Managing Claim Costs Before They Occur

York Risk Services Group reports significant savings and outstanding results in "Managing Claim Costs Before They Occur".

MedMetrics powers the analytics and technology behind York's success.

Read York’s recently published White Paper:

Managing Claim Costs Before They Occur
 

Learn more about MedMetrics.

or contact:
Karen Wolfe, President/CEO
MedMetrics, LLC
Workers’ Compensation Analytics
541-390-1680 (v)
541-388-1422 (f)
karenwolfe@medmetrics.org

 

WC Medical Cost Control Made Simple and Affordable Through Technology

A White Paper
by Karen Wolfe

Everyone talks about it, but few are taking significant steps to effectively control medical costs in Workers’ Comp. Solutions are available that can significantly impact medical costs, but too few are implementing them. Moreover, the solutions are easy and affordable, leaving payers with the question, “How can continuing business as usual be justified”?

Technology as a cost management tool
The elements of success are already in place. Every payer organization, has data and an IT (Information Technology) department, either internally or through a third party (TPA). Now they need to advance beyond gathering, storing, and reporting data, to developing new capabilities through technology. The objective is to design technology applications that significantly impact claim costs.

Plain data

In its raw form, the data is not very useful. But when it is subjected to analysis and re-presented to business units in a simple and meaningful way, it delivers valuable claim management intelligence. For example, data can be evaluated through analytics to measure medical provider performance.

Transform data

Medical provider files in claims, bill review, and network systems contain the provider’s name, address, and other demographic information. However, the provider record alone cannot divulge the provider’s impact on claims, including cost, return to work, referral patterns, and other critical factors. But when data from bill review, claims level, utilization review, and pharmacy systems are integrated around a medical provider, the resulting information is exponential.

Measure medical provider performance

Medical provider data integrated across systems offers a platform for powerful analysis. Comparing providers of similar medical specialties treating similar injuries will reveal best patterns of medical care. Analyzing frequency of return to work, indemnity costs, legal involvement, and other factors associated with providers in the data will bring best providers for Workers’ Comp to surface and expose the poor performers and abusers. Workers’ Comp industry research shows avoiding the poorly performing providers results in measureable cost savings every time.

Electronic claims monitoring

Additionally, when data is electronically monitored on a continuous and concurrent basis, it can prompt and guide adjusters and medical managers to take timely and appropriate action. An example is electronically monitoring the data for medical doctors’ prescribing behaviors. Automatic alerts of excessive Opioid prescriptions are sent to appropriate persons who initiate damage control. Lives and dollars are saved.

Computer-intensified medical management

Computer-intensified medical cost management through rules-based data monitoring can be applied to scores of conditions and events in claims that portend risk and cost. Using technology to monitor all claims continuously can even preclude elaborate and expensive methods such as predictive modeling. Claims identified as risky through predictive modeling must be monitored going forward. However, monitoring all claims electronically through specifically designed technology insures that no risky claims are missed, including those identified or not identified through predictive modeling. Electronic data monitoring is the more comprehensive, yet affordable solution.

Maintaining status-quo

The IT tasks required to maintain claims systems and properly handle data are considerable. Therefore, additional IT tasks are not viewed favorably. At the same time, business units compete for IT time and are hesitant to request additional IT resources. Therefore, a simple solution that could save millions may be disregarded to avoid internal disruption. Change avoidance guarantees business as usual with no impact on medical costs.

Outsource for repurposed technology

Often the most propitious way to repurpose technology for Workers’ Comp medical cost control is to outsource to Workers’ Comp managed care and technology specialists. To build systems internally that will achieve significant medical cost control can be a daunting and lengthy task. Knowledgeable business unit personnel must translate strategies to IT personnel for design and development. IT personnel must be dedicated to the project and continuing process. Outsourcing is more practical.

Outsourcing extends IT

IT’s role in outsourcing is to transmit data elements in a secure file from each source system. Data integration and mapping is provided by the outsourced company, freeing IT from the burden. Updates to the data are set automatically so IT involvement is minimized. Outsourcing positions IT to oversee the technology project, while extending its capabilities with significantly less time and cost.

Affordable
Outsourcing medical cost management through outsourced technology is simpler, quicker, and much less costly than developing new medical cost management technology internally. Outsourcing technology to target medical costs through analytics and data monitoring is very affordable and offers favorable and timely cost benefits results. Doing nothing cannot be justified.

Karen Wolfe is the President and CEO of MedMetrics®, LLC, an online Workers’ Compensation analytics company. MedMetrics links analytics to operations to make them actionable for medical cost control.

Two Steps to Recharge WC Managed Care

By Karen Wolfe

Having the long-view perspective offers advantages. Sometimes it also generates frustration and occasional surprise. One thing we know is that the workers compensation industry is not given to abrupt change or quick assimilation of new ideas or technology. Moreover, once a process is in place, bringing about change is difficult.

Change resistance

Managed Care (medical cost management) is one of those processes in Workers’ Comp that resists change. While we’ve had managed care programs in place for twenty-plus years, medical costs continue to escalate. The confounding thing is business continues as usual, continues the same services using the same methods, while many hope for different results.

The industry created programs such as PPO networks, medical case management, utilization review, peer review, bill review and other initiatives to contain medical costs and produce better claim outcomes. In doing so, it also built an industry made up of companies and divisions of companies whose chief focus was medical cost containment. Over the years, that focus morphed to organizational preservation through revenue enhancement. Discounting methods and cost saving reporting have been reduced to simple subterfuge, without evidence of quality medical performance or outcomes.  

Starting over

Nonetheless, industry thinking is beginning to change as the elephants in the room are acknowledged. While it might be nice, starting over is not an option. The sunk costs are huge. Yet, many medical cost containment programs in the industry were soundly conceived in the beginning. The challenge is to realign them to achieve the results originally intended. Two major initiatives are necessary.

Follow the money (What else is new?)

Revenue models for managed care programs must be the first target of change. The consumers of managed care, the payers, must demand the change. Purchasing decisions are powerful change agents.

To satisfy the revenue requirements of managed care organizations as they shift their focus requires creative thinking and planning. Revenue should be structured to reward desired behavior and proven outcomes. That will require major process shifting because the current comfort level is entrenched.

Technology-intensified managed care

The second step in revitalizing managed care programs is to reinforce them with intelligent technology. Over the past twenty plus years, while computer technology has advanced exponentially, little has made its way to Workers’ Comp. managed care programs.

Technology offers ample opportunities to maximize cost savings. They include monitoring historic and current integrated data to identify and alert professionals of adverse conditions in claims in real time. Data can be re-presented for business units to be used as decision support and work-in-progress tools. Analytics can discern best medical providers to revamp networks and make the information instantly available to those directing care. Processes can be optimized and corporate standards enforced. Moreover, predictive models can guide strategic business decisions.

Making it happen

The first initiative of change is the more challenging. Changing business rationale carries the risk of revenue reduction or loss in the transition.

Affordable

Happily, infusing technology into operations is much easier and affordable. Do-it-yourself projects can work, but development time and costs can be excessive. However, proven tools are available to recharge managed care programs and begin realizing actual medical cost management.

Learn more about managed care technology “apps” at MedMetrics or contact karenwolfe@medmetrics.org

 

 

 

 

 

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

Cost Control Discovered at the Intersection of Technology and Managed Care

By Karen Wolfe

Costs continue to rise
Regardless of the myriad of interventions directed at containing claim costs in Workers’ Compensation, costs continue to increase. Now that the medical portion of claim costs amounts to sixty percent or more, the fact must be acknowledge that traditional managed care initiatives are inadequate. Moreover, new medical costs seem to be appearing from unfamiliar places, leaving no apparent recourse. Costs are finding new avenues of expression in the form of drug costs, complex medical procedures, and exponential costs due to comorbidities.

What now?
It seems everything that can be done, has been done. Managed care programs including provider networks, bill review, utilization review, peer review, and medical case management are conceptually well-founded. Still, outcomes are disappointing. What more can be done?

Starting over is absolutely not an option. Disbanding current managed care programs and creating new ones is completely impractical. Sunk costs of existing programs are huge, and building new ones is not feasible or affordable. Besides, managed care programs in Workers’ Compensation are well-founded conceptually, and based on solid principals. They just need to function more effectively.

Managed care is tired
Managed care programs in Workers’ Compensation are tired. Like much of our country’s infrastructure, they have not been revitalized over the years of their existence. They operate today just like they did twenty years ago. Specifically, most managed care programs have not taken advantage of the exponential advances in technology during their tenure.

Same tenure—different results
Think about it. As recently as twenty years ago (1991 seems like yesterday) Microsoft’s Disk Operating System (DOS) was the predominant operating system for personal computers. PC’s were large, expensive, and scarce in companies. Local area networks were just emerging and required hard-wiring to connect, servers, PC’s and printers. The Internet was not yet available for general use. Significantly, this was also the time of Workers’ Comp managed care ascendency. Yet, it would be some time before managed care programs were even computerized.

Computerization in managed care is relatively recent and the uptake has been laboriously slow. At the same time, evolution in technology has been explosive. Reluctant technology upgrades in managed care have been dedicated to hardware and operating software at a pace consistent with Microsoft operating system advances. Little has been done in managed care to exploit technology to actually benefit outcomes.

In contrast, PC’s (350 million were sold in 2010!), cell phones, and smart phones have proliferated. It is estimated 4.6 billion cell phones are in use worldwide. They are enabled with text messaging, web browsers and cameras, as well as by wireless connectivity in place of landlines to reach remote communities, as well as by new social networks that enable collaboration on more and more devices. As recently as 2005, Facebook was a start-up phenomenon, Twitter was still a sound, the cloud was something in the sky, and 3G was a parking space.1 The flood of technology and its applications has serious and exciting implications for Workers’ Comp managed care.

Differentiate through technology
Underscoring the point, Joel Cawley, the vice president for strategy at IBM is quoted as saying, “Two things will differentiate companies, countries, and individuals from one another. One is analytics. Once everyone is connected, prosperity will depend on how well you or your company can analyze and apply all the data pouring through these networks to optimize your ability to provide better…(services).”2

The Workers’ Compensation industry must of necessity step up to the challenge because continuing to do business as usual is ever more unconscionable in light of claim cost escalation and deteriorating outcomes. Workers’ Comp organizations, whether they are insurers, third party payers, self-insured employers, or service providers to the industry, must leverage technology to improve their services and control costs. To do otherwise is derelict.

Move to the intersection of technology and managed care
Analyze the data to gain insight into best practices and procedures and who is providing them. Leverage the data to find best in class doctors and other providers. Enable current data to inform adjusters and medical case managers of claims containing potentially calamitous conditions. Let technology notify appropriate persons of approaching key benchmarks and other pivotal conditions. Most importantly, act on the findings of analytics.

Drive the results of analytics to operations to mobilize appropriate action to intervene in time to prevent further damage. Make analytics and technology work-in-progress tools that lead people to informed decisions and to taking action early enough to contain costs. Most importantly, embrace technology to ramp-up, revitalize, and recharge managed care programs. Use analytics backed by technology to take charge of outcomes. Move to the intersection of technology and managed care.

Learn how MedMetrics will move you to the intersection of technology and managed care, thereby gaining more control of costs and outcomes.

1 Friedman, T., Mandelbaum, M. That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back. Farrar, Straus and Giroux. 2011.
2 Ibid.