New York State System to Cut Costs, Injuries

New York State System to Cut Costs, Injuries

By Andrea Novotny
Staff Writer

New York state this month will begin using an automated worker's compensation system for state employees that could result in savings of up to 20 percent annually.

The state spends $175 million a year in worker's compensation costs, so even a 5 percent savings of $9 million would be substantial, said Jeffrey Lutzker, program manager for New York's Department of Civil Service, which is overseeing the statewide project.

The Accident Reporting System, which uses software from PeopleSoft Inc. of Pleasanton, Calif., should cut the time it takes to process a claim from three weeks to two days, state officials said. This will allow workers to find out faster what expenses and medical treatment are covered under the program, they said.

The system also should improve safety for the state's 200,000 government workers by identifying hazardous work conditions from the data collected, state officials said.

Most of the expected savings from the system will come from tracking accidents and identifying hot spots, Lutzker said, but this part of the program will not begin until late next year. "The savings in costs and time are going to be considerable and [the system] will have a significant impact on safety," he said.

After an accident, workers will be able to call a toll-free number that prompts them to answer questions using touch-tone responses. The information then will be electronically routed via PeopleSoft software to the employee's personnel office. An electronic version of the state's accident claim form will be sent to the State Insurance Fund and Worker's Compensation Board. In 1996, New York state handled 21,125 state employee worker's compensation claims.

The paperless system should eliminate most of the human error that occurs during the manual intake of accident reporting, Lutzker said. But governments must carefully consider the potential difficulties in getting such a system configured and training the staff, he said.

New York's civil service department contracted with Andersen Consulting LLP, Chicago, to customize the software for the Accident Reporting System, said Ric Barre, chief of the civil service department's data processing services. The department avoided significant costs by upgrading PeopleSoft software it purchased in 1989 for an electronic benefits enrollment system, he said. Barre would not say how much the state paid for the upgrades, training and consulting on the new system.

PeopleSoft officials would not speculate on how much a similar system would cost a government entity today, but "pricing for all PeopleSoft software product lines starts at $100,000 per application and varies depending on software products licensed, number of users and size of organization," said Laura King, PeopleSoft marketing communications manager.

The Accident Reporting System is being tested at 12 state agency sites that report the highest incidence of work-related accidents, including the state's corrections and transportation departments, Barre said.

Lutzker said the department has begun an intensive two-month training program for users at 300 sites. The state plans to be online with the statewide system in January or February 1998, he said.

It typically takes three to 12 months to fully integrate the software for such a system and even longer to see the benefits of the system, said Tom Morley, a spokesman for PeopleSoft.

"It's not like Microsoft. ... The idea of plug and play is virtually nonexistent" with such systems, Morley said. The software also needs to be tailored to meet specific state or federal requirements, he said.

Several other states are looking to buy new worker's compensation systems, state officials said. New Jersey currently is seeking bids from the vendor community for a client/server system and expects to close that bid process in December, said Edward Mount, New Jersey's assistant state treasurer. Tennessee has completed an analysis of a new system and will open it for bids in January 1998, said Bradley Dugger, the state's chief of information systems.

It is unlikely, however, that states will jump to fix their current systems, said Leslie Kao, a public sector analyst with G2R Inc., a Mountain View, Calif.-based research firm.

"Automating worker's compensation systems will probably not be a high priority for states. Most already have a lot on their plates," Kao said.

PeopleSoft, a leading provider of enterprise applications software, signed applications software licensing agreements with 40 state and local government organizations this year, bringing its public sector client list total to 150.

PeopleSoft revenues for the first nine months in 1997 increased 84 percent to $555.1 million from $302.4 million for the corresponding period in 1996. The company expects total revenues in 1998 to increase by up to 55 percent.

PeopleSoft's competitors in the enterprise applications market include SAP America Public Sector Inc. and Oracle Corp., Redwood Shores, Calif., King said.

"SAP is very interested in meeting the needs of its customers, whether in specific applications or an enterprisewide view," said John Greaney, director of the public sector center of expertise for SAP America Public Sector Inc., a subsidiary of SAP America, Philadelphia.

"The public sector is a significant market with a tremendous amount of growth. ... SAP is definitely focusing on the public sector ... [and] state and local is a key part of that."

SAP's customers include more than 300 public sector organizations, Greaney said. He was unaware, however, of SAP projects analogous to PeopleSoft's accident reporting system for New York state.

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