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The MedMetrics blog provides comments and insights regarding the world of Workers’ Compensation, principally, issues that are medically-related. The blog offers viewpoints regarding issues affecting the industry written by persons who have long experience in the industry. Our intent is to offer additional fabric, perspective, and hopefully, inspiration to our readers.

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Sunday, January 23, 2011

Finally Control Workers’ Comp Costs—Analytics in the Cloud!

It’s all been tried—medical case management, utilization review, discounted provider networks (aka MCO’s, MPN’s), bill review, peer review, fee schedules, and medical practice guidelines. Yet, medical costs in Workers’ Compensation continue to soar. After twenty-five years or so, each of these managed care programs has morphed into substantial businesses, both as internal corporate initiatives and as independent companies. Still, medical costs continue to spiral upward. But now there is finally something new and powerful.

The one management initiative still largely untapped in the Workers’ Comp industry is technology-supported data analysis (analytics). While aggressively applied in other industries with quantifiably positive results, the use of analytics as a working tool has been skirted in Workers’ Compensation. Reasons for this are many, but foremost among them is probably fear—dread of complexity and cost. Be assured, when implemented correctly, technology-supported analytics is easy and affordable.

Analytics Implementation—the Key to Cost Containment

Just the term, analytics can be off-putting. However, as with much of the technical jargon, its meaning is simple—data analysis. Nonetheless, it is the implementation of analytics that matters. To effectively impact Workers’ Comp claim costs, analytics should be comprehensive, concurrent, and implemented as a work-in-process tool.

Unified and Current Data Platform

Begin with a commitment to a unified and current data analysis platform. In Workers’ Comp, the data are profuse, but rarely in one place. Claim-related data can be found in First Reports of Injury, provider first and subsequent reports, raw billing data, bill review data, OSHA logs, medical case management systems, utilization review systems, provider network systems, and, of course, claims adjudication systems. Just the number of silos containing useful data describes the problem. Combing data sets can be a daunting task for some, yet crucial to impacting cost. Minimally, billing and claims level data sets should be combined for analysis.

Integrating historic and current data across databases is important so the analytics are comprehensive and informative. Analyzing bill review data alone, for instance, is silly because billing has little meaning without outcome information, which is found only in claims level data. The medical treatment process can be understood by analyzing bill review data, but effectiveness of treatment is known only if viewed in context with indemnity payments, return to work, and disability rating information, all found in the claims system.

Moreover, access to integrated and interpreted data must be concurrent to influence cost. Reviewing reports from last year or even last quarter is pointless in terms of controlling the cost of current claims. Claim cost control can only occur during the course of a claim, not after the fact. Too often, analysis is focused only on closed claims.

To be fair, analysis of closed claims enlightens analysts regarding what to watch for going forward. That is the basis for predictive modeling. But if ongoing claims are not continually analyzed, even predictive analytics cannot perform.

Stated again, to effectively impact claim costs, analytics must be comprehensive, concurrent and implemented as a work-in-process tool. How is all that possible without complete overhaul of the Workers’ Comp claim management process? Meet the cloud.

The Internet Cloud

Online banking, online shopping and storing photos online, are all examples of cloud computing, now widely accepted Internet activities. Cloud computing is a general term for anything that involves delivering hosted services over the Internet. Hosted services means users work from their various computer devices anywhere while the infrastructure, data analysis, software, and data storage are handled by an Internet-based company, the host. The host has all the heavy equipment and does all the work.

The cloud symbolism is inspired by the cloud graphic, long used to depict the Internet on flowcharts. Once again, the technical jargon is demystified.


Saas (Software as a Service) is one form of cloud computing, the one that finally impacts Workers’ Comp costs. It is the delivery mechanism for technology-supported analytics—analytics that are comprehensive, concurrent and implemented as a work-in-process tool. The process is simple. Data from the disparate sources of an organization are transmitted to the SaaS company online via secure file transfer protocol (SFTP). For Workers’ Comp, the data are de-identified, meaning claimant name, address and SSI are not included.

Regarding data, read Peter Rousmaniere’s recent article, “Make Claims Data Free”.

The SaaS provider imports and integrates its customer’s data, analyzes and presents the results online in the form of software tools that let customers easily analyze their live, current data. The data are updated frequently (usually daily) so that customer business units have access to the most current information possible for objective decision support, opportunity for early intervention, and cost control.

Benefits of SaaS-based Workers’ Comp Analytics

Using SaaS technology for Workers’ Comp analytics has multiple advantages, even beyond fully integrated, currently analyzed live data. Fully hosted SaaS providers are Internet technology veterans that not only handle the technical work, but also make available subject matter expertise. Knowledgeable Workers’ Comp managed care experts contribute to the SaaS model, designing the software to meet the customer’s information needs and also performing high level predictive modeling. A fully hosted SaaS provider offers a comprehensive solution at a fraction of the cost of building in-house.

Because the service is Internet-based, users access the information from anywhere, at any time, using any device that has Internet access. Users are not burdened with capital investment costs, nor are they bothered by installing updates to the software, or conducting backups and disaster recovery. The SaaS host does it all.

SaaS-based Workers’ Comp analytics is new to the industry—and is the only new and innovative option available for controlling Workers’ Comp costs. The approach leverages the power of the Internet and is unique, powerful, and effective. Happily, it is also affordable and available now.

Disclosure statement: MedMetrics is a fully hosted, SaaS-based Workers’ Compensation analytics provider.

View additional articles by Karen Wolfe under Blogs at www.medmetrics.org