Workers’ Compensation claims and medical managers are continually challenged by upper management to analyze their cost drivers. Moreover, upper management wants comparisons of the organization’s results to that of their peers.
Executing the analysis is the lesser of the two demands. More challenging is finding industry or peer data that is similar enough to create an apples to apples study. In a recent article, Nick Parillo states “Regardless of the data source, whether it be peer-related or insurance industry-related, risk managers must be focused on aligning the data to their respective company and its operations.” Parillo emphasizes the data should be meaningful and relevant to the organization.
Aligning the data to the situation can be challenging. Industry or peer data may not be situation-specific enough or granular enough to elicit accurate and illuminating information. State regulations vary, as do business products and practices, along with a multitude of other conditions that make truly accurate comparisons difficult.
Analyses can be designed that dissect the data at hand. Follow up to the above example might include looking for other geographic variables in costs, in injury types, and in medical practice patterns. Compare physician performance for specific injury types in the same jurisdiction and then look for differences within. To gain this kind of specificity and relevance, drill down for other indicators.
Evaluate how costs move. Look at costs at intervals along the course of claims for specific injury types. In this case, utilizing ICD-9’s is more informative than the NCCI injury descriptors. One client found that injury claims which contained a mental health ICD-9 imbedded during the course of the claim, showed an upsurge in costs beginning the second year. Now further analysis can begin to discern earlier indicators of this outcome. In other words, dive further into the data to find leading indicators.
Industry data is not likely to contain the detail necessary to evoke subtle mental health information during the course of the claim. Most analysis ignores the subtlety and sequence of diagnoses assigned. Few would uncover the mental health ICD-9 because few bother with ICD-9’s at all.
Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics and technology services company. MedMetrics analyzes the data and offers online apps that super-charge medical management by linking analytics to operations, thereby making them actionable. firstname.lastname@example.org