Service cost management: Limiting rising hospital spending

In the years prior to the beginning of the project, the client recorded well above average increases in service expenditures for sick pay amounting to 11,5% (compared to the market average of 6,7% during this period) and was experiencing a steadily worsening trend. The causes for this were not evident.

Due to its extensive experience with sick pay projects SKC was assigned

• to rapidly identify the causes,
• to develop a new controlling strategy and
• to then prepare the decentral organization according to the new controlling philosophy whilst
• simultaneously implementing the IT-support for the processes.

The changes in the controlling set-up were implemented from day one.

SKC has developed a modular sick pay program which takes the various key influence factors of sick pay dynamics within the insurance into account. These include

• a sophisticated case selection,
• a risk-based, cause-specific management,
• the work support through resources and organization, as well as
• an intensive collaboration in order to find solutions for the individual members and
• as a result the controlling of the resource utilization in the organization.

In only a few project weeks, a communication and training program which contained strong team development elements was carried out for the decentralized organization.

Significant shortenings of sick pay duration were accomplished with the implementation of the concept and as a result expenditure cuts of up to 15% in individual insurance groups.

The client is the only statutory health insurance which was able to attain decreasing sick pay payments contrary to the trend of the total market in the past years.