Cutting Healthcare Costs Doesn't Lower Quality

The key to supporting healthcare quality while cutting costs is generating data that will identify potential problems early.

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. These supposed opposites -- high quality and low costs -- can 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. 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. 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 is needed. A claims payment organization can set standards for what should be considered the threshold of excess 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 lower costs while sustaining quality. 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. 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. Industry research speaks for itself. Consider this Washington state study, “Long-term Outcomes of Lumbar Fusion Among Workers Compensation Subjects: An Historical Cohort Study.” 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.” Monitor the data to discover outliers early so that interventions will effectively improve outcomes. The key to supporting quality while cutting cost is identifying potential problems early. The longer an issue persists, the more challenging it is to correct it. Consider both medical quality and cost control equal goals. They are not mutually exclusive. 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

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Karen Wolfe

Karen Wolfe is founder, president and CEO of MedMetrics. She has been working in software design, development, data management and analysis specifically for the workers' compensation industry for nearly 25 years. Wolfe's background in healthcare, combined with her business and technology acumen, has resulted in unique expertise.


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