Part IV—Monitoring Provider Performance for Predictive Profiling
This is the fourth and final in MedMetrics’ series about rating medical providers, most specifically, rating physician performance. The series, available at www.medmetrics.org at the MedMetrics Blogs link includes:
Part I—Rating Medical Providers
Part II—How to Evaluate and Rank Medical Providers specifically for Workers Compensation
Part III—Transforming Workers’ Comp Provider Networks into Quality Networks
Part IV—Monitoring Provider Performance for Predictive Profiling
Transitioning from the concept of rating physician performance to the realm of predictive analytics might seem like a quantum leap, however using provider competence as a predictor of risk makes good sense. Poorly performing providers from a Workers’ Compensation vantage point can predict high cost and questionable outcomes. Rather than, or in addition to applying advanced, sophisticated mathematical formulas to predict risky claims, a little logic goes a long way. While sophisticated predictive modeling is invaluable and may be the ultimate answer to controlling Workers’ Compensation costs, some shorter term solutions are attainable, affordable, and valuable.
Predictive analytics is that area of data mining and business intelligence concerned with forecasting probabilities and trends. Advanced predictive modeling techniques are decidedly beneficial tools used to study the data to identify conditions or sets of conditions that will bring about a predictable outcome. Basically, predictive modeling is a process used to create a statistical model of future behavior.
The realm of predictive modeling includes multiple methods of testing assumptions and uncertainty while looking for patterns in the data. If X is true, then what is the probability Y will occur? Conversely, when Y occurs, what are the factors that could have predicted it? Find a correlation, look for causation, develop a theory, test the theory and apply it. Once implemented, the model must be continuously tested and adjusted.
A familiar example is auto insurance where actuaries take into account potential driving safety predictors in the data such as age, gender, and driving record when issuing auto insurance policies. The probability of an accident is calculated and the premium cost is rated by that analyzed intelligence in the data.
Multiple conditions or predictors are combined into a predictive model that when subjected to data analysis, can be used to forecast future probabilities with an acceptable level of reliability. Nevertheless, in Workers Compensation, we also have the opportunity to leverage existing knowledge to gain advantages in claim management and cost control. Prevailing knowledge (industry wisdom) is the untapped predictive resource in Workers’ Compensation!
For instance, nearly everyone would agree that poorly performing medical providers will almost certainly result in a complex and expensive claims with dubious outcomes. Research backs this up. In his article describing his research, “Impact of Cost Intensive Physicians on Workers’ Compensation”, Edward Bernacki, MD identified specific indicators of what he calls high intensity physicians. The research showed poor performance providers have higher medical costs, longer medical treatment durations, longer claims duration, and higher indemnity costs (increased lost time). Of course, that does not come as a surprise to anyone—and that’s the point.
Research literature describing generators of medical costs in Workers’ Compensation is not extensive, but we can learn from what is available. We can apply knowledge from the literature to claims handling procedures and medical management, thereby gaining advantages. If we know poorly performing providers produce unsatisfactory results, we should be aggressively measuring and carving out the deficient providers. Start by evaluating provider performance in context with the peculiarities of Workers’ using the parameters described in this series of articles about rating medical providers. (www.medmetrics.org, MedMetrics Blogs)
The Bernacki article suggests other predictive indicators, such as injury types that do not have precise treatment pathways. A lower extremity fracture has a specific course and duration of treatment with an expected outcome, whereas a low back strain does not. Treatment patters vary widely. Moreover, a low back strain diagnosis combined with surgery of any kind suggests complexity and cost. When further combined with a poorly rated provider, it guarantees trouble. Data combinations reflecting these conditions can identify (predict) complex, costly claims early in the course of the claim. Moreover, research combined with the general wisdom can be tapped for other predictive indicators.
People with experience in Workers Compensation have developed wisdom in these matters that should not be discounted. Such intelligence should be formally incorporated into the management process. Doctors known to be high-intensity, high-cost providers should be avoided if possible and certainly monitored aggressively. One management tactic is to use the data to compare a questionable provider’s performance with others of the same specialty or those who have treated the same kinds of injuries. Such objective comparisons based on data are far more palatable to physicians than other initiatives meant to influence treatment patterns. Moreover, physicians are more likely to adapt their treatment processes when they see comparisons of their performance to others like them.
Experienced claims adjustors and medical case managers know intuitively about predictors. Create predictive data models derived from research along with the knowledge of your colleagues. Statistically-based predictive modeling is a powerful tool just beginning to appear in Workers’ Compensation that should be taken seriously and planned for strategically. Nevertheless, before or while applying huge resources to it, we should leverage the untapped predictive knowledge already known to us.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Thursday, October 28, 2010
Monday, August 16, 2010
Part III Transforming Provider Networks into Quality Networks
This series began with Rating Medical Providers—Part I, describing how rating medical providers in group health has evolved over the past thirty years and where those initiatives stand today. Physician rating in group health is differentiated from that required in Workers’ Compensation. Group health physician rating does not translate directly to Workers’ Compensation, because the goals and process issues are different. Part II of this series, Rating Medical Providers for Workers’ Comp, takes the next logical step.
Part II describes how physician rating in Workers’ Comp necessarily demands evaluating providers and networks using unique, non-clinical performance criteria. While medical treatment quality remains crucial, non-medical performance is of equal importance. Process and non-medical determinations must adapt to the workplace and distinct cost considerations. This article, Part III in this four-part series takes yet another step to consider how to evaluate networks.
A recent discussion on the LinkedIn Work Comp Analysis Group was introduced by the statement, “California MPN’s: aren’t they all the same?” The implication is since there is a finite number of practicing physicians in California, many of them will appear in multiple MPN’s, therefore one network is more or less like another. The discussion in the group naturally widened to a discussion of medical providers in networks beyond California. Suggestions regarding ways to find the best physicians and “hand-select” providers were put forward. Ideas included establishing rapport with providers, listing quality indicators and asking providers to visit the work place—all good tactics, but difficult to evaluate, maintain and replicate. Amazingly, no one suggested seeking objective data regarding provider performance!
This is really about two separate issues. The first is deciding how to choose a network and the other is choosing medical providers within the network selected. When selecting a network, rather than trying to evaluate the participating providers, the network structure and administration itself should be the first focus. What kind of provider evaluation and monitoring does the network provide? What are the measures of quality for participating providers? Does the network provide regular analyses and reports of provider performance for their customers? Many network administrators consider their job complete when they have enrolled as many providers as they can find.
Another critical factor to consider about networks is the sort of financial incentives that are used with their contracted providers. Are they using the tired approach of extracting discounts from providers in exchange for directing patients to them? More sophisticated networks today are not discounting provider fees as dues for membership. Instead, they are rewarding providers who have good track records for returning injured employees to work and achieving positive outcomes. Asked the question, which is better—discounting provider fees or rewarding providers for excellence, most would choose the latter. But, it’s easier to calculate discounts than it is to evaluate performance.
Network administrators should be evaluating providers using the rating systems described in Parts I and II of this series. For instance, measure frequency and duration of medical treatment compared with the performance of similar providers or specialists treating similar injuries. Recall that most networks discount provider bills on individual unit fees. Why wouldn’t providers increase frequency and duration of treatment when they are docked on individual elements? Refer to our article, The Conspiracy of Silence in Medical Provider Networks for more details.
Only the data offers objective bases for provider performance evaluation and remains the only untapped source of rational provider selection. Yet, provider performance evaluation based on the data is available and affordable. Networks do not typically subscribe to the approach suggested here because it would require changes to their revenue structures. Using the data to evaluate provider performance, redesign networks, and reward exemplary behavior drives a wedge into systems that have been operating on autopilot for decades.
Would network consumers rather spend more money to identify providers that show documented positive track records or continue to play roulette in that regard? Would those network purchasers prefer documented outcome information or continue trying to establish rapport with providers to influence results? Interestingly, most providers would also prefer the documented information approach.
Most providers, unless they are deliberately fraudulent, would elect the documented data methodology. Comparative analyses can and should be shared with them, a simple yet powerful strategy not typically employed.
Managing provider performance by sharing comparative data with individual providers can be likened to the old Hawthorn Effect research where subjects who know they are being watched change their behavior, typically moving toward the mean. Most medical providers have never seen comparative data and would consider it extremely helpful. Most would not choose to be an outlier.
Moreover, the analyzed data is a prime platform for discussion and planning with individual providers that will lead to genuine professional rapport. Developing a collaborative relationship with objective tools to support it along with similarly documented and monitored activity going forward will lead to continued improvement.
Identifying best practice treating physicians is imperative, and one direct route is through a responsible and advanced network administrator. Network purchasers should stop believing the status quo myth. Savvy purchasers should select networks that evaluate and monitor the data.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Part II describes how physician rating in Workers’ Comp necessarily demands evaluating providers and networks using unique, non-clinical performance criteria. While medical treatment quality remains crucial, non-medical performance is of equal importance. Process and non-medical determinations must adapt to the workplace and distinct cost considerations. This article, Part III in this four-part series takes yet another step to consider how to evaluate networks.
A recent discussion on the LinkedIn Work Comp Analysis Group was introduced by the statement, “California MPN’s: aren’t they all the same?” The implication is since there is a finite number of practicing physicians in California, many of them will appear in multiple MPN’s, therefore one network is more or less like another. The discussion in the group naturally widened to a discussion of medical providers in networks beyond California. Suggestions regarding ways to find the best physicians and “hand-select” providers were put forward. Ideas included establishing rapport with providers, listing quality indicators and asking providers to visit the work place—all good tactics, but difficult to evaluate, maintain and replicate. Amazingly, no one suggested seeking objective data regarding provider performance!
This is really about two separate issues. The first is deciding how to choose a network and the other is choosing medical providers within the network selected. When selecting a network, rather than trying to evaluate the participating providers, the network structure and administration itself should be the first focus. What kind of provider evaluation and monitoring does the network provide? What are the measures of quality for participating providers? Does the network provide regular analyses and reports of provider performance for their customers? Many network administrators consider their job complete when they have enrolled as many providers as they can find.
Another critical factor to consider about networks is the sort of financial incentives that are used with their contracted providers. Are they using the tired approach of extracting discounts from providers in exchange for directing patients to them? More sophisticated networks today are not discounting provider fees as dues for membership. Instead, they are rewarding providers who have good track records for returning injured employees to work and achieving positive outcomes. Asked the question, which is better—discounting provider fees or rewarding providers for excellence, most would choose the latter. But, it’s easier to calculate discounts than it is to evaluate performance.
Network administrators should be evaluating providers using the rating systems described in Parts I and II of this series. For instance, measure frequency and duration of medical treatment compared with the performance of similar providers or specialists treating similar injuries. Recall that most networks discount provider bills on individual unit fees. Why wouldn’t providers increase frequency and duration of treatment when they are docked on individual elements? Refer to our article, The Conspiracy of Silence in Medical Provider Networks for more details.
Only the data offers objective bases for provider performance evaluation and remains the only untapped source of rational provider selection. Yet, provider performance evaluation based on the data is available and affordable. Networks do not typically subscribe to the approach suggested here because it would require changes to their revenue structures. Using the data to evaluate provider performance, redesign networks, and reward exemplary behavior drives a wedge into systems that have been operating on autopilot for decades.
Would network consumers rather spend more money to identify providers that show documented positive track records or continue to play roulette in that regard? Would those network purchasers prefer documented outcome information or continue trying to establish rapport with providers to influence results? Interestingly, most providers would also prefer the documented information approach.
Most providers, unless they are deliberately fraudulent, would elect the documented data methodology. Comparative analyses can and should be shared with them, a simple yet powerful strategy not typically employed.
Managing provider performance by sharing comparative data with individual providers can be likened to the old Hawthorn Effect research where subjects who know they are being watched change their behavior, typically moving toward the mean. Most medical providers have never seen comparative data and would consider it extremely helpful. Most would not choose to be an outlier.
Moreover, the analyzed data is a prime platform for discussion and planning with individual providers that will lead to genuine professional rapport. Developing a collaborative relationship with objective tools to support it along with similarly documented and monitored activity going forward will lead to continued improvement.
Identifying best practice treating physicians is imperative, and one direct route is through a responsible and advanced network administrator. Network purchasers should stop believing the status quo myth. Savvy purchasers should select networks that evaluate and monitor the data.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Wednesday, July 21, 2010
How to Rate Medical Providers in Workers' Compensation—Part II
Part I of this series made the point that while rating providers in group health is a long-practiced endeavor, its elements and parameters have not migrated to Workers’ Compensation. Efforts to translate group health provider quality measures to Workers’ Compensation have fallen well short of the mark because they omit several factors crucial to Workers Comp. Quality medical performance indicators in Workers’ Comp encompass medical treatment, outcome and cost factors similar to those in general health, but they also include non-medical functions. In Workers’ Comp, those non-medical elements can be primary drivers of cost, quality, and outcome.
A major quality goal in Workers’ Comp is return to full work. Responsibility for achieving that goal rests most significantly with the treating physician. Another major quality goal in Workers’ Comp is return to maximum or full work capacity at the least cost, also largely attributable to treating doctors. This article, Part II of this series, explores the many non-medical functions of treatment that spell quality in Workers’ Compensation, factors that must be considered in rating doctors’ performance.
For instance, multiple and repeated studies have shown that early return to work is a major indicator of better outcomes in Workers’ Comp. (Google search: “Return to Work studies in Workers Compensation”) The generally accepted notion based on these studies is that the sooner employees return to work after a work-related injury, the sooner they are re-acclimated to the job and the lower the overall cost of the claim. Alternatively, the longer the employee is kept off work, the higher the cost of the claim, with reduced chance of successfully returning to work. Studies show a 1:1 correlation between length of time off work and returning to work—ever. Treating providers are the major driver in returning claimants to work. Therefore, early return to work and reduced overall work loss are key indicators for evaluating medical provider performance.
Also important to rating provider performance in Workers’ Compensation is the issue of cost. Two quantifiable generators of unnecessary costs are excessive frequency and duration of medical treatment. Because PPO, MCO and MPN networks discount each unit of service delivered, the tendency of some providers is to exploit both frequency and duration of treatment to overcome their discounted fees. The elements of frequency and duration of medical treatment for specific injury types should be measured and compared with the performance of peers treating similar injuries.
Another comparative quality indicator is direct medical costs. Moreover, billed costs can be enriched as a performance indicator by combining that number with paid amounts or percentage reduction of charges recommended by bill review.
Of critical importance is evaluating providers in terms of claim outcome—how did things turn out in the claims where they were involved? Is the employee back at work, permanently disabled or somewhere in between? What is they provider’s record on that score? If a provider is associated with a high rate of litigated claims, that should also be considered in the mix, as well.
Providers can be rated specifically for Workers’ Comp by creating a set of algorithms measuring these factors using data. An algorithm is simply a process, usually mathematical, used to solve a problem or reach a conclusion. Algorithms should be used to compare similar types of providers who have treated like injuries in the same jurisdiction during the same time frame. Consistency is achieved because the computerized algorithms apply the same standards to all medical providers.
Rating doctors and other treating providers can be tricky because multiple variables intrude. Evaluating treatment patterns is instructive and sometimes predictive, but in Workers’ Comp multiple additional elements come into play. How severe is the injury? What are the complicating factors such as obesity or diabetes? How old are the claimants and what kind of work do they do? A fractured ankle for a healthy, middle age male construction worker implies greater risk and more cost and complexity than a similar injury for a same age male computer worker. The more factors considered, the more accurate the result. Data rich with detail will produce the most reliable results.
The data used to evaluate provider performance should be derived from more than one source. Raw billing data or bill review data should be integrated with select claim data in order to reach a valid conclusion. Stated differently, billing and treatment data must be integrated with loss time and outcome information, usually found in a different system, in order to reach legitimate conclusions regarding providers.
Ratings for medical providers must be transparent, fair, and objective. Fairness and accuracy in developing and measuring provider performance is critical and the indicators are found in the data. Frankly, the Workers’ Compensation industry has been slow to recognize the importance of integrating data from its disparate sources and leverage it to identify medical and non-medical best practices along with the doctors who use them. The data must be integrated and evaluated using computerized algorithms that measure and monitor provider performance based on a combination of Workers’ Compensation unique values.
A post was recently submitted by Joe Paduda, "Like it or not, physician ratings are coming”. The title may suggest rating doctors is a bad thing. However, it is actually a good thing, unless you are a poorly performing provider. Using legitimate Workers’ Comp-specific rating schemes to provide objective evidence for selection and for weeding out the less effective or even fraudulent providers is positive progress. Informed decisions about medical providers based on data will replace personal biases about providers and unknown outcomes. It will also provide the basis for informed improvement by individual doctors. Moreover, medical provider ratings that are transparent, fair, and objective for Workers’ Comp are not coming, they are available now!
Look for Part III of this series: Transforming Workers’ Comp Provider Networks into Quality Networks
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
A major quality goal in Workers’ Comp is return to full work. Responsibility for achieving that goal rests most significantly with the treating physician. Another major quality goal in Workers’ Comp is return to maximum or full work capacity at the least cost, also largely attributable to treating doctors. This article, Part II of this series, explores the many non-medical functions of treatment that spell quality in Workers’ Compensation, factors that must be considered in rating doctors’ performance.
For instance, multiple and repeated studies have shown that early return to work is a major indicator of better outcomes in Workers’ Comp. (Google search: “Return to Work studies in Workers Compensation”) The generally accepted notion based on these studies is that the sooner employees return to work after a work-related injury, the sooner they are re-acclimated to the job and the lower the overall cost of the claim. Alternatively, the longer the employee is kept off work, the higher the cost of the claim, with reduced chance of successfully returning to work. Studies show a 1:1 correlation between length of time off work and returning to work—ever. Treating providers are the major driver in returning claimants to work. Therefore, early return to work and reduced overall work loss are key indicators for evaluating medical provider performance.
Also important to rating provider performance in Workers’ Compensation is the issue of cost. Two quantifiable generators of unnecessary costs are excessive frequency and duration of medical treatment. Because PPO, MCO and MPN networks discount each unit of service delivered, the tendency of some providers is to exploit both frequency and duration of treatment to overcome their discounted fees. The elements of frequency and duration of medical treatment for specific injury types should be measured and compared with the performance of peers treating similar injuries.
Another comparative quality indicator is direct medical costs. Moreover, billed costs can be enriched as a performance indicator by combining that number with paid amounts or percentage reduction of charges recommended by bill review.
Of critical importance is evaluating providers in terms of claim outcome—how did things turn out in the claims where they were involved? Is the employee back at work, permanently disabled or somewhere in between? What is they provider’s record on that score? If a provider is associated with a high rate of litigated claims, that should also be considered in the mix, as well.
Providers can be rated specifically for Workers’ Comp by creating a set of algorithms measuring these factors using data. An algorithm is simply a process, usually mathematical, used to solve a problem or reach a conclusion. Algorithms should be used to compare similar types of providers who have treated like injuries in the same jurisdiction during the same time frame. Consistency is achieved because the computerized algorithms apply the same standards to all medical providers.
Rating doctors and other treating providers can be tricky because multiple variables intrude. Evaluating treatment patterns is instructive and sometimes predictive, but in Workers’ Comp multiple additional elements come into play. How severe is the injury? What are the complicating factors such as obesity or diabetes? How old are the claimants and what kind of work do they do? A fractured ankle for a healthy, middle age male construction worker implies greater risk and more cost and complexity than a similar injury for a same age male computer worker. The more factors considered, the more accurate the result. Data rich with detail will produce the most reliable results.
The data used to evaluate provider performance should be derived from more than one source. Raw billing data or bill review data should be integrated with select claim data in order to reach a valid conclusion. Stated differently, billing and treatment data must be integrated with loss time and outcome information, usually found in a different system, in order to reach legitimate conclusions regarding providers.
Ratings for medical providers must be transparent, fair, and objective. Fairness and accuracy in developing and measuring provider performance is critical and the indicators are found in the data. Frankly, the Workers’ Compensation industry has been slow to recognize the importance of integrating data from its disparate sources and leverage it to identify medical and non-medical best practices along with the doctors who use them. The data must be integrated and evaluated using computerized algorithms that measure and monitor provider performance based on a combination of Workers’ Compensation unique values.
A post was recently submitted by Joe Paduda, "
Look for Part III of this series: Transforming Workers’ Comp Provider Networks into Quality Networks
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Tuesday, July 13, 2010
Rating Medical Providers—Part I
This is the first in a four-part series about rating medical providers in Workers’ Compensation.
Part II—How to Evaluate and Rank Medical Providers specifically for Workers Compensation
Part III—Transforming Workers’ Comp Provider Networks into Quality Networks
Part IV—Monitoring Provider Performance for Predictive Profiling
Would you rather pay $6000 for a claimant’s back procedure because the physician is in your network and a discount is guaranteed—or agree to pay more and direct the claimant to a best practice provider, identified by analyzing the data? Unfortunately, the majority of payers in Workers’ Compensation are still choosing the former scenario. Frankly, it is easier to enjoy reports of discounts than it is to analyze provider performance.
Analyzing provider performance requires data gathering and integrating, followed by broad spectrum analysis of multiple performance indicators. Therefore, it’s easier to just accept the discount, regardless of the outcome. But that isn’t enough anymore.
A reliable predictor of high cost in a Workers Compensation claim is a poorly performing medical provider. Individual providers can be naively oblivious to the special needs and conditions in Workers’ Compensation, just inept, or downright fraudulent. Yet, for the most part, Workers’ Compensation provider networks and the payers that use them, do not evaluate and rate provider performance to find and cultivate the good ones. However, the group health industry does just that.
The group health industry is very different from the Workers’ Compensation industry in this regard. In fact, group health has thirty years of experience evaluating physician competency and healthcare quality. Organizations such as NCQA (National Committee for Quality Assurance), JCAHO (Joint Commission on Accreditation of Healthcare Organizations), AMA (American Medical Association) and several private organizations have all worked to identify quality indicators and individuals who use them in their practices to gain best outcomes. Now, after so many years of provider rating, the remaining issues in general health are standardizing indicators of quality across rating organizations and agreeing on how to rate and rank providers fairly.
In fact, the group health industry seems to be barreling forward in its attempts to rate providers. A little Internet surfing bears this out. Check out Healthgrades where 750,000 physicians, 5000 hospitals and 16,000 nursing homes are rated. Physicians can be searched and rated by specialty and conditions treated, a one-stop doctor shopping experience. Not long ago, this would have been considered impertinent. But there is more.
Using Angie’s List one can search physicians by areas of practice alongside carpet cleaners, plumbers and manicurists. Angie’s List uses a customer satisfaction approach to evaluating medical care. As such, it is subjective evaluation, limited to how well-liked the doctor is or how good the patient felt following treatment. Moreover, Zagat, the restaurant guide, was approached not long ago by Blue Cross to help them develop a rating system for physicians. And probably not finally, there’s an app for that—Deep Pocket Series adapted to your mobile where you can conveniently search for many things medical, including neurologists, drug lists and romantic matching for unattached doctors and nurses.
However, even with all the hullabaloo in general health about rating doctors, it is of little note or applicability in Workers’ Compensation. Even if Workers’ Compensation payers were interested, group health physician rating in any of its current forms does not translate well to Workers’ Compensation.
One reason physician rating in general health does not apply to Workers’ Compensation is that the comparative parameters do not equate. In group health, an episode of care is artificially identified in the data so that comparisons can be made “apples to apples”. An episode of care might be a fractured femur, along with all associated doctor’s visits, diagnostics and treatment services. In Workers’ Compensation, the episode of measurement is simply a claim. The parameters are clear—everything from DOI to close. The claim is more encompassing and physician influence extends beyond treatment to wage replacement and legal involvement. Key performance indicators of physician performance in Workers’ Compensation cut a wide swath that would be ignored in group health.
Another difference between the two is definition of quality. In general health quality is defined as those diagnostics and treatments that lead to return to full health, whereas the fundamental goal in Workers’ Compensation is return to work. Both systems are concerned with cost. However, group health costs are primarily controlled by policy design. The policy defines what is paid for specific conditions (diagnoses) and that is the end of it. If it’s not included in the insurance policy or under Medicare or Medicaid or HMO, payments will simply not be made for a medical service. Conversely, in Workers’ Comp the costs include not only medical costs, but multiple other contributed costs.
Because the two systems are so different, methods for rating doctors under group or general health have little meaning in Workers’ Comp. But that begs the question, how can we rate doctors in Workers Comp? That’s the tease—you’ll find answers in Part II of this four part series.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Part II—How to Evaluate and Rank Medical Providers specifically for Workers Compensation
Part III—Transforming Workers’ Comp Provider Networks into Quality Networks
Part IV—Monitoring Provider Performance for Predictive Profiling
Would you rather pay $6000 for a claimant’s back procedure because the physician is in your network and a discount is guaranteed—or agree to pay more and direct the claimant to a best practice provider, identified by analyzing the data? Unfortunately, the majority of payers in Workers’ Compensation are still choosing the former scenario. Frankly, it is easier to enjoy reports of discounts than it is to analyze provider performance.
Analyzing provider performance requires data gathering and integrating, followed by broad spectrum analysis of multiple performance indicators. Therefore, it’s easier to just accept the discount, regardless of the outcome. But that isn’t enough anymore.
A reliable predictor of high cost in a Workers Compensation claim is a poorly performing medical provider. Individual providers can be naively oblivious to the special needs and conditions in Workers’ Compensation, just inept, or downright fraudulent. Yet, for the most part, Workers’ Compensation provider networks and the payers that use them, do not evaluate and rate provider performance to find and cultivate the good ones. However, the group health industry does just that.
The group health industry is very different from the Workers’ Compensation industry in this regard. In fact, group health has thirty years of experience evaluating physician competency and healthcare quality. Organizations such as NCQA (National Committee for Quality Assurance), JCAHO (Joint Commission on Accreditation of Healthcare Organizations), AMA (American Medical Association) and several private organizations have all worked to identify quality indicators and individuals who use them in their practices to gain best outcomes. Now, after so many years of provider rating, the remaining issues in general health are standardizing indicators of quality across rating organizations and agreeing on how to rate and rank providers fairly.
In fact, the group health industry seems to be barreling forward in its attempts to rate providers. A little Internet surfing bears this out. Check out Healthgrades where 750,000 physicians, 5000 hospitals and 16,000 nursing homes are rated. Physicians can be searched and rated by specialty and conditions treated, a one-stop doctor shopping experience. Not long ago, this would have been considered impertinent. But there is more.
Using Angie’s List one can search physicians by areas of practice alongside carpet cleaners, plumbers and manicurists. Angie’s List uses a customer satisfaction approach to evaluating medical care. As such, it is subjective evaluation, limited to how well-liked the doctor is or how good the patient felt following treatment. Moreover, Zagat, the restaurant guide, was approached not long ago by Blue Cross to help them develop a rating system for physicians. And probably not finally, there’s an app for that—Deep Pocket Series adapted to your mobile where you can conveniently search for many things medical, including neurologists, drug lists and romantic matching for unattached doctors and nurses.
However, even with all the hullabaloo in general health about rating doctors, it is of little note or applicability in Workers’ Compensation. Even if Workers’ Compensation payers were interested, group health physician rating in any of its current forms does not translate well to Workers’ Compensation.
One reason physician rating in general health does not apply to Workers’ Compensation is that the comparative parameters do not equate. In group health, an episode of care is artificially identified in the data so that comparisons can be made “apples to apples”. An episode of care might be a fractured femur, along with all associated doctor’s visits, diagnostics and treatment services. In Workers’ Compensation, the episode of measurement is simply a claim. The parameters are clear—everything from DOI to close. The claim is more encompassing and physician influence extends beyond treatment to wage replacement and legal involvement. Key performance indicators of physician performance in Workers’ Compensation cut a wide swath that would be ignored in group health.
Another difference between the two is definition of quality. In general health quality is defined as those diagnostics and treatments that lead to return to full health, whereas the fundamental goal in Workers’ Compensation is return to work. Both systems are concerned with cost. However, group health costs are primarily controlled by policy design. The policy defines what is paid for specific conditions (diagnoses) and that is the end of it. If it’s not included in the insurance policy or under Medicare or Medicaid or HMO, payments will simply not be made for a medical service. Conversely, in Workers’ Comp the costs include not only medical costs, but multiple other contributed costs.
Because the two systems are so different, methods for rating doctors under group or general health have little meaning in Workers’ Comp. But that begs the question, how can we rate doctors in Workers Comp? That’s the tease—you’ll find answers in Part II of this four part series.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Thursday, July 1, 2010
Calming a Perfect Storm--Managing Workers' Comp Claims with Data
To make eyes glaze over accompanied by severe hearing impairment, simply launch a discussion about data management. Data analysis is not a topic that breeds popularity at social or even business gatherings. So this article is not about data or data management. Rather, this is about a concept known as Knowledge Management, i.e., how to manage processes and outcomes in an organization by strategically managing the organization’s knowledge.
What knowledge?
Knowledge Management evolves from the more familiar concept of Business Intelligence whereby an organization intentionally and comprehensively gathers, organizes, integrates, and analyzes its data to better understand its business processes. Business Intelligence reports and graphs are produced in abundance in most organizations to portray cost drivers and trends, profits and loss, and multiple other factors dissected by any number of variables. Knowledge Management, on the other hand, takes that intelligence and links it to operations, thereby making it actionable. Knowledge Management methods takes the results of analyses and distributes them throughout the organization in the form of software-like tools that can be used for decision support and to initialize appropriate action. Knowledge Management is widely used in other industries, such as retail.
Walmart, for example, is unusually skilled at developing and managing their Knowledge Management systems. They gather raw data from various sources including purchase transactions at the cash register to determine customer preferences, timing, and demographics. They analyze buying patterns in geographic areas, at certain times of year such as holidays, and during unplanned events such as calamitous weather. They even monitor weather data to determine which stores are likely to be effected by predicted storms. The data are integrated with data gathered from other sources including current inventory, inventory location and distribution schedules. Finally, the data are analyzed to determine the effects on inventory in affected stores during by a storm. But that is only the beginning.
The steps described to this point meet the classic definition of Business Intelligence. However, Walmart kicks it up a notch. It operationalizes its intelligence using a practice known as Information Management.
Walmart uses the gathered intelligence to automatically mobilize a pre-designed action plan. A predicted weather event such as a hurricane mobilizes strategic action to immediately and automatically redistribute goods in the affected region. Inventory known to be in high demand during such events is shipped to stores in the area as soon as a storm is identified. Normal shipping schedules are shifted, taking the closest high-demand inventory available and redistributing it to affected stores. Results: Customers find the products they need in adequate amounts in their local Walmart stores even though the demand has multiplied. Walmart not only increases revenue through increased sales, but also gains the benefit of meeting customer needs.
The process of Knowledge Management does not end there. New data gathered from all the sources throughout the course of the event are analyzed and applied to validating or improving the solution for the next time a crisis event occurs. For instance, normal inventory levels in the region may be adjusted during the entire hurricane season to insure quicker response. Walmart practices Knowledge Management by operationalizing its business intelligence and the entire organization benefits, along with its customers. By acting on their current data, they are able affect immediate change in practice and prevent further problems for themselves and their customers. Moreover, the same processes can be applied to other businesses in other industries, even Workers’ Comp.
Knowledge Management can be translated to the Workers Compensation payer and managed care industry. Certainly, the data are available from many sources as it is at Walmart. Billing data, bill review data, claims data, FROI, physician reports, pharmacological data, OSHA reports, medical case management data, UR, and payroll systems are among the data sources. The data must be integrated and analyzed, like it is at Walmart. However, in Workers‘ Comp, the data are rarely collected and integrated from the multiple sources, and certainly not as intentionally as within Walmart. But when the data are collected and integrated from just two sources, huge gains can be made. Take billing and claims data to start.
Organizations that collect, integrate and analyze billing and claims data can embark on the path to Knowledge Management and expect optimized outcomes. The data are similarly gathered, integrated, and analyzed within the context of the business. The leap to Knowledge Management is a matter of disseminating the results through the organization in the form of actionable tools, appropriately directed, just like Walmart.
In Workers Comp, a hurricane-like, calamitous event is a potentially hazardous claim. Conditions of the claim are represented by data elements that when combined, portend high risk, high cost and poor outcomes—a perfect storm.
The data in a claim can identify it as potentially high risk, such as a leg amputation, with additional high risks (the claimant is 65 and obese or diabetic), and complications (second surgery). When such combinations of data occur, the Knowledge Management system that is monitoring current data, can prompt automatic and immediate action by appropriate persons immediately. Perfect storms in claims are best prevented by identifying early those claims that will develop high cost and poor outcomes. They can be discovered by integrating, analyzing, and monitoring the data from the various sources to uncover tell-tale combinations and initiating action.
Implementing Knowledge Management methods for Worker’s Comp claims is not very different than managing storm demand for Walmart. Rather than shifting inventory levels, alerts are sent to key persons when high risk data combinations occur. Currently monitored, integrated and analyzed data mobilizes action to insure early intervention to calm the perfect storm and prevent unnecessary further damage.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
What knowledge?
Knowledge Management evolves from the more familiar concept of Business Intelligence whereby an organization intentionally and comprehensively gathers, organizes, integrates, and analyzes its data to better understand its business processes. Business Intelligence reports and graphs are produced in abundance in most organizations to portray cost drivers and trends, profits and loss, and multiple other factors dissected by any number of variables. Knowledge Management, on the other hand, takes that intelligence and links it to operations, thereby making it actionable. Knowledge Management methods takes the results of analyses and distributes them throughout the organization in the form of software-like tools that can be used for decision support and to initialize appropriate action. Knowledge Management is widely used in other industries, such as retail.
Walmart, for example, is unusually skilled at developing and managing their Knowledge Management systems. They gather raw data from various sources including purchase transactions at the cash register to determine customer preferences, timing, and demographics. They analyze buying patterns in geographic areas, at certain times of year such as holidays, and during unplanned events such as calamitous weather. They even monitor weather data to determine which stores are likely to be effected by predicted storms. The data are integrated with data gathered from other sources including current inventory, inventory location and distribution schedules. Finally, the data are analyzed to determine the effects on inventory in affected stores during by a storm. But that is only the beginning.
The steps described to this point meet the classic definition of Business Intelligence. However, Walmart kicks it up a notch. It operationalizes its intelligence using a practice known as Information Management.
Walmart uses the gathered intelligence to automatically mobilize a pre-designed action plan. A predicted weather event such as a hurricane mobilizes strategic action to immediately and automatically redistribute goods in the affected region. Inventory known to be in high demand during such events is shipped to stores in the area as soon as a storm is identified. Normal shipping schedules are shifted, taking the closest high-demand inventory available and redistributing it to affected stores. Results: Customers find the products they need in adequate amounts in their local Walmart stores even though the demand has multiplied. Walmart not only increases revenue through increased sales, but also gains the benefit of meeting customer needs.
The process of Knowledge Management does not end there. New data gathered from all the sources throughout the course of the event are analyzed and applied to validating or improving the solution for the next time a crisis event occurs. For instance, normal inventory levels in the region may be adjusted during the entire hurricane season to insure quicker response. Walmart practices Knowledge Management by operationalizing its business intelligence and the entire organization benefits, along with its customers. By acting on their current data, they are able affect immediate change in practice and prevent further problems for themselves and their customers. Moreover, the same processes can be applied to other businesses in other industries, even Workers’ Comp.
Knowledge Management can be translated to the Workers Compensation payer and managed care industry. Certainly, the data are available from many sources as it is at Walmart. Billing data, bill review data, claims data, FROI, physician reports, pharmacological data, OSHA reports, medical case management data, UR, and payroll systems are among the data sources. The data must be integrated and analyzed, like it is at Walmart. However, in Workers‘ Comp, the data are rarely collected and integrated from the multiple sources, and certainly not as intentionally as within Walmart. But when the data are collected and integrated from just two sources, huge gains can be made. Take billing and claims data to start.
Organizations that collect, integrate and analyze billing and claims data can embark on the path to Knowledge Management and expect optimized outcomes. The data are similarly gathered, integrated, and analyzed within the context of the business. The leap to Knowledge Management is a matter of disseminating the results through the organization in the form of actionable tools, appropriately directed, just like Walmart.
In Workers Comp, a hurricane-like, calamitous event is a potentially hazardous claim. Conditions of the claim are represented by data elements that when combined, portend high risk, high cost and poor outcomes—a perfect storm.
The data in a claim can identify it as potentially high risk, such as a leg amputation, with additional high risks (the claimant is 65 and obese or diabetic), and complications (second surgery). When such combinations of data occur, the Knowledge Management system that is monitoring current data, can prompt automatic and immediate action by appropriate persons immediately. Perfect storms in claims are best prevented by identifying early those claims that will develop high cost and poor outcomes. They can be discovered by integrating, analyzing, and monitoring the data from the various sources to uncover tell-tale combinations and initiating action.
Implementing Knowledge Management methods for Worker’s Comp claims is not very different than managing storm demand for Walmart. Rather than shifting inventory levels, alerts are sent to key persons when high risk data combinations occur. Currently monitored, integrated and analyzed data mobilizes action to insure early intervention to calm the perfect storm and prevent unnecessary further damage.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Tuesday, June 22, 2010
How to rate medical providers in Workers Compensation—Part II
Part I of this series made the point that while rating providers in group health is a long-practiced endeavor, its elements and parameters have not migrated to Workers’ Compensation. Efforts to translate group health provider quality to Workers’ Compensation have fallen well short of the mark because they omit several factors crucial to Workers Comp. Quality medical performance indicators in Workers’ Comp encompass medical treatment, outcome and cost factors similar to those in general health, but they also include non-medical functions. In Workers’ Comp, those non-medical elements can be primary drivers of cost and outcome.
A major quality goal in Workers’ Comp is return to full work and achievement of that goal rests most significantly with the treating physician. Another major quality goal in Workers’ Comp is return to maximum or full work capacity at the least cost, also largely attributable to the treating doctors. This article, Part II of this series, explores the many non-medical functions of quality in medical treatment for Workers’ Compensation, factors that must be considered in rating doctors.
For instance, multiple and repeated studies have shown that early return to work is a major indicator of better outcomes in Workers’ Comp. (Google search: “Return to Work studies in Workers Compensation”) The generally accepted notion based on these studies is that the sooner employees return to work after a work-related injury, the sooner they are re-acclimated to the job and the lower the overall cost of the claim. Alternatively, the longer the employee is kept off work, the higher the cost of the claim, with reduced chance of ever returning to work. Studies show a 1:1 correlation between length of time off work and returning to work—ever. Treating providers are not the only factor, but they are certainly the major driver in returning the person to work. Therefore, early return to work and reduced overall work loss are key performance indicators for evaluating medical providers. What is a provider’s performance in terms of return to work and how does it compare to others?
Also important to rating provider performance in Workers’ Compensation is the issue of cost. Quantifiable generators of excessive costs are the frequency and duration of medical treatment. Because PPO, MCO and MPN networks discount each unit of service delivered, the tendency of some providers may be to exploit both frequency and duration of treatment services to boost discounted fees. The elements of frequency and duration of medical treatment for specific injury types should be measured and compared with the performance of peers treating similar injuries.
Also, billed costs are comparative quality indicator. Billed costs can be strengthened by combining that number with paid costs or percentage reduction of charges recommended by bill review. One can also evaluate a provider’s performance in terms of claim reopening after closure. Certainly ratings should include outcome data—how did things turn out? Is the employee back at work, permanently disabled or somewhere in between? If a provider is associated with a high rate of settled or litigated claims, that should be considered in the mix.
Providers can be rated specifically for Workers’ Comp by creating an algorithm or a set of algorithms evaluating these factors and executed using data. The algorithms should compare similar specialty providers who have treated like injuries in the same jurisdiction during the same time frame. Moreover, the algorithms should “handicap” individual providers to insure fairness. Consistency is achieved by the computerized algorithms applying the same standards to all medical providers.
Rating doctors and other treating providers can be tricky because multiple variables intrude. How severe is the injury? What are the complicating factors such as obesity or diabetes? How old are the claimants and what kind of work do they do? A fractured ankle for a healthy, middle age male construction worker implies higher risk than a similar injury for a same age male computer worker. The more factors considered, the more accurate the result. Other issues must be considered, as well.
The data used to evaluate provider performance must be derived from a broad spectrum. Raw billing data or bill review data should be integrated with select claim data in order to reach a valid conclusion. Stated again, billing and treatment data must be integrated with loss time and outcome information, usually found in a different system, in order to reach a legitimate result regarding provider performance. Evaluating treatment patterns is instructive and sometimes predictive, but in Workers’ Comp multiple other elements come into play.
Ratings must be transparent, fair, and objective. Fairness and accuracy in developing and measuring provider performance is critical and the indicators are found in the data. Frankly, the Workers’ Compensation industry has been slow to recognize the importance of integrating data from its disparate sources and leveraging it to identify medical best practices and the doctors who use them. The data must be integrated and evaluated using computerized algorithms that measure and monitor provider performance based on a combination of Workers’ Compensation-specific values.
A post was recently submitted by Joe Paduda, “Like it or not, physician ratings are coming”. The title suggests rating doctors is a bad thing. It is not, unless you are a poorly performing provider. Using legitimate Workers’ Comp-specific rating schemes to provide objective evidence for selection and for weeding out the less effective or even fraudulent providers is positive progress. Informed decisions about medical providers based on data will replace personal preferences with unknown outcomes. It will also provide the basis for informed improvement by individual doctors. Moreover, medical provider ratings that are transparent, fair, and objective are available now.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
A major quality goal in Workers’ Comp is return to full work and achievement of that goal rests most significantly with the treating physician. Another major quality goal in Workers’ Comp is return to maximum or full work capacity at the least cost, also largely attributable to the treating doctors. This article, Part II of this series, explores the many non-medical functions of quality in medical treatment for Workers’ Compensation, factors that must be considered in rating doctors.
For instance, multiple and repeated studies have shown that early return to work is a major indicator of better outcomes in Workers’ Comp. (Google search: “Return to Work studies in Workers Compensation”) The generally accepted notion based on these studies is that the sooner employees return to work after a work-related injury, the sooner they are re-acclimated to the job and the lower the overall cost of the claim. Alternatively, the longer the employee is kept off work, the higher the cost of the claim, with reduced chance of ever returning to work. Studies show a 1:1 correlation between length of time off work and returning to work—ever. Treating providers are not the only factor, but they are certainly the major driver in returning the person to work. Therefore, early return to work and reduced overall work loss are key performance indicators for evaluating medical providers. What is a provider’s performance in terms of return to work and how does it compare to others?
Also important to rating provider performance in Workers’ Compensation is the issue of cost. Quantifiable generators of excessive costs are the frequency and duration of medical treatment. Because PPO, MCO and MPN networks discount each unit of service delivered, the tendency of some providers may be to exploit both frequency and duration of treatment services to boost discounted fees. The elements of frequency and duration of medical treatment for specific injury types should be measured and compared with the performance of peers treating similar injuries.
Also, billed costs are comparative quality indicator. Billed costs can be strengthened by combining that number with paid costs or percentage reduction of charges recommended by bill review. One can also evaluate a provider’s performance in terms of claim reopening after closure. Certainly ratings should include outcome data—how did things turn out? Is the employee back at work, permanently disabled or somewhere in between? If a provider is associated with a high rate of settled or litigated claims, that should be considered in the mix.
Providers can be rated specifically for Workers’ Comp by creating an algorithm or a set of algorithms evaluating these factors and executed using data. The algorithms should compare similar specialty providers who have treated like injuries in the same jurisdiction during the same time frame. Moreover, the algorithms should “handicap” individual providers to insure fairness. Consistency is achieved by the computerized algorithms applying the same standards to all medical providers.
Rating doctors and other treating providers can be tricky because multiple variables intrude. How severe is the injury? What are the complicating factors such as obesity or diabetes? How old are the claimants and what kind of work do they do? A fractured ankle for a healthy, middle age male construction worker implies higher risk than a similar injury for a same age male computer worker. The more factors considered, the more accurate the result. Other issues must be considered, as well.
The data used to evaluate provider performance must be derived from a broad spectrum. Raw billing data or bill review data should be integrated with select claim data in order to reach a valid conclusion. Stated again, billing and treatment data must be integrated with loss time and outcome information, usually found in a different system, in order to reach a legitimate result regarding provider performance. Evaluating treatment patterns is instructive and sometimes predictive, but in Workers’ Comp multiple other elements come into play.
Ratings must be transparent, fair, and objective. Fairness and accuracy in developing and measuring provider performance is critical and the indicators are found in the data. Frankly, the Workers’ Compensation industry has been slow to recognize the importance of integrating data from its disparate sources and leveraging it to identify medical best practices and the doctors who use them. The data must be integrated and evaluated using computerized algorithms that measure and monitor provider performance based on a combination of Workers’ Compensation-specific values.
A post was recently submitted by Joe Paduda, “Like it or not, physician ratings are coming”. The title suggests rating doctors is a bad thing. It is not, unless you are a poorly performing provider. Using legitimate Workers’ Comp-specific rating schemes to provide objective evidence for selection and for weeding out the less effective or even fraudulent providers is positive progress. Informed decisions about medical providers based on data will replace personal preferences with unknown outcomes. It will also provide the basis for informed improvement by individual doctors. Moreover, medical provider ratings that are transparent, fair, and objective are available now.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Thursday, June 17, 2010
A Conspiracy of Silence--WC Provider Networks
A particularly bizarre process has been carried out in the Workers Compensation industry for a very long time. It's something everyone knows about, but few talk about, and still fewer make any attempt to change. It is a conspiracy of silence that continues to drive up medical costs.
Managed care networks (PPO's, HCO's MPN's) contract with physicians and other medical providers to discount their services in exchange for directing injured workers to them. Some states have gotten into the act by legislatively requiring provider networks to be similarly structured. The appeal to those who subscribe to networks is that discounts are applied to individual units of medical services delivered. When the discounts are tallied they are sent to network clients in the form of clean, easily understood reports of dollar savings. The number of services charged is very simply multiplied by the contracted discount. Obviously, more units of service charged result in more discounts and more reported dollars saved. But not really.
You don't need to be too clever to figure out that more discounts reported means more medical services were delivered, but not necessarily more savings. Increasing medical services inflates the number of reported discounts, not overall savings.
Moreover, medical providers are a part of the conspiracy, being quick to realize the way to overcome the revenue hit of discounts is to deliver and charge for more services. Most providers don't think of themselves as exploiting their charges and the system. Many just know that for Workers Comp patients under the network discounting arrangement, they maximize treatment.
Payers go along with the deception because reports of discounts make people feel good. Who doesn't want to receive the good news of cost savings? They can pass along the feel-good reports to their clients and accounts. Everyone wins--except the employer who eventually has to foot the bill. Employers are aware of these shenanigans; it's hardly breaking news. But in the conspiracy of silence, no one is willing to topple the apple cart by leading the charge of change.
Nevertheless, medical network practices could be made palatable, even defensible if this archaic method of discounting were redirected to evaluating medical practice patterns and outcomes. Think quality. Under present procedures, once providers are contracted by a network, they remain on the panel indefinitely, without performance evaluations or monitoring. Quality is not measured and outcomes are not reported. We have no proof of value. We have no quality measures for the treatment practices of the individual providers in the network. Yet, this higher level of information and process management is available now.
The technology and methodology to measure and monitor treating provider performance is a process of evaluating the data to measure quality in context with desired outcomes in Workers Comp. That is different than in group health or general health where quality criteria are determined by return to health whereas in Workers Comp we are more concerned with return to work. Evaluating data is not so difficult except for the fact that in Workers' Comp, the data related to a claim are often found in different locations, even in different companies. Regardless of where the data resides, it is rarely integrated for the purposes of understanding medical treatment in context with outcome. Provider networks hold vast amounts of medical billing data, but not claim outcomes data.
Medical billing data is rich in medical treatment detail along with billed charges for services delivered. But it has to travel through bill review where the charges are evaluated and recommendations made for adjusted payments based on appropriateness and fee schedules. The bills also go the networks where the unit discounts are applied. Bill review companies and networks have truckloads of data, but still not enough data.
The essential value-add to fair provider performance evaluation is claims level data. Treatment practices of providers found in billing and/or bill review must be considered in context of the entire claim. Billing, whether discounted or not must be viewed from the broader perspective of return to work, indemnity payments and outcomes. Continuously monitoring providers and their treatment practices in this way will reveal best practice providers, inept providers, and fraudulent providers. So what's the hold-up?
The concept of contracted provider networks is not the problem. The problem is the revenue and payment structure currently used by them. Not monitoring and measuring provider performance is unacceptable. But most networks do not want to consider alternative structures, structures that do not rely on unit discounts. It would mean changing their business model where revenue and payments are derived from different logic. But networks should consider the fact that employers might prefer to pay for networks (via their payers) that evaluate providers and provider performance. Employers might choose to pay for networks with providers who have better outcomes rather than misleading discounts and reported savings. But for now, the conspiracy of silence continues.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
Managed care networks (PPO's, HCO's MPN's) contract with physicians and other medical providers to discount their services in exchange for directing injured workers to them. Some states have gotten into the act by legislatively requiring provider networks to be similarly structured. The appeal to those who subscribe to networks is that discounts are applied to individual units of medical services delivered. When the discounts are tallied they are sent to network clients in the form of clean, easily understood reports of dollar savings. The number of services charged is very simply multiplied by the contracted discount. Obviously, more units of service charged result in more discounts and more reported dollars saved. But not really.
You don't need to be too clever to figure out that more discounts reported means more medical services were delivered, but not necessarily more savings. Increasing medical services inflates the number of reported discounts, not overall savings.
Moreover, medical providers are a part of the conspiracy, being quick to realize the way to overcome the revenue hit of discounts is to deliver and charge for more services. Most providers don't think of themselves as exploiting their charges and the system. Many just know that for Workers Comp patients under the network discounting arrangement, they maximize treatment.
Payers go along with the deception because reports of discounts make people feel good. Who doesn't want to receive the good news of cost savings? They can pass along the feel-good reports to their clients and accounts. Everyone wins--except the employer who eventually has to foot the bill. Employers are aware of these shenanigans; it's hardly breaking news. But in the conspiracy of silence, no one is willing to topple the apple cart by leading the charge of change.
Nevertheless, medical network practices could be made palatable, even defensible if this archaic method of discounting were redirected to evaluating medical practice patterns and outcomes. Think quality. Under present procedures, once providers are contracted by a network, they remain on the panel indefinitely, without performance evaluations or monitoring. Quality is not measured and outcomes are not reported. We have no proof of value. We have no quality measures for the treatment practices of the individual providers in the network. Yet, this higher level of information and process management is available now.
The technology and methodology to measure and monitor treating provider performance is a process of evaluating the data to measure quality in context with desired outcomes in Workers Comp. That is different than in group health or general health where quality criteria are determined by return to health whereas in Workers Comp we are more concerned with return to work. Evaluating data is not so difficult except for the fact that in Workers' Comp, the data related to a claim are often found in different locations, even in different companies. Regardless of where the data resides, it is rarely integrated for the purposes of understanding medical treatment in context with outcome. Provider networks hold vast amounts of medical billing data, but not claim outcomes data.
Medical billing data is rich in medical treatment detail along with billed charges for services delivered. But it has to travel through bill review where the charges are evaluated and recommendations made for adjusted payments based on appropriateness and fee schedules. The bills also go the networks where the unit discounts are applied. Bill review companies and networks have truckloads of data, but still not enough data.
The essential value-add to fair provider performance evaluation is claims level data. Treatment practices of providers found in billing and/or bill review must be considered in context of the entire claim. Billing, whether discounted or not must be viewed from the broader perspective of return to work, indemnity payments and outcomes. Continuously monitoring providers and their treatment practices in this way will reveal best practice providers, inept providers, and fraudulent providers. So what's the hold-up?
The concept of contracted provider networks is not the problem. The problem is the revenue and payment structure currently used by them. Not monitoring and measuring provider performance is unacceptable. But most networks do not want to consider alternative structures, structures that do not rely on unit discounts. It would mean changing their business model where revenue and payments are derived from different logic. But networks should consider the fact that employers might prefer to pay for networks (via their payers) that evaluate providers and provider performance. Employers might choose to pay for networks with providers who have better outcomes rather than misleading discounts and reported savings. But for now, the conspiracy of silence continues.
View additional articles by Karen Wolfe under Blogs at www.medmetrics.org
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