Quality Medical Treatment Drives Costs Down!

by Karen Wolfe

Workers’ Compensation is an industry where the high cost of medical care is a major issue, yet tracking accurate medical cost and outcome information for specific medical conditions is uncommon. It is all the more puzzling because evaluating outcomes and costs for medical care can be done rather easily using data readily available.

People have consistently dodged the issue of quality medical care, convinced that quality is more expensive. But more quality actually means less cost! Tracking claim outcomes and costs based on injured workers’ injury or condition leads to selecting the doctors that deliver better results and at lower cost. 

Understanding costs

Measuring and tracking results is a familiar principal in most industries, yet in Workers’ Comp medical costs are measured in broad terms such as overall medical spend. Medical costs are used to set reserves and calculate premiums. But rarely are costs measured in context with medical outcomes or how patients improve.

Michel Porter and Thomas Lee in their article, “The Strategy That Will Fix Health Care” published in the Harvard Business Review[1] list six methodologies necessary to change healthcare in the US. One of the six value strategies they list is to measure true outcomes and costs for every patient. 

“When outcomes are measured and reported publicly, providers are under pressure to improve and to adopt best practices, with resulting improvements in outcomes.” 

Defining quality medical care
Porter and Lee further state that we focus too much on what doctors do, rather than what is important to the patient (injured worker). What the injured worker wants is freedom from pain, return to pre-injury status, to health, and to work. We should be measuring what matters to the injured worker. 

What the patient wants is the true measure of 

quality medical care. 

Adverse effects 

It matters very much to injured workers that they avoid any adverse effects of the medical treatment they receive. Adverse effects include infection, re-admission to the hospital for the same problem, returns to the Emergency Department, complications such as embolism or thrombosis, and revision or re-do of a surgical procedure. Length of treatment is important, as is length of stay in the hospital. What injured workers want is quality care. 

Quality Medical Care
Traditional measures of quality focus on what providers do, the treatment they render. That can include laboratory tests and other diagnostic procedures, surgery, medications, referral to specialists, and, of course, cost. However, measuring the full set of outcomes that matter to patients with similar conditions is essential to understanding quality and meeting their needs and expectations.[2] It is the only real measure of quality care. 

Minimize disability
In Workers’ Compensation we can easily measure functionality or return to normal physical activity by return to work or modified work data. Duration of disability and disability rating at claim closure are other important indicators of the injured workers’ functionality. These are the things important to injured workers because they portray health. Moreover, shorter disability means lower costs.

Other measures of quality include length of medical treatment and length of hospital stays. Measuring the full set of outcomes that matter is critical to meeting injured workers’ needs and is a powerful vehicle for reducing medical costs.

When outcome measures improve, costs go down! 

Quality measures reduce costs
Absent complications and other adverse effects, costs are naturally lower. It’s simple logic. Analyzing the data reveals the elements of care that are positive and, as a result, keep costs down. 

Choose doctors with good results
Costs by themselves are not the driving force in medical management. The driving force is increasing the quality of care and the avoidance of adverse effects. The way to apply analysis of outcomes, including cost, is to identify the doctors who consistently get the best results for patients. Find the best providers associated with the best outcomes. Those with better outcomes will have lower costs.

Finding doctors who consistently get desired outcome measures is the first step. Then injured workers must be directed to them in states where that is appropriate. In other places, offering injured workers objective information regarding the doctors who get the best results in terms of outcomes can be very persuasive. 

Monitor the course
Provider performance can fluctuate over time. Consequently, the data must be monitored continually to insure the best doctors continue to generate the best outcomes.

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics and technology services company. MedMetrics analyzes the data to score medical provider performance and offers other online apps that link analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

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[1] Porter, M. Lee, T. The Strategy That Will Fix Healthcare. Harvard Business Review.

https://hbr.org/2013/10/the-strategy-that-will-fix-health-care/ar/1

[2] Ibid.

How Workers' Comp Medical Managers Can Out-Perform Those in Group Health

by Karen Wolfe

We all know the current healthcare system in the US delivers erratic quality at unsustainable, yet ever-increasing costs. Workers’ Compensation medical care is affected by those costs. 

Value-based healthcare

A major shift in the health industry is occurring called value-based healthcare that will also benefit Workers’ Compensation. Embracing select new medical management methodologies put forth in value-based healthcare has the potential to be powerful.

Healthcare transformed 
Value-based healthcare means restructuring how medical care is organized, measured, and reimbursed.[1] It moves away from a supply-driven system organized around what physicians do to a patient-centered system organized around what patients need. (underscore added) The focus is shifted from volume and profitability to patient outcomes needed (quality care). When fully implemented, the overall impact will be nothing less than ground-shifting.

Porter and Lee, healthcare industry strategists at Harvard, have described six value strategies that are necessary to achieve health care industry transformation. Many of the changes are now underway in ACO’s (Accountable Care Organizations) such as the Cleveland Clinic, proving the concept. These defined initiatives produce desired results—quality care at less cost. 

Six components of value-based healthcare

The following briefly describes the methodologies necessary to transform healthcare according to Porter and Lee.

     1.    Integrated Practice Units (IPU’s) meaning multiple specialists practice together resulting in comprehensive and integrated medical care rather than fragmented, duplicated services.

     2.    Measure true outcomes and costs for every patient

When outcomes are measured and reported publicly, providers are under pressure to improve. Fraud and self-dealing are reduced.

     3.    Bundled Payments

Payment bundles are capitated single payments for all the patient’s needs during defined episodes of care such as specific surgical procedures. Providers are rewarded for delivering quality while spending less.

     4.    Integrate Care Delivery Systems

Services are concentrated and integrated to eliminate fragmentation and to optimize the quality of care delivered at any given location.

     5.    Expand geographic reach

Centers of excellence are developed where expertise is gained through higher volume of similar procedures.

     6.    Information Technology

Data mining powerfully enables the first five initiatives and informs services and decisions going forward. 

“Whether providers like it or not, health care is evolving from a proficiency-based art to a data-driven science, from freelance physicians to hospital-employed physicians, from one-size-fits-all community hospitals to vast hospital networks organized around centers of excellence.”[2] 

Value-based medical management in Workers’ Comp

The goal of value-based medical care is to enhance quality outcomes for patients (injured workers) while reducing costs. Focusing on quality (what the patient needs) actually reduces costs.

For group health, the measures are physical and philosophical requiring widespread disruption in how services are organized, delivered, and reimbursed. However, Workers’ Compensation payers can benefit by incorporating three of the six value measures into their medical management process now.

     2.    Measure true outcomes and costs for every patient   (Injured Worker)

Physician performance is scored based on Injured Workers’ experience and outcomes along with cost. Providers who score poorly can be avoided.

     3.    Bundle payments

Bundling is capitating payments for all the services required for procedures such as specific surgical procedures, including all associated pre-op and post-op care. The costs are kept in line because providers need to stay under the cap to be profitable. They also focus on quality because re-do’s, redundancy, and complications add cost to the service bundle, thereby diminishing profits. Prepare to see bundled payment options available to Workers’ Compensation sooner rather than later.

     6.    Information technology

The data in Workers’ Compensation, while siloed, is all organized around individual claims and injured workers. When the data is integrated at the claim level, patient experience, provider performance, outcome, and cost analysis opportunities are unlimited. The more comprehensive and accurate the data, the greater the opportunity for gain.

Those who cling to traditional seat-of-the-pants medical management will be left behind. Those in group health may be hampered by slow regulatory change, organizational upheaval, and resistant providers, while Workers’ Compensation payers are free to adopt transformative value measures now. Organizations that progress rapidly to implement the value agenda will reap huge benefits. 

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics and technology services company. MedMetrics analyzes the data to score medical provider performance and offers online apps that link analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

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[1] Porter, M. Lee, T. Harvard Business Review—The Strategy That Will Fix Healthcare

https://hbr.org/2013/10/the-strategy-that-will-fix-health-care/ar/1

[2] Cosgrove, T. Value-based Health Care is Inevitable and That’s Good. Harvard Business Review. https://hbr.org/2013/09/value-based-health-care-is-inevitable-and-thats-good/#