Paduda: Work Comp Is the Innovation-Prevention Business| Employees Compensation Information

By Joe Paduda

Thursday, June 24, 2021 | 0

Workers’ Comp is the innovation prevention industry.

Joe Paduda

As I wrote years ago, many executives, risk managers, “thought leaders” and brokers criticize the lack of innovation in the workforce, but they are often the reason why innovation does not happen.

There are a variety of reasons – cultural, practical, financial, historical, structural – all of which impede, if not prevent, true innovation.

Basically, the work design is hyperconservative, narrow-minded and traditional. A couple of notes:

  • It’s almost entirely about musculoskeletal injuries that haven’t changed in about a million years (no, that’s not an exaggeration). Cause, treatment, and physical recovery are very well understood – at least for those who want to understand.
  • It is an insurance policy that, by definition, is risk averse.
  • It’s not important for the C suite. Labor costs are a rounding error in company books, make up less than 1% of medical spending in the US, and are steadily decreasing.

Structural problems, starting with the RFP process, kill innovations, starving them for light and energy before they can take root.

In most, but not all cases, the RFP / supplier selection process is just plain dumb. The whole thing is to enable the committee to select a vendor to compare apples to apples by forcing respondents to indicate how they will deliver a specific, detailed, highly structured solution that exactly meets specifications.

That’s fine, but what if you really need an orange?

Instead, the buyer should ask how each vendor solves their problem, what they do differently, how they can deliver better results, and what the buyer must do to achieve breakthrough results.

Coming soon: Other barriers to innovation and why you have to break them.

Joseph Paduda is a co-owner of CompPharma, a consulting firm focused on improving pharmacy employee compensation programs. This column is republished on his Managed Care Matters blog with his permission.

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