By: Kent Spafford, Chairman of the Board, One Call Medical
Having been engaged in workers’ compensation for many years, it’s been interesting to monitor industry trends over time. Since September 2009 and over the last 18 months, there has been considerable movement to embrace “quality” and the impact it has on overall claims costs and outcomes.
When the economic recession initially hit and deepened, workers’ compensation payers became increasingly concerned with saving money and the price tag attached to claims-related services. Ultimately, they wanted to know, “How much is this going to cost?”
In various scenarios across the country, service providers began to promise a low cost. Many payers took the bait, but began to realize they were incurring additional expenses due to poor delivery of that service. As time went on, data analysis provided proof of an industry-wide finding—the lure of shortsighted savings can often result in a much higher bill, especially when the total value and benefit of a service (or lack thereof) are taken into account.
Let’s look at the cost vs. quality dilemma more closely. On the surface, a service may appear to have a lower rate, but the overall cost of the claim actually increases as poor service and poor quality boost costs in other related areas. Ultimately, it’s the payer and employer that foot the bill for the life of a workers’ comp claim. This includes indemnity costs to cover lost time due to service delays, inaccurate diagnosis, inappropriate treatment, and extended disability—not to mention potential litigation costs. All these factors serve as cost multipliers to what initially appeared to be a cost-savings.
In addition, the delivery of medical services in workers’ compensation is affected by very different factors than in general healthcare. For example, it may behoove an injured worker and payer to obtain an MRI early in the life of the claim. Diagnostic imaging leads to a more accurate diagnosis and treatment plan, enabling the injured employee to return to work quickly and safely. The initial scan may have been expensive, but the overall cost of the claim was dramatically reduced.
Realizing they have been pennywise and pound-foolish, payers have begun to adopt a more holistic and systematic approach to their service buying decisions. Now, even before unit price is considered, payers are taking other pressing concerns into consideration, including quality outcomes, service levels, SAS-70 compliance, provider qualifications and credentialing, as well as data backup to ensure redundancy in case of a catastrophic event.
Another chief concern is how service providers interact with injured workers in terms of quick, easy-to-use, and convenient service, as well as a high level of patient advocacy and satisfaction. This “big picture” shift in a payer’s purchasing mindset has dramatically changed the way service providers are being evaluated and selected in today’s workers’ compensation market. Many payers are demanding data analysis, metrics, and benchmarks to monitor a service provider’s performance, particularly in the area of patient satisfaction.
Another key finding is that service providers must consider quality at the outset of conceiving their business models. In this way, quality is built in—actually hardwired into the service delivery mechanism—rather than added as an afterthought. Trying to “tack on” quality at the end is both costly and ineffective.
For example, building a solid credentialing process to ensure the use of quality providers—or leveraging evidence-based medicine to ensure quality medical outcomes—takes years of experience and a volume of business that only the most mature and distinguished service providers can boast of. Due to these factors, kudos are much deserved for the service providers that have built their businesses based on the “right stuff.”
Obviously, cost is still one of the key criteria in the service provider selection process, but today it’s not the only factor. Low cost accompanied by low quality will never be cost-effective in the long run. At a recent summit of workers’ compensation leaders, this perspective was resoundingly confirmed—quality is king—although the road to achieving this level of excellence requires continued commitment, discussion, and investment in order to reap the rewards.
Ultimately, the dynamics of today’s market dictate that workers’ compensation payers must take the time to consider all aspects of this quality quotient and define what quality means to them. In this way, they’ll be better equipped to take both traditional factors, such as cost, and new criteria measures, such as “quality,” into their service buying decisions and vendor selection process.
About Kent Spafford
Mr. Spafford is currently the Chairman of the Board at One Call Medical, Inc., joining the company in January of 1999, after successfully leading a Wall Street-backed recapitalization of the company.
Mr. Spafford began his career with the General Electric Company in their medical systems division as the sales manager for the Western division for 10 years. In 1989, he moved to Intracorp, a wholly owned subsidiary of Cigna, as Division Vice President and General Manager. He has also held executive management positions at Image America and Principal Care.
About One Call Medical
One Call Medical (OCM), the nation’s leading provider of specialty services to the insurance industry, has a “smart partner” approach in delivering its suite of easy-to-use, efficient, and cost-effective ancillary services that help claims professionals to achieve superior outcomes. OCM enables injured claimants and insurance payers to get the best quality and value for diagnostic scans and electrodiagnostic testing—the building blocks for successful treatment plans and optimal return-to-work results. Through its STOPS subsidiary, the company provides transportation and language services, required by today’s increasingly diverse claimant population; and through its Express Dental Care subsidiary, OCM assists with all aspects of the dental claims management process, as well as handling referrals to hearing, eye, and other hard-to-find specialty providers. OCM’s customers include the nation’s leading insurance companies, third-party administrators, payers, and self-insured employers. More information about One Call Medical can be found at www.onecallmedical.com.