Intelligent WC Medical Management, a Process for Efficiency and Measured Results

by Karen Wolfe

Technology in Workers’ Comp is hardly new, but new ways to infuse technology and predictive analytics into the claims and medical management processes can significantly improve accuracy, efficiency, outcomes, and, importantly, profitability. Well-designed technology that streamlines operational flow, provides key knowledge to the right stakeholders at the right time, promotes efficiency, and generates measureable savings is formidable. The system is intelligent and includes these key components:
1.     Predictive analytics
2.     Data monitoring
3.     Knowledge for decision support

Predictive analytics
Predictive analytics is the foundation for creating an intelligent medical management process. Analysis of historic data to understand the risks and cost drivers is the basis for an intelligent medical management system. For the risks identified, the organization sets its standards and priorities for which stakeholders are automatically alerted to those specific conditions in claims as they occur.

The stakeholders are usually claims reps and nurse case managers but others inside or outside the organization can be alerted, such as upper management or clients, depending upon the situation and the organization’s goals. Upper management establishes specific action procedures for specified conditions or situations, thereby creating consistent procedures that can be measured against outcomes.

Data monitoring
Incoming data must be updated and monitored continuously. Random or interval monitoring leaves gaps in important claim knowledge that is overlooked until the next monitoring session. The damage may have escalated by then. With continuous data monitoring, everything is reviewed continually so nothing is missed. When the data in a claim matches the conditions outlined by the predictive modeling, an alert is sent to the stakeholder so action or intervention is initiated.

Some say the stakeholders will not comply with such a structured program because they resist being directed. To solve that problem, accountability procedures in the form of audit trails in the system act as overseer. At any point, management can view what alerts have been sent, to whom they were sent, for what claim, and for what reason, thereby observing participation and supporting accountability.

Knowledge for decision support
The alerts sent offer collected knowledge about the claim needing attention so the stakeholder is not forced to search for information before deciding upon an action. The reason the alert was triggered, detailed claim history including medical costs paid to date is displayed for alert recipients. Importantly, the projected costs for a claim with similar characteristics are portrayed, making reserving adjustments easy and accurate.

The projected ultimate medical costs for the identified claim is portrayed for the claims rep based on the analytics, thereby providing decision support for adjusting reserves. Data entry into the system is never needed, therefore, accuracy and efficiency is optimized.

At the same time, a nurse case manager is automatically notified of the situation if indicated by the organization’s rules in the system and is informed with the same claim detail. Now the case manager and claims rep are collaborating to mitigate the costs for this claim. They know the projected ultimate medical cost for the claim and the projected duration of the claim so they have a common and concrete target to challenge. Moreover, improvements on the projections offer objective and defensible cost savings analysis.

Predictive analytics combined with properly designed technology to create an intelligent medical management process establishes a distinct advantage. Knowledge made available at the appropriate time for the right people leads to efficiency and accuracy. Early, intelligent intervention drives better results.  Stakeholders coordinate efforts to mitigate the claim, working toward a shared goal. Finally, knowledge provided for decision-support positions for measureable, objective, reportable savings at claim closure.

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

 

7 Reasons You Really, Really Want WC Medical Analytics

by Karen Wolfe
In a recent post, Joe Paduda stated, “The workers’ comp, and, for that matter, the entire property and casualty insurance industry, is chronically systems-poor.  While other industries view IT as a strategic asset, continually investing billions in IT, WC/P&C considers IT an expense category to be mined for pennies to add to earnings per share.”[1]

As one who has worked on the vendor IT side of the Workers’ Comp industry for decades, I know for a fact Joe is exactly right. Nevertheless, both inside and outside change is impacting the industry—compliance requirements and how IT is perceived, financed, and implemented.

Moreover, customers are demanding more usable information. So as a way of advancing the perception part of medical analytics, seven reasons are offered here to whet the appetite for analytics-informed medical management

Analytics-informed medical management means collecting, integrating, and analyzing all relevant current and historic data to gain insights that will improve performance and outcomes. The following are a few very good reasons to invest in analytics.

1.    Look forward, not backward
An unfortunate, but persistent perception of business intelligence and data analysis is that reports are for looking at the past—how many claims, the trend in slips and falls, or how much money was spent last quarter. Interesting, but not actionable.

Much greater advantage can be gained from analyzing the data to understand what is happening now in order to improve procedures going forward. Identify cost drivers and develop prompt, appropriate, and consistent actions to redirect the organization.

2.    Find meaning in your data
The industry has been diligently collecting data for years, yet little attention has been paid to what the data might reveal. Analytics looks at the data to derive meaning, suggest direction, and empower informed decision-making.

Corporate leaders are often victims of their own denial, assuming all important information is known and current processes are the best they can be. Rarely is that actually the case and analytics can be eye-opening.

3.    Deliver intelligence to those who need it
Analytics can be used to evaluate medical provider performance, for instance, and deliver the information in real time to those who are directing care. Since poorly performing providers are guaranteed to add cost and complexity to claims, analytics used in this manner will directly impact efficiency, cost, and outcome.

Similarly, information about untoward events and conditions in claims delivered to operations concurrently will add efficiency and improved outcomes.

4.    Standardize procedures
A rule-based approach can be used to monitor data and create alerts of high risk conditions and events that occur in claims. Doing so inserts credibility, consistency, and comprehensiveness into the medical management process. Moreover, when standard procedures and actions are established to respond to specific alerts, the entire process can be measured for organizational improvement, cost-savings, and outcome success.

5.    Data as a work-in-process tool
Data can be a working tool. Analytics can be structured to concurrently tag data items that portend risk and cost in claims, then alert the person who can take action. Front line workers will gain decision support information in time to intervene effectively and usually avoid irreversible damage.

6.    Discover unexpected opportunities
When analytics are employed, newly discovered information or conditions understood differently can reveal opportunities. Interventions, priorities, and procedures might be restructured, streamlined, or enhanced. New products or delivery methods may also be realized and developed.

7.    Ensure the organization’s competitive advantage
Having implemented standard and consistent methodologies, improved outcomes are demonstrated objectively for clients and prospects. Proof of value generates confidence in operations and outcomes, a much easier sell.

The forgoing seven reasons to invest in medical analytics are not by any means all-inclusive, nor are they exhaustive in their portrayal. Much more can be said and gained by implementing medical analytics. The data ingredients are available and waiting.

The general tenor in the industry is to continue business as usual, but doing so has not produced desired results. Nor will it. As Paduda points out, IT in the WC/P&C industry is exceedingly underappreciated and underfunded.

Therefore, a  little creativity may be required to obtain what is needed. Outsourcing to a company that uniquely provides Workers’ Compensation medical analytics is one approach. Fees can be sized to the organization, thereby making it affordable. Being analytics-poor is no longer an option.

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Paduda, J. Who’s running your company. 05/20/2016 http://www.joepaduda.com/2016/05/whos-running-company/#sthash.LJIERvyq.dpufv

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation, analytics-Informed medical management and technical services company. MedMetrics analyzes and scores medical provider performance and offers other online apps that link analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

Are You an Industry Disruptor? It Can be a Good Thing

by Karen Wolfe

The idea of an industry disruptor might be reminiscent of a classroom prankster, the one who continually distracts to keep the teacher off topic. But no. The term “industry disruptor” is being used to describe organizations with concepts or approaches that significantly impact an industry. Because of their unique presence and ingenuity, industry disruptors change the entire industry—often forever.

Industry disruptors

Think of Steve Jobs’ invention and Apple, Inc.’s implementation of the iPod. It turned the music industry on its side. Jobs could envision completely new products and new ways to use them, so he changed the music world. But the music industry was not the only business he disrupted.

Jobs did not invent the cell phone, but he changed the way cell phones are used. The “smart” iPhone profoundly changed the way we use phones. Now they are small, but powerful hand-held computers with apps that embrace almost any activity. Land lines have become almost obsolescent and old “Ma Bell” would not recognize the industry.

Moving on, Jobs also disrupted the personal computer industry with the iPad. Sales are down for laptops and portable computers because people rely on the simpler iPad for personal use, for e-reading, for movies, and for specific business adaptations. As an example, doctors’ offices now use iPads for data input into EMR’s (Electronic Medical Records). iPads and phones even capture credit cards and signatures.

Jobs could “think different”, actually using that phrase in advertising. He could envision, design, develop, and implement electronic tools that disrupt whole industries. Amazingly, the technology, through the continuous development of apps (purpose-specific applications) has allowed expansion from the original concept into every avenue of life.

Yet another, more recent disruptor is Uber. Uber has taken use of the smart phone a step further, thereby changing the way people travel from point to point in cities. Just tap your phone, and you will be picked up and driven to your destination. No money or credit card transactions are needed because that has been set up in advance on the Uber website.  

Uber has seriously disrupted the stodgy taxi industry as people find the simplicity of Uber quicker and more satisfactory. However, disruptor transition is not necessarily easy. Uber is suffering from growth stumbles and legal push-back from the taxi industry. Resistance is found in many industries.

Disruptors in Workers’ Compensation

Everyone agrees Workers’ Compensation needs updating and improving. Unfortunately, the industry is notoriously resistant to change. What would an industry disruptor create for this industry?

Legislation

Some say the big change needed is to legislate the employer opt-out option from state regulated systems. Texas and Oklahoma are the change leaders in that effort. However, a group of employers is working in other states to bring about similar legislation. If well-executed, these efforts could significantly impact the industry.

To bring about superior, sustainable change, new applications of technology will be required to monitor consistency, quality, and compliance across jurisdictions. The technology is available. Now a unique application is needed, one that everyone loves to use!

Loving technology

Loving technology is not a sentiment normally found in Workers’ Compensation. That is because most still think of technology as tedious data input and mistrust the output. Nevertheless, creative technology could boost and enhance nearly every activity in Workers’ Compensation.

The ultimate goal in any Workers’ Compensation endeavor is (should be) to optimize the medical care of injured workers at the lowest possible cost. A successful industry disruptor will apply technology in new ways, thereby positively impacting cost and outcome pathways for injured workers and their employers.

Industry disruptors

Any industry disruptor technology will encounter resistance in Workers’ Compensation. However, everyone can contribute to positive industry disruption by simply being open to change. Change might mean doing things differently. It might be willingness to learn about and adopt new technology-based approaches in business operations. It might even mean willingness to love technology.

The point is, a creative new use of technology will change the way the Workers’ Compensation world is managed going forward. Industry disruptors will make that happen.

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics and technology services company. MedMetrics analyzes the data and offers online apps that super-charge medical management by linking analytics to operations, thereby making them actionable. karenwolfe@medmetrics.org

 

Balancing Medical Quality and Cost A Zero-Sum Game?

by Karen Wolfe

Many believe medical quality is sacrificed when attempting to control costs. The logic assumes the way to achieve quality medical care is to deliver more of it. The other side of the same reasoning is that less medical care means less quality. However, the cost-quality balance is not a zero sum game.

Zero sum games

A zero sum game means that when one element of the equation prevails, the opposite is suppressed. That would mean efforts to control medical costs by reducing the amount of medical care will result in poor medical quality. Cost control efforts such as not authorizing treatments and procedures necessarily result in poor quality.

Coexisting factors

However, these supposed opposites can, and should coexist in managing the medical portion of Workers’ Compensation claims. Quality is not counter to cost management in medical treatment. For instance, managing the number of visits or encounters, prescriptions, and the number of specialists the claimant encounters are just a few ways to limit medical services that may, in fact, improve quality.

Visits and services

On the one hand, the treating doctor should see the injured worker often enough to understand, direct, and maintain control over the recovery process. Yet, some physicians embellish their revenue flow by seeing patients more frequently than necessary. To manage excessive utilization of office visits and services, evaluate the data to learn what is reasonable and what is disproportionate. To be effective, the data must be monitored concurrently so that intervention has an impact.

Analyze the data

The way to objectively measure excessive visits is to monitor and analyze the data. For specific injuries in a given jurisdiction, what is the mean number of medical visits? Outliers can be interpreted to mean either the treating physician is fraudulent or the claimant is in trouble. Either way, focused attention to the matter is needed.

Standards and legislation

A claims payment organization can set standards for what should be considered the threshold of excessive for given conditions. Beyond that point, the claim is examined and intervention initiated. Some states legislate frequency of care.

The state of California, for instance, has placed limits on the number of physical therapy and chiropractor visits. The data system can mobilize notification to the appropriate persons when the benchmark is approaching so that limits are not exceeded. Applying similar methods to a variety of medical visits and services adjusted by diagnosis and other factors such as age and comorbidity will similarly impact costs while sustaining quality.

Over-prescribing

Another example of balancing quality and cost is controlling frequency or volume of services by electronically monitoring prescription practices, especially those for Schedule II or Opioid drugs. The literature is replete with examples of ineffective and poor outcomes when Opioids are over-used. By monitoring current data, usage and cost can be checked through appropriate intervention.

Over-referring

Yet another indicator found in the data reflecting excessive medical treatment is multiple medical referrals. Too often when the patient is not improving, the doctor’s response is to refer to specialists. The data gives up that information by noting the number of medical providers and specialists involved in a claim. Assuredly, a claim with multiple specialists is a claim in trouble, or at least progressing poorly, needing attention.

Surgery

Industry research speaks for itself. Consider this Washington state study, “Long-term Outcomes of Lumbar Fusion Among Workers Compensation Subjects: An Historical Cohort Study”[1] This study concluded, “Lumbar fusion for disc degeneration, disc herniation, and/or radiculopathy in a workers comp setting is associated with significant increase in disability, opiate use, prolonged work loss, and poor RTW status.”

Intervene early

Monitor the data to discover outliers early so that interventions will effectively impact outcomes. The key to supporting quality while impacting cost is identifying potential problems early. The longer an issue persists, the more challenging it is to correct it.

Balancing quality and cost

Consider both medical quality and cost control equal goals. They are not mutually exclusive nor is it a zero-sum game. The medical profession itself is recognizing and addressing the issues of over-prescribing, over-testing, and over-treatment. Medical managers need to assist in the process.

Karen Wolfe is the founder and President of MedMetrics®, LLC, a Workers’ Compensation medical analytics company. MedMetrics offers online apps that super-charge medical management by linking analytics to operations to make them actionable. karenwolfe@medmetrics.org

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[1] http://dspace.uta.edu/handle/10106/1922 Lumbar_Fusion Outcomes_in_Washington_State.13.aspx

  http://www.ncbi.nlm.nih.gov/pubmed/20736894

 

Repost: You Might Be in the Medical Business Now

By Karen Wolfe

The well-known Workers’ Comp sage, Joe Paduda, published an article today for WorkCompWire entitled, “What Business are You In?” Paduda asserts that leaders in Worker’s Comp industry are misguided regarding what business they are actually in. He says they are in the medical business. The following article was posted by MedMetrics January 8, 2013 and is republished here to underscore Paduda’s point.

In Workers’ Compensation, direct medical costs now amount to 60% of claim costs. For most businesses in most industries, when the bulk of expense dollars shifts significantly, the business process immediately adjusts to target the problem. Not so in Workers’ Comp.

An example is managed care programs in Workers’ Comp having remained essentially unchanged since their inception, now nearly thirty years past. Originally designed to control medical costs (and generate revenue for networks), many managed care programs have fallen short. Some of the original designs were good while others were faulty from the start. That none has evolved, taking advantage of advances in technology, is disheartening.

Retro networks

Most medical provider networks not only have not changed, but have somehow sustained the illusion that they offer value. They report discounts on units of medical services. Shady medical providers respond by ramping up the number of treatment services and the duration of treatment to make up for revenue lost to discounts. Ironically, the result is more discounts reported! No one screams “Foul!” and the elephant in the room smugly sits there.

The bad guys

Industry research tells us less than 4% of the doctors generate over 70% of the costs. Moreover, it is easy to figure out who those people are by analyzing the data, so what keeps organizations from steering away from them? Individuals in the 4% bracket should be identified and claimants directed away from them. Better yet, stop referring to them just because they are in the network (and generating those bogus discounts).

Medical management is complicated

Many payers feel powerless in managing medical costs. Claims adjusters and Workers’ Comp managers may know a lot about work injuries, but they cannot be expected to create system change. Rather than trying to manage doctors, they should simply avoid the bad ones. Even in states where directing care is not allowed, intelligence about provider performance and claim outcomes is useful to inform decisions by claims adjusters, nurse case managers, and injured workers.

Monitor the data

A crescendo of concern about Opioid use and abuse has emerged recently. It’s not the drugs themselves that escalate costs, but the collateral damage they inflict on injured workers. Dependence, addiction, and pain confusion prevent, delay, and complicate recovery. Monitoring the data in real time to discover abuse in the form of repetitive prescriptions can be very effective. Most complex claims develop over time and would be more easily resolved and costs avoided when discovered in earlier stages.

Predictive modeling

Predicting the claims that are likely to become complex is an excellent initiative. Still, monitoring all claims electronically, concurrently, and continuously may be a more practical approach. For instance, an alert is sent when a second or third Opioid bill appears in a claim. Now is the time to intervene, whether the claim was predicted to be costly or not.

Even when a claim is tagged using predictive modeling, the only logical procedure is to monitor that claim from the beginning and intervene as conditions warrant. By the same token, concurrent data monitoring can trigger an alert when something suspicious arises in a claim. All claims can be monitored electronically rather than the few singled out through predictive modeling. It’s a powerful medical management tool and nothing slips between the cracks.

Technology-intensified medical management

Tackling the medical part of the business can be complex and difficult, especially for people not specifically trained in it. However, applying analytics and delivering information appropriately through technology tools is powerful. Deliver the right information to the right person at the right time so that early intervention will impact claim conditions, events, and medical costs more effectively. Well-designed technology will find problems early and inform the appropriate persons, thereby linking analytics to operations and significantly impacting results.

You are in the medical business

Workers’ Comp leaders should recognize they can’t avoid addressing the medical portion of claims. They are are actually in the medical business. It’s time to get serious and implement the expert methodologies available to actualize intended managed care initiatives. Continuing business as usual guarantees continuing high costs and substandard results. Ultimately, it could jeopardize the business itself.

Many organizations do not have the resources to develop the kind of tools briefly described here. Instead, they can purchase them from a third party Workers’ Comp managed care technology company. It is doable, affordable, and effective. Even small organizations can partake in the benefits.

Karen Wolfe is president of MedMetrics which applies analytics and technology to maximize medical management initiatives. Visit MedMetrics to learn about MedMetrics Provider Performance Suite and other “power apps” that link analytics to operations, thereby making them actionable.  For questions, contact karenwolfe@medmetrics.org

 

 

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Survey: Employers Want WC Cost Control. Really?

by Karen Wolfe

Much has been said about the recent Workers’ Comp survey reported in the Insurance Journal revealing that employers’ top concern is cost containment. Really?
http://www.insurancejournal.com/news/national/2012/03/19/239972.htm

Tired remedies
That employers are concerned with cost is obvious. Focusing on and controlling cost is the only way companies survive and thrive. But the survey did not report how frustrated employers must be with the same tired “solutions” offered as remedies. For instance, 65% of the employers surveyed said the most effective measure would be having a safety-minded culture. Nice.

Additionally, fifty-nine percent indicated that a light-duty or return to work program is a highly effective method of controlling cost. That one has been proven effective through research. Other measures mentioned were onsite accident evaluations, loss prevention evaluations, zero-accident goals, having a dedicated claims manager, safety committee efforts, and using a preferred occupational medicine facility. The suggestions are good and can be effective. Sometimes.

Soft cost controls
When implemented consistently with unrelenting energy and consistent funding, soft cost controls listed can be very effective. But they rarely are applied in that manner. Each is subject to individual leadership interest, commitment, management skill, intervening business demands, and budget allocations. For instance, how is a safety-minded culture structured, implemented and sustained it over time? Such programs can be excellent when conceived, implemented and managed by a creative and strong leader willing to stay on the job. But, that is difficult and rare.

If these time-worn measures were significantly effective over time, Workers’ Comp costs would not be an issue. Adequate funds would be allocated consistently, along with appropriate training and monitoring methodologies. Unfortunately, soft controls rely on the individual initiative. Programs of this sort suffer from too many variables, too many moving parts, and for the most part, no way to insure uninterrupted implementation. However, another approach that does not rely on the human factor is not mentioned in this study as a solution. The omitted solution is computer-aided cost control.

Computer-aided cost control
For instance, one of the suggested tactics for cost control in the survey is using a preferred occupational medicine facility. However, which should be the preferred provider? What are the track records of various clinics? How is performance measured for frequency and duration of treatment, as well as cost for effectively medically managing injuries. How are costs differentiated by injury type and severity? The same questions should be asked about specialty providers. The answers to these critical questions often remain unknown and choices are made based on personal preference. So often, continuing business as usual is just easier. But that could fly in the face of cost control.

Technology as a management tool
The Workers’ Compensation industry, unlike most other industries in this country and others worldwide, has not embraced technology and data analysis as an effective cost control strategy. Many still do not grasp the potential power of analytics. Computer-aided cost management will make the greatest and most consistent impact on costs, with or without available leadership resources. Configured appropriately, computer-aided cost control is an automated cost control tool.

Current data required
To be effective as a cost control tool, data analysis (analytics) must draw on current data. The data must be collected and analyzed concurrently, making timely intelligence available to operations. Users are alerted of potentially complex and costly events in claims in near real time, not at the end of the month or quarter when it’s too late to intervene. A system that monitors current data continuously can pick up subtle indicators of risk in the data otherwise overlooked by manual monitoring. Analyzing current data for computer-aided cost control is critical, as is linking the analytics to operations.

Analytics alone are not enough
Many are now implementing analytics, but analytics alone is not enough. Colorful graphic presentations posted on the wall or in a summary report will never impact costs. Use of analytics in this way guarantees they remain soft cost controls because a leader is required to translate the information to operations. For analytics to become a powerful and practical cost control tool, they must be actionable.

Actionable analytics
Actionable analytics require the analytics be linked to operations so they are automatically acted upon. Claims examiners and medical case managers are alerted and informed early of negative conditions in a claim so the focus is placed on claims needing the most attention. Actionable analytics provide quick lookup of comparative provider performance in a geo-zip region or an alert of a claimant’s diabetic condition. Actionable analytics can make timely, automatic and appropriate referrals. Actionable analytics do not require a manager to interpret the intelligence, mobilize action and sustain it.

Good management
Good management is making sure what you did stays done. Soft cost control measures require excessively vigilant and consistent management. On the other hand, computer-aided cost control removes the management burden and guarantees consistent oversight with measureable results.

Learn how to implement computer-aided cost controls.