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By MICHELLE KERR, who writes on risk management and safety issues

Your flight to Chicago was delayed. A piece of your luggage mysteriously got diverted to Atlanta. It's 8:00 p.m. now and all you want to do is check into the room you booked at the Marriott, order a little something from room service, and get some rest before your 8:00 a.m. meeting across town.

But that's okay. Rest assured that Bob Steggert and every member of his team are thinking about those things for you, 24 hours a day, 365 days a year.

Steggert, Marriott International Inc.'s vice president of casualty claims, helms the world-class workers' compensation and disability management program that covers nearly 105,000 Marriott employees in 700 U.S. locations.

The excellence of Marriott's program has been recognized for the second year in a row by the judges of the Theodore Roosevelt Workers' Compensation and Disability Management Awards. This year, Marriott is one of two companies to share first-place honors in the for-profit category.

Steggert and his team are not new kids on the block. It's been years since they cleared out all the low-hanging fruit, rolled up their sleeves and got down to the real nitty-gritty. Even so, Marriott continues to post consistent, year-over-year decreases in injuries as well as overall workers' comp losses--despite being in an industry where the injury rate is significantly higher than for workers in general industry. Marriott's losses are also double-digit percentage points below the company's strongest competitors.

One of the cornerstones of Marriott's success is its in-house claims-handling system. For a company of Marriott's size to even handle claims in-house is strikingly rare. The potential for in-house systems to become sluggish, inefficient beasts has led many companies to hand the reins over to third-party experts.

But the Marriott team opted to resume ownership of its claims practice 25 years ago and has never looked back.

"It really was a journey and an evolution," says Steggert, whose first project as director of claims was to facilitate the company's move from third-party administrator to an in-house claims system. The transformation was tackled on a state-by-state basis, and the process was complete by 1990.

The decision would raise eyebrows today, but it makes perfect sense when you consider the company's culture--a culture first established by J.W. Marriott, Sr., nearly 80 years ago. "If the employees are well taken care of," said Marriott, "they'll take care of the customers, and the customers will come back."

Taking on self-administration of workers' comp claims has allowed Steggert and his team to view the process through J.W. Marriott's lens, and to offer injured employees an experience that honors his spirit of service.

Right off the bat, Steggert explains, it better serves injured employees to know that they're dealing with fellow employees. In workers' comp situations, where people might be feeling fearful or stressed, it can bring great peace of mind to feel there's a peer looking out for your best interests.

Marriott's hospitality-influenced approach to claims tends to create a nontraditional dynamic all around, shifting the thought process, in many cases, from "What is the rule?" to "What will best serve this customer?"

At times, says Steggert, that can mean paying for things that an insurance carrier or TPA might not pay for. "For instance," he says, "you might have an injured worker who's a little overweight or who might need to go into a weight-loss program. If we think that comorbidity or issue is precluding an optimum recovery, we won't hesitate to pay for a weight-loss program, whereas a carrier would say, 'That's not compensable under the state law,' and a TPA may do the same thing."

Of course, embracing that philosophy while adhering to fiduciary responsibility isn't always easy.

"We take care of our associates," says Steggert. "We try to make the right decisions. We're not always right, but more often than not, we are."

Marriott employees appear to agree. Thanks to a high level of claimant satisfaction, the company has sustained a low rate of litigation and attorney involvement in workers' comp cases. Attorneys were involved in only 3.77 percent of workers' comp claims in 2007. Compare that to an average of 5 percent to 10 percent in most of the country, with some regions grappling with rates of up to 20 percent.

And while the primary goal of Marriott's in-house practice is to provide employees with superior service and a high level of satisfaction, the operation also excels in a variety of other ways. Far from turning sluggish or inefficient, the department has become a model of quality and efficiency, generating continuous improvement even while shrinking its staffing level from 240 to around 200.

It's not lost on the team that they're part of something unique to the field. Steve Perroots, senior director of the mid-Atlantic regional claims office for Marriott, says that people work hard to keep it that way. "The folks that we hire, we prefer to hire from square one and train them the Marriott way. We just feel that we're head and shoulders above the crowd in terms of the quality of the claims practice that we have. And the results speak for themselves."

So do the figures. The company also enjoys significant savings on administrative costs as a result of its in-house claims operation--proving that doing what's best for employees is also what's best for the company. "We come out well on both ends," says Perroots. "It's all part of the big picture. While a lot of what we do is for the associate, it all translates into a more efficient and more productive bottom line."

THE DIGITAL DOMAIN

The efficiency of Marriott's self-administered program is no happy accident. Recognizing early what it would take to remain viable for the long term, Steggert's team turned to state-of-the-art technology and automation tools to streamline its operations.

What powers the company's claims system today is a 24/7/365 call center meshed with a seamless interface with Marriott's browser-based claims system. Some hotel locations are also testing a direct online reporting system which could lead to further savings.

The system features an end-to-end electronic infrastructure, which includes electronic data interchange for state-mandated reporting and electronic funds transfer to simplify payments to partners and vendors. In September, Marriott also launched a pilot program that allows payments to be made to injured employees electronically--directly into their bank accounts. That program will be rolled out on a large scale next year, says Perroots.

Documents are scanned companywide so that adjusters, managers and nurse advocates can exchange information via browser-based connectivity. And thanks to another recent enhancement, claims handling is now tapeless as well as paperless. Interviews are recorded and stored digitally. That's particularly advantageous in the event that litigation does arise, because recordings can be sent to attorneys electronically in seconds, without the time and expense of media duplication, or concerns about damage or loss of the original tape.

This vibrant electronic framework of real-time transactions and virtual communication has allowed Steggert's team to shorten the claims lifecycle significantly, and to improve productivity among all stakeholders. All of which benefits injured workers, who receive appropriate care promptly and are able to return to their jobs as soon as medically possible, without having their cases mired in red tape.

A key piece of Marriott's electronic arsenal is a centralized data hub that provides Steggert and his team the ability to collect data and leverage it to keep a tight rein on performance companywide, and to drive further safety improvements and cost savings.

The data allows Marriott to place an intense focus on results. Steggert's team has developed formulae for dozens of key performance indicators, or KPIs--including workers' comp losses per $100 payroll and on-time claimant contact. KPIs are captured every 28 days and distributed to departmental managers, general managers, and regional directors. The detailed reports generated from KPIs help the team spot any kind of trend--at the individual level or at the adjuster level, within the claim operation in a particular office, or across the board.

"I think when people first heard about KPIs, they thought it was just going to be a report card, but it's not," says Perroots. "We use KPIs as tools to say, 'OK, let's find out why this number is going in this direction, or why is this number lower than we think it should be.'

"So, for instance, how often we're getting attorneys involved in cases might increase as the result of some process that we changed internally," he says. "And if we don't like the results of that, we might decide to switch gears and go another direction."

In some cases, he adds, there may be nothing wrong. "It's just a matter of understanding why that number is there, and whether that's a good number for what we're trying to accomplish. So it's much more than a 'let's see how you and your neighbor are doing.' It really helps us upgrade the quality and consistency of our claims handling."

ACCESS TO SUCCESS

Enabling managers to capitalize on all of this cutting-edge performance management, Marriott provides all managers with the means to take action. Perhaps the most powerful resource it has established is the loss-prevention portal available to each location via the company intranet.

The portal provides access to customized loss prevention reports as well as downloadable copies of forms and policies. Managers can also search for specific OSHA guidelines. Each manager can also select and download prepared "three-minute safety talks" on topics related to specific hazards, as well as submit requests to borrow any of the loss-prevention training videos in the company's library.

Through the portal, managers at all 700 locations can connect, exchange ideas, and learn from their peers' successes. Best practices, tips and ideas are shared freely, making it the first place most managers will turn when they have a question or need information.

Marriott also uses the portal to provide access to an extensive job safety analysis (JSA) library. Managers develop JSAs that outline safety guidelines for the various jobs and tasks in their departments. The JSAs are often used for reference during the "stand-up meetings" on safety that are held in most departments.

Additionally, the loss-prevention portal is home to "My Learning," a five-module online training series for managers. Each multimedia module is interactive and includes a test at the end to help evaluate trainee comprehension. Steggert says an even more comprehensive online training curriculum by job title is currently in the works, and options are being explored to expand the online training to supervisors and eventually to hourly employees.

At Marriott, it's not enough to take it on faith that employees are satisfied with the treatment they receive after an injury. After a claim is closed, employees are asked to fill out satisfaction surveys, which contain questions specific to the treating physician, the nurse case manager, and the claims adjuster--much like the surveys that hotel guests are encouraged to fill out.

A quality-assurance team then reviews the surveys and addresses any issues that might have been raised.

The best evidence, though, of the success of Marriott's workers' comp and disability management programs, may be the comments that come unsolicited.

"People know when you're genuine, and when you're doing the right things," says Steggert. "We get feedback all the time, sometimes to claims adjusters, but particularly to our nurses, 'Thank you for being there.' "

J.W. Marriott, Sr.'s words--and his potent vision--are alive and well. And in extremely strong and capable hands.

(Check out the profiles of the other Teddy Award winners.)

November 1, 2008

Copyright 2008© LRP Publications