified, QA needs to focus on maintaining the consistency of those best practices. By “enforcing” this best practices regimen, QA can insure consistency across the entire organization.

    In any organization, process for the sake of process tends to become the norm. Successful managers can prevent that from happening by identifying best practices, and instilling them in the organization through tools and workflows and subsequently using the QA process to insure those best practices are maintained. Maintaining a critical alignment between best practices and QA can insure that processes within the organization are flexible enough to change and adapt as needed.

    John Lombardi, COO
    Vatti-Manhattan Group
    (203) 445-0010
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