ADJUSTED
ADJUSTED
Ideal Caseloads for Claims Professionals with Bill Zachry
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In this episode, ADJUSTED welcomes Bill Zachry,strategic advisor for Voxel AI and former CA State Workers Compensation Fund Board member. Bill discusses some the complexities of determining the ideal claim load, and some things to consider when determining the right number of claims for a claims examiner.
Season 7 is brought to you by Berkley Industrial Comp. This episode is hosted by Greg Hamlin and guest co-host Mike Gilmartin, Area Vice President, Sales & Distribution, for Key Risk.
Visit the Berkley Industrial Comp blog for more!
Got questions? Send them to marketing@berkindcomp.com
For music inquiries, contact Cameron Runyan at camrunyan9@gmail.com
Hello everybody and welcome to Adjusted. I'm your host, greg Hamlin, coming at you from beautiful Birmingham, Alabama, where it is really hot and humid, and with me is my co-host for the day, mike Gilmartin.
Speaker 3Mike, you could introduce yourself, as you always do, yeah hey everybody, mike Gilmartin, I work at Key Risk here in Greensboro, north Carolina. And yes, it is like I don't know man. It's like don't go outside hot. It's like you walk outside and the flop squat starts. It's miserable. So I'm glad that I live in the South. I'd like to live somewhere else now because I've been able to go outside in like two weeks.
Speaker 2I am right there with you, Mike. It's pretty bad. But unless you're living where Bill's living in California, the rest of us are going to have three bad months. It's just whether you want them to be freezing cold or insanely hot.
Speaker 3So you have done an in-person podcast in California with Bill. That's exactly right.
Speaker 2So our special guest we've had Bill Zachary on before and we're glad to have him on again. He's a board member of the state fund in California. Not only that, he's just very involved in claims and workers' comp and has been especially in California but also across the country, and so we're glad to have Bill with us. Bill, if you want to introduce yourself to the group, I probably did a poor job.
Speaker 1I'll let you talk about yourself a little bit. Well, thank you very much, greg. It's a delight to be with you again. I really appreciate what you're doing to help the industry get some insights. I think this is a very valuable tool. If you will, my background is I was a risk manager at Safeway for 15 years Safeway Albertsons. While I was there, I was awarded Risk Manager of the Year from RIMS, and so I have both workers' comp and risk management background. Unfortunately, I was replaced on the board of the state fund a couple months ago, and so that was a 15 year gig that I really enjoyed and we really had some good success there. Currently executive director of what's called CompSense that's helping write regulations here in the state of California. I'm one of the editorial people on the local California labor code. I'm co-chair of the national disability conference that'll be in Vegas this year. I'm also a strategic advisor to an AI company in San Francisco, a medical device company in Silicon Valley, and I'm writing basically a weekly article, which was the genesis for today's meeting, I think.
Speaker 2Yeah, so I've been following. If folks haven't followed Bill's blog or weekly emails that he sends out, I would really encourage you to reach out to him. They're great. There's some great content there and he did one recently on ideal caseloads.
Speaker 2And I know this is something every claims manager gets asked, and especially from people who are not from claims, that want to know well what should be the right number of claims. And everybody wants that answer because they want to staff the right amount of people. They don't want to overstaff, they want to make sure they have those things right. And as I was reading through that article, bill, I really thought you hit on some things that really probably need to be talked about, and maybe even especially for those who are in insurance leadership positions but don't understand how claims work and the value that comes through caseloads. So maybe, just starting it out there, everywhere I've worked I've had insurance leaders who've wanted to know that magic question what's the right number of claims for an adjuster to handle? What's the ideal caseload? And I guess I want to start with are we even asking the right question, bill?
Speaker 1I frankly don't think we are at all asking the right question. I think the question is is what is the ideal caseload to get the lowest possible total cost of claim? And right now, the lowest possible total cost of claim? And right now, many of the vice presidents of claims' entire success is ranked by how they manage their budget, and so there's no financial incentive for them to focus on the total loss dollars, which is much bigger than the expense dollars, and so you have people inappropriately focused on the wrong item One of the best insurance companies out there. They don't have a budget for their vice president of claims. They're focused entirely on lost dollars and have run a much higher expense ratio, but they're 20, 30, 40% below the industry on the lost dollars, and so it really is where the focus has to be. But there are so many other things that go into measuring what is the correct caseload.
Speaker 1It's a fascinating bit of the puzzle, if you will, and when I first showed up at Safeway, for instance, we were self-administered, self-insured, and I said I want a CNR, I want a fully final settlement, all the claims, and one of the supervisors said we don't do that here. We stipulate provide lot of time, future medical, and I said I understand that, but we're going to change that. And she said I had heard you were evil, but I did not know how evil you were, which was an interesting comment to the vice president from a claim supervisor. But I said all right, let me rephrase this a little bit If you settle all the claims, what are you going to get? And they said a lower caseload. And I said OK, now I promise you this I will not fire you for doing your job. So all you're going to get is a lower caseload. And everybody said, oh well, we can do this now.
Speaker 3That kind of thing, and so that was part of the dynamic.
Speaker 1When I started, we had what? 15,000 open files. Five years later, we're down to 5,000 open files and I never fired anybody. But what we did do is, if we had any kind of attrition, obviously we would consider whether or not we needed to replace or didn't need to replace, and that's all part of the day-to-day dynamic of what you do and how you do it. But the ideal caseload is a factor of so many other things. For instance, what is your settlement philosophy? Are you going to settle or are you going to stipulate? What do you expect the workload to be in terms of how you expect that person to do it? And then the settlement authority, In other words, what tools do you give?
Speaker 1The caseload is dependent upon what your claim system is. It's dependent upon whether or not you have assistants or other people doing the job. It's dependent upon whether you have managed care people who are doing the managed care process or controlling your medical versus the claims examiner controlling the medical. A little side story. I had a full semester of physiology in high school and so when I showed up at my first, second, third day on the job, the supervisor threw four cases. They called the doctor and let him know whether or not you approved the surgery. And I thought what do I know? And that's one of the problems we currently have. Approve the surgery? And I thought what do I know? And that's one of the problems we currently have in the system.
Speaker 1We have a lot of people doing a lot of things that they're not necessarily appropriately trained for, and it takes a lot of time to make a mess of things while you're doing that. So I think the first thing you have to look at in terms of caseloads is what I call throughput of claims, and that's dependent upon the nature of the claims that you have. For instance, I had almost exactly the same number of claims adjusters in Southern California as I did in Northern California, and yet during an annual time, I would have a thousand more cases go through Northern California because the litigation rate was so much lower. And so what takes time for examiners to do and it's the number of new cases that takes a lot of time to get a new case up and running Then you have the litigation process really slows down or takes a lot of time for the claims examiners, and there are other things that you do. So you have to look at the productivity, you look at the throughput of claims and then you figure out what is the ideal thing that will get the lowest possible cost of claims, and a lot of that has to do again with philosophy of.
Speaker 1I think we may have talked about this in the past, but the goal of quick determination of compensability is one of those that really brings down your litigation. The faster you can make a call on it, the appropriate call you make on it, the lower your litigation rate, and so we had goals of how fast we would make determinations. I asked my claims adjusters to make a call yes or no within 14 days of the date of injury, and there are certain claims you just can't do that. But generally speaking, both as a VP at an insurance company as well as self-insured, self-administered, our average time between date of injury and date of accept or denial was seven days, and so these are the kinds of things that you want to have in place to look at to determine what kind of caseload you might want to have in terms of how much work you do give to the claims adjusters. So that was sort of a shotgun, wasn't it?
Speaker 3Yeah, but I think you know, look, regardless of what the ideal number is, we're talking about it because industry-wide it's not done well, right? The ideal number is we're talking about it because industry-wide it's not done well, right? So like that's the baseline. Is that across the board, I think caseloads, no matter what jurisdiction you're handling, for the most part are probably too high. I think Greg would agree. I mean, I've had anywhere from 225 claims down to 100 claims and it's a lot easier to adjust at 100 than it is at 225. And kind of everywhere in between.
Speaker 3I think the other big thing for me that makes this more prevalent than ever and Bill, we were talking about it a little bit before this started but the amount of stuff we have asked our adjusters to do and track and know and be experts on has grown over the last 20 years. When I started in claims, I mean Medicare was a thing, but we didn't really pay attention to it all that much, if I'm being frank. And now it's you know you have to be an expert on Medicare and you have to be an expert on set-asides. You have to ask all these different questions because we want to track more data and we want more information. And like to your point, Bill, unless you the systems and the technology and the things that can aid our adjusters in doing that seamlessly, to not have all that friction when they're trying to get to those decision points.
Speaker 3It's going to be really hard to do, and we've asked them to become experts in so many things that, at the end of the day, what a claims adjuster needs to do is be able to make timely decisions with the information they have, without a lot of friction. And so to your point, bill. I don't know that there's a number you put on that, but I think it's definitely not where we are now or where we are currently. And so I mean, that's my thoughts, greg. I don't know if you have anything to throw in there.
Speaker 2Yeah, I was just going to add. My experience has been if you give people less claims, they have time to get faster results and the files stop just sitting. And what can happen is if you have 200 claims, you're just maybe answering the phone but you're not proactively handling claims. You can't proactively handle claims. You're simply just putting out fires and hoping that you've put out enough and meanwhile some of those fires are going to create a lot of extra steps of work because you didn't have time to do what you needed to do.
Speaker 2In the beginning we went from. When I came here at Berkeley we had 1,600 open claims, which isn't a lot because we're small. We do high hazard workers comp, but we've almost doubled in size and premium and we have less than 1,000 open claims. And part of that is we hired people and we lowered the caseload and we gave people time to work the files and put some incentives around resolving those files and really everybody's won in those situations. The injured worker has gotten the benefits they needed more timely, we've avoided unnecessary litigation or if there is litigation, we didn't pay an attorney to have that go on for three years. We got it resolved.
Speaker 2So from my perspective I think there's a lot of value in thinking about what's the bigger outcome. And if you just make the question well, what's the perfect caseload or how many claims can I pile on, how few people You're not going to end up in the right spot. From your perspective, bill, what are some of the benefits that you've seen when you've controlled caseloads a little bit better? And then, conversely, what are some of the problems you've seen when companies have just let that ride and loaded people?
Speaker 1up. I think you both hit several points I'd like to talk about. And, mike, I think the earliest part of your comment was about jurisdiction. I think it's important to recognize that the complexity of claims administration is different by jurisdiction, and so you can't give a flat number basically for California and expect it to be the same as Oklahoma. So that's one little piece of the puzzle.
Speaker 2The other one, I think.
Optimizing Claims Adjuster Caseloads
Speaker 1Greg, you talked a little bit about the attorney involvement, and my experience is that one of the first things that claims examiners do when they're overwhelmed is they send every case out to an attorney, and the attorney ends up being the safety net for the claims administrator. So, even though you know there were recent today some data came out about how there's been a 9% reduction in California claims frequency for self-insurance, but at the same time, the average claims cost has significantly gone up, and I would submit to you that part of that is because of the caseeloads, and so I think that's a real problem. Greg, you touched on something, though I think that's an ideal piece of the puzzle, and that is what is the ideal caseload in order to get the ideal throughput of claims, and that is absolutely what you're looking for in terms of your analytics. One of the other comments, though, before we go too much further into that kind of thing, is to recognize the fact that there are different skill levels, and you have your superstar claims adjusters, who will get your throughput no matter what the caseload, and then there's a tendency for some operations to say, okay, that's now the standard, and unfortunately, not everybody can run the same pace, not everybody can walk the same pace, not everybody can shoot the basketball the same way, kind of thing. You have superstars and you can't set your standards based on one superstar. So that's, I think, applicable to what we're talking about here. Is you want to look at what is the process?
Speaker 1Another thing that's going on that I find fascinating is the issue of the implementation of AI process. So what we have in the industry is we have a large number of claims where, if you do not do anything and you get out of the way, the 51% of the claims account for 10% of the dollars. They're the lower cost, medical only and very simple indemnity claims and, quite frankly, the more we can get out of the way and let them go through the system without intervening or without creating roadblocks, the better it will be for everybody, and that's one piece of the puzzle. Now, the other side of the for everybody and that's one piece of the puzzle. Now, the other side of the coin is you have the catastrophic claims, and the catastrophic claims used to be only the amputations, the head injuries, the severe burns, the loss of vision, quads and parrots, but in looking at a lot of the numbers, you also have what I call sisterhood of the traveling body part injuries, and these are the claims that started out as a minor claim but become a total disability and you go. What in the heck happened here?
Speaker 1And the early identification intervention of these are so important in terms of how you can bring down your overall total costs, and it has a lot to do with your focusing in on the throughput. Your throughput has to have your goals One of the interesting pieces about the goals. I don't think that many claims operations focus on this as they can. I learned this from a presiding judge down in Florida. In Florida they have a law basically saying you're supposed to bring a case to a legal conclusion within 200 days of MMI. I don't think a lot of jurisdictions are focused on how you bring the cases to a conclusion and setting time goals for when and how you can do that. But that has a lot to do with the throughput process. Setting throughput goals so that you can achieve that then will help you derive what kind of an ideal number you should have. Now, one of the things that I've seen several surveys out there and it looks like, generally speaking, the consensus number seems to be about a 115 to 125 indemnity case load, but I don't think that's the right number per se in terms of again, it doesn't take into account jurisdiction, it doesn't take into account.
Speaker 1When I was a baby claims adjuster, again, the first thing ever handed to me were future med cases to basically call and see if they were still alive.
Speaker 1Literally me call and literally the guy answering the phone and say yes, I'm still alive, and hang up on me.
Speaker 1But the point being is that future medical became a much more complex claim than it used to be and yet we in the industry tend to think of oh, these are very simple claims that can fluff up the caseload a little without really taking a lot of time on the part of the claims exam. So that then becomes the question of I think, mike you talked about we're being. A lot of issues are being asked of us that we had not done in the past and, quite frankly, the medical issues are the most complex part of the process and we're not necessarily having the right people deal with the complex medical issues. If you ask a claims adjuster who has not got medical training to be doing things, you have some issues that it won't necessarily near to the benefit of the whole system and we're going to digress a little bit on this, but I think it's important and that is that one of the things that we're not recognizing in the industry as a problem is misdiagnosis.
Speaker 1I don't know about either of you, but I've not seen any data on misdiagnosis in the comp system. And yet that creates a lot of extra work for the claims of justice because these become again the sisterhood of the traveling body part claims. These become the real complex claims and take a lot of time and energy and yet we are not having the right expertise handling that piece of the puzzle, are not having the right expertise handling that piece of the puzzle. So what we've covered here is in my philosophy.
Speaker 1I like to have medical professionals embedded in the claims operations. I think having access to a medical director helps. I think using nurses is particularly helpful on complex claims. I think having the right focus of the attorneys on settlement instead of the claims administration, things like that are all pieces of the puzzle. But the faster you can get and, greg, I think you and I I'm sure Mike as well have seen how many claims can you settle at a deposition so that you can just get it done and that you know the early intervention and closure is such a huge opportunity and yet we're not necessarily holding everybody accountable for doing that, but that would significantly help the caseload, it will help the throughput, it will help everything else. So it's not just the claims examiner, it's the claims examiner and how you handle the legal, it's how you handle the medical and how it all fits together with the claim system. That makes all the difference in the world.
Speaker 3I think they're not mutually exclusive and I completely agree with you. But I think to be able to look at a claim and say, hey, I need an intervention here. Or hey, I really need a nurse on this one. Or hey, I had time to review these medical notes and this doesn't look right. I don't exactly know why, but I need somebody to step in and help me with that. Or hey, I'm going to dump all this work over to the attorney. I mean all of that.
Speaker 3Generally nobody wakes up and says I want to do a bad job and I'm not going to handle my claims well today. But if you're not given the opportunity to be successful and you're not given the time, like Greg said before, right, to me it all comes down to time, whether it's talking about throughput or however you want to say it, like do I have the time to not only handle it myself, but do I have the time to make the correct decisions, to get the right people involved, to get the best outcome? And so generally what I've seen is, for the most part, right. You're always going to have people that are not great at handling claims and generally we try and find something else for them to do. But it's not a decision or the inability to make a decision. It's not having the time to make a decision and it's not having like hey, yeah, I should have read those medical notes that had that added the back end and the neck end to my leg injury, but I didn't look at them because I was checking a box in the file and moving on to the next thing, because I have 40 cases pending and I have six new claims and I have all these things to do.
Speaker 3So I think your point is extremely valid. I don't know that there's an ideal number. I also love the part in your article where you talked about it all depends on how experienced you are. Right, I mean, if you're brand new and I gave you 75 claims, you're not going to be successful with 75 claims. I mean, that's just not the reality of it. But an experienced person with 75 claims, that's probably a little bit low, depending on what they do and their skill set. So I think there's a number of things that come into it, but the decision points you're talking about are 100% correct. I just think a lot of that comes from not having the time to make those decisions or recognize that a decision needs to be made.
Speaker 1So let me build on that a little bit. Mike, one of the interesting things that I was recently at a conference and I talked to seven different defense attorneys and every single one of them said that they were unable to get a call to or a call back from the claims adjuster. Are a callback from the claims adjuster that in today's world, with the case loads the way they are, they've been unable to communicate with the claims adjuster. One had an interesting solution and part of this is I don't know if it's generational or not, but part of this is he said as a solution what he did, is he set up a Zoom because they would show up for a Zoom.
Speaker 2As a solution what he did, is he set up a Zoom because?
Effective Claims Adjuster Caseload Management
Speaker 1they would show up for a Zoom, which I thought was fascinating. But what are leading indicators of potential to a higher caseload? I think are very interesting things to start delving into and one of those I think is if you can look at the diary and the inability of the claims examiner to stay up with the diary is a really heavy leading indicator of a problem that you might have a too high case level. And there are other ones like that. I'm not sure. Some claims administrators keep track of calls in, calls out and responds and or voicemail kind of thing. If you can keep track of those kinds of things, I think it's another leading indicator of a potential problem, if you will, with too high a caseload. I think your internal audit process. Most claims operations have internal audit and this is a two-edged sword. One of the problems that you've talked about I think both of you really touched on is the compliance piece that's required of the claims adjuster in terms of checking the box right.
Speaker 1In checking the box, one of the things I hated as a claims adjuster was doing a file review with a claims specialist from the broker If I didn't have the employer there engaged in the process and I was being beaten up by the claims specialist out of the broker. I always thought that was just a waste of time and a lot of things as a claims adjuster I didn't feel were what moved the file along. If I had to just do reporting without necessarily moving the file along, I also frankly felt that that was a waste of time as well. I wanted something that would move the file along, not check the box, and I found that very frustrating as a claims adjuster. So I think if you're running a claims operation, you really wanna think about within your shop what are the potential leading indicators of what is the ideal caseload for this person.
Speaker 1Another thing, though a little tip what I used to do is I used to look carefully at the number of reserve changes and the amount of the reserve changes by claims adjuster within the office reserve changes by claims adjuster within the office Because one of the things that told me is whether people were stair-stepping or whether they were really doing the analysis. You know somebody who did twice the number of reserve changes and yet half the amount of the change on the reserves was stair-stepping and that was a lot of extra time that was wasted that could have been spent doing other things if they've been thinking carefully about what the real exposure and risks are. But then the little piece, the nuance of that is they have to have the right reserve and settlement authority to be able to move things along, and if they don't have that, then there's an artificial barrier to keep them from doing what they need to do. So it's amazing how in our conversation, it all fits together at the end of the day in terms of how many issues that will come together to determine what is the ideal caseload.
Speaker 1When I ran Safeway as a self-administered self-insured, I ran around 90 claims per claims adjuster and I was running at that time statistically 40% below the industry with average claims costs.
Speaker 2Yep, bill, I would say on our end, I mean we do benefit because we're high severity, low frequency, so I don't have millions of met onlys coming in, although I know in Mike's company they use just as you mentioned. They do have a lot more frequency, but they use an automated claim model to help with those simple met only files getting the bills paid, getting them moved along, since they don't require a lot of touch if it's just an ER visit or an occupational one-time visit. His team's taking advantage of that. But we've been able to do a very similar thing and we get a lot better outcomes. And then there can be a lot more accountability. Like going back to what you were talking about with attorneys, we have fantastic attorney partners. I love the partners we have. They do great jobs.
Speaker 2But one of the things that I've noticed and it doesn't matter how good the attorney is, everybody's cautiously optimistic I've noticed and it doesn't matter how good the attorney is, everybody's cautiously optimistic it's going to resolve well until it's the day of the hearing. And it's been two and a half years and we paid for all the depositions and we've been billable hours for two and a half years and then on the courtroom steps. Now it's time to settle. So a good adjuster who has the time to evaluate that claim early and say you know what, before we do another year of all of this, can we make an offer? The depots and we're going to move all the way out two and a half, three years when maybe we could have taken care of it in the first six months if the adjuster was a little bit more aggressive.
Speaker 2But when you've got 200 claims, you need help and you're counting on your attorneys to kind of do that work for you or help you with it. You don't really have the time to be proactive. And those are good attorneys I'm talking about. These are not the ones that you're like. Well, that attorney is terrible. Of course they do that. These are good attorneys. They want to do a good job of what they're doing and of course they want to check all the boxes on their end. But there has to be somebody to take a look at that and say, well, does this make sense to keep doing this? And you can't do that if you don't have time.
Speaker 1You know, Greg, you hit about four different issues that I think are very important. The first one I love what you started with, and that was the partner part, and I think we have to treat them as partners, and when we don't treat them as partners but treat them only as a expense vendor, we start to lose that relationship and, frankly, the relationship between the examiner and the attorneys. One of the positive things that comes out of a good relationship is the continuing legal education to the examiners on what they're exposed to and how they do it. A second piece of the puzzle, though, is setting expectations for when the claims will be settled.
Speaker 1And one of those that gets back to when you have a caseload. I like setting a caseload expectation of improving 1% for every single accident year compared to the prior accident year as a methodology for moving cases along and then, within the claims operations, the other thing we did is we took the top 10 cases that would have the largest impact on the actuarial results and said those will be closed this year. And so you do things like that. That will change the collateral costs, it will change the expense costs and we, as claims people, don't do the following we don't necessarily include our collateral costs when we're figuring out the settlement. We don't include the expense for claims administration when we're figuring settlement. Nor do we actually frankly and this is one of those big secrets that we don't talk about is we don't really include inflation in the medical when we settle out claims. And so when you really look at some of these claims, they really are worth a lot more than what we're offering per se up front.
Speaker 1And one of my favorite stories about that is that I was insisting that we move towards settlement on a lot of claims in an insurance company and they said we think we're overpaying. And I said, well, go talk to the actuaries. If we're overpaying then you don't have to do this, but if we're not overpaying then let's get it done. And they basically saw almost a 47% reduction in pending inventory. Once they said, okay, the actuaries said we're not actually overpaying on this, it's worth it to get them settled and gone.
Speaker 2You know what's fascinating about that is so we've seen and this may be anecdotal, but I think that there's industry data to support it that with Medicare and Medicare set-asides, where we're funding accounts and we're setting those up for their lifetime medical, and a lot of times we use a partner like Inetros to administer it professionally so that everything's kosher and we're following all the laws and there's no question about it it's amazing how the spend on those files, even though they have access and can treat and do whatever they want now without authorization, slows way down than when there was an open claim with us. And they still have access even in fact they have more access than they had with us to use that money for their medical and yet the treatment tends to not always, but tends to really taper. I always think it's an interesting dynamic when we think about claims in injured workers that you know there's a benefit there as well on all of the parties if it's done the right way.
Speaker 1I think you know well, you hit a really important piece. I think having somebody like that vendor do the administration for the future of many cases is really, I think, ethically and everything else is the right thing to do. And you're correct absolutely about the fact that there then seems to be less of a usage of that process than when we're trying to do the claims administration when they think it's theirs.
Speaker 1but I think the other piece of that settlement process, frankly, is that they then stop thinking of themselves as an injured worker and get on with their lives, and I think that's such a positive thing in terms of letting them become accountable for who they are and what they are and not thinking of themselves as an injured worker rather than thinking of themselves as a productive person back in society, kind of routine, and so that all fits together in the settlement philosophy piece.
Speaker 1That makes a huge difference on what ultimately your pending inventory will be.
Speaker 1But the pending inventory part is always when you first start is problematic in terms of if you're a new person taking over, what is the right level and what do you have to do to it. And so sometimes one way to get to the right pending inventory is to do settlement programs and other things in order to bring the cases down to the right level so that you can work on the throughput instead of working on the backlog. And that's an important piece is the throughput versus backlog is always problematic because normally in operations that I've seen you take over something, you think, oh my gosh, look at how many the state fund. For instance, when I started, they had 67,000 open files. With the new settlement philosophy I think they're down to about 24,000 open files now. So really getting rid of that backlog takes a lot of work. But also you're going to have to talk carefully with your actuaries and everybody else in terms of what you're doing on that. Otherwise, actuaries tend to punish you if you change things.
Speaker 2That's very true. That's very true. They love consistency. Mike, your thoughts on all of that?
Speaker 3Yeah, I think it's. I mean, having a settlement philosophy is great and I think you know working a file to get to the point of closure and settlement is good, but I don't know that. That's the whole conversation, right? So when I look at this, I would argue that if I have a higher caseload or a higher pending upfront which causes me to not do the right things on the files day one, two, three, four and five, I'm probably going to push that file to a point where I have to settle it, versus a file that just returns back to work and goes away on its own because I did all the right things and that person's happy and they go back to work.
Speaker 3So we talk a lot on this podcast about empathy, about treating people the way they want to be treated, about being able to relate with our injured workers. It's impossible to do that with too many claims, plain and simple, right. So the second somebody has too much to do. They're not taking the extra second to see how somebody's doing. They're not taking the extra second to put themselves in that person's shoes. They're not taking the extra second to explain the process to an injured worker. And what does that do? It drives people to uncertainty. It drives people to attorneys and therefore we're going to have all of those settlements and settlement days and backlogs and everything else and, granted, you settle files all the time without attorneys.
Speaker 3I'm not arguing that, but it's what happens up front that then causes the issues on the back end, and so I think if we want to talk about, you know, adjusting with empathy and doing all those things, I agree, I don't know what the right number is, but I think when we have too much, all of those things go by the wayside. You're human right. My job is to be as fast as possible because I'm being held to a certain standard. I don't have time to hold your hand, unfortunately, and that's really what these claims need. I mean, this is a person's first claim. They have no clue what's going on. They don't know how they're going to get paid, they don't know who covers their medical, they don't know what they should expect unless we tell them. And if we don't have the time to even tell them that, you're setting a claim up for as not a successful path as it should be. So that's, that's my thoughts on it, greg very good points mike, I agree with you 100.
Speaker 1Another thing that has to do with ideal caseload and, greg, I think you'll you'll go along with this.
Speaker 1Identifying those cases that really need to focus is really important, and one of the things that I learned from. I don't want to make this an advertisement for plethy, but what I learned is if somebody's engaged in their recovery, they're doing okay. It's if they're not engaged in the recovery is the time where you really need to intervene, and getting it early. One of the pieces I think that will help with the ideal caseload is understanding when to intervene and looking for those leading indicators of when to intervene. And so if you know somebody's doing all their physical therapy, if you know somebody's doing okay, again, those are the kinds of claims where you don't have to spend as much time on, and so the question of focus of the claims examiner on the right claims at the right time is another piece of the puzzle that leads you towards the ideal optimum productivity of the examiner within their caseload, right, yeah we believe very heavy here in segmentation, in looking at the claims and trying to get them to the person with the right level of experience to handle it early on.
Speaker 2And you know that takes a lot of work because there is ego involved. Whenever you move a file from one person to another there's ego involved because you feel like well, what I can't handle this. But you know some of our most experienced catastrophic adjusters only have 30 to 40 claims, that's it. But those 30 to 40 claims require a lot of attention. They may spend a whole week on two of those claims and those it's worth putting the time and energy in. If somebody else has 80 claims or 100 claims or 120 claims, they don't have the time it takes to help that person through that and it is going to blow up. So that's one of the things we've had to work really hard at internally is setting our egos aside and realizing we're all one team and we all want the same thing in the end. And it's not about capability A piece of it is, but a big piece of it is also time. And the time it takes to handle a claim like that when you're busy with other claims, letting go of that and understanding that it's not because you're not capable, but it's because you don't have the time it's going to take and the resources it's going to take to move this file along, while we've empowered this other person who does have that time. But that's a hard conversation and, no matter where I've worked, there's some ego involved in being able to help people understand, to let go, and that doesn't mean that they're not capable. I remember when I was an adjuster having files pulled for me and thinking, man, they must just think I stink. And now, where I sit now, I understand it a lot differently. I had two or three years of experience and somebody saw that person that had avascular necrosis and was 19 and then needed two total hip replacements. That probably needed to go to somebody else. But at the time I remember thinking, well, why can't I handle that? And so there is some of that that has to be worked through as we try to make sure we're being fair not just to the adjusters but to the injured workers as well, and just to kind of piggyback off of the injured workers as well and just to kind of piggyback off of the concept of technology.
Speaker 2I think what we've seen is just figuring out how to meet people where they're at and when we have construction workers and some of those construction workers they're never going to do anything but call you on their cell. We've got miners that are 90 years old and they're not even going to talk to you. They're going to hand the phone to their wife and you're going to have to talk to her to schedule or do anything, and they don't want to have medications mailed to their house. They like to go to the pharmacy and visit with that pharmacist and, conversely, we have younger employees that they want to text, so we've set up a texting situation for them. So I think it's figuring out what the needs are and meeting people where they're at.
Speaker 2One of the biggest challenges, if you do go to a segmentation model, is how do you manage the egos in that and make sure that people understand the why behind it? And even if you do it as careful as you can, there's still going to be some moments where there's some teaching opportunities and some conflict that you just have to kind of work through and let people know that you haven't failed here. This is just an opportunity for someone who has more time and energy to spend on that, and I think we've come a long way, but I can tell you when we first started it it was a little uncomfortable at first.
Speaker 1Well, I think, greg, you hit several points that I'd like to touch on. One is the fact that it is appropriate and important in certain situations that the segmenting of the claims. One of the other pieces, though, is that every time you transfer a claim, it increased the cost of that claim because that relationship with the injured worker between that and the examiner has now been severed and you have to create a new one, right, and so I used to calculate a certain percentage increase in costs every time I transferred a file, so what I try to do is make sure that, everything else being equal, the general for most claims, unlike the severity question is you want to be able to have a mixture of claims that the claims adjuster can experience so that they can grow within their job, and so that's an important piece of, I think, what you run into on that. By the way, one other piece and we have this is another piece that I once wrote about, and that is that, occasionally, you'll get claims examiners and injured workers who do not like each other. Yes, so what I found is, as a supervisor, as a manager, once a year, I would ask each of my examiners to transfer five of the claims they hated the most, to get rid of the emotional involvement with that claim and get it into an objective. This is an objective process, if you will, and it was amazing when we did that how many of those files within the next couple of months closed.
Speaker 1So you know the caseload. You have to think of the caseload as a dynamic structure, if you will, and part of that is the complexity and the various variations. Part of that is the timing of new claims going through. You can't have a whole bunch of brand new claims coming through all at once because that requires a lot of extra work kind of thing. So you want a steady flow. You want to make sure that you're doing the throughput if you will measurements with your claims examiners correctly. You want to make sure that you do have the objective support mechanisms in place, all of that necessary to get the right kind of results. But you know, greg, you hit a lot of good points on those kinds of really severe claims and the importance of really understanding that customer, if you will, and taking great care of that customer.
Speaker 2You're right and I think it's hard sometimes in that one of the ways we learn the best is through our mistakes, and so you have to allow people to make some mistakes. That's how we learn, and I can remember some of the early claims. I can remember their names because I look back on it and I remember after that thinking, well, I will never do that. Because I look back on it and I remember after that thinking well, I will never do that again. And you don't want to have too many of those experiences, but sometimes you do learn that way in a specific jurisdiction. So you're right in that if you only give people very simple claims, they're never going to grow. There has to be some challenges in there, some moments where you don't know exactly what to do, and you have to work through that.
Speaker 2Bill, I've really enjoyed having you on this episode. It's always fun to talk to you. You have so much experience in the industry and are really an idea leader, so certainly glad to have you on this. Bill, if people want to reach out to you and sign up for the articles you've been pushing out, what's the best way for them to do that?
Speaker 1My email address W Zachary. Again, zachary doesn't have a second A or E, so it's W-Z-A-C-H-R-Y at gmailcom is the best way to do that. Happy to you. Know, it's a free thing I send it out to. Right now we're about 8,000 people and that's not too bad and we're happy to have more, believe me.
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Speaker 2Well, I would encourage folks to do that if you want to learn more about the industry. Bill has a lot of experience and one of the most important things, in my opinion, as we move forward, is transferring that knowledge to the next generation that's going to be doing this so that the lessons we've learned move on, because there really is a large group of people who will be moving on to the finer parts of life and retirement and we need to make sure that this next round learns the lessons of where we've been. So I encourage folks to sign up for it. It's a great read. There hasn't been a topic that you've covered that I haven't thought wow, that's great. Glad I had time to think about that and Mike, as always, always glad to have you on the podcast.
Speaker 2For those who don't know, mike and I go back a long way before, even here at a Berkeley company, so we started around the same time. So for those who this is the first time you've listened to an episode we remind folks we release every two weeks on Monday. We've been consistent on that for four years now, so you can count on it and if there are topics that you're interested in hearing more about that we've never covered. I encourage you to reach out. You can reach out. You can reach out to me directly at ghamlin, at burkindcompcom. We'd love to hear topics that we maybe haven't covered so far. And then we remind our listeners to do right, think differently and don't forget to care. And that's this episode of Adjusted Thanks, everybody.