WC Medical Cost Control Made Simple and Affordable Through Technology

A White Paper
by Karen Wolfe

Everyone talks about it, but few are taking significant steps to effectively control medical costs in Workers’ Comp. Solutions are available that can significantly impact medical costs, but too few are implementing them. Moreover, the solutions are easy and affordable, leaving payers with the question, “How can continuing business as usual be justified”?

Technology as a cost management tool
The elements of success are already in place. Every payer organization, has data and an IT (Information Technology) department, either internally or through a third party (TPA). Now they need to advance beyond gathering, storing, and reporting data, to developing new capabilities through technology. The objective is to design technology applications that significantly impact claim costs.

Plain data

In its raw form, the data is not very useful. But when it is subjected to analysis and re-presented to business units in a simple and meaningful way, it delivers valuable claim management intelligence. For example, data can be evaluated through analytics to measure medical provider performance.

Transform data

Medical provider files in claims, bill review, and network systems contain the provider’s name, address, and other demographic information. However, the provider record alone cannot divulge the provider’s impact on claims, including cost, return to work, referral patterns, and other critical factors. But when data from bill review, claims level, utilization review, and pharmacy systems are integrated around a medical provider, the resulting information is exponential.

Measure medical provider performance

Medical provider data integrated across systems offers a platform for powerful analysis. Comparing providers of similar medical specialties treating similar injuries will reveal best patterns of medical care. Analyzing frequency of return to work, indemnity costs, legal involvement, and other factors associated with providers in the data will bring best providers for Workers’ Comp to surface and expose the poor performers and abusers. Workers’ Comp industry research shows avoiding the poorly performing providers results in measureable cost savings every time.

Electronic claims monitoring

Additionally, when data is electronically monitored on a continuous and concurrent basis, it can prompt and guide adjusters and medical managers to take timely and appropriate action. An example is electronically monitoring the data for medical doctors’ prescribing behaviors. Automatic alerts of excessive Opioid prescriptions are sent to appropriate persons who initiate damage control. Lives and dollars are saved.

Computer-intensified medical management

Computer-intensified medical cost management through rules-based data monitoring can be applied to scores of conditions and events in claims that portend risk and cost. Using technology to monitor all claims continuously can even preclude elaborate and expensive methods such as predictive modeling. Claims identified as risky through predictive modeling must be monitored going forward. However, monitoring all claims electronically through specifically designed technology insures that no risky claims are missed, including those identified or not identified through predictive modeling. Electronic data monitoring is the more comprehensive, yet affordable solution.

Maintaining status-quo

The IT tasks required to maintain claims systems and properly handle data are considerable. Therefore, additional IT tasks are not viewed favorably. At the same time, business units compete for IT time and are hesitant to request additional IT resources. Therefore, a simple solution that could save millions may be disregarded to avoid internal disruption. Change avoidance guarantees business as usual with no impact on medical costs.

Outsource for repurposed technology

Often the most propitious way to repurpose technology for Workers’ Comp medical cost control is to outsource to Workers’ Comp managed care and technology specialists. To build systems internally that will achieve significant medical cost control can be a daunting and lengthy task. Knowledgeable business unit personnel must translate strategies to IT personnel for design and development. IT personnel must be dedicated to the project and continuing process. Outsourcing is more practical.

Outsourcing extends IT

IT’s role in outsourcing is to transmit data elements in a secure file from each source system. Data integration and mapping is provided by the outsourced company, freeing IT from the burden. Updates to the data are set automatically so IT involvement is minimized. Outsourcing positions IT to oversee the technology project, while extending its capabilities with significantly less time and cost.

Affordable
Outsourcing medical cost management through outsourced technology is simpler, quicker, and much less costly than developing new medical cost management technology internally. Outsourcing technology to target medical costs through analytics and data monitoring is very affordable and offers favorable and timely cost benefits results. Doing nothing cannot be justified.

Karen Wolfe is the President and CEO of MedMetrics®, LLC, an online Workers’ Compensation analytics company. MedMetrics links analytics to operations to make them actionable for medical cost control.