It is
well-known in Workers’ Compensation direct medical costs now amount to 60% of
claim costs. For most businesses in most industries, when the bulk of expense dollars
shifts significantly, the business process immediately adjusts to target the problem. Not
in Workers’ Comp.
Managed
care programs have remained essentially unchanged since their inception, now
nearly thirty years past. Originally designed to control medical costs, many managed
care programs have fallen short. Some of the original designs were good while others
were faulty from the start. That none has evolved, taking advantage of advances
in technology, is disheartening.
Retro
networks
For example,
most medical provider networks not only have not changed, but have somehow sustained
the illusion that they offer value. They report discounts on units of medical services.
Shady providers respond by ramping up the number of treatment services and the
duration of treatment to make up for revenue lost to discounts. Ironically, the
result is more discounts reported! No one screams “Foul!” and the elephant in
the room smugly sits there.
The bad
guys
Industry
research tells us less than 4% of the doctors generate over 70% of the costs.[1] It’s easy to figure out
who those people are by analyzing the data, so what keeps organizations from steering
away from them? Individuals in the 4% bracket should be identified and
claimants directed away from them. Better yet, stop referring to them just
because they are in the network (and generating those bogus discounts).
Medical
management is complicated
Many
payers feel powerless in managing medical costs. Claims adjusters and Workers’
Comp managers may know a lot about work injuries, but they cannot be expected
to affect system change. Rather than trying to manage doctors, they should
simply avoid the bad ones. Even in states where directing care is not allowed,
intelligence about provider performance and claim outcomes is useful to
inform decisions by claims adjusters and injured workers.
Monitor
the data
A
crescendo of concern about Opioid use and abuse has emerged recently. It’s not
the drugs themselves that escalate costs, but the collateral damage they
inflict on injured workers. Dependence, addiction, and pain confusion prevent,
delay, and complicate recovery. Monitoring the data in real time to discover
abuse in the form of repetitive prescriptions can be very effective. Most complex
claims develop over time and would be more easily resolved and costs avoided when discovered in
early stages.
Predictive
modeling
Predicting
the claims that are likely to become complex is an excellent initiative. Still,
monitoring all claims electronically, concurrently, and continuously may be a more
practical approach. For instance, an alert is sent when a second or third Opioid
bill appears in a claim. Now is the time to intervene,
whether the claim was predicted to be costly or not.
Even
when a claim is tagged using predictive modeling, the only logical procedure
is to monitor that claim from the beginning and intervene as conditions warrant.
By the same token, concurrent data monitoring sends an alert when something
suspicious arises in a claim. All claims can be monitored electronically rather
than the few singled out through predictive modeling. It is a powerful medical
management tool and nothing slips between the cracks.
Technology-intensified medical management
Tackling the medical part of the business can be complex and difficult, especially for people not specifically trained in it. However, applying analytics and delivering information appropriately through technology tools is powerful. Deliver the right information to the right person at the right time so that early intervention will impact medical costs more effectively. Well-designed technology will find problems early and inform the appropriate persons, thereby linking analytics to operations and significantly impacting results.
Workers’
Comp payers should recognize they can’t avoid addressing the medical portion of
claims. They are, or should be in the medical business. It’s time to get
serious and implement the expert methodologies available to actualize intended
managed care initiatives. Continuing business as usual guarantees continuing
substandard results.
Many organizations do not have the resources to develop the kind of tools briefly described here. Instead, they can purchase them from a third party Workers’ Comp managed care technology company. It is doable, affordable, and effective. Even small organizations can partake in the benefits.
You are
invited to visit MedMetrics to learn more about its
analytics and technology tools that manage medical costs.
[1] Bernacki, et.al. “Impact of Cost Intensive Physicians
on Workers’ Compensation” JOEM. Vol. 52. No. 1. January, 2010.
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