Since its passage in 2010, the Affordable Care Act (ACA) has been the subject of intense political debate and a source of anxiety for many retailers. While most of the attention has focused on the law’s health benefit requirements, there is little doubt that the ACA will also influence workers’ compensation costs, which are often the second highest expense for retailers after payroll. By taking steps now to understand and manage how the ACA will likely affect costs, payroll, and claims filings, retailers can lessen any potential negative impacts.
Probably the most predictable outcome of the ACA is that the number of individuals in the United States with health insurance coverage will increase. Proponents contend that this increased access to care will result in a healthier society and ultimately help curb rising workers’ compensation costs. In reality, however, the result is more likely the opposite.
For example, as the number of individuals seeking medical treatment rises, it has the potential to put additional stress on a healthcare system that is already short on doctors. This is particularly troubling as it relates to specialists and the potential for delays in obtaining diagnostic tests and scheduling surgeries and other procedures. Longer periods of disability and complications as a result of such delays would ultimately drive workers’ compensation costs up.
At the same time, proponents of the ACA say that because more people will have access to health care, there will be a reduction in comorbid diseases and disorders among individuals. To be sure, comorbidities can complicate workers’ compensation claims and have been shown to result in higher-than-average benefit payments. However, there is no significant evidence to support the contention that an employee is healthier and less likely to file a workers’ compensation claim simply because he or she is insured. For example, data from the Centers for Disease Control and Prevention indicate that heart disease remains the leading cause of death in the United States and that the percentage of Americans with a high body mass index has steadily climbed over the last 50 years — two trends that are not confined to the uninsured population.
In addition, greater access to care is also unlikely to reduce cost shifting, as some proponents have claimed. Retailers have long been concerned that non-work-related injuries are being shifted to the workers’ compensation system. While an uninsured employee injured outside of work may be tempted to file a workers’ compensation claim in order to receive benefits, there is still the temptation to shift non-work-related injury claims to the workers’ comp market due to the higher reimbursement rates and lack of deductibles and co-payments. Not only is it clear that the ACA will not result in every American having health insurance, these financial incentives will continue under the new law.
On a more positive note, the industry’s shift to quality care and better patient outcomes as a result of the ACA do have the potential to offset rising workers’ compensation costs. Traditionally, the healthcare industry’s focus has been on volume: more patient admissions, tests and procedures translated to higher revenues. Post-reform, however, the industry has shifted its focus to improving standards of care and achieving better patient outcomes.
If this transition results in less emphasis on costly procedures, which often produce questionable results, workers’ compensation costs could be reduced. Although it remains to be seen whether the standards of care developed under the ACA for group health care would be enforced under workers’ compensation, this is a promising development for retailers.
Another area under the ACA that retailers need to remain aware of has to do with premium refunds. The ACA allows insurers to rebate premiums to employers that have better-than-expected performance with their healthcare programs. Employers can either refund such premiums back to their workers or use them to offset future premiums. The National Council on Compensation Insurance (NCCI) has indicated that if premium refunds are given to workers, this would be considered payroll under workers’ compensation premium calculations.
Retailers need to keep this in mind when deciding what to do with healthcare premium rebates that may be received.
Until the ACA has been fully implemented, the full impact of the law remains unknown. However, retailers can take steps now to lessen any potential negative consequences. These include:
- Increasing efforts to identify medical providers that can provide the best quality care for injured workers, and taking the necessary steps to ensure the workforce has access to these providers.
- Carefully managing the approach to healthcare premium rebates.
- Closely monitoring any shifts in injury claims away from group health to workers’ compensation.
- Remaining committed to loss control efforts.
Mark Walls is senior VP and workers’ compensation market research leader for Marsh USA, the world’s leading insurance broker and risk adviser.
The ACA will influence workers’ compensation costs, which are often the second highest expense for retailers after payroll.
Transforming Real Estate Management with Big Data
In an era of Big Data, retailers are finding new ways to leverage that information to improve processes and consumer engagement. However, there’s one area where Big Data can have a big impact that companies in the retail space may be missing: real estate.
Mark Ledbetter, global VP retail strategy for SAP, recently spoke with Chain Store Age about the promise of Big Data for retail real estate, and how retailers can best take advantage of it.
Where does retail real estate data originate?
There are three primary sources for the data for managing retail real estate. First is the retail store or shopping center itself. This might include energy-consumption data down to the sub-meter level for managing energy use. It might also involve sensors on equipment that can improve service and reduce downtime, minimizing disruptions that affect shopping. This data can improve retailer operations, lift tenant satisfaction, and provide mall owners with opportunities in areas like buying and selling energy.
Second is shoppers. Both retailers and mall owners can use video cameras, Wi-Fi, cellular signals and other technologies to measure shopper traffic to understand consumer behavior, reduce bottlenecks and optimize staffing. A lot of this data gathering can be done anonymously, protecting shopper privacy.
Third is customer sentiment data, gleaned primarily from social media. Sentiment data lets you see in near-real time what people are saying to their friends about your store or your mall, and offers clues to how you can better engage them. Shopper and sentiment data can help retailers and retail property owners evaluate the best places to open a store, or to acquire or develop a retail facility.
What technologies do retailers need to gather and analyze real estate data?
Machine-to-machine (M2M) sensors and communication can capture facility and equipment data. Mobile technology provides insights into customer behavior and sentiment. In-memory databases allow you to pull together this enormous volume of structured and unstructured data in a single place. Advanced analytics enable you to quickly analyze that data to uncover hidden insights and even predict future trends. Cloud platforms can make the resulting insights available to the right people at the right time and at an affordable cost.
What advantages can retailers obtain from in-depth analysis of real estate data?
Retail investments have generally been based on location and demographics. But today you can add actual behavior of actual consumers, helping you make smarter decisions about where to open a store, where to acquire or develop a property, which products and services should be offered where, what kinds of rents are appropriate, and more.
Beyond real estate, all the new data you’re acquiring can help you better attract and engage consumers, long an explicit goal for retailers and increasingly one for mall owners. This is a win-win for both the retailer and mall owner, with retailers finding ways to maximize revenues and mall owners able to increase rental income and better retain tenants.
What is the financial benefit?
Previously, retail finance was always in reactive mode, waiting for the monthly close to make adjustments. Today, with real-time capture and analysis of new data streams, finance can respond dynamically to changes as they’re occurring. Even better, finance can perform what-if analyses to get ahead of the curve.
For example, as you do budgeting and planning, you can analyze store profitability and understand why a particular location is under- or over-performing compared with forecasts. Even better, you can run scenarios to proactively decide to open a store at this location or divest yourself of a retail property at that location.
For retailers and retail property owners, Big Data means you’re no longer operating in a vacuum, making decisions based on best guesses. You have the insights you need to better manage your properties, deliver a superior consumer experience and run your business more profitably.
The Sentimental Approach
If you really want to know what people think about you, you need to find out what they say behind your back. Historically this has been a tricky proposition, but the advent of social media provides an open forum where companies as well as individuals can check to see what is being said, and whether the commentary is good or bad.
Dick’s Sporting Goods Inc., the 550-plus-store, Pittsburgh-based retailer of athletic equipment and apparel, leverages hosted technology from social intelligence provider newBrandAnalytics to monitor relevant consumer “chatter” on various social networks.
“Within social media, there is a lot of information, and different ways to get a better sense of customer sentiment,” said Ryan Eckel, VP brand marketing of Dick’s Sporting Goods. “It complements our internal survey perspective.”
newBrandAnalytics provides a hosted, customized social intelligence platform that uses natural language processing and machine- learning capabilities to obtain contextual and inferred meaning from social comments, which are often casual, colloquial and even sarcastic. The machine-learning capabilities allow the solution to become more proficient at detecting and analyzing relevant commentary as time goes on.
“We get the meaning with a high degree of confidence it’s accurate,” Eckel said.
Dick’s Sporting Goods was not actively seeking a social monitoring solution when newBrandAnalytics contacted the company in early 2013 to explain its technology, according to Eckel.
“There was no RFP, but it sounded interesting enough to take a meeting,” he recalled. “We hadn’t identified a need but decided we’d listen.”
Seeing the potential value of newBrandAnalytics’ offering, Dick’s Sporting Goods began working with the vendor in May 2013 for a short run-up to launch of the platform in July 2013.
“We prepared the data for a week or so to figure out the right way to look at it for our organization,” Eckel said. “We push all social media data through the software to analyze it. We can look at brand sentiment and how specific regions or locations are performing.”
The highly scalable, multi-tenant custom platform is hosted with Rackspace and features an HTML5-based front end. While Dick’s typically checks data on a weekly, monthly and yearly basis to compare against previous trends, the company can pull data at any time for real-time analysis and reaction.
“What we’ve been seeing is no massive surprise, but it gives us more color behind our quantifiable data,” Eckel explained.
Different data, such as commercial chatter and customer service chatter, is applied to different parts of the business. In addition, since initial rollout Dick’s has been customizing social media data for use by other departments besides marketing. Areas such as operations and human resources are now receiving custom data sets for their own use, and Dick’s plans to continue expanding this program for other departments, as well.
“The highest utility is on the brand side,” concluded Eckel. “We look at native chatter and how it can drive brand sentiment. We are making this part of our corporate culture, which is to be as insightful as possible.”