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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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Thursday, October 18, 2012

How to Measue What Might Have Been

By Karen Wolfe

The most difficult cost savings measurement is calculating the savings gained from what did not happen. Call it cost-avoidance measurement. Some say it cannot be done because if it has not happened, it certainly cannot be measured.

However, another point of view says that if placed in the context of assumptions based on analysis of the data, assessing savings for avoidance is doable.

Did the risk ever exist?
The first challenge in this tricky process is proving that a costly situation would have actually occurred given the conditions surrounding it. When it did occur, did the interventions mobilized reduce potential costs?

A sample scenario is examining the data and finding that when a certain combination of data elements occurs, the result is consistently a 20% increase in indemnity costs. One can make the reasonable assumption that whenever that data combination appears in the claim, indemnity payments will increase unless intervening action is taken. That is predictive modeling 101.

Hours of IT time can be spent analyzing the data to tease out conditions that consistently result in cost increases. This do-it-yourself approach is not for everyone, maybe not for any one.

Rocket science
An alternative is the “rocket science” (mathematically sophisticated) approach of predictive modeling.  Formal predictive modeling procedures can be applied to the data to discover costly situations that should be avoided. This is a good approach, but it requires another step: concurrently monitoring the data to identify the risky conditions and taking appropriate action to avoid or minimize them. Nevertheless, the cost savings of avoidance can be claimed using this method.

Short cut
While either of these approaches has the potential to result in appropriately measuring and claiming cost savings, another method abbreviates the process. The short-cut is leveraging industry research and it is an easier, less costly, and more practical for most organizations.

Workers’ Comp industry research studies offer a format for measuring cost avoidance. During the course of research, large data bases are analyzed, usually applying sophisticated mathematical methodologies that identify risks and costs given certain conditions.

Leveraging research
An example of applicable research is the study conducted by Dr. Ed Bernacki and his team at Johns Hopkins University published in 2010.[1] Using five years of data containing closed claims supplied by Louisiana Workers’ Compensation Corporation, the research team first carved out claims where the reserves had increased from $15,000 to $50,000. The idea was to find the claims that had migrated in a negative way and then look for consistent conditions among them. In this case, the research team was seeking characteristics of poorly performing doctors.

Cost-intensive physicians
Amazingly, it was found that in the migratory claims 72% of the costs could be attributed to 3.8% of the physicians. The research team named physicians in this group cost-intensive physicians and identified consistent traits and behaviors associated with them. For instance, the physicians in this group were consistently associated with higher medical costs, longer treatment duration, longer claim duration, and higher indemnity costs.

Moreover, the cost-intensive physicians tended to treat disorders that have variability of treatment options, that is, no clearly defined treatment pathway. The disorders in that group included carpal tunnel, joint pain, intervertebral disk disorders, and psychological disorders. Additionally, certain physician specialties were associated with the characteristics of this group.

The study is rich in detail that can be translated to identify cost-intensive physicians in other databases who are the risky condition in claims. Using the research as a guide, isolate data elements that epitomize the characteristics of cost-intensive physicians.

Once identified in the data, cost-intensive physicians can be avoided. Find the cost-intensive physicians using the criteria demonstrated in the study, then avoid them. Determining the amount of savings is a question of establishing organizational policy based on the study.

Measuring savings of avoidance
Each time a cost-intensive physician is avoided, the savings can be calculated. Referring back to the study, preventing reserve migration is the framework of savings. If in the study the reserves migrated from $15,000 to $50,000, the claim savings assumed when a cost-intensive physician is avoided can be set conservatively or aggressively within that range.

Savings policy
The amount of savings declared is a question of determining the organization’s savings policy statement. An organization should establish standards for how it proclaims savings in claims. The savings policy statement, based on the research might read, “Based in the indicators found in industry research, avoiding a cost-intensive physician saves approximately $15,000”.

Monitoring and documenting
Obviously, none of this is useful information unless it is embedded in an operational process of analyzing the data, identifying cost-intensive physicians, and documenting avoidance. Traditionally, organizations have relied on their medical provider networks, but it turns out most network administrators do not evaluate provider performance on any basis. So it’s back to do-it-yourself or get help.

Nevertheless, it is possible to measure cost saving of what might have been. When placed in the context of assumptions based on research, assessing savings for avoidance is valid. To learn more, you are invited to visit MedMetrics or contact karenwolfe@medmetrics.org.

[1] Bernacki, et.al. “Impact of Cost Intensive Physicians on Workers’ Compensation” JOEM. Vol. 52. No. 1. January, 2010.

Tuesday, October 2, 2012

Announcing Release of Master Provider Index!

Another computer-aided managed care service from MedMetrics

Now you can quick-search the best medical providers for Workers’ Comp by specialty and geo-zip directly from the Internet anytime! Master Provider Index analyzes provider performance based on data from multiple payers.

Because poorly-performing medical providers are 100% predictive of high claim costs in Workers’ Comp!
Imagine the savings derived from simply getting injured workers to the best doctor from the start—or referring to the best medical specialist every time!

Not your basic “Angie’s List”
Master Provider Index is a simple look-up online. Just select the specialty and geo-zip to display a list of the est medical doctors and other providers in that location. It’s that easy to use.

However, in order for Master Provider Index to display only the best medical providers, MedMetrics applies important technical underpinnings and analytics. MedMetrics does the technical heavy lifting and analytics so you can easily find the right doctors, those who are scored best based on the data.

Master Provider Index includes three major technical service components, all critical to the result:
            1) Technical services
            2) Medical performance analytics
            3) Online search
            4) Continuous updates

1.      Technical services
Data Import
The only way to evaluate provider performance in Workers’ Comp is to scrutinize and analyze the data. MedMetrics imports data from participants’ bill review, claims adjudication, and pharmacy systems. MedMetrics supplies a list of data items needed and where they are typically found. Participants place the data elements in a file and transmit it to MedMetrics. Data mapping is not required.

Data integration
MedMetrics validates, integrates, and maps the data from participants’ systems. Claimant-identifiable data is not used and participants’ data is placed in their confidential, secure sector of MedMetrics data warehouse. For Master Provider Index, MedMetrics will query data from all participants to analyze provider performance.

Scrub and optimize provider records
Provider records in most data sets are incomplete and contain many duplicates. MedMetrics corrects this by scrubbing and optimizing the provider records and duplicates are merged. Only then can a provider record be added to the Master Provider Index.

Continuous updates
MedMetrics imports data updates quarterly and continually monitors and re-analyzes provider performance. Master Provider Index is refreshed regularly, never assuming provider performance is static.

2.      Analytic services

MedMetrics executes its proprietary algorithms to evaluate the broad-spectrum data and score provider performance, thereby identifying best performing providers. Provider scores are integrated across multiple participant data, thereby creating a robust critical mass of data from which provider scores are calculated.

Medical services in the US are part of a cottage industry, therefore, performance indicators are spread across payers. MedMetrics integrates the provider scores across participants to provide a more robust basis for analysis.

3.      Online search tool
Master Provider Index users simply go online to select medical specialty and geo-zip. Users pick from a list of specialties and enter three to five digits of a zip code. Entering fewer numbers of the zip code broadens the geographic search.

Best practice providers are listed instantly on the screen. Providers include individuals, clinics, and facilities.

Easy, yet powerful
How easy it is for claims adjustors, medical case managers, plant or store managers, and others to quickly find the right provider for the situation. Provider location and contact information is displayed instantly. Licensed participants have unlimited access to Master Provider Index for all persons they authorize. Master Provider Index is always on, instant, and available from anywhere.

Contact karenwolfe@medmetrics.org now to become a participant and receive special pricing for Master Provider Index available only until the end of 2012.

Learn about MedMetrics' other computer-aided power apps that recharge managed care in Workers’ Compensation.