Only a few
MedMetrics®
recently conducted a “spot check” data analysis in three states to measure what
percent of medical providers generate most of the costs. The findings were
consistent across all three states. Less than 7% of medical providers generate
over 70% of Workers’ Compensation claim costs.
The
three states MedMetrics studied were California, Texas, and Florida. What
prompted the study was the FAQ (Frequently Asked Question), “How do you know
the results from Berncki’s Louisiana study can be translated to other states?”
Dr.
Edward Bernacki and his team from Johns Hopkins conducted a study of the
Louisiana Workers’ Compensation Corporation data titled, “Impact of Cost Intensive
Physicians on Workers’ Compensation”[1] Bernacki’s Louisiana study
revealed less than 4% if physicians were responsible for 72% of costs. While the
Bernacki and MedMetrics results are not exactly the same, the proximity and consistency
is glaring.
The
percentage of cost intensive medical providers in the MedMetrics study were
California 6.5%, Texas 6.38%, and Florida at 6.60%. The difference between the
Bernacki and MedMetrics studies in this regard can be attributed to slight differences in
study structure and time frame. Also the Bernacki study limited medical
providers to medical doctors, while MedMetrics examined all treating medical
providers. The fact remains, only a small percentage of medical providers
generate most of the costs in Workers’ Compensation. That should be a manageable
problem.
Other identifiers
Bernacki,
in a recent presentation to the SIIA (Self Insurance Institute of America)
Executive Summit in St. Louis also identified other characteristics of cost
intensive physicians found in his study. Among other indicators were longer
medical treatment duration, longer claim duration, higher indemnity costs, as
well as high medical costs. Moreover, the study contains even more information
about the identity of costly physicians, all important to understanding and
measuring provider performance.
Cost intensive providers are in the data
Both
studies demonstrate cost intensive medical providers can be identified in the
data. Similarly, best performing providers can also be identified. They will be
associated with shorter treatment durations, shorter claim durations, and lower
indemnity costs for similar injuries, among other factors. Best practice
providers should be singled out and included in networks and injured workers
should be directed to them.
Conference takeaway
Bob
Wilson of Workers’Compensation.com recently
published a summary of the same SIIA Conference titled, “SIIA Shows Choosing
the Right Doctor is the Best Prescription”[2] “One of the big takeaway
points for me was how important selecting the right doctor is in the process of
treating an injured worker. And by the right doctor I do not mean the cheapest.
I mean the best; The one with the best outcomes. It was blatantly clear from
the sessions at this conference that the best medicine is also, in most cases,
the best cost control.”
Wilson
continues, “This has unfortunately
not been a priority area for our industry. We have assembled massive networks
of physicians with an eye largely focused on procedural costs and negotiated
discounts, and it appears this practice is costing us money and sacrificing the
health of those in our care over the long run.”
Choose doctors carefully
In another
recent article, “Price Shopping Your
Company Doctor Will Cost You” [3]
Rebecca Shafer, J.D. of Amaxx Risk Solutions, Inc. states “Key Criteria For Doctor Selection
Should Not Be Perceived Price Discount. Many employers rely on
the HMO, PPO or the medical provider network to provide a medical provider for
the injured employees. This approach often ends up with doctors that keep the
injured employee off work longer than necessary. Often the key criteria for
being a member of the HMO, PPO or medical provider network is a willingness to
accept the HMO’s, PPO’s or medical provider network’s fee schedule arrangement.
These same medical providers may offset their lower profit per visit by
requiring the employee to come in to be checked more frequently, or by
extending the number of times the employee is seen (and the time off work).”
Conclusion
1.
Industry
studies show only a few doctors and other medical providers generate most of
the costs in Workers’ Comp claims. 2. Medical fees are only a part of cost and they can be manipulated by providers.
3. Other factors contributing to claim costs include longer medical treatment duration, longer claim duration, and higher indemnity costs.
4. Payers have been misled in thinking discounts on medical service fees reduce claim costs.
5. Cost intensive medical providers can be found in the data.
It begs
the question, why are cost intensive doctors in networks? They can be
identified in the data and avoided. Likewise, best practice providers can also
be found in the data and injured workers should be directed to them.
Karen Wolfe is the founder and president of
MedMetrics®, LLC, a Workers’ Compensation analytics company. MedMetrics specializes
in medical provider performance analysis. Its analytics and technology are
leveraged to provide powerful online “apps” that link analytics to operations,
thereby making them actionable. Visit MedMetrics to learn more or contact karenwolfe@medmetrics.org.
[1] Bernacki, et.al. “Impact of Cost Intensive Physicians
on Workers’ Compensation” JOEM. Vol. 52. No. 1. January, 2010
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