Repost: You Might Be in the Medical Business Now

By Karen Wolfe

The well-known Workers’ Comp sage, Joe Paduda, published an article today for WorkCompWire entitled, “What Business are You In?” Paduda asserts that leaders in Worker’s Comp industry are misguided regarding what business they are actually in. He says they are in the medical business. The following article was posted by MedMetrics January 8, 2013 and is republished here to underscore Paduda’s point.

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 so in Workers’ Comp.

An example is managed care programs in Workers’ Comp having remained essentially unchanged since their inception, now nearly thirty years past. Originally designed to control medical costs (and generate revenue for networks), 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

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 medical 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. Moreover, it is 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 create 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, nurse case managers, 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 earlier 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 can trigger 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’s 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 claim conditions, events, and 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.

You are in the medical business

Workers’ Comp leaders should recognize they can’t avoid addressing the medical portion of claims. They are are actually 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 high costs and substandard results. Ultimately, it could jeopardize the business itself.

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.

Karen Wolfe is president of MedMetrics which applies analytics and technology to maximize medical management initiatives. Visit MedMetrics to learn about MedMetrics Provider Performance Suite and other “power apps” that link analytics to operations, thereby making them actionable.  For questions, contact karenwolfe@medmetrics.org

 

 

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