Tag Archives: Gregory Moore

Workers’ Comp: the Best of Both Worlds

I kicked off this series by detailing my argument for why physician quality is the single most important aspect of a claim — efficient and effective care is far more impactful than discounted care. Now, I want to expand on this idea by delving further into the relationship between the preferred provider network (PPO) and the exclusive provider network (EPO).

First, let’s understand what is meant by EPO. The narrow definition of the term is a network that is the exclusive option for providers. In workers’ compensation, it most accurately describes programs like the MPN in California, the HCN in Texas or the PPP in Illinois. These are all examples of models where the insurer or employer can define an exclusive list of providers from which an injured worker must choose their doctors. In a broader sense, I think of the EPO as the listing of doctors and ancillary providers that are going to be included in elite programs. This includes the list of doctors you would want to use every time you create a workplace poster or the list of doctors used in any channeling program like initial triage. Think of it as the doctors you want to use any time you have the opportunity to either direct, contain or influence selection of a provider. Ideally, the goal of an EPO should be selecting the best available providers to drive improvements in outcomes.

And improved outcomes should be at the heart of the relationship between PPO and EPO. Over the past decade, outcomes-based networks have become a well-adopted and proven model for dramatically improving a claim population’s overall costs, lost time and litigation, but many organizations struggle with the roll of PPOs in this model. They are also curious as to how to leverage the best of both worlds — PPO and EPO — to drive better outcomes and better pricing moving forward.

Separating “Who” and “How”

The idea of using both PPOs and EPOs to improve outcomes has been somewhat confounding to date. As discussed in Part One of this series, the primary goal of the PPO is to contract with as many providers as possible to drive the best purchase prices for medical and ancillary services. In the absence of any controls over care, the PPO serves its customers best by including poor-performing doctors, courtesy of more available discounts. With controls (and strategies to leverage those controls) for outcomes in place, however, the game changes, and the roll of the PPO needs to be reconsidered.

See also: Why So Soft on Workers Comp Fraud?  

In this environment, PPOs and EPOs coexist in an important balance. The EPO needs to determine “who” to work with, and the PPO provides the mechanism for “how” you work with them.

Consider the following table:

Hopefully, it quickly becomes clear that the “best of both worlds” model is not only achievable but also makes things like vendor selection and program management easier.

Under this framework, the value proposition and role of the PPO is clarified: The PPO is the source of doctors who have been properly vetted through credentialing practices and contracted to provide care, typically at a favorable price. This function could be offloaded to your bill review vendor if it is positioned to resell networks, or you can take on the task of deciding which combination of PPOs gives you the best bench to select doctors from in each jurisdiction. On a case-by-case basis, you may find barriers with a certain jurisdiction or PPO vendor, so some research may be necessary to determine how to manage selecting a subset of providers from a list of preferred providers.

Once you’ve built your bench of “available” doctors, the next step is to select the doctors that are going to be invited into the elite program, or EPO. The most effective method for selecting doctors for an EPO is outcomes-based. Depending on the program, it may be necessary to have processes and documentation for decisions related to the inclusion or removal of doctors from your elite programs. This is more important in situations where the decision to exclude a provider will prevent them from being able to treat your injured workers. Think MPN exclusion. It’s not really an issue when you are just selecting three doctors to be on a workplace poster.

The core message is: Think differently about the purpose of your PPOs; they have a specific value proposition when you are working with an EPO strategy. Use the PPO to build your bench of available doctors, and use your EPO to decide which doctors are the ones you want your injured workers to use.

See also: Healthcare’s Lessons for Workers’ Comp  

The age of accountable care is upon us — in both comp and group health. Data science and access to big data has enabled a level of accountability that did not exist a decade ago. If you do not have a strategy for using quality as a primary factor in determining who should be seeing your injured workers, you are missing the boat. Having a framework for how to separate who you work with (EPO) from how you work with them (PPO) helps get you started on the path to an outcomes program or provides an easier perspective for how you manage and improve an existing program over time.

Next Steps

Once you have your framework in place, you need to determine the right balance of quality and quantity. To do this, quantify the difference between good and bad doctors. There are a lot of tools available to help you do this. Then, determine how many doctors you need of each type in a given geography to fully service workers. Next, eliminate those doctors whose outcomes don’t make the cut from your network. As long as you have enough good doctors available who can also provide a discount, there is zero benefit to having a deep bench. Once you make smart cuts, emphasizing quality over quantity, watch your savings and worker satisfaction with their care dramatically improve.

Next up: outcomes strategies for each type of jurisdiction. In Part Three of this series, I will dive into three types of jurisdictional models and look at the differences between states. Stay tuned!

This article was first published in Claims Journal.

Healthcare’s Lessons for Workers’ Comp

The healthcare industry is going through seismic changes today as it tries to control costs while providing the best care possible to all patients. In workers’ compensation, the changes in healthcare are affecting us in ways we may not recognize. It behooves us to examine what’s occurring on the broader stage of healthcare and what we might learn from the great healthcare experiment that will help us improve workers’ compensation.

During the recent National Workers’ Compensation & Disability Conference (NWCDC) in Las Vegas, a panel of workers’ compensation professionals comprising me, Kimberly George (senior vice president and senior healthcare adviser of Sedgwick Claims Management Services) and Lisa Kelly (senior workers’ compensation manager for Boeing), discussed this very topic: healthcare transformation and how it can help workers’ compensation achieve better outcomes and risk management.

What is happening in healthcare that can affect workers’ compensation?

  • The drive to accountable care. This term refers to providers being “accountable” for the outcomes of the healthcare they deliver – not just for providing the services. “Accountable care organizations” of providers have been created and have also given rise to other configurations such as medical homes – centralizing patients’ care through the primary care physician.
  • Integration of care. There is broad recognition that when services are integrated between facilities, specialties and technology, it is finally possible to deliver truly coordinated care and reap the benefits of improved quality, safety and efficiency. With integrated care, from the onset of a patient’s health episode, all clinical teams are able to communicate, monitor and track the patient’s progress.
  • Pay-for-value versus pay-for-service. Healthcare payers are shifting to payment models that reward higher-quality care and better outcomes, vs. the old fee-for-service model that paid for each transaction.

While there is no indication that our state-mandated workers’ compensation system is moving toward a pay-for-value model at this point, there is a growing awareness and movement toward recognizing the value of integrating care with high-performing physicians and linking services through technology and care coordination to achieve a more efficient and effective treatment plan and a faster return-to-work. It is this area in which we can immediately move workers’ compensation medical management forward. Indeed, that movement is already occurring.

Curing the Patient, Curing the System

Traditionally, workers’ compensation focuses on getting injured workers to the closest provider, instead of the one that delivers the best patient experience and produces the best outcomes. For years, payers have wondered, “Who are the best doctors, and how do I get my injured workers to them?”

Physician scorecards (measuring the outcomes through the life of a claim tied to the treating physician) provide the answer.

Physician scorecards identify physicians who produce superior outcomes at less cost. During a five-year period, a Harbor Health Systems program found that physicians with superior outcomes reduced medical costs by an average of 20%. Previous studies have shown that treatment by these physicians also shortens the duration of the claim and reduces indemnity costs.

The discussion at NWCDC shared the latest data about the results from using these best-in-class physicians, and what we have discovered matters:

  • Recent results document that the higher-ranked physicians produce significantly lower duration of claims, lower claims costs, lower litigation rates, fewer TTD (temporary total disability) days, lower indemnity costs and lower reopening rates.
  • There is a striking difference between one-star physicians and five-star physicians within the workers’ compensation industry.
  • One-star primary care physicians (lowest score being one, highest score being five) had an average cost of $244,246 per claim, while five-star physicians had reduced the cost to $15,196 per claim. This data supports the concept that getting appropriate treatment faster and eliminating unnecessary care saves money on the claims side while getting an injured worker recovered and returning to work faster.
  • With primary care physicians treating injured workers, the average duration of a claim (in days) for five-star physicians was 263; for one-star primary care physicians, the average claim duration amounted to a staggering 2,389 days.
  • The difference in indemnity costs was eye-opening, as well: With five-star primary care physicians, indemnity costs were approximately $5,433. With one-star physicians, indemnity costs skyrocketed to $75,829.

What’s Next?

The ability to use the best physicians for injured workers and to link together superior providers throughout the continuum of care, integrated by technologically enabled communications, is the new goal for workers’ compensation.

The technology now exists to accurately and effectively measure claims outcomes by physician, to get injured workers to see these physicians quickly, to link rapidly with best-in-class ancillary providers and to power the systems to keep the care plan on track for a fast, safe recovery.

Mere cost containment is no longer enough. Workers’ compensation professionals can and must work together to achieve better outcomes – for our organizations and, most importantly, for injured workers. If we focus on curing the patient, we will cure the system, as well.