15 Excuses For Not Changing And 5 Reasons To Change The Way We Make Change

Posted on April 1, 2014 by Marc Lanzkowsky

Going Along With How It’s Been Done Is Not The Best Way To Go Through Business

I have a client that is so entrenched in its way of doing things that a significant part of my job has been to manage change. Change is hard for everyone and how and when to change has been debated and discussed in companies since the first company was formed. What is never debated are some of the excuses used for not changing. People are resistant to change and despite the need to move forward people generally prefer to live with what they have. Fast Company put out a list of Reasons Why We Cannot Change and these are my favorite 15:

We’ve never done it before
We’ve been doing it this way for 25 years
It won’t work in our company
Why change — it’s working OK
It needs further investigation
It’s too much trouble to change
Our company is different
We don’t have the money
We don’t have the personnel
You can’t teach old dog new tricks
It’s too radical a change
I don’t like it
You’re right, but….
We’re not ready for it
We’re doing all right as it is

“Men Plan, God Laughs”

This list was originally complied in 1959!!! by E.F. Borish a product manager for a Milwaukee company. Amazingly these excuses are as true today as they were over 50 year ago. So we plan to make change and address the list of excuses to help achieve a positive result. Regardless, in addressing these excuses it is important to accept that change is difficult and also understand that great strategic plans may still not yield desired results. Management must acknowledge during any change process that “culture eats strategy for breakfast” (a quote attributed to management guru Peter Drucker).

5 Changes To The Way We Change

To help address the culture and achieve success, Harvard Business Review’s Bill Taylor suggests changing the way to approach change in his article The More Things Change, the More Our Objections to Change Stay the Same.

Mr. Taylor continues asks – “so what have we learned in the twenty years since Fast Company was created, or the 54 years since E.F. Borisch compiled his list?” He suggests 5 possible principles to consider to change the way we make change:

Originality – For leaders to see their organization and its problems as if they’ve never seen them before, and, with new eyes, they need to develop a distinctive point of view on how to solve them
Break from the past without disavowing it – The most effective leaders…don’t turn their back on the past. They reinterpret what’s come before to develop a line of sight into what comes next.
Encourage a sense of dissatisfaction with the status quo – persuade colleagues that business as usual is the ultimate risk, not a safe harbor from the storms of disruption
Requires a sense of “humbition” (humility and ambition) among leaders – enough ambition to address big problems, enough humility to know you don’t have the answers. When it comes to change, nobody alone is as smart as everybody together.
Be consistent in the approach – If, as a leader, you want to make deep-seated change, then your priorities and practices have to stay consistent in good times and bad times.

Change does not have to be a bad thing but managing the change process must be addressed. Strateigic plans must have an approach to dealing with change to achieve a measured success.

How Do You Address Cultural Issues During the Change Processs?

Part 3 on Leadership: Challenges and Assistance in Leading Change

Posted on March 25, 2014 by Marc Lanzkowsky

Collaborating Can Make The Successful Difference

In Leadership: The Change Process In Claims Requires A Different Approach, I put forth the position that changing a claims organization needs a new brand of leadership skill that does not usually exist in the traditional claims organization. In Part 2 on Leadership: Developing a Strategic Transformation Team, I addressed how to break from existing management process to achieve effective strategic results. In the final installment, I discuss how challenges around leading change make it beneficial to bring in strategic support to help achieve the desired success.

Additional Challenges in Leading Transformational Change

Oftentimes, managers are too close to individual problems to have the necessary perspective to see what needs to be done to benefit the whole organization. As a result, many fail to achieve true Strategic Transformation.

There are three main reasons why building Strategic Transformation can be such a challenge:

Lack of Independence – Management has political ties and history within an organization and are not always free to ask the sometimes difficult questions and make recommendations that are truly in the best interests of the organization.
No Objectivity – Often companies are attached to their existing organizational and procedural structure. Despite very good intentions, it is human nature for individuals to get emotionally connected to a particular method of doing things. Management can be entrenched with emotional or political agendas as to how things are being done. Change requires an objective, fresh viewpoint–without worrying about what people in the organization might think about the results and how they are achieved.
Limited Experience –Strategic Transformation requires a set of skills that combines project management with a strategic sense of determination. Managers have experience and skills on how to execute what has been done but lack the depth of knowledge to execute change that transforms their organization. Most claim managers come from a purely technical claims handling role and may lack experience addressing organizational problems, thus failing to grasp all the process concerns of their own operations.

Facilitated Strategic Transformation to Achieve Success

Bringing in an expert from outside the organization is one way to jump-start the Strategic Transformation process. Independent, objective experts can help facilitate the building of teams and focus the organization on successful, rapid implementations. In addition, the best facilitators will have specific capabilities in managing large scale project management, and insurance industry specific knowledge with proven methodologies in management. Such facilitators can:

Identify Problems – Sometimes employees are too close to a problem inside an organization to identify them. Facilitated sessions can help draw out what many in the company already know but could not see.
Supplement The Staff and Minimize Disruptions – Getting staff to focus on problems is difficult when the call of everyday business comes. Having a dedicated independent resource helps to balance those situations and ensure projects move forward on time and on budget. Delays can have disastrous effects down the chain and across other projects. Supplementing staff can help avoid these pit falls.
Objectivity Allows 3rd Parties to Act as a Catalyst- Most employees resist change. Regardless, change is needed, and an independent may be brought in to “get the ball rolling.” In other words, the facilitator can do things without worrying about the corporate culture, employee morale or other issues that get in the way when an organization is trying to institute change. They can also be there as the independent voice to validate how the change will help improve the organization.
Inject New Ideas – A fresh set of eyes can bring experiences from other transformation projects to inject new change ideas. At one time or another, most businesses need someone to administer “first aid” to get things rolling again.

The Time to Change is Now

In today’s market it is harder for insurance companies to distinguish themselves from competitors. For companies to gain an advantage, carriers must adapt to changing market conditions, embrace technology and further expand their use of data analytics. Moving rapidly to manage change requires new ways to manage multiple initiatives. Strategic Transformation is a method for meeting these challenges and ensuring that projects are rapidly deployed on time and on budget.

How Have You Tried to Move Your Organization Through the Change Proccess?

Part 2 on Leadership: Developing a Strategic Transformation Team

Posted on March 17, 2014 by Marc Lanzkowsky

Breaking the Linear Approach by Leading Strategic Transformation

In my last post, Leadership: The Change Process In Claims Requires A Different Approach, I put forth the position that changing a claims organization needs a new brand of leadership skill that does not usually exist in the traditional claims organization. Continuing with this theme, I will address what it means to break from existing management process to achieve effective strategic results.

Breaking from the linear approach to management is the key to leading Strategic Transformation. A standard organization will have a head of claims and then a variety of department heads to manage each line of business. Depending on the company there may be additional senior managers to handle various operational aspects of the group, which may include support staff, call center, technology and data analytics. Under this method, projects get initiated and managed within the same linear organizational framework. The result of this approach is a development process built in a silo that limits input and understanding of possible interdependencies that may exist outside the framework.

A Strategic Transformation Team, however, is formed with a center to lead change over multiple projects. Each project team consists of people from a variety of departments and levels. The teams are charged with creating objectives, setting priorities, securing buy-in, and executing on the vision. The teams are not formed within a linear framework and can draw upon different expertise to get the project completed. The Strategic Team in the center can drive all projects, manage interdependencies, and facilitate moving projects forward without distraction from the day-to-day management. Their focus is on the bigger picture and not limited within an individual project silo.

The Best Transformation Happens When Dedicated Transformation Teams Are Formed

To make effective change rapidly, it’s best to create a dedicated team to deal with change as their sole mission. This team will have the principal objective of producing outcomes and will be dedicated to adopting and improving the organization on an ongoing basis and not as part of some once every five year strategic plan. The independent team will also have multiple benefits which would include:

A central pressing vision to produce valuable effective change
Being focused on the big, as well as little pictures
Rapid deployment capability to get things moved to implementation
The ability to challenge the status quo to break conventional methods of project deployment
Expanded institutional knowledge about multi-disciplinary impacts to improve team efficiency on future projects

While building such a team internally is possible, there has to be an initial effort on getting commitment and focus from the staff to work in a new framework that is different from their existing work environment. For this reason, it is often best to bring in a third party to help facilitate the process.

How a Strategic Transformation Team Works

Getting from point A to point B requires a methodical approach to projects. The Strategic Transformation team will typically establish a Project Management Office (“PMO”) to help to successfully execute those projects identified “as needed to improve the operation.” The areas of responsibility under a PMO include:

Project identification and defining project purpose and requirements
Organization and management of work resources to execute projects and requirements
Assuring timely and useable deliverables
Coordinating multiple projects and dependencies
Reporting to key stakeholders and organizational communication

With a PMO established, projects can be outlined and staged appropriately to both manage costs and deal with interconnecting parts. Additionally a PMO can facilitate the gradual introduction of new processes and technologies which might otherwise disrupt the existing environment. This will allow an organization to phase in procedural changes in a manner to help gain cultural “acceptance” and “buy in” from employees.

The main team will go through a series of steps following established project management techniques to define, plan and execute on multiple strategic concerns simultaneously. The overall focus will be developed; and for each project, a similar multistep approach will be used and address the following.

Business champion/leadership assignment
Prioritization of project within scope of organizational needs, other projects and budget
Strong objectives established
Well defined project charters drafted and approved
Interdependencies/relationships explored and managed
Develop a risk analysis
Rapid and timely implementation
Buy-in and adaptation to change addressed with staff and stakeholders
Conclusion and re-explore

Achieving strategic transformation is possible with the right teams in place. Regardless, sometimes those efforts still hit road blocks. In my next post I will discuss how assistance from thrid parties with transformation experience can help to expedite the process or, at the very least, provide a second set of eyes to oversee the work being done.

How successful has your transformation team been?

Leadership: The Change Process In Claims Requires A Different Approach

Posted on March 10, 2014 by Marc Lanzkowsky

Meaningful and Successful Improvements to Claim Departments Require a Different Approach to the Management of the Change Process

Successful organizations are always changing and adopting to improve their operations, lower costs and increase efficiencies. Claims departments are no different and have been under pressure to transform their operations and live by the mantra of doing more with less. Good claims organizations continuously evolve and adapt to ensure they add value to the overall business. Regardless, changing to meet the challenges of the marketplace is often fraught with problems and difficulties. Many initiatives fail to get off the ground or fail in the implementation process. Change can be very successful and if managed and led correctly. To change effectively there must be a strategic approach and a change in how these initiatives are led.

Why is claims transformation so difficult?

One reason claims transformation is so difficult is that claims departments are generally linear organizations. The claims value chain, or the process of moving a claim from first notice to resolution, is always looked at in a straight line. A claim comes in, is evaluated, reserved, and then resolved. Of course there are many steps in between depending on the claim, but generally all claims follow a similar pattern from beginning to end. Claims departments are often structured in a linear pattern as well. From intake units, to claims handlers, adjusters, managers, and operations – the claim moves through the organization in a linear pattern. Claim managers know this pattern and manage it well. However successful transformation does not follow a linear path. As such, many claims managers fail to have the transformational leadership skills needed to move projects to a successful outcome.

Change Leadership is Different Than Management

Management of the claims process is not the same as providing leadership to change processes and the culture that has been entrenched to those processes. Leading change is very different than managing change. Management guru and Harvard Business School Professor Dr. John P. Kotter puts is best when he said that:

[m]anagement makes a system work. It helps you do what you know how to do. Leadership builds systems or transforms old ones. It takes you into territory that is new and less well known, or even completely unknown to you.

Although most claim managers are well suited to managing core business functions such as staffing, claim volumes, customer satisfaction, budgets, day-to-day process and other operational and technical aspects of running a claims department, they often lack the skills necessary for effectively managing strategic change initiatives. In order to successfully lead change, a strategic vision and a specific program for management of a series of transformational projects to support those visionary objectives needs to be developed. Taking short-term approaches to individual tactical solutions will not create the strategic outcome needed to transform the organization successfully. Achieving this type of Strategic Transformation requires a new paradigm and skillset to deal with managing multiple interconnecting projects.

Another reason transformation is so difficult is that in response to problems, claims executives will initiate a variety of complex transformation projects to improve operations based upon the same linear task based approach to their day-to-day management. Claims executives use this linear approach to identify problems, conceive and implement solutions, manage expectations and results all within an enterprise environment where multiple interdependencies and stakeholder interests may impact outcomes.

Transformation Requires a Different Appraoach

Despite good intentions to improve operations many initiatives become ad-hoc responses to an immediate problem rather than a holistic solution to operational ills. This reactive focus means that projects will often get initiated in a vacuum, not managed fully, delayed or simply never implemented. To transform organizations, and achieve Total Outcome Management, executives need to adopt a proactive holistic Strategic Transformation approach to changing the organization for the better.

How Should Organizations Approach Change?

Claims Challenge: It’s Time for a Change – Are You In?

Posted on January 14, 2014 by Marc Lanzkowsky

There are enough of us out there so let’s come up with some new ideas!

I have been in the claims industry in one way or another for the past 23 years. When I started as an insurance defense attorney only the secretary’s had computers and I was fighting with colleagues to hand over the case law book I needed to finish my research. Business applications were limited as were computer networks. Mobile phones were expensive and lap-tops were slow and bulky.

That was the world’s reality not long ago but since then technology has helped to innovate the fabric of our lives and transform our businesses. We have almost limitless information in the palm of our hand that 20 years ago would have required a library to access.

I for one revel every few years at how much we actually now take for granted was not even around ten years ago (both Facebook and LinkedIn are only 10 years old). Despite the innovation to the world around us, the claims industry has transformed very little in decades. There has been improvement in technology that helped to speed up claims processing and provided ways to prevent fraud and streamline the process. There has been more data to assess to help provide insight on what has come and what may come. And there has been more speicalization and focus on training and development. However with all of these changes, there has been little change to the core way claims are evaluated and paid. Claims have a process that they must go through that goes from intake – to investigation – to evaluation – to resolution – with a variety of detailed steps in between. This has been the case since the first claim was ever filed.

Claims as an assembly line

The claims process has evolved over time in a similar manner that manufacturing innovated at the turn of 20th Century. Claims have become like an assembly line. Claims follow a specific path and specialization for aspects of the process has helped to streamline the flow and increase productivity for claims resolution (i.e. property damage adjsuters seperate from bodily injury adjusters). This has been a good thing for the industry and has enabled claimants to receive fair compensation where appropriate much faster than in decades past.

Look at many of the natural disasters of today versus those of only a few decades ago. While there are always the obligatory problems and issues, if one looks that claims processed for Sandy one would find “it took an average of almost nine days to get inspectors to a site after first receiving a claim, almost four days after that inspection to provide an estimate and almost six days from that estimate to issue payments.” (NY Companies Report In as Sandy Insurance Claim Numbers Climb, Online Auto Insurance News, 1/7/13) That is an impressive effort that could only happen with the factory like efficiency that now exists.

Certainly there is a place for factory like productivity and nothing is likely to change too dramatically for claims in the future. At the end of the day, that workflow of the claims value chain will endure. Regardless, what takes place within that workflow can and should certainly be innovated.

The challenge

So here is my challenge. We belong to a community of claims professionals which extends across this World Wide Web touching thousands of current and past experts in the field. Through avenues such as The Claims Spot, LinkedIn Groups and other resources we can connect and discuss what works and ways to change and innovate. So let’s bring the power of this community to bear on various problems that may face the industry to debate new ideas to improve what we are already getting better at.

Let me start: The collaborative claim file

Here is an idea I would like to see discussed and debated:

We now have the ability to gather and digitize tremendous amounts of information rapidly and efficiently making it available instantly anywhere you happen to be. Every claim brings with it new challenges yet it is rare that the facts and circumstance of a claim have not been seen in the past. Currently it is usually the responsibility of one individual to follow the claim assembly line and determine an outcome.

With the ability to share information what if it was the responsibility of a team of people to review and assess claims as information is coming in? What if multiple claims professionals could collectively work on a matter to bring shared knowledge and experience to a claim file to help ensure a proper investigation is undertaken and a consensus is reached as to an appropriate valuation and outcome? It would be like creating mini virtual claims committees on every file. Everyone could bring their experience and assist in moving the case to a quick and fair resolution. This would be a truly innovative way of looking at the claims value chain.

What do you think? How would this collective community of claims professionals adress truly innovate the industry?

4 Keys to Managing a Successful Outsourced Claims Operation

Posted on October 30, 2013 by Marc Lanzkowsky

To be Successful One Must Have Strong Oversight and Controls From the Beginning

So you have decided to hire a Third Party Administrator to handle your claims and it seems like a reasonable decision at the time. You either have some new specialized business you are writing and don’t have the expertise in-house, or you don’t want to set up a new regional claim office or you are a new company and want to have an experienced claim department in place. Yes – the TPA is the answer to all your concerns.

All things being equal there are many fine TPAs in the market that will provide wonderful service to your insureds in a cost effective and comprehensive manner. Initially you think you have chosen a good one. However, as time goes on you realize you are not exactly getting what you expected from your TPA. So what happened?

It matters little what your reasons for outsourcing were. Bottom line is if you didn’t take certain steps to properly select and manage a TPA you are likely to end up with problems. The partnership you form with your TPA will be fruitful if you take these key steps to select and manage them in a way designed to foster long term success.

TPA Selection – Do your due diligence. If you are handling claims over to a Third Party Administrator remember they will be the face of your company to your customers. Take their selection seriously. Form a multidisciplinary selection team and engage IT, Finance and Operations in the selection process. Besides the basic questions, look at their staffing and turnover rates. Ask to speak to references and understand how they manage their accounts internally. Do they have dedicated claim units? How strong is their technology? How flexible are they in producing reports? When was the last time they had an independent audit? There are many more questions to be asked but this is not the time to be shy. Dig deep and understand who they are and what they can do.
Oversight – General Guidelines. Don’t rely on the TPA’s claims guidelines. You should develop, and expect the TPA to adhere to, a very specific set of best practices to suit your company’s requirements. Tell the TPA what you expect and hold them to it. When drafting guidelines pay attention to sections involving the retention of counsel, vendors and experts. Make sure they seek approval where appropriate and drive the selection to vendors that have been vetted by you or better make them use your own panel. Be specific about what claims you want to know about and when. Make sure you review these guidelines regularly and adjust them where appropriate. Remind the TPA will be using these guidelines to measure their compliance.
Strong Internal Formal Claims Program. Just because you have outsourced your claims management to a TPA does not mean you do not need to maintain a strong internal claims program. The successfully managed programs work with a combination of oversight and strong in-house claims account managers watching the TPA’s activities. It is important that internal claims staff be well versed in the expected handling practices and the ability to spot issues before they become problems. Internal claims professionals should have skills similar to a department manager that can handle trend analysis as well as being able to have difficult performance discussions with the TPA. No successful program works without skilled in-house claims resources.
Audit – Review and Re-review. Unless you are reviewing the TPA’s work for compliance through regular claim audits you are setting your program up to fail. Reacting to individual claim issues will not create a balanced efficient program and will cause the TPA to react to whatever the issue of the month is. Regular audits identify problems and force solutions to be addressed by the TPA. Some of the best run programs audit their TPA’s 3-4 times per year. In addition to regular best practice compliance reviews conducting specific targeted reviews can strengthen a program’s effectiveness (i.e. reserve review, vendor management or financial controls).

Working with TPAs can be a very rewarding and cost effective method for handling claims. Many are experts at what they do and have well run efficient operations. Regardless, the old adage about the squeaky wheel getting the grease is never truer than in the oversight of a TPA. Get squeaky!

What are other things needed when selecting and managing a TPA?

Kindergarten Management: Getting Back to the Basics

Posted on June 10, 2013 by Marc Lanzkowsky

Guess What – Good Management And Organizations Are Like a Smoothly Run Kindergarten

Everything we know in life started back in kindergarten. Kindergarten is where we learned to socialize in groups, lived by rules, played well with others, managed time, took turns asking questions and listened to authority. Success and creativity were rewarded and failures became further learning experiences. The more I thought about this recently the more I realized that kindergarten is a perfect example of a well-functioning organization and management.

We can lean a lot by going back to kindergarten. Bear with me and let’s take a look how this would apply in a claims department.

Relating to others

As in kindergarten, managing claim files effectively requires the ability to socialize well with others both inside and outside the organization. The good claim professional knows how to get along with his or her peers and relates well to claimants who are facing some kind painful loss. In addition, to be a successful claims professional it is important to be able to work well in teams and share and learn from the group. All quintessential lessons learned in kindergarten.

Time management

Time management is a key element in handling claims. Like kindergarten, everything needs to be done at a specific time. With large caseloads and ever increasing demands, the effective claims professional manages their time very well using diary reminders and focusing on the tasks at hand. A well-structured day allows the claims professional to address file demands in a consistent and timely manner.

Controlled creative thinking

Kindergarten encourages a controlled environment with guidelines that still allows for the expression of creativity. Think finger painting. Finger painting allowed one to be wildly creative but still had to be done on the specific paper, in a specific area under certain rules. Best practices are frameworks that good claims handlers follow to ensure they are managing files in a timely and fair manner. Regardless of the claims guidelines or best practices however, creativity in thinking and managing files is essential in achieving some of the best results. Out of the box approaches to challenging claims issues are welcome and these creative approaches make for very successful operations (see Improve bottom-line outcomes on claims by thinking outside-the-box!).

Rewarding success and learning from mistakes

Kindergarten is about establishing the framework for children to succeed in primary school and ultimately in life. Successes are actively and openly rewarded and shared with the group. Conversely, failures and mistakes are not punished but rather used as learning experiences to encourage and promote improvement. Good claims managers work the same way and openly praise success and work with mistakes to make people better and foster improvement. It is important to have both. While this is business and there are certainly instances where continued failures must have consequences, regardless, working to correct mistakes often creates a more cohesive high performing organization.

Let’s be clear, Kindergarten Management is not saying employees are children and needed to be treated that way. That is not the message here. Kindergarten Management is going back to the basics and working to foster a fun but controlled working environment that encourages the overall development of not only the individual but the group as a whole.

What other lessons from the past would be good examples of how management?

Claim Files Are Evaluated Using A Form Of Root Cause Analysis So Why Not Do The Same When Evaluating The Department?

Posted on March 5, 2013 by Marc Lanzkowsky

Assessing operational ills requires the same skill needed to evaluate a claim file

We have heard the mantra time and time again about how treating the symptom of a problem doesn’t do anything to cure the cause of the problem. As one of my favorite bloggers Seth Godin recently wrote in Signals vs. causes, “A fever might be the symptom of a disease, but artificially lowering the fever (ice bath, anyone?) isn’t going to do anything at all to change the illness.”

Assessing a claim file is like doing a Root Cause Analysis. Looking at the damages and paying the claim may move a file but it doesn’t tell you whether the claim should be paid in the first place. Analyzing a claim file is learning to know the what, why and how an event happened which is essentially what Root Cause Analysis is.

Root causes are specific problem or faults that create a breakdown in an operation or process. Claim files are a result of some event that causes a claim to arise (i.e. an accident, malpractice, property damage). It is the claims professionals primary job to assess these events and determine what happened and why prior to paying a claim. In general, root causes can be defined as an event that is:

Underlying to the problem
Reasonably identifiable
Within managements control to correct
When corrected will be effective in preventing recurrences

Despite Root Cause Analysis being a core skill in handling a claim file, claims management doesn’t always approach departmental issues with same type of evaluative assessment. Using the same techniques in assessing the root cause of a claim, management can assess operational problems.

Since the techniques are already in use for claims analysis why not use them for operational assessments?

Doing a Basic Root Cause Analysis: The 5 Whys

Similar to a claim file analysis, operational problems require an assessment as to what happened, how it happened, how could it have been prevented, who was at fault, what’s it going to cost to fix the claim and are there any lessons learned. For example, let’s say payments are being delayed resulting in fines being assessed against the department. If one looks at the fines as a claim one would want to determine what caused the fine? how did it happen? and how can it be corrected? An analysis of the “claim” needs to take place prior to making any decisions.

A great technique for getting to the root cause of a problem is to ask the question “Why” question five times. “By repeatedly asking the question “Why” (five is a good rule of thumb), you can peel away the layers of symptoms which can lead to the root cause of a problem. Very often the ostensible reason for a problem will lead you to another question. Although this technique is called “5 Whys,” you may find that you will need to ask the question fewer or more times than five before you find the issue related to a problem.” (Determine the Root Cause: 5 Whys – from www.isixsigma.com)

Going back to our example of a payment delays causing fines, and using the 5 “whys” technique, one could assess the problem this way:

Why are we being fined?
Because payments are being delayed by 5 days
Why are payments being delayed 5 days?
Because they were delayed in getting to finance
Why were they delayed in getting to finance?
Because they were not in the outgoing tray for approved payments
Why were the not in the outgoing tray?
Because they were sitting on a manager’s desk for signature and the manager was on vacation
Why was there no plan to have another manager cover the vacationing manager’s desk?
Because there was not procedure in place

The example above is simplified but it truly demonstrates that similar types of issues can be explored with a series of basic questions. Getting to the root cause is essential to moving a problem to a solution.

What are other techniques used for assessing a claim file can be used to assess the operation?

3 Things Good Claims Professionals Won’t Do

Posted on January 24, 2013 by Marc Lanzkowsky

Follow what good claims professionals don’t do and you will lead the pack!

Recently I read an article about things doctors won’t do when it comes to treatment and procedures for themselves. It included things like not having their first child at home, getting a PSA screening test, or taking sleeping pills. Since it is highly unlikely they will sue themselves for malpractice, these are treatments they believe might be adding little value or could cause harm. While managing a claim file is certainly not like managing your health, it got me thinking (which is never a good thing) about what a good claims professional won’t do.

I have audited a lot of claim files over the years and consistently good claims professionals manage their claim files following best practices. And when looking at these well managed files there are certain patterns that develop. I found that there are three things that good claims professionals won’t do and they are:

Fail to document: The best claim files are concisely and appropriately documented regularly. When reading a file the claim should speak for itself and tell a story as to what the issues are, potential pitfalls, and an understanding of the plan to resolve the claims. Good documentation is concise, free from extraneous commentary and reflects an understanding of the issues. Recording the events surrounding the claim is part of a well managed file and a good claims professional would never fail to document their file.

Assume this file is the same as the last one: Claim file management requires an understanding of the liability to the company and exposure to the insured, value of the loss and a plan to resolve the matter. Good claims professionals won’t skip any of the key steps needed to evaluate their files. If there is one thing that is consistent across all claim files it is that every file is different with different facts and nuances. One cannot assume that because one case had a certain outcome or facts a similar case will follow the same pattern. No matter what the issues are the best claims professionals never assume things they don’t know and never assume the file was like the last one.

Stick with the basics: There are no short cuts to getting to the bottom line. Claims professionals are always growing and learning and tyring to improve their craft. Sticking with basics won’t help when a new claim throws in a curve ball. One has to work outside the box looking for new ways to understand a claim or resolve a difficult matter. Trying to go beyond the basics is one reason handling claims can be so interesting. Previously we posted about thinking outside the box about innovative ways claims can be managed. This post generated over 40 comments in the Linked-In Claims Management Group. The reason for all the comments is that good claims professionals don’t just stick with what they know and wanted others to learn from what they had done (and maybe one up one another with a better war story).

Good claims practice is about common sense. Like any business it is important to grow and learn and adopt to changing environments. Good claims professionals are always looking for new ways to make sure that they are providing prompt service to assist their clients to secure fair compensation where appropriate. Seek out the good ones and learn from them!

What are other things that good claims professionals don’t do?

How Would Albert Einstein Approach Claims

Posted on January 3, 2013 by Marc Lanzkowsky

Albert Einstein must have been a claims manager!

As we begin the New Year it is always a time to reflect and look forward to new beginnings. Recently an executive in my company sent along some words of wisdom from Albert Einstein. Einstein was an interesting character known not only for his scientific brilliance but also for his quick wit. He produced some wonderful quotes which I believe were directed to the claims industry.

OK maybe they weren’t written with the world of claims in mind, they are nonetheless applicable.

“Setting an example is not the main means of influencing others, it is the only means.”

Claims departments should be leading companies in how they run their business. Claims departments are the fruits of the product being sold and when an insured buys a policy it is claims that serves up the services paid for. One of the best ways to retain and grow new customers is by “setting an example” in claims. Ensuring customer service metrics are met and exceeded and developing new ways to assist the customer is not the “main means of influencing others, it’s the only means.”

“Any intelligent fool can make things bigger and more complex…it takes a touch of genius—and a lot of courage to move in the opposite direction.”

There is a trend for more systems, more technology and better information in claims departments. I am a big supporter and believe it’s about time the industry wakes up to the power more claims data can have in making departments more efficient and providing robust information to improve the business. Regardless, providing more complexity and bigger technology solutions is not the only answer. Be a “genius” and go smaller and less complex in building and implementing claims software. We have the technology it just needs to be used correctly.

“Not everything that can be counted counts and not everything that counts can be counted.”

This is one of the biggest claims dilemmas. We are being overwhelmed with data and that can be a good thing. Regardless, the fact that it can be measured doesn’t mean it is actually adding value to the process. Take a look at your metrics and really explore if what is being counted “counts.” On the other side, there are things in claims that unfortunately can’t be counted perfectly. Given how climate, legal issues and other external factors change rapidly, comparing claim metrics from period to period is sometimes a difficult exercise. Regardless, striving to “count” what “counts” is what the industry needs to continue to do.

“If you can’t explain it to a six-year old, you didn’t understand it yourself.”

Wouldn’t it be great if we could all work like this? Let’s be realistic, if you can’t explain your claim to management, opposing counsel, the claimant, in an easy simplified way then you probably don’t understand it yourself and will never get to the desired outcome. Like his quote on being a genius by making things smaller and less complex I say get to the point. It is still important to get all the facts and make sure all the “i’s” are dotted and the “t’s” are crossed, but do it in a way that will allow you to truly understand the claim and be able to explain it.