Teleunderwriting Triage
Hank George, FALU, CLU, FLMI
September, 2007 • Teleunderwrtiting Essay 8
What do we mean by “triage?”
In clinical medicine, triage is the process by which patients – typically in emergency care settings – are divided into groups based on the urgency of their need for treatment. For example, if you have a bad cold and I have a bleeding head wound…and we both arrive at the E.R. at the same time, you will be watching TV (bored out of your mind) while I am treated first.
Triage is also a fact of life in underwriting, but in a different way.
In all modes of underwriting, we reach several points in the appraisal process where we may be positioned to make the fundamental triage decision: can I take action with what I have or do I need more information?
This may occur at initial case review; that is, if there are no screening requirements that have not arrived by the time the underwriter reviews the application.
Or it may need to be deferred until any remaining age/amount screening requirements are in hand.
Whenever triage takes place, the process is the same: we look at what we know and decide if it is possible (a) insure, (b) decline or (c) postpone at that point in time, or, if we need further evidence to reach a decision point.
Therefore, the triage process is intrinsic to what we do every day, whether we use conventional underwriting or have upgraded to teleunderwriting!
If triage is a routine part of underwriting, why write an essay distinguishing triage in teleunderwriting?
To answer this question, we need to reflect on the two main reasons most companies choose to embrace teleunderwriting:
- Shorten application-to-issue cycle time
- Reduce the number of cases on which medical records are sought
If these goals are not being realized, sooner or later, with the use of teleunderwriting, then our bosses can (and likely will) rightly question why we went over to this new approach in the first place!
Shortening cycle time and reducing medical record dependency are intrinsically related, aren’t they?
Why? Because the one requirement most responsible for delays in taking final underwriting action is the APS – or whatever acronym you use (PMAR, etc.) for medical records.
Except in those companies still burdened with obsolete requirements like chest x-rays and treadmill stress tests (which quite often take even longer to complete and assess than medical records), the APS is the slowest requirement we routinely pursue.
In the USA, the very fastest of the service firms that procure medical records for insurers take anywhere from 12 to 15 business days, from the time the underwriter makes it known that the report is needed, to get an APS and relay it on to that underwriter.
This is a multiple of the interval now required to arrange for and (usually) complete paramedicals and, with them, specimen collections for lab tests and resting ECGs.
Most other requirements used for screening in the USA – MIB codes, Rx profiles, motor vehicle reports – are procured electronically and hence acquired all but instantaneously (usually before the teleinterview can even be completed).
Therefore, if we are to significantly impact cycle time via teleunderwriting, the most important benchmark of our success will be the percentage of cases on which we would once have pursued medical records where we can now forego such records in favor of taking final action.
For this reason, our success rate in TELEUNDERWRITING triage goes a long way toward determining if the primary goals of teleunderwriting are realized.
What is the essential element that distinguishes teleunderwriting triage from conventional underwriting triage?
It is the degree of emphasis on taking – rather than deferring – action; on not pursuing elective medical records (or other requirements).
Note that when we say “elective medical records” we are distinguishing those ordered based on underwriting judgment from those that are mandatory based on the age of the proposed insured and the amount of insurance applied for.
Most companies will make some reports – either from the named personal physician or any physician seen with a certain interval of time – mandatory as an age/amount requirement.
Nevertheless, the vast majority of medical reports we pursue are of the elective variety (which is precisely why teleunderwriting triage can accomplish so much).
What determines whether we have a favorable impact from teleunderwriting triage?
It all hinges on our ability to take more actions by ordering fewer medical records!
Which, in turn, is driven by three primary factors:
- The caliber of the drilldown questions, which are supposed to give the underwriter far more information to work with than what we typically get on non-medical, paramedical and M.D.-taken medical histories.
- The amount of useful information actually gathered by the teleinterviewer.
- The ability of the underwriter to maximize the 3. use of this information.
The caliber of information depends on the quality of the interview questions.
Let’s face the facts here. If you ask 8 questions of a diabetic applicant, you won’t get nearly the amount of information as if you ask 16.
Eight is not enough!
I grimace when I hear chief underwriters obsess over making the duration of teleinterviews as short as possible because they fantasize that taking 3 or 5 minutes longer – essential to maximizing teleunderwriting triage – will somehow undermine their teleunderwriting program!
The amount of useful information depends on (a) the skills of and (b) effort expended by the teleinterviewer.
The ability of the underwriter to make full use of this information depends on 3 things:
- How knowledgeable the underwriter is.
- The extent to which the underwriter has “bought in” to the philosophy that teleinterview information is a viable alternative to hunting down the medical records on a given impairment.
- Whether or not the underwriting manual is written in a manner that facilitates decision- making based on nuggets of drilldown information…or, conversely, inhibits this process by creating the “disconnect” phenomenon discussed in last month’s essay.
It is a sad fact that the failures to (a) focus sufficient resources on continuing education and (b) facilitate underwriter mentoring – especially over the last 12-15 years – have left many insurers with a glaring deficiency in terms of underwriters’ knowledge base and decision-making comfort zone.
These are issues that companies doing teleunderwriting MUST address if they hope to achieve all that is possible with teleunderwriting triage.
As far as whether we convince our underwriters to “buy in” to teleunderwriting, this is determined by two main factors:
- Whether sufficient effort is expended in providing re-training sessions to teach and reinforce the process of teleunderwriting triage.
- Whether underwriting audits support decision-making driven by underwriting triage (even if these decisions aren’t always precisely what the auditor would have done).
For the record, both of these issues are prevalent in most companies that do teleunderwriting.
You can’t expect veteran underwriters to suddenly see the light and change their old habits.
Retraining and reinforcement are an intrinsic part of teleunderwriting and the failure to recognize this and take appropriate action could very well doom even the most brilliantly crafted teleunderwriting model!
When Teleunderwriting Flounders: A Report of an Audit
I am often asked by insurers to conduct audits focused on teleunderwriting.
These audits are far different from conventional audits. The issue is less about the appropriateness of the decision (although the chief underwriter invariably wants to know what I find in this regard!) and more about (a) the caliber of the information presented to the underwriter and (b) whether this information was used, in lieu of medical record ordering, in appropriate scenarios.
Recently, I was retained to do one of these audits by a company that went over to teleunderwriting 18 months prior to the audit…and was “achieving” a higher incidence of APS ordering than was the case prior to teleunderwriting!
Turnaround times were not getting better and the company’s producers were up in arms because they had been assured just the opposite would be true.
The first thing I noticed was that the information gathered on their teleinterviews was rather lean. It was also markedly inconsistent from interview to interview.
I asked them how they procured their teleinterview drilldown scripts.
Predictably, they chose to take the “free” scripts provided by their outsourced teleinterview vendor, in lieu of either developing them in-house or procuring them from experts.
To add insult to injury, they didn’t even bother to edit the scripts they were given!
When they chose a teleinterview provider, they only looked at two firms and made their decision on the basis of “per interview” fees and (alleged) turnaround time (% of interviews said to be completed within 1, 2, 3 and 4 days).
Therefore, the seeds of their dysfunctional state were already apparent and my recommendations in this regard were not exactly “rocket science:”
- Either get new scripts or edit the ones you use. What you have now is decidedly sub- par!
- Your consideration of potential providers was too narrow. When the time comes, look at a large cross-section of candidate firms.
- Next time, listen in on actual calls made by more than 1 or 2 of the firm’s teleinterviewers. Pay attention. See if there are distinct differences from provider to provider. Weigh this consideration heavily when making your choice.
- Once you are up and running with that provider, make sure someone on your staff continues to monitor a batch of calls periodically and see if they are doing their job.
Then I looked at how the underwriters used the information – such as it was – in terms of ordering medical records vs. taking action with what they had.
It should be noted here that this was a veteran underwriting shop. Average experience was almost 15 years.
What I found was predictable.
Well over half of the cases where the interview information would have reasonably allowed for taking underwriting action rather than ordering medical records, the underwriters nevertheless proceeded by rote, as if in a trance, ordering what they did not need…and thereby putting the case file into “purgatorial orbit” around their cubicles!
This was particularly true on impairments that required more knowledge and insight…diabetes, mole removals, fainting and chest pain episodes, histories of “colitis” and so on.
All logical candidates for teleunderwriting triage, of course, especially – in the case of garden-variety type 2 diabetes – when the lab test results were known.
My recommendations?
- Schedule a series of case clinic sessions – prepared and conducted by someone who actually understands teleunderwriting and can effectively hammer home the proper analysis of the challenging teleunderwriting- feasible risk scenarios, like those cited just above.
- Invest in continuing education on a priority basis so that the underwriters will have a contemporary medical database on which to analyze the drilldown information.
- Acquire whatever resources the underwriters need to enhance their triage capabilities.
- Make sure your medical director isn’t part of the problem instead of part of the solution! If the underwriters rely on their help to a great extent and if they haven’t seen the light where teleunderwriting is concerned, they will inevitably reinforce – with authority – the ways of the past, and thus imperil progress.
- Be certain that whenever you or your managers are called upon to review and defend an underwriter’s decision in the face of an appeal, that you make every effort to support prudent teleunderwriting triage.
On this last point, it should be mentioned that there will be cases where the underwriter does appropriate teleunderwriting triage and the producer is taken aback because a given medical report was not pursued – “they always were…now, suddenly, you don’t do that any more!.”
Sometimes that producer will complain to the chief underwriter that the failure to get that “important” APS led to an “unfair” decision.
No problem.
The response I would use is fair and practical (and unlikely to fuel more of these situations).
“Just return the policy to the head office as ‘not taken,’ we will refund your client’s premium and then order that report. If there is information from that physician which empowers us to take more favorable action, we will.
On the other hand, if what is unearthed in this process makes the actual risk worse, then…!!!
In other words [Mr. Producer], if you want to ‘bet the ranch’ on Dr. Smith’s records, we will be pleased to oblige…so long as it is understood that our original offer is now “off the table” and we will “reunderwriting” the whole risk in light of what we learn…”
This offer can be extended to assuage those (hopefully few) unrelenting producers.
However, as regards the chief underwriter’s interface with the underwriter in this transaction, this message must always be sent:
Doing teleunderwriting triage in lieu of getting medical records is 100% “consistent with new business goals of our company” and should continue to drive his triage process, even if the odd case causes a momentary ruckus (from world-class “ruckus-makers”) and even if on any given case the APS turns out to have been an unexpected gold mine of new information.
If you do appropriate teleunderwriting triage, there will be a few where, as fate would have it, the APS would have radically changed the outcome.
The fact that there are few cases where medical records would have made an impact absolutely DOES NOT make teleunderwriting triage a flawed concept.
It merely affirms that when one is severely reined in by time restraints and cost constraints (quite unlike clinical physicians), these things will sometimes happen.
What REALLY matters is that the adversity of these few cases is dwarfed by the benefits derived from teleunderwriting triage of vast majority of cases.
Retraining and conducting periodic reinforcing sessions are both absolutely essential to the long- term success of any teleunderwriting operation!
DISCLAIMER
This essay was written for informational purposes only. Hank George and Hank George, Inc. do not recommend or endorse any specific business practice or procedure discussed herein. All business considerations concerning matters covered herein should undergo proper and sufficient scrutiny by appropriate management personnel of the companies involved prior to implementation on any basis. © 2009-10 Hank George, Inc.
