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By JARED SHELLY, senior editor/Web editor of Risk & Insurance®

Cities and municipalities are caught in a conundrum these days. With tight budgets they're looking hard at their return-to-work and claims processes, but the idea of investing in new technologies to help strengthen them is almost unthinkable. But so is the idea of employees spending days and weeks on the sidelines and dealing with archaic processes to deal with their workers' compensation and disability claims.

Kimberly Lukanic, managed care specialty products manager at Sedgwick Claims Management Services in Schaumburg, Ill., said that since the recession a lot of the company's public-sector clients have shown interest in figuring out ways to get people back to work faster.

"They realize there is money to be saved with return-to-work programs so they will at least embark on the development of some sort of formal program, even if it's a fairly simplistic one," she said.

But with increased recognition and scrutiny on return-to-work -- and decreased budgets to address it -- it's "absolutely critical" that municipal leaders get creative when figuring out how to deal with the problem, Sanchez said. After all, they certainly can't throw money at it.

Finances at the city of Jacksonville have been stretched thin, just like any other municipality. So when it invested in a host of new surveillance equipment, budget hawks may have thought the spending was frivolous.

"Government is under extreme financial pressure so they must determine their core business because that's all that's going to be funded," said Mitchell Perin, who came on as finance and administrative manager in 2007. "We, like any other area in government, are under this microscope."

But Perin had a plan for the city, which employs 10,000 workers.

An energetic industry veteran, he figured out that today's technology isn't all that expensive in the scheme of things. A modest investment can achieve a significant return in the form of claims processors and adjusters with more time and the ability to garner better data about injuries and time spent out of work on workers' comp and disability claims.

Digital cameras, for example, are just $89; Perin bought nine. And digital voice recorders are around $100; he bought 15. He also converted the system from paper-based folders to electronic files.

That investment pales in comparison to the $100 million that the city pays in annual workers' comp and disability claims. "Yesterday's business model is not today's business model, nor tomorrow's business model," Perin said. "One must position themselves to be flexible and strong, and remain true to their core values to survive now and into the future."

Transforming to a paperless workers' comp and disability claims system made recordkeeping a whole lot easier. Now, digital photos are kept online and voice recordings are held as audio file formats -- and photos and bulky tapes don't slip out of folders and get lost. "Now, we don't lose tapes, and they don't degrade," said Perin, noting that the city also doesn't have to continually buy new blank tapes.

He also bought extra monitors so claims managers can toggle back and forth between documents -- saving time. "Now, they work seamlessly. It lets them focus and concentrate and we get more productivity out of them," Perin said.

Perin provided his adjusters with digital camcorders to help them record details of accidents onsite and he equipped them with flash drives so they can easily gather and upload information.

The technology upgrade has led to a streamlined process that has supplied adjusters and claims processors with time, which has in turn allowed them to have more time to focus on return-to-work rather than the minutia of processing claims.

"The use of technology gives the adjuster invisible time to do their job better, to manage and administer the claim to give the best possible level of care given the nature and condition of the injury," Perin said.

Armed with more time and better technology, Jacksonville officials can store many more records than in the past, allowing them to extrapolate data, which can then be analyzed and brought to future budget meetings or help prevent accidents altogether.

"If you have the right tools you can extract the previously unstructured, invisible data, and find out what it tells you about your business," Perin said.

For example, the city can now tell which accidents and injuries are most common. One common injury was sustained by first responders who were getting back and arm sprains from lifting people into ambulances and on to stretchers. Perin wanted to get his people equipped with power-lift stretchers, but with a closely monitored budget, such purchases may seem unnecessary.

That is, of course, if you can justify that purchase to city leaders by showing how much more expensive it is to have first responders out on disability with back and arm sprains. When dealing with a cash-strapped city government, providing evidence of this caliber is priceless.

"We saw this problem in the unstructured data," Perin said. "On a paper system, you're not going to be able to extrapolate that data."

The results of Jacksonville's changes have been eye-opening. In 2004 the city lost 21,164 work days to disability compared with just 350 days in 2010. In the five years since Perin took the job, the city was able to reduce its cumulative lost work days by 26 weeks.

Could other cities follow suit? That depends on the city and its leadership, experts said. Sedgwick's Lukanic said that larger cities and municipalities are focusing on updating technology, while smaller ones don't even have the budgets to entertain such an idea.

Whatever the size of the municipality, there are certainly benefits to updating equipment like Jacksonville did. If possible, it's also a good idea to add a risk management information system which can help identify trends and pain points in the program, as well as provide factual evidence that can be used to win a budgetary fight later on.

Lukanic said the secret is to show city council members and other municipal budgetary leaders evidence that any investment they make in the program -- technology or otherwise -- will lead to a reduction in the number of lost work days.

Paperless and Internet-based solutions can go a long way toward impacting how a return-to-work program is reported and communicated to workers, she said, however she doesn't believe that having outdated technology hinders a city's ability to get people back to work faster.

In the end, technology can only take you so far, Luckanic said. It's the energy and willingness of executives -- like Perin in Jacksonville -- that make the real difference. Technology can make return-to-work programs work better, make them prettier and make them more efficient, Lukanic said. "However, that technology is not necessarily a requirement for a good program," she said.

November 1, 2011

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