A New Peter Principle: Control Claim Costs By Focusing on the End Game

05 May, 2013 Bob Wilson


The statement came from Peter Federko, CEO of the Saskatchewan Workers' Compensation Board, in the middle of an otherwise typical committee meeting. Direct and to the point, it was a comment stunning both in it's basic simplicity and incredible depth. The Medical Committee at the International Association of Industrial Accident Boards and Commissions (IAIABC) had been debating points related to medical care and controlling associated claim costs, when Peter spoke up.  

His comment was directed to the need of focusing on quality rather than cost of medical care. He said, essentially (I am paraphrasing due to my poor note taking skills), "I don't care what a particular procedure costs. If we are focused on the right goal, which is getting the injured worker properly treated and back to work, it doesn't matter. What matters is that you focus on and attain that goal of returning them to a productive role. If you do that, then the costs ultimately come in line". 

Brilliant. Give that man a rubber jelly bean and a key to the city - assuming Saskatchewan actually has a city. Focus on the goal, and work toward it. Everything else will ultimately fall in line. 

I suppose his statement hit me as it did because, sadly, in many claims situations today, we in the United States lack a clear vision of that end goal, and therefore are not in a position to attain it. We are lost in the fog of claims minutiae, with no direct idea or appreciation of where those details are taking us. Where we do have a clear goal, it is often the wrong one. 

Ask any room full of adjusters what their ultimate objective is when a new claim lands on their desk, and you will likely hear the resounding chorus, "Close it". 

And why wouldn't they? Claims professionals today juggle upwards of 200 to 300 claims at any given time. For the serious cases, returning a worker to work is hard work; harder than closing their claim and letting them become Social Security's headache. Simply closing a claim and getting it off our desk often does not solve the underlying issues, and in many cases burdens our society and economy with more non-contributing dependents. The sad fact is workloads most adjusters endure today are not conducive to managing claims to a positive outcome.  

And we can't see the forest for the trees. 

Now I might be a complete moron (an observation no doubt that some of you will agree with), but I firmly believe we can both improve return to work outcomes and save money as an industry. The two standards are not diametrically opposite. The new Peter Principle was a missing component in my ongoing campaign to change "Claims Management" to "Recovery Management". Begin with the end. Focus on the finish. Have the proper goal of returning injured workers in your care to a productive role in society, and the other details will fall in line.

Saskatchewan, build yourself a city, and give Federko the key. He's earned it.

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