Cost Control Discovered at the Intersection of Technology and Managed Care

By Karen Wolfe

Costs continue to rise
Regardless of the myriad of interventions directed at containing claim costs in Workers’ Compensation, costs continue to increase. Now that the medical portion of claim costs amounts to sixty percent or more, the fact must be acknowledge that traditional managed care initiatives are inadequate. Moreover, new medical costs seem to be appearing from unfamiliar places, leaving no apparent recourse. Costs are finding new avenues of expression in the form of drug costs, complex medical procedures, and exponential costs due to comorbidities.

What now?
It seems everything that can be done, has been done. Managed care programs including provider networks, bill review, utilization review, peer review, and medical case management are conceptually well-founded. Still, outcomes are disappointing. What more can be done?

Starting over is absolutely not an option. Disbanding current managed care programs and creating new ones is completely impractical. Sunk costs of existing programs are huge, and building new ones is not feasible or affordable. Besides, managed care programs in Workers’ Compensation are well-founded conceptually, and based on solid principals. They just need to function more effectively.

Managed care is tired
Managed care programs in Workers’ Compensation are tired. Like much of our country’s infrastructure, they have not been revitalized over the years of their existence. They operate today just like they did twenty years ago. Specifically, most managed care programs have not taken advantage of the exponential advances in technology during their tenure.

Same tenure—different results
Think about it. As recently as twenty years ago (1991 seems like yesterday) Microsoft’s Disk Operating System (DOS) was the predominant operating system for personal computers. PC’s were large, expensive, and scarce in companies. Local area networks were just emerging and required hard-wiring to connect, servers, PC’s and printers. The Internet was not yet available for general use. Significantly, this was also the time of Workers’ Comp managed care ascendency. Yet, it would be some time before managed care programs were even computerized.

Computerization in managed care is relatively recent and the uptake has been laboriously slow. At the same time, evolution in technology has been explosive. Reluctant technology upgrades in managed care have been dedicated to hardware and operating software at a pace consistent with Microsoft operating system advances. Little has been done in managed care to exploit technology to actually benefit outcomes.

In contrast, PC’s (350 million were sold in 2010!), cell phones, and smart phones have proliferated. It is estimated 4.6 billion cell phones are in use worldwide. They are enabled with text messaging, web browsers and cameras, as well as by wireless connectivity in place of landlines to reach remote communities, as well as by new social networks that enable collaboration on more and more devices. As recently as 2005, Facebook was a start-up phenomenon, Twitter was still a sound, the cloud was something in the sky, and 3G was a parking space.1 The flood of technology and its applications has serious and exciting implications for Workers’ Comp managed care.

Differentiate through technology
Underscoring the point, Joel Cawley, the vice president for strategy at IBM is quoted as saying, “Two things will differentiate companies, countries, and individuals from one another. One is analytics. Once everyone is connected, prosperity will depend on how well you or your company can analyze and apply all the data pouring through these networks to optimize your ability to provide better…(services).”2

The Workers’ Compensation industry must of necessity step up to the challenge because continuing to do business as usual is ever more unconscionable in light of claim cost escalation and deteriorating outcomes. Workers’ Comp organizations, whether they are insurers, third party payers, self-insured employers, or service providers to the industry, must leverage technology to improve their services and control costs. To do otherwise is derelict.

Move to the intersection of technology and managed care
Analyze the data to gain insight into best practices and procedures and who is providing them. Leverage the data to find best in class doctors and other providers. Enable current data to inform adjusters and medical case managers of claims containing potentially calamitous conditions. Let technology notify appropriate persons of approaching key benchmarks and other pivotal conditions. Most importantly, act on the findings of analytics.

Drive the results of analytics to operations to mobilize appropriate action to intervene in time to prevent further damage. Make analytics and technology work-in-progress tools that lead people to informed decisions and to taking action early enough to contain costs. Most importantly, embrace technology to ramp-up, revitalize, and recharge managed care programs. Use analytics backed by technology to take charge of outcomes. Move to the intersection of technology and managed care.

Learn how MedMetrics will move you to the intersection of technology and managed care, thereby gaining more control of costs and outcomes.

1 Friedman, T., Mandelbaum, M. That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back. Farrar, Straus and Giroux. 2011.
2 Ibid.