By unifying decision-making, balancing biases and building a digital ecosystem, Claims and Procurement groups can strengthen relationships and improve customer experiences.

Over the course of this series of posts, I’ve suggested that Claims and Procurement need to reset their mindsets in order to drive sustainable value and continuous improvement over time. In this post, I’ll look at how they can work together to build a model that coordinates their operating principles from a strategic perspective.

Unify decision-making

Claims and Procurement need to unify decision-making, governance, process ownership and performance management—among other factors. While opportunities for improvement exist across the entire claims procurement lifecycle, one place to begin is by looking at roles, responsibilities and accountability. For some insurers, Procurement does it all. In other organizations, there is overlap and duplication.

Design a future state where Claims and Procurement work together to select, manage and pay vendors. Each side brings its own ideas and experiences, so use that to your advantage to boost competitiveness. Claims organizations value long-term relationships and the associated expertise and competitive pricing. Yet risk management is critical given the nature of claims work.

Balance biases

Balance the inherent biases toward contractual risk and relationship in Procurement and Claims. Both groups are tied to performance outcomes. Coordinating at the intersection will help both to achieve their desired outcomes.

Key questions to ask to improve outcomes include:

  • What data do both sides care about? Procurement should partner with Claims to agree on the types of data to mine and analyze (loss, expense, contract, compliance, performance and more).
  • What is the data telling us about adherence to contracts? Is a contract expiring? Are rates out of compliance? Is performance good? These questions should initiate actions. Some might be handled by Claims, some by Procurement, but collaboration is key.
  • Are the right checks and balances in place between Procurement and Claims? Does Claims validate decisions, given it owns the budget and the wallet?

Build a digital ecosystem

Insurers should also work with technology providers to design and build a digital ecosystem that connects Claims and Procurement. It is essential that all systems touching claims activity—including Claims Management System, Source to Invoice, Accounts Payable and Legal Exchange—are synchronized and share data.

Digital improvements might include:

  • Enhancing underlying data, from intake to outcome. Enhanced intake data can support more complex rule sets for vendor selection. Outcome data fed back into the digital ecosystem creates a cycle for ongoing improvement of outcomes.
  • Managing vendors digitally. Insurers are not using technology to manage vendors throughout the claim. A vendor portal would enable all communication and document uploads to occur electronically, removing the need for manual entry. Where this exists for indirect vendors, it could also be leveraged for claims vendors?

When Claims and Procurement work together, insurers create competitive differentiation and drive economic value—the strongest vendor relationships are rewarded and strengthened, and customer experiences are improved through a more engaging claims process.

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