Perspective | 1984 or 2021? Big Brother Never Left and Insurance Could Be to Blame

According to Big Data statistics compiled by Forbes, “the amount of data created, captured, copied, and consumed in the world increased from 1.2 trillion gigabytes to 59 trillion gigabytes, an almost 5,000% growth” between 2010 and 2020. This burgeoning wealth of data, however, is of no value without the ability to organize, analyze and apply it.

CorVel Corporation surveyed employers and payors about the use of data analytics in their workers’ comp and liability programs, and more than 50% of respondents said they wanted more data from their service provider. Just 57% of respondents said their service provider also acts as a data consultant.

“A lot of vendors can gather data, but they don’t explain it. What’s the data really telling you? That requires expertise within the field, an understanding of the business and market in question, to pull together disparate pieces of data and come back with something that’s actionable,” said Jeffrey Gurtcheff, Vice President of Strategic Insights at CorVel Corporation.

“Traditionally, the biggest barrier in harnessing the full potential of data is that companies lack a consultant — a team focused on helping the customer understand and apply data insights to improve outcomes.”

A dedicated data analytics service — including consultation — can help payors and employers develop specific, targeted plans to identify and mitigate drivers of claim frequency or severity and reduce their total cost of risk. Here’s how.

The Value of a Data Consultant

Knowing what metrics to track and how to derive actionable insights from data requires expertise. When data providers are able to elucidate their findings and craft recommendations, companies can achieve greater control over claim management.

“For example, we have a client that utilized a mix of their own on-site occupational health nurses and CorVel’s Advocacy 24/7 nurses to triage cases. In either case, the nurse determines whether the injury can be treated with first aid, whether it requires a telehealth or in-person evaluation, or if the injured worker needs to get to the emergency room. That initial decision sets the trajectory of the claim,” Gurtcheff said.

“Our Strategic Insights team explored very granularly how these two approaches to medical management ultimately correlated with claim outcomes.”

A dive into the data showed that utilizing CorVel’s advocacy line yielded both indemnity and medical cost savings compared to claims involving the company’s on-site nurses. The analysis also considered the expense of executing each approach to paint a full cost-benefit picture.

“We took the analysis a step further by sitting down with that customer and engaging in a discussion about the information. We go beyond just exposing the data and focus on creating action plans. If you engage injured workers differently, how might that impact their losses? Perhaps we start piloting new services in certain locations and measure the shift in results,” Gurtcheff said.

“It’s the client’s choice whether to proceed with a recommendation, but at least we’ve laid out some meaningful takeaways from their data.”

By explaining an analysis and offering specific recommendations, the Strategic Insight Manager serves as extensions of clients’ risk management teams and creates positive changes in their risk profile.

Analytical Expertise is Critical in a Rapidly Changing Environment

Identifying opportunities to reduce claim frequency or severity is especially important amid the challenges posed by COVID-19. The pandemic dramatically and unequally altered the claims landscape. CorVel studied workers’ compensation claims received from April 1 through December 31 for both 2019 and 2020 to assess the impact of the pandemic environment on different industries within their book of business.

Overall, new claim reports decreased by 13.6%, and claims closed roughly 15 days faster. But there was significant variance among sectors. Healthcare, for example, saw a 30% increase in claims volume due to COVID-related claims.

“It’s that odd year, but as we recover from the pandemic, the challenge will be figuring out what the norm should be. It’s going to be very critical for companies to track how those numbers are progressing and understand how they compare to the COVID timeframe and the pre-COVID timeframe,” Gurtcheff said.

One customer, for example, utilized CorVel’s Strategic Insights services to review their temporary total and temporary partial disability run rates over the previous three years. The data demonstrated a sharp uptick in March 2020.

“This particular customer went through a lot of furloughs and layoffs and tried to right-size their business, which pushed more focus on to the temporary total and temporary partial disability,” Gurtcheff said.

“Now is an opportune time to address this as their business is coming back and they have a need to expand their workforce. We’re building a process with them to bring people back to work and positively impact their disability numbers going forward.”

Gurtcheff stressed that given the disparate impacts of the pandemic, the numbers will look different for everyone. Understanding the full claims impact and identifying opportunities for improvement will demand a comprehensive look at the data. Root cause analysis can hone in on previously undetected drivers of claim costs. Benchmarking against industry peers, as well as NCCI and WCRI reports, will also provide context. CorVel’s survey identified benchmarking as a chronically underserved area of analysis.

“I think it will be very important to look beyond key performance indicators and pay attention to outliers. The data may suggest there’s some opportunity to do some things different moving forward,” Gurtcheff said.

Expertise and Consultative Service Make Data Analysis Meaningful

Nearly one-third of the survey respondents said they are paying for data analysis services but not receiving them. That represents a missed opportunity to positively impact claim outcomes and reduce total cost of risk. CorVel’s recently launched Strategic Insight services seek to put actionable data-driven insights within reach for these companies when they need it most.

In addition to comprehensive analysis, customers also benefit from a dedicated Strategic Insights Manager, who act as a consultant and trusted advisor. By distilling data into an easy-to-understand format and creating solutions and recommendations to move the needle, SIMs are not just data providers, but true partners in risk management.

“Our Strategic insight team members s all have at least 20 years of experience across all three sides of the business — TPA, carrier and medical management. In many cases they also have previous industry experience with major self-insured or high retention or deductible companies that had data analytics as part of their teams. So they truly understand the business and what to look for within that data themselves,” Gurtcheff said.

Strategic Insights services are part of CorVel’s CogencyIQ solution, which also includes advanced analytics, artificial intelligence, machine learning and predictive analytics capabilities. These services allow companies to take a forward-looking view of their business and measure the effect of changes in real time. According to Gurtcheff, machine learning, AI and analytics can all support the adoption of dynamic claim practices.

“Today most organizations use static claim practices, meaning certain processes happen at certain points of the claim lifecycle, regardless of the circumstances. Dynamic claim practices mean engaging in certain actions depending on specific claim needs. By learning what certain types of claims demand, AI and machine learning allow claim professionals to prioritize their attention appropriately, meaning high-risk claims get the high-touch engagement they require,” Gurtcheff said.

The integration of strategic insights services with other managed care services, including pharmacy and claims solutions, also ensures a comprehensive and up-to-date analysis.

“All the data is there and accessible in real time, as opposed to having to obtain it from other vendors. That’s a significant advantage for us, and it means we can deliver the high-quality service that so many are seeking from a data provider,” Gurtcheff said.

To learn more, visit https://www.corvel.com/services.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with CorVel. The editorial staff of Risk & Insurance had no role in its preparation.

CorVel is a national provider of risk management solutions for employers, third party administrators, insurance companies and government agencies seeking to control costs and promote positive outcomes.