I have just returned from IRMI’s excellent Construction Risk Conference in Las Vegas. Interesting location for a bunch of risk averse people…
One of the keynoters was Pat Ryan, founder and chair of Aon Corp, the big broker. He gave a talk covering a wide range of topics, including Spitzer, contingent commissions, and transparency. What was notable to me was what he did not discuss, or even mention – health care costs.
I find this intriguing for a couple of reasons. First, what is more important today than health care costs? Health care costs are contributing to his clients’ risks in employee benefits, workers comp, auto, general liability etc. And, medical expenses in the property and casualty lines are increasing at a rate substantially faster than in group health (10-12% v. 8.2%). What could be more important, more significant, than health expense inflation?
Second, Aon is making a big push to become the expert in data mining, analytics, and assessment to better predict and manage “risk”; broadly defined. In this context, risk could include flood, wind, politics, etc. Since our focus here is on health care, we’ll stick to that. Unfortunately, Aon’s attempts to date to assess and evaluate medical expense in the workers comp world, at least the public reporting of same, reflect a dangerously superficial understanding of medical expense, providers, practice pattern variation, etc. (note – sources indicate Aon’s understanding is not any better when presented in private meetings..).
If this initiative is so important to Aon, why would it not be part of a speech to 1500 eager listeners, and why would it not incorporate even a mention of what Aon is doing to help customers deal with this to-date-unmanageable problem – health care cost inflation.
If Aon is all about managing risk, it better learn something about medical expenses soon. And the company sure can do a better job in presenting itself as an expert in same.
What does this mean for you?
Watch out for consultants that don’t understand what is really driving your claims costs.
Nov
9
