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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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Wednesday, October 17, 2018

Benchmark for Proof of Value

by Karen Wolfe 

Benchmarking is a long-established business initiative used to measure the quality and value of products and services. Business Dictionary defines benchmarking as “A measurement of the quality of an organization's policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers.
The objectives of benchmarking are (1) to determine what and where improvements are called for, (2) to analyze how other organizations achieve their high performance levels, and (3) to use this information to improve performance.”[1

Performance measured
Measuring quality performance in the Workers’ Compensation managed care arena has long been problematic. Medical networks measure discounts as savings from fee schedule while bill review companies measure reductions from the billed amount. Both means of measuring savings are difficult to justify and sustain over time. Still, savings from medical case management interventions and initiatives are the most challenging to calculate and prove. But not impossible.
Organizations can benchmark against published data from the NCCI, WCRI, or CWCI. All are valuable, but not specific to measuring an organization’s managed care process and outcomes compared to peers engaged in similar initiatives. To objectively know where your organization’s medical management performance stands, dive into the detail through data analysis and benchmarking. The rationale for benchmarking are compelling.

Peer alignment
Everyone wants to see how their peers are doing, but obtaining that information is tricky. “I‘d love to see your data, but I will not share mine”, is a common sentiment. To avoid that conundrum, a non-affiliated third-party must do the analysis.  The third-party must be without connections or obligations that compromise the operation or its participant’s anonymity.

Proof of Value
Benchmarking is a powerful tool that demonstrates or proves the organization’s performance compared to others. Clients and senior management want to know if they are getting the best results. Benchmarking provides a measure of the value of the services and products purchased. Moreover, benchmarking is a powerful means of retaining clients and influencing prospects.

Quality improvement
When benchmarking results show less than positive results for the organization, benchmarking reveals exactly where improvement is needed. It calibrates quality accurately, objectively, and without requiring additional effort or resources of the organization. Medical management performance is calculated and visible, thereby highlighting areas of excellence along with those operations that need improvement. Moreover, by refreshing the data at regular intervals, repeated benchmarking provides an excellent, ongoing quality assurance monitoring program for the organization.

Regardless of the benchmarking goal, specific factors representing medical management process and outcome must be isolated in the data.  Peer performance is then compared specifically, accurately, and anonymously.

Standardized calibration
Data elements in the participant data must be selected for analysis, collected and measured against the same data elements in the third-party database. For example, Workers’ Compensation medical benchmarking data elements would include overall medical costs, indemnity costs, and return to work factors. Process analysis requires such data elements as time from the date of loss to claim closure, among others, while adjustments for diagnostic severity should be made.

Benchmarking medical management practices for Workers' Compensation is state-specific. Because of jurisdictional variability and state fee schedules, comparing more broadly will generate inaccurate and misleading results.

Analyze quality and value
A third-party organization with Workers Compensation medical management knowledge, and technical know-how will conduct a benchmarking study for the states of interest to your organization practices. Learn where your organization excels. Alternatively, learn how to monitor and improve quality. 

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation predictive analytics-informed medical loss management and technical services company. MedMetrics offers intelligent medical management systems that link analytics to operations, thereby making insights actionable and the results measurable. karenwolfe@medmetrics.org