"Mr. Watson, come here. I want you." Alexander Graham Bell - March 10, 1876.
Probably the most talked about subject of the past five years, the world has seen a tremendous growth in one of the greatest communication tools since the advent of the telephone: the Internet. Up until this year, the ‘Net was primarily a link for risk managers to share ideas, concerns and conduct research. While most of the risk management community have been e-mailing and "surfing the Net," a growing proportion of companies have recognized the Internet as a communication tool for claims administration. In the case of Pasadena California based RMIS software provider, Sucaba Company, Inc, Internet Outsourcing of their ClaimLink system was a natural extension.
The outsourcing of risk management system services has been around for a number of years. This new wrinkle, however, provides a faster and more cost effective solution than it’s predecessor. In the past, outsourcing was termed "time-sharing" because customers contracted to rent RMIS computer time. This was being done because yesterday's mainframe computers used to be much more expensive to own and run. In today’s standards, personal computers (P.C.'s) for a medium to large sized corporation often cost upwards of $7,000 or more per-machine-per-year for hardware and software support and maintenance. Strangely enough, such high costs of ownership have companies even outsourcing their P.C.'s, as 1996 statistics show over 1/3 of corporate America outsources some aspect of their information systems. Although the primary reason for outsourcing today is usually based on such costs, an increasing number of companies also outsource for expertise and value for the money. While it’s often easy to find an outsourcing company that can reduce your overall computing costs of ownership, it is more difficult to find outsourcers to offer improved services.
"We wanted a fast and reliable communication vehicle that our outsourcing clients could use, without the high monthly charges normally associated with long distance leased data lines," noted Don Mead, President and founder of Sucaba and chief architect of the ClaimLink system. "Internet connections have dropped as low as $12.95 per month for unlimited access, for an average savings of nearly $4,000 per year over traditional communication costs. This allows us to provide a level of service not normally found with traditional outsource providers."
The internet outsourcing solution also allows start-up clients to get up and running in as little as one day. "We were able to getour entire staff up and running without the worry of a server getting bogged down," said Stuart Baron, President of Cerritos based TPA Workers’ Compensation Claims Control Company and internet outsourcer. "Outsourcing our RMIS allows us to run at peak efficiency."
The ease of connectivity has been further enhanced by interfacing with computers which use Windows 3.1x, Windows 95, Windows NT, DOS, MAC O/S, OS/2, and UNIX operating systems, allowing clients to utilize the PCs they already own."Having the ability to utilize the PCs we already had was a plus," noted Baron. "We wanted to have a multi-user claims administration system without the overhead cost of purchasing a system or the exorbitant cost of leased data lines. Add in the ability for our clients to easily access their data and on line e-mail, the whole solution was very appropriate for increasing our organization’s effectiveness."
Internet outsourcing operates the same as traditional outsourcing. The RMIS outsource provider literally becomes a specialized risk management data processing department for each organization which contracts for RMIS services, thus eliminating the organization’s need for nightly backups of the computer system, report generation, software installation and upgrades and system maintenance. The claims hardware and software is housed "off site" from the claims department, normally at the outsource providers office’s. The internet connects the organization with the outsource provider for claim processing. Yet, all reports and printed matter print on laser printers at the organization’s site. Since the internet connection is available 24 hours a day, risk managers may access claims and enter data off-site from any remote location--even via cellular phones--which makes for easy entering of accidents into the system, anywhere in the world.
Besides the ease of connectivity and savings, Internet outsourcing providers may also bring a whole new level of service to the RMIS table. "Frequent updates to the system from our suggestions are immediately placed into effect so we don’t have to wait for a "yearly release," commented Baron. "Internet outsourcing is a much better deal because Sucaba takes care of all the headaches. Taking care of a system is a major responsibility. I don’t have the time to worry about software and hardware problems. Our client’s cases are more important."
One of the greatest concerns risk managers have with utilizing the internet for their claims handling is the issue of security with "mission critical" information. "We have constructed multiple complex ‘firewalls’ to protect our clients and their information from hackers," commented Mead. As it stands, it would be virtually impossible for unauthorized users to gain access to claim data. However, should a client feel the need for additional security, we offer a firewall package with up to 3 billion dynamically changing access codes."
With a multitude of Internet Service Providers (ISP), there are always questions of a ISPs reliability, speed and ability to get an organization connected quickly. Baron suggests, "do your homework and make yourself knowledgeable about how the internet works. Once you understand the concept, you will better appreciate the value the internet connection provides. This is real-time with transactions and case updates happening instantaneously. You need to make informed decisions."
For the future of this technology, Mead said, "we’ve just begun to tap into the internet as a source of data transmission. As internet technology progresses and satellite links come on-line, we’ll probably see a greater influx of risk management forms, medical reports, legal briefs, notes and e-mail correspondence, creating a nearly paperless file system without the need for scanners and high volume data storage. Video conferencing between TPAs, clients, and medical providers over the web will speed up actions on cases to fulfill the workers compensation purpose...getting the employee back to work as soon as possible."
More information on Internet outsourcing may be obtained by visiting the Sucaba web site at: http://www.sucaba.com or calling (626) 440-1676.
All Material Copyright © 1996, 1997, 1998, 1999, 2000 Sucaba Company, Inc.