March 17, 2008 By Chandler Harris
During a 2003 workers' compensation board meeting in Vancouver, Canada, Steve Barnett, vice president and assistant chief financial officer of WorkSafeBC (WSBC), started chatting with Valerie Adamo, CIO of the Ontario Workplace Safety and Insurance Board (WSIB). The two executives found they had a common business interest: the desire to revamp their work force database and operations systems. Their conversation eventually led to a highly successful public-private partnership (PPP).
"We found it was a good fit between us and Ontario collaborating," Barnett said. "That's unique because Ontario and British Columbia (BC) are a long way apart, and we tend to view ourselves as unique. But it didn't take long to understand we're in the same business and we do things similarly - so it became natural."
WSBC and the WSIB are the workers' compensation agencies for British Columbia and Ontario, respectively, but they also perform other services, such as workplace injury prevention programs, and health-care and rehabilitation monitoring.
At the beginning of the collaboration, WSBC and the WSIB had systems that were built in the late-1980s, which lacked a comprehensive intelligence- and evidence-based case management system. Instead, they focused solely on paying workers' benefits. The WSBC had five legacy systems and several other reporting applications that made streamlining and integrating information a challenge.
Instead of building a new case-management system from the ground up, the partners decided to look for software vendors willing to commit to a PPP - a collaboration between municipal and private institutions in which each partner shares the risks and rewards of corporation.
"We looked at it and said, 'If we build it together and split the cost, we'll still be ahead because we're sharing the cost,'" Adamo said. "My team has expertise in vendor management, contracts and negotiations, and deal structuring. BC took the lead to determine the requirement process and how we would get the job done."
The team researched vendors and found Curam Software, which provides enterprise social-management solutions. Curam's social-justice and benefits programs were similar to the case-management solutions the PPP was seeking. Although Curam didn't have a workers' compensation product, the company had a product suite with vertically integrated solutions that included unemployment insurance and food stamps. Adamo and Barnett determined there was enough content in Curam's software for a successful customization.
The Dublin, Ireland, software company agreed to a public-private partnership with the WSIB and WSBC to develop the Curam Workers' Compensation solution, which enables workers' compensation agencies to effectively manage end-to-end claims by providing comprehensive and efficient benefits-delivery capabilities. Although the WSIB and WSBC agreed to pay development costs, and Curam would own the software, the two public organizations established a royalty agreement to receive lower support costs whenever Curam sells the new software. Another benefit for the municipalities was future software development by the company's experts at reduced cost.
The company benefited from the PPP by working closely with both municipal infrastructures to create a successful Workers' Compensation software solution. The program provides automated claims processing, eligibility and entitlement assessments, task and caseload management, claims classification and service planning.
"By collaborating with two large, innovative workers' compensation organizations, we were able to ensure best-practice business process enablement capabilities were incorporated into Curam Workers' Compensation," said Ernie Connon, president of Curam Software, in an official release. "The solution provides case workers with a holistic view of each applicant's claim, resulting in more efficient benefit determination and delivery, resulting in effective citizen service."
PPPs bring private-sector expertise to the public sector while relieving governments of risk. With municipalities increasingly utilizing new technologies for organizational development, the demand for public-private partnerships has been growing. The United States, for example, is in the midst of a PPP boom because of terrorist attacks, natural disasters and public policy issues like health care and education, according to the National Association of State Chief Information Officers Corporate Leadership Council. PPPs also have been formed for infrastructure projects, such as water distribution and transportation. The average American city works with private partners to perform 23 out of 65 basic municipal services, according to the National Council for Public-Private Partnerships.
Steps for PPP Success
Yet attempts to utilize PPPs to build IT infrastructure have had little success so far, as some cities have discovered with recent municipal Wi-Fi programs. Cities like San Francisco and Chicago saw years of planning go for naught when EarthLink re-evaluated its business strategies and changed course with its municipal Wi-Fi programs. EarthLink's agreement to pay all upfront installation and network costs in some of its proposed municipal Wi-Fi programs was widely considered to be unrealistic. This imbalance of risk and reward is a leading cause of PPP disaster, said Costis Toregas, lead research scientist in the school of computer science at George Washington University. Toregas teaches classes on PPPs.
"When public-private partnerships fail, it is either because what you have is no longer important to me, or somehow you managed to fool me and we're not sharing the same risk and reward," he said.
There are six important factors to a successful public-private partnership, Toregas said. The first is to have the necessary political support and leadership endorsements to lead the way. The second success factor is to have the strong involvement of a public organization at all levels, especially when it comes to HR issues.
"Many times when you develop a partnership, you will be dealing with private-sector employees who may have a different set of values than you do as a government employee," Toregas said. "So to be able to match and appreciate the different value sets of the public and private sector is a key success factor."
Next, a well developed plan is essential. Difficulties may arise during the process that can cause problems for both parties. Adamo helped craft a detailed plan with clearly defined roles, which also included an exit strategy if the partnership wasn't successful.
"What becomes very important is clarity of what your interests are individually and having honest, upfront and deep discussion of whether interests are aligned," Adamo said. "When you don't do that, you get in trouble. Then you need to question interests, and it brings you back to the center and you can decide if this is the right way through."
The fourth key is a solid financial plan. Next, it's important to engage all the stakeholders, including customers and citizens. Critics of San Francisco's failed municipal Wi-Fi plan believed the city did not do enough outreach to the community, which stalled the plan until EarthLink changed direction.
The final factor is that municipalities and private companies must select the right partner, which was very important for the Curam PPP, Barnett said.
"We found that working with Curam was a pretty good fit because of the culture of the organization," Barnett said. "They were willing to step up when we wanted them to, and we helped them enhance their software."
Worth the Cost
The Curam Workers' Compensation software was developed in 18 months and was officially released in April 2007. The software provides a core set of management capabilities for a claim's entire life cycle - from injury to outcome. The software's automation capabilities address standard claims, which free users to focus on injured workers who need specialized service.
The PPP was the first of its kind for Curam; due to the successful nature of the endeavor, the company is open to other PPPs like it, said Kimberley Williams, Curam vice president of global marketing.
"Although we had some domain expertise at Curam, we certainly didn't have the amount of domain expertise found in those organizations," Williams said. "By working with two organizations at once, we were able to easily identify common business processes across all workers' compensation organizations and then isolate the business processes that were specific to the organization."
The WSBC implemented Curam Workers' Compensation earlier this year and has realized a 35 percent return on investment, 8 percent clerical staff repurposing, a 10 percent reduction in claim costs, and an overall reduction in service delivery costs. The WSIB will implement the software in phases this year, but already estimates an annual savings of U.S. $2.5 million.
Curam has sold its Workers' Compensation software to WorkCover South Australia and is in negotiations with other companies, Williams said, which reduces costs for the WSIB and WSBC because of the royalty agreement. Both Canadian organizations have taken the unusual role of sales by promoting Curam's software. The WSBC has already met with other organizations like the Alberta government to discuss the software, and has agreed to be a reference site for presentations. Primarily because of the WSBC's success, a PPP is being pursued in British Columbia's health-care system, Barnett said.
"It was a fabulous experience and worked very well," Adamo said. "The management team in BC was excellent to deal with, and all our boards saw the wisdom of this when it can be done safely. ... As a result, we saved several million of dollars because we didn't have to do development, and we didn't have to do it twice for each organization."
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