Using Automated Systems to Evaluate Your Vendors’ Performance
Do you score the quality of vendor investigations, record mitigation and vendor costs on your cases, and record outcomes? If you do, you’ve taken some steps already that can be advantageous in evaluating vendors, and eventually choosing to whom you refer a particular case. If you are recording these metrics in your case management system, you should be able to get some very useful data out of that system to help you improve the quality of the investigations you are getting from your vendors and deciding who gets your cases.
At a high level, scoring your vendors on things like the overall quality of an investigation, turnaround time, video quality and usefulness, communication, etc., can really pay off in the long run. Over time, you’ll have the ability to communicate areas of needed improvement with your vendors and give yourself an opportunity to set your expectations with them. Believe it or not, your vendor partners are grateful to get this feedback. They genuinely want to give you the best service they can and hearing your perspective on things is invaluable to them.
It might surprise you to learn that a good number of your vendors are performing internal, very detailed scoring of their investigations already. In our consultative discussions with investigative firms, we’ve seen a large array of how this particular cat is skinned, especially when it comes to measuring video. But overall, the adage “that which is measured, improves,” has proven to be a universal truth. We’ve seen some of the better firms out there show an eagerness to share this information with their clients, usually in the form of periodic stewardship reports.
On the other end of that process, we’ve seen successful SIUs have cadence meetings with their vendors to review quality and SLA compliance, and to facilitate an open dialogue designed for improvement. They’ve reported consistent improvements from these routines. You’ll want these meetings to be spread out far enough so that sufficient information can be gathered between them and there is enough time for targeted improvement. If you have a large vendor panel, these meetings can be overly burdensome, so communicating expectations can become less bi-directional. Overall, however, communication is important, and if you have measured elements to convey that’s all the better.
Using your Automated System to Ensure Adherence to Budget and Pricing Agreements, as well as Reporting Requirements, SLAs, and Special Instructions
Has monitoring and reviewing vendor invoices, pricing, and the budgets they’ve been given ever been a burden to you and your SIU staff? If so, that’s some fairly expensive bill review. An analysis of the opportunity cost of a single investigator having to divert their efforts away from case resolution for the purpose of administrative work can be alarming. If, however, the vendor is entering the billable hours, mileage, expenses, flat fees, etc. into your case management system, your system should be able to do a lot of the work for you. Such a system can produce the invoice based on the agreed-upon pricing and budget, or produce a quick review sheet that makes the vouching of their invoices a secondary concern as you review the quality and outcomes of their work.
What about the handling of the case itself? Every insurer has certain requirements that they expect their investigation vendors to adhere to. On the front of this process, your system should spit out the special requirements and procedures to your vendors during the assignment process of every case. By doing this, there is never a misunderstanding. Additionally, checklists should be available to vendors every time they enter a case update so that they can “follow the bouncing ball” related to your procedures.
And what about case reporting? Most vendors have their own case report formats, and while that certainly can be appreciated from their own branding and standards viewpoint, having multiple case report formats complicates the process for those who are charged with reading them. If your investigative vendors are giving you routine updates on their cases, along with still photos and other documentation, those updates can be converted to case reports in the format you desire. Having this kind of consistency can make the case report review a much simpler process.
But what if you could do both the bill review and case review processes at the same time?
The Work and Bill Review Efficiency Yield
Some time ago we at Polonious did a time-and-motion study on the administrative tasks associated with case processing once automation was added. What we learned surprised even us. It turned out that the biggest efficiency gained was achieved not simply because of automation, but from automation that facilitated a procedural change. That procedural change involved reviewing and vouching the hours and expenses associated with a case update, concurrently with that case update. We found that doing a review of a vendor bill immediately before or after reading the case update from the vendor reduced the amount of time it took for the SIU team to process the case. This not only reduced the labor involved, (thus freeing SIU personnel to do more important things), but also improved the cycle time on the case tremendously. That’s because some of these review tasks were acting as bottlenecks to the file-closing process.
What causes these types of efficiency gains? One explanation is a phenomenon called Task-Switching. It turns out that cognitive attention shifts require more mental energy and a “restart” to the process altogether. If two related tasks can be done together – in this case, reviewing updates, evidence, and related costs, the “restart” can be avoided at the conclusion of the case. Once the SIU has “approved” the update, that part of the case never has to be re-addressed, and folks can move on to the next task.
What makes case updates to your system from vendors even more vital is that you can require them to upload their evidence in the process as well. Once that’s achieved, you will have evidence and data in the same system. Your videos, photos, and other documentation can be referenced easily, and again, compared concurrently with case updates and billing information.
Panel Management Dashboards and Management Reporting
Is it possible for SIU management to oversee most vendor-allocated cases through a case management system? We think so. And that task becomes even easier when you have dashboards to work with and reports that assist in case and performance evaluation.
Dashboards in your case management system should allow you to evaluate the timeliness, status, and quantity of the cases your vendors are working in real-time. You should be able to configure your dashboards so that you can narrow down by region, case type, vendor, status, due date, or any other operational view you need, and you should be able to drill down into the individual case to do more evaluation. The dates of action, inaction, case assignment, and case movement should all be automatically recorded in the system, so escalations can occur within the dashboard itself in real-time and alerts and warnings can be sent to the appropriate parties.
Ultimately, reviewing the performance of your vendors in their aggregate can come down to a few key financial metrics. At the highest level is the return on investment. How much mitigation was achieved by each of your vendors in relation to their cost per case? Here’s an example of how this can be evaluated using a modified Boston Consulting Matrix format:
The four quadrants of this matrix can help you easily identify where you are getting the most bang for your buck, where the highest savings are in relation to investigator cost, with the ‘star’ operators being in the upper right-hand quadrant. When these financial measures are compared with operational case evaluations, the results can be quite telling.
In the end, whether you employ some or all of the automation and process improvements outlined above, vendor accountability goes hand in hand with your vendor partnerships. Systems like these provide for process improvement, but also solidify the trust between the vendor and the SIU and more clearly layout expectations.