Monthly archives of “September 2018

comment 0

Non Payment for Electronic Diagnosis – Industry Culture Overrides Logic

One of the first steps in understanding the damage caused by an accident (and a mandatory step in determining the repair needed) is the pre-repair electronic scan of the vehicle’s systems and modules.

Many insurance companies take the position that they will pay for this step if any damage codes are found, but will not pay if there are no codes that can be attributed to the accident.

When I describe this stance on payment to anyone outside of the collision repair industry they are amazed and find it very hard to understand the logic. If you go to the doctor with a health complaint; the doctor sends you for a blood test or other diagnostic and the tests come back negative. That is probably good news but you wouldn’t expect to not be charged for the test. So why would it make sense to anybody to not pay for a diagnostic test on a car because the test results show no damage.

The answer lies in the culture of the repair industry, which has been built up over 50 years and still serves many participants well. That culture is that payment is made only for actual physical repair; nothing else is paid for. This worked well enough when diagnosis involved little more than looking at the damage and making a few quick guesses on what was needed for the repair.

When electronic measuring became an accepted part of the repairer’s tool kit the time spent on this measurement was not paid for. However, if damage was found set up time could be charged, which would cover the time spent on diagnosis. This worked reasonably well because in most cases it was possible to see that some damage existed and measuring was needed to confirm what was very likely to be there.

It started to work less well as cars began to be built more accurately and needed equally accurate repairs. Visual inspection did not always reveal damage; the repairer was now at risk of spending time on diagnostics and not getting paid if he could not find damage.

This is the background and current reality; nothing gets paid for other than actual repair. Electronic issues are invisible and can be caused by a very wide range of incidents or events; there is no visual check to determine if it is needed or not. Not checking before the repair starts compromises the repair.  Despite what the sellers of equipment claim in their promotional material this diagnostic work cannot be left to the least experienced and lowest paid staff member. The equipment costs money, the software licensing costs money and the analysis of the results requires a high level of skill.

The insurance companies are not paying for it because they are clinging to a model that is outdated.  As long as they have power over the repair side, based on asymmetric size and market control they will not be in any hurry to change this model.

They will change when they have to but not before. The ‘have to change ‘will come when the problems caused by the old model become too expensive.  However, this ‘have to change’ recognition will not come when the change is needed, but sometime after it should have been implemented.  It will then be implemented with some urgency and hit a repair industry that is not well prepared (the repair side is stuck in the same old culture.)  By refusing to accept the need for change and allowing it to be introduced gradually we are setting up for another long, inefficient and expensive transition

comment 0

…but, of course we all want the cars fixed right. …. but, you have to do the correct repair.

Over the last serval months, perhaps going back as far as  a year, every discussion about the challenges and costs of modern vehicle repair ends with  a variation of the phrase  ‘but of course we need correct repairs ‘ . This is said with a tone that suggests;  ‘I have met my obligations because I have mentioned that correct repairs are needed.’  With this phrase and no further investment the speaker imagines or hopes that he has transferred all responsibility to the repairer and is now absolved of all liability or requirement in further investment in that repair.

This phrase is always aimed at the repairer and is always used by anyone who has an opinion on repair procedures and repair cost, but has no hands on responsibility for that real world repair. Insurers really like it and industry commentators, speakers and trainers always close with it.

The beleaguered ‘estimator’ being told to fix the car right is not being paid for looking anything up and in fact will be penalized for doing so.

If the car is fixed that poorly that a serious comeback results then there will be repercussions. However with all metrics centred on severity, cycle time and customer satisfaction an improper repair that gets past the customer will gain higher marks than the correct repair that takes an extra day and costs another $500. There is not a lot of incentive to spend extra time doing something he is not good at if the probable result is lower marks, and a bigger stack of files still on his desk.

With each year the active fleet being repaired gains added complexity and more and more cars requiring research and careful analysis before the repair starts are becoming part of the repair mix. A time will come, not that far in the future where the incorrectly researched repair will fail almost every time. But we are not quite there yet.

Mike Anderson gave a recent presentation about position statements in which he said that even if the manufacturer does not reinforce a procedure in a position statement you still have to follow that procedure.

http://www.repairerdrivennews.com/2018/08/13/anderson-oems-without-position-statements-still-say-to-scan/

He is without question correct in this, however he went further by saying that if a repairer does not research the correct procedures it is simply because of laziness.  He did not acknowledge that finding relevant OEM information is not a trivial issue, requiring both an investment in purchasing access and then a very real, and more costly, investment in learning how to use the program properly and efficiently. There are many real world obstacles to getting the right information that would need to be overcome before  ‘laziness’ became a factor.

Referencing back to a July 10 2018 article about a Collision Hub Repair U video,  http://www.repairerdrivennews.com/2018/07/10/we-have-totaled-this-poor-malibu-repair-u-blueprinting-class-reveals-work-necessary-for-minor-collision/\ 

A part of the discussion was that it took an hour to find the relevant OEM information and ‘more than that to read it and understand it.’  I am going to guess that there were no questions to answer about other files during this time and no significant time pressure to get to the other files waiting.  There is no denying that the procedures advocated in the article are the correct procedures, but there is also no denying that it is very difficult to get paid for these procedures.  Many people are quite good at getting paid but the majority of repairers do get tired of the fight to get paid.  The points made are valid and they do point very clearly to a future that will arrive, but they are not the current reality in most of the collision repair world.  In this same article the suggestion of resolving liability issues by working for free can only be described as a bizarre business model.

Repair report writing, repair procedures and the payment structures around these will have to change. For now, for most people, the old ways are still viable and still the standard.  Unfortunately the industry is waiting for this change to be mandatory before acting on it. There is only a very spotty and ad hoc process of preparing for the change.

‘Of course it needs to be fixed right’ is not preparation