The prevailing mantra of senior management regarding underwriting and most other operational functions is "faster, cheaper, better."
Chief underwriters are obliged to take whatever steps they can to address this in literally everything they oversee.
Call it an APS, GPR, PMAR or by any other name, a report from the insured's doctor remains the cornerstone of medical underwriting. Indeed, few would argue with the statement that these reports confer substantial protective value…
…that is, of course, when their use is optimized with appropriate guidelines.
Medical record use in risk appraisal has some major issues:
- They are increasingly expensive and their cost continues to rise steeply.
- They are notoriously slow to acquire and predictability the last evidence in hand on most cases.
Furthermore, the impact of electronic medical records remains uncertain at best. Some believe e-records will expedite access. Recent experiences with e-records do not necessarily support this presumption.
In addition, we do not know whether e-records will result in physicians keeping two sets of records and sequestering vital information to which we may not be privy. There is also the matter of the extent to which patients may be able to influence and even alter their content.
What are our options?
There are precious few steps we can take to cut back on our use of (actually, dependency on) medical records.
Many American companies have substantially reduced the number of "age/amount" medical reports they require.
As the term suggests, these are ordered on the basis of the proposed insured's age and the amount of coverage applied for, without regard to whether any significant medical history is acknowledged at the time of the application.
It is one thing to eliminate "age/amount" reports on younger persons and quite another to do so at older ages.
We already see too many elder applicants that cannot "recall" any encounters with physicians. This makes foregoing records at older ages when a personal physician is named a worrisome proportion… even in the absence of an acknowledged risk-relevant history.
Another strategy for paring back medical record ordering is to identify circumstances, based on admitted disorders or symptoms, where underwriters can be encouraged to steer clear of ordering an APS.
For example, we could mandate that no medical reports will henceforth be pursued on applicants who say they were told they have fibromyalgia or if a benign tumor was excised.
Problem is, there is an imposing "dark side" to this approach.
We have more than a few cases where a GP's diagnosis of fibromyalgia was changed to rheumatoid arthritis or systemic lupus after referral to a rheumatologist.
And there are so many "benign" tumors with substantial insurability implications that we are devoting an entire CE course to this subject in 2014!
What is the most effective solution to the APS dependency syndrome?
The primary obstacle limiting our capacity to designate scenarios where underwriters should abstain from getting medical records is that we often do not have sufficient information to make a sound triage decision.
Our capacity to safely defer medical records is directly proportional to two factors:
- The quantity and quality of the information we get
- The ability of underwriters to use what they do have to make a sound triage (get records vs. act without them) decision.
A sound approach to gathering risk-related history may bestow a virtual cornucopia of information upon the underwriter.
However, if the underwriter lacks the necessary knowledge and/or does not have high-caliber guidelines to separate wheat from chaff, the result will be a protracted risk assessment process.
Most insurers have walked away from traditional methods of risk-history taking in favor of teleinterviews or, more recently in America, so-called "smart" paramedicals.
In both, the key component is the drilldown. This is where the impairment or symptom is greatly amplified by scripted questions.
If the ideal questions are asked by a skilled history-taker, we should have the quantity and quality of information we need to make a sound triage (get APS or forego it) decision.
Assuming we do get this information via drilldowns, then the second factor comes into play.
Does the underwriter have – in terms of training, experience and, above all, cogent guidelines – what is needed to make the triage decision?
Having adequate guidelines is a major issue here because most existing guidelines do not directly match up with information taken on drilldowns.
How do we remedy this bottleneck?
The answer is easy to explain but far more difficult to implement.
We need expert guidelines addressing each aspect of the impairment or undiagnosed symptom as reflected in the drilldown.
In addition to age and gender, these aspects include
- The nature of the symptoms
- The number and duration of episodes
- The interval since the most recent symptom
- The ostensible diagnosis (if any)
- The tests undertaken or advised to make a diagnosis
- Whether or not the applicant was seen in an emergency care environment and/or hospitalized
- Treatment(s) given and any interval changes in these treatments
- Significant specific medical advice, such as limit heart rate increase), and so on…
If these questions – plus selected others on an impairment-specific basis – are adequately asked and answered by interviewers, they can be fitted to specific paradigms to facilitate optimal APS triage.
Using a high quality paradigm model we would identify 50%+ of the cases where we would have otherwise spent unnecessary sums while enduring grievous delays.
And the quality of our underwriting actions on those 50%+ cases would also be outstanding.
It all comes back to the caliber of our risk triage paradigms and how effectively they correlate with teleinterview and similar modes of history taking.
Our guidelines must be expertly crafted using the latest developments in medicine.
Based on our recent experiences working with reinsurers and others, we know now that this can be done.
And when it is, we will finally be able to minimize the cost and turnaround time issues inherent in using medical reports to underwrite risks.