FAQ
A frequently
asked question is, how can the value of Workers’ Comp managed care programs be
proven? That the question is asked at all is a very good sign for the industry.
Value has been ignored for far too long. However, people are less willing to
accept assumptions and sales claims of savings as proof of value. The best
example of value in managed care measured by assumption and sales claims is in
medical networks.
PPO discounts
Medical
Preferred Provider Organizations (PPO’s) emerged in Workers’ Comp about
twenty-five years ago, mimicking PPO networks in group health plans. Methods of
network development were similar to those in general health—sign up doctors and
facilities. The deal was, in exchange for being a part of the network, thereby
enjoying the marketing benefit of automatically bringing in new business (patients),
the provider would accept a discount on their fees for their medical services.
The gain for payers, the purchasers of PPO services, was the discount on
medical fees. The benefit for networks is a cut of the discount and a very
profitable business. But the intrinsic value of networks themselves remains
obscure.
The spoof of proof
Unlike
PPO’s in general health where the insurance plan defines the rates and what
services are reimbursable; Workers’ Comp offers no such restraint. The conditions
are set for unbridled medical cost escalation through increased numbers and
duration of services. Discounts are proclaimed for each of those services while
value received from services, is ignored. However, if people no longer believe
in discounts, networks will need a measure of value to gain the competitive
advantage.
The question behind the question
The real
question behind the frequently asked question (FAQ) of how to prove value is how
to gain the competitive advantage. Organizations want to know how to prove
their managed care programs save money or generate better outcomes. In other
words, they want to show they are better than their competitors. If they can
demonstrate that kind of value, they will gain the competitive advantage.
Michael
Porter, creator and leader of the Institute for Strategy and Competitiveness at
the Harvard Business School has spent his career studying and writing about competitive
advantage in all kinds of organizations.[1] He says the competitive
advantage is gained by creating and sustaining superior performance.
Positioned for advantage
Managed
care programs in Workers’ Comp are positioned to gain the competitive advantage,
primarily because it is still a nearly deserted space. Most organizations are
still in the FAQ stage. Networks will have great difficulty shifting to a value
proposition because they will only reluctantly change their funding methodology.
Network value
The way
for networks to create their competitive advantage is to analyze the data to
evaluate provider performance. Rather than including every provider, only the
best practice providers for Workers’ Comp, based on analysis of the data, will
be included. The added challenge for networks is that payers and self-insured,
self-administered employers can do this on their own. Moreover, the end savings
with a best practice provider can easily outweighs discounts.
NCM—mysticism and skepticism
Nurse
case management (NCM) has been widely implemented in Workers’ Comp, and at the
same time, underutilized and misunderstood. Mysticism and skepticism plague NCM programs. The cause is its vague processes, procedures,
and reporting. Gaining the competitive advantage by creating and sustaining superior performance is well within the reach of nurse case management programs, but they will need to step up to superior performance by applying standardized systems and procedures.
Standardize and quantify the process
Nurse
Case Management organizations have allowed their product to be defined,
manufactured, and delivered by individual nurses, so the product, even with an organization
varies widely. Standardized processes are rare. Even though nurses might be certified in NCM,
it is the organization that should establish measurable standards of
performance and insure they are followed..
Organizational
standards include specified initiatives taken for defined indicators in claims.
As a beginning, objective indicators that trigger referral to NCM should be
automated through systems to guarantee quality and consistency.
Superior performance
Once
the referral is made to NCM, standardized procedures should be followed by individual
nurses and the organization. Clients of the organization can be informed of the
standards and procedures in advance and in process. In place of mysticism and
skepticism, objective statements of goals and intervention tactics are clear.
Calculating savings (value)
Calculating
savings is often tricky because it is necessarily based on what might have been
had nurse case management initiatives not been applied. Some answers to that
question can be found in a former MedMetrics article, “How to Measure WhatMight Have Been”.
Needless to say, calculating savings in claims is best achieved when comparing
apples to apples, when the conditions triggering nurse case management and the
actions taken are consistent.
As
Porter says, the competitive advantage is gained through creating and
sustaining superior performance. Superior performance in NCM is creating objective
standards and following them consistently. Automating and reporting superior
performance seals the deal.
MedMetrics specializes in Workers’ Comp
analytics and offers online “apps” that link analytics to operations, making
them actionable. They strengthen and maximize medical cost containment initiatives. Visit MedMetrics to learn more or contact karenwolfe@medmetrics.org
to learn how
MedMetrics will help your organization gain the competitive advantage.
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