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More third-party administrators sharing technology with customers


Third-party administrators have made strides in using technology to broaden the range of products and services they offer, but they need to work harder to make technology an asset for their customers, risk managers and brokers say.

TPAs have spent much time and effort on improving their technology, which has helped them move toward a paperless environment and provide easier access to information—a key factor in the early life of a claim when getting the right resources applied to a case is critical, said Mark Noonan, the Boston-based managing director and practice leader for workers compensation for Marsh Inc.

Beyond merely improving technology, the key issue for TPA customers is how well TPAs use technology to translate compiled data into practical information that improves the ability to measure outcomes, brokers say.

Some TPAs are moving rapidly to make technology an asset for their customers while others are not moving in that direction at all, said Neil Harrison, managing director, Aon Technical Services in New York. "It's a lack of focus in making the technology relevant to the customer."

The top TPAs are thoroughly analyzing the information and developing a plan to better manage large claims, said Karl Zimmel, director of risk management at Alberto-Culver Co., a personal care products manufacturer in Melrose Park, Ill. "It's come a long way."

Itasca, Ill.-based Gallagher Bassett Services Inc. and Memphis, Tenn.-based Sedgwick Claims Management Services Inc. have tended to be the leaders in using technology although some of their competitors are catching up, Mr. Zimmel said.

In the past year, several TPAs enhanced existing products or launched new ones.

In November, Philadelphia-based ESIS announced an enhancement of its ESIS Impact program that identifies certain claims earlier in the process, which allows clients and vendors to better manage those claims, said Nancy DiVincenzo, vp of ESIS product management.

Last year, Crawford & Co. rolled out its Claims Advantage tool nationally. The Web-based tool is designed to address core problems such as inconsistency in claims practices and failure to identify complex cases early in the life of a claim. "It answers a lot of questions about consistency and quality and gets very quickly to what the issues are in a claim," said Larry Mattingly, senior vp and chief innovation officer at Plantation, Fla.-based Broadspire Services Inc., which Atlanta-based Crawford acquired in October.

Empowering customers to be more productive and in control of their claims data was the thrust of the EYE Advisor tool launched last year by Parsippany, N.J.-based GAB Robins North America Inc., said Tere Travaglia, product manager for EYE Advisor. The tool's Quick Track feature compiles data on a particular claim and a Quick Alert feature sends automatic e-mail notifications about significant events—defined and managed by the customer—that are triggered when data changes indicate an event has occurred.

TPAs also are applying existing technology to new lines of business.

Sedgwick, for example, entered the health care professional liability arena last year by acquiring TPA CompManagement Inc. Sedgwick plans to use its data warehouse technology developed for predictive modeling of general liability and workers compensation claims to create a similar system for health care professional liability, said Paul Posey, Sedgwick's general counsel.

Lorie Kelly, director of risk management for Seattle-based Swedish Medical Center and a longtime CompManagement client, said risk managers need this type of information to benchmark their claims, both on a regional and national level, in the health care professional liability area.

"It's been a pretty closeted environment in terms of how claims are settled, what their values are and whether it's advisable to take them to trial," Ms. Kelly said.

One trend that is "detrimental" to progress in the development and use of technology to provide better solutions for clients is the ongoing consolidation in the TPA industry because it restrains the TPAs, Mr. Harrison said.

The impact of consolidation on technology and customer service depends on the execution of the merging of entities, Mr. Mattingly said. Crawford and Broadspire, for example, contacted customers for both entities to discuss their specific concerns and had a plan for evaluating all software, he said.

There are still areas that require the attention of the TPAs, brokers and risk managers say.

For example, TPAs need to continue to address ongoing issues such as heavy caseloads for their adjusters and high turnover, Mr. Zimmel said.

While every risk manager can speak of one or two TPAs that are not up to speed, the industry has made good strides over the last few years, he said. "It requires constant customer service, but I would say the industry has progressed and is doing a better job," Mr. Zimmel said.