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

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

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