Magical thinking: is it time for insurers to do [over]due diligence on industry services?In the lexicon of psychiatry, magical thinking magical thinking Psychology Dereitic thinking, similar to a normal stage of childhood development, in which thoughts, words or actions assume a magical power, and are able to prevent or cause events to happen without a physical action occurring; a conviction that is a symptom of psychosis.
There is another kind of magical thinking. P.T. Barnum understood it very well. The skill sets for fertilizing such thinking are well honed in the domains of sales and marketing.
Thinking such as this has been known to creep in when underwriting vice presidents are besieged be·siege
tr.v. be·sieged, be·sieg·ing, be·sieg·es
1. To surround with hostile forces.
2. To crowd around; hem in.
3. with evidence of the "truly remarkable" nature of ostensible Apparent; visible; exhibited.
Ostensible authority is power that a principal, either by design or through the absence of ordinary care, permits others to believe his or her agent possesses. assets they're egged on to deploy. The clock ticks audibly as pressing accountabilities pile up during anything-but-free lunches. The not-so-faint echo of the chief financial officer and his minions, chanting the fiscal mantra "cheapest is best," hangs heavily in the air.
"Our [fill in] is/are the best in the business. Trust me!"
See how magical thinking might creep in here?
There is a remedy at hand: due diligence (defined here as getting beyond force-fed, free-food fantasies).
When you buy a used car, you put the engine and transmission through its paces--or scuttle home to make lemonade! Reckon you'd do likewise where ceding a portion of the company's bottom line to black boxes or any other external essential elements (we call this outsourcing) are concerned.
Saving a buck is great, as long as you apprehend this rock-solid reality of the new age of underwriting: garbage in, garbage out (humour) Garbage In, Garbage Out - (GIGO) /gi:'goh/ Wilf Hey's maxim expressing the fact that computers, unlike humans, will unquestioningly process nonsensical input data and produce nonsensical output. . A fair and competitive price is one reason to buy. It should never be the only reason when mortality/morbidity gains drive profitability.
Sure, auditing invoices to avoid paying for something you didn't buy is important. However, it's just a starting point, not the sum and substance of due diligence. Fact is, if your outsourcing partner isn't a tad anxious regarding what he'll hear at that next "free" lunch, you just took up residence in his hip pocket! There are many meritorious vendor firms, and some others. There are high quality services, and imitations thereof. In the end, there are good deals, and bad calls.
Three things are clear:
* He who does not look cannot see.
* He who does not question cannot learn.
* He who does not audit cannot know.
That is, until one fateful morning when all-too-audible footfalls Not to be confused with the science fiction novel Footfall.
Footfalls is a play by Samuel Beckett. It was written in English, between 2 March and December 1975 and was first performed at the Royal Court Theatre as part of the Samuel Beckett Festival, on May descend the staircase, quarterly results held in the boss's vice-like grip.
It doesn't have to end up like that.
When a client asks this underwriter what questions one must ask in this regard, my heartfelt recommendations are: How many options do you have? How many providers/products are out there to choose from? Since big does not inherently equal better, see them all and get focused feedback from peers who are users.
When the time comes Adv. 1. when the time comes - at the appropriate time; "we'll get to this question in due course"
in due course, in due season, in due time, in good time , do that audit and ask questions such as: Do 90% of blood pressure readings end in 0? Are too many specimens hemolyzed? Are the drilldowns notable for their scantiness scant·y
adj. scant·i·er, scant·i·est
1. Barely sufficient or adequate.
2. Insufficient, as in extent or degree.
scant or their abundance? Does that engine hum or belch belch
To expel stomach gas noisily through the mouth; burp. balderdash bal·der·dash
[Possibly alteration of Medieval Latin balductum, posset. ?
Alas, I'm preaching to the choir where a handful of role model carriers are concerned. For them, all of this is just business as usual.
Maybe that's why they're role models.
Hank George, a Best's Review columnist, is the principal in his own consulting and training firm, Hank George Inc. He may be reached at HankGeorge@aol.com.