I am ever more impressed with the quality of studies on work injuries coming out of four key research centers. They are the California Workers Compensation Institute, the Liberty Mutual Center of Disability Research, the National Council on Compensation Insurance and the Workers Compensation Research Institute.
But, churlish me, I grouse over the reluctance of claims payers to open up their data to the world.
In the closing weeks of 2010, I bumped into a burly, obstinate fellow I've met all too often while writing this column. I expect that you have often met him without being aware of it.
He is Mr. No You Won't Get My Claims Data.
My most recent encounter began with an illuminating discussion with a loss-prevention expert. This articulate, empathic person, employed by an insurer, argued forcefully for a safety strategy in an industry well known for high injury frequency. I wanted to devote a column to this strategy, and I made one reasonable request. Given as the insurer had many hundreds of accounts in this industry, it surely could provide me with claims data to document the importance and success of the strategy.
Mr. No wrote back, saying that he cannot release claims data. Why? Doing so would, mysteriously, reveal information about specific claimants.
It appeared, as I dug deeper, that the claims staff had a problem producing an analysis even for internal use. Its withholding of claims data diminishes the credibility of the very safety strategy that it is promoting.
We need to understand how workers' compensation claims data sets are crucial to meeting societal goals for work safety. This specific insurer needs to better understand the business it is in, which is more than selling insurance and paying claims.
Workers' compensation insurance looks, of course, like a system of insurance. But the way worker safety and injury benefits have jointly evolved in the past hundred years suggests a more expansive formulation.
Workers compensation insurance, in its essence, is a promise that there will be no injuries with a guarantee of the results. It needs to engage throughout the cycle of this promise.
Most of us think our work involves only responding to the guarantee--that is, the payment of benefits. Yet our insurers have a role in the entire risk management cycle, starting at injury risk and returning back to improved injury risk, with risk transfer as a funding mechanism.
This cycle is important for public policy at state and federal levels.
States, of course, set the rules for how the benefits are paid. And state agencies, to be sure, collect a lot of claims data, which is made publicly available. But these databases do not include all elements needed for effective analysis.
Washington, D.C., is involved in a largely unheralded yet essential way. Workers' compensation insurance as we know is enabled by the freedom of insurers to share their claims data. You think this exemption from anti-trust law is too obscure to matter? Just consider how airlines, auto manufacturers and hotel chains cannot share their cost data.
So please, claims payers, retire Mr. No with a nice severance and enter the 21st century. The Age of Analysis is not just upon us, it arrived years ago when claims systems became powerful enough to capture useful data for predictive modeling, multi-account benchmarking and fraud detection.
Still, if the insurance industry won't fire Mr. No, then the federal government should by mandating open access to claims information, stripped of course of unique identifying data. We will have better claims analysis, including actuarial forecasts, and ultimately better workplace safety.
Sure, there will be a substantial initial cost and administrative burden of managing a single database, assuming one is needed. Point made.
What we need is a thoughtful change in industry attitude about transparency of costs.
PETER ROUSMANIERE is an expert on the workers' compensation industry.
January 11, 2011
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