Two Steps to Recharge WC Managed Care

By Karen Wolfe

Having the long-view perspective offers advantages. Sometimes it also generates frustration and occasional surprise. One thing we know is that the workers compensation industry is not given to abrupt change or quick assimilation of new ideas or technology. Moreover, once a process is in place, bringing about change is difficult.

Change resistance

Managed Care (medical cost management) is one of those processes in Workers’ Comp that resists change. While we’ve had managed care programs in place for twenty-plus years, medical costs continue to escalate. The confounding thing is business continues as usual, continues the same services using the same methods, while many hope for different results.

The industry created programs such as PPO networks, medical case management, utilization review, peer review, bill review and other initiatives to contain medical costs and produce better claim outcomes. In doing so, it also built an industry made up of companies and divisions of companies whose chief focus was medical cost containment. Over the years, that focus morphed to organizational preservation through revenue enhancement. Discounting methods and cost saving reporting have been reduced to simple subterfuge, without evidence of quality medical performance or outcomes.  

Starting over

Nonetheless, industry thinking is beginning to change as the elephants in the room are acknowledged. While it might be nice, starting over is not an option. The sunk costs are huge. Yet, many medical cost containment programs in the industry were soundly conceived in the beginning. The challenge is to realign them to achieve the results originally intended. Two major initiatives are necessary.

Follow the money (What else is new?)

Revenue models for managed care programs must be the first target of change. The consumers of managed care, the payers, must demand the change. Purchasing decisions are powerful change agents.

To satisfy the revenue requirements of managed care organizations as they shift their focus requires creative thinking and planning. Revenue should be structured to reward desired behavior and proven outcomes. That will require major process shifting because the current comfort level is entrenched.

Technology-intensified managed care

The second step in revitalizing managed care programs is to reinforce them with intelligent technology. Over the past twenty plus years, while computer technology has advanced exponentially, little has made its way to Workers’ Comp. managed care programs.

Technology offers ample opportunities to maximize cost savings. They include monitoring historic and current integrated data to identify and alert professionals of adverse conditions in claims in real time. Data can be re-presented for business units to be used as decision support and work-in-progress tools. Analytics can discern best medical providers to revamp networks and make the information instantly available to those directing care. Processes can be optimized and corporate standards enforced. Moreover, predictive models can guide strategic business decisions.

Making it happen

The first initiative of change is the more challenging. Changing business rationale carries the risk of revenue reduction or loss in the transition.

Affordable

Happily, infusing technology into operations is much easier and affordable. Do-it-yourself projects can work, but development time and costs can be excessive. However, proven tools are available to recharge managed care programs and begin realizing actual medical cost management.

Learn more about managed care technology “apps” at MedMetrics or contact karenwolfe@medmetrics.org