Workers’ comp is the Innovation Prevention Industry.
As I wrote years ago, many executives, risk managers, “thought leaders” and brokers decry the lack of innovation in workers’ comp – yet they are often the very reason innovation doesn’t happen.
There are a host of reasons – cultural, practical, financial, historical, structural – all hampering, if not outright preventing real innovation.
Fundamentally, work comp is hyper-conservative, hidebound and traditional. A few notes…
- it’s almost entirely about musculoskeletal injuries – which haven’t changed for about a million years (no, that’s not hyperbole). Cause, treatment, and physical recovery are extremely well-understood – at least for those who want to understand.
- it’s insurance – which by definition is risk-averse
- it’s not important to the C-suite – work comp costs are a rounding error on corporate ledgers, account for <1% of US medical spend, and are steadily decreasing.
Structural problems – starting with the RFP process – kill off innovation, starving it of light and energy before it can take root.
In most – but not all – cases, the RFP/vendor selection process is just stupid. The entire thing is intended to allow the committee to pick a vendor – to compare apples to apples by forcing respondents to tell how they will deliver a specific, detailed, highly-structured solution that precisely meets specs.
That’s fine – but what if you really need an orange?
Instead, the buyer should ask how each vendor will solve their problem, what they do differently, how they can deliver better results, and what the buyer must do to achieve break-through results.
Next – other barriers to innovation, and why you need to blow them up.