How to Make WC Managed Care Effective, Affordable, and Accountable

By Karen Wolfe

In a recent blog, Joe Paduda posed the question “Managed care in work comp: worth the cost?”[1] He continued, "Are we wasting hundreds of millions on ineffective programs, or are these programs holding costs well below what they otherwise would be?" 

Frankly, that this question is asked, whether we are wasting hundreds of millions on ineffective managed care programs, reveals a lot by itself. Why have managed care processes and outcomes not been measured for effectiveness continuously throughout their history? Managed care programs have been applied to Workers’ Compensation for twenty-five years, yet the question of whether they are effective is only now being asked? The fact is, managed care effectiveness is largely unknown because the appropriate technology has not been properly applied to manage, measure and monitor the processes.

Analytics backed by technology

Stated simply, analytics can determine what processes are most effective and technology can be leveraged to direct the managed care focus to the claims, events, and conditions in most need of attention. That creates efficiency. The managed care focus should be on claims that contain elements that are known to portend trouble, thereby avoiding frivolous activity and extraneous cost.

Inform the process

To ensure managed care methods are effective and to power the processes, both technology and analytics must be applied. Work-in-process electronic software tools must be developed and implemented to translate analytics to action.  Electronic tools specifically designed for Workers’ compensation managed care will inform the process, improve the outcome, and measure its effectiveness. Using technology to continuously monitor historic and current claim data will exact a more perfect result.

How to recharge managed care
Specific essentials are needed to recharge managed care effectiveness and establish its accountability. All are necessary and all are based on technology and analytics that build on existing resources:

1. Build a unified historic and current data platform
2. Monitor the integrated data continuously
3. Analyze the data to discover problematic conditions in claims
4. Link the analytics to operations with software “apps”

1.      Build a unified and current data platform
The data must be comprehensive, sourced from multiple data silos. Those include bill review data, PBM (Pharmacy Benefit Management) data, and claims system level data. The data must be integrated at the claim level and updated continuously for comprehensive analysis. These basic technological tasks create the platform for performance.

2.      Monitor the integrated data continuously

The unified, concurrent, and continuously updated data platform must be electronically monitored continuously. The crux of computer-aided medical management is maximizing claim monitoring using the technology. Relying on manual monitoring of current and historic data in claims to distinguish those that need attention is not practical or even possible.

Moreover, monitoring current claims data in context with claims history is a technological function that searches for conditions and elements in claims that portend risk and cost. Manual monitoring by even experienced persons cannot begin to approach this goal.

3.      Analyze the data to discover problematic conditions

Rules-based and knowledge-based algorithms built into the underlying software will identify actual or potentially problematic claims. Electronic data monitoring is used to uncover events, diagnoses, and data combinations that are of concern.

Reveal hidden threats

For instance, a diagnosis of diabetes might be documented on a bill by a treating physician on the fourth or fifth visit. Such a comorbidity buried in the data might easily go unnoticed without computer-aided medical management. Yet, technology will uncover it every time.

Identify poor providers

Another example of analytics used to uncover risk is evaluating physician performance. A physician who keeps claimants off work without sound rationale or a blatantly fraudulent doctor who is treating the claimant are both predictive of higher cost outcomes. Yet, when the physician is on the approved panel, no one takes notice. A smart software system will alert appropriate persons apprising them that a low ranking physician is treating the claimant—as it is occurring.

The same smart system will single out best-in-class medical providers so that claimants can be directed to them from the start.

4.      Link the analytics to operations using software “apps”

Analytics must be logically linked to operations. No advantage is gained by performing analytics and letting them languish somewhere in graphic form. Analytics must be made actionable.

When the results of analytics are translated into software tools and alerts for claims adjusters, medical case managers and others, the information can be acted upon before much of the damage is done. Medical provider networks can be converted to quality networks. Claims cannot deteriorate without notice.

Software multiplies intelligence

Bill Gates said software is the multiplier of human creativity and performance. Software makes people do what they do best even better. Managed care programs can be intelligently revitalized by applying technology and analytics to the process, thereby gaining efficiency, accuracy, and accountability.

Paduda concludes: “Paying over a hundred million dollars for network access without clear and convincing proof that they are improving outcomes is not smart.” Also, “Using case management and UR indiscriminately across all providers in all cases is a waste of money and counter-productive.” He is absolutely correct. But it need not be that way. Affordable solutions are available now.

What it takes

A logical and efficient merger of technology and analytics is the only feasible way to resolve the issues in managed care. Automated processes coupled with intelligent analytics will produce the desired results along with the necessary proof of value. Happily, building the system internally, a costly and time-consuming effort, is not necessary.

A knowledgeable managed care analytics outsource will implement the advantages without the hassle, time, or cost of builidng these functions internally. In fact, managed care power apps can be added to the managed care initiatives of any size organization for less than the cost of a part time analyst!

Learn more about MedMetrics or for discussion, contact KarenWolfe@MedMetrics.org

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[1] http://www.joepaduda.com/archives/002361.html