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.
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.