In any very mature industry — and workers’ comp is certainly that — certain truths are immutable. Scale, margin compression, consolidation are all inevitable — or at least two out of three are.

Joe Paduda

Innovation — mostly “small i” innovation — can and will help smaller entities compete with goliaths, and large companies maintain and even grow margins.

The innovations I’m speaking of are the tweaks, efficiencies, streamlined processes and smoother customer interactions that make vendors easier to work with. Frontline customers benefit from these small innovations, sometimes almost without noticing them.

• What used to take two phone calls now is done automatically.
• Medical services are scheduled, visits conducted, and progress reports prepared and delivered with no action by frontline customers needed.
• Bills that had to be reviewed line-by-line are now auto-adjudicated, with only those lines or bills that qualify via a rules engine hitting the frontline person’s queue.
• Medical services are automatically authorized, with relevant guideline language attached.
• Medical service reports are auto-uploaded to the claim file, with only those issues needing attention highlighted for review.

What’s easy to lose track of is the purpose of automation and innovation. The primary purpose is NOT to make the vendor more efficient and reduce vendor costs; it should be to deliver better service to the end user, be they provider, patient frontline customer.

Therein lies the trap. In a mad dash to strip out cost and improve “efficiency,” many service companies don’t pay nearly enough attention — if they pay any attention at all — to how those changes affect the end user.

For a while, those “improvements” will reduce costs and add to profits. Then, as frontline users suffer in voicemail hell or can’t find anyone to answer their questions or have to ask for another password to enter a “portal” for the umpteenth time, revenues will start to decrease.

Instead, focus your innovation efforts on those that will make your end users happier, less stressed and less busy.

Take work off their desk/work stand and put it on yours.

That’s innovation that delivers long-term results.

Joe Paduda is co-owner of CompPharma, a consortium of pharmacy benefit managers. This column is republished with his permission from his Managed Care Matters blog.