By: David A. North, President & CEO, Sedgwick Claims Management Services, Inc.
A shift in current thinking is beginning to emerge when it comes to the treatment of injured workers. We have become an industry focused on delivering managed care rather than health care, and change is inevitable. Less emphasis should be placed on negotiating discounts and processing paperwork, and greater emphasis on identifying quality providers and delivery of care. In order to understand the implications of this movement, it’s important to look at where we’ve been and the results generated.
Managed care techniques have been at the heart of claims management activities since the 1990s when many believed the workers’ compensation system was on the verge of collapse. Industry leaders at that time sought to incorporate long-standing cost containment tools that were prevalent in group health to the strained workers’ compensation system. As a result, medical bill review, case management, utilization review, and preferred provider organizations became a part of the risk management vernacular. And yet despite comprehensive managed care programs in the workers’ compensation arena, claims costs continued to soar with medical expenses leading the way.
Even today, the rate of increase associated with workers’ compensation medical costs outpaces that of general health care. Moreover, studies have shown that the standards of care associated with occupational medicine are generally perceived to be lower than those delivered in a traditional healthcare setting.
Looking at today’s best practices and the application of managed care to workers’ compensation, these results and perceptions are really not surprising. Some of the shortcomings in expectations can be attributed to the following:
- PPO networks do not generally include quality and outcome metrics in the contracting and credentialing process.
- Network management does not place enough emphasis on improving quality of care for the injured worker.
- Physicians who do deliver high valued services in workers’ compensation are treated the same as physicians with little or no experience.
- Network fees are outdated and costs do not correlate to the value of care delivered and claims outcomes.
- Not enough consideration is given to the deployment of nurse case management and utilization review or how to maximize the value of these services.
- Medical literacy is missing from today’s model as little effort is directed toward helping injured workers understand their diagnosis, treatment options, or how to facilitate the recovery process.
So, how can we put the brakes on costs and improve quality of care? Beauty lies in simplicity and taking a broader view of our purpose.
Let’s look at our original goal of restoring the health of an injured worker and returning much needed labor to the employer as quickly as possible and how that relates to what we do everyday.
As an industry, we become engaged when a worker suffers an unexpected event at the workplace and requires medical care. Following the injury, the worker’s need to remain on the job and earn a living does not change, nor does the employer’s need for labor diminish as a result of the event.
One of the best ways to address both needs is to ensure the injured worker receives appropriate medical care as soon as possible. The reality is better medical outcomes are good for both workers and employers. Workers are more likely to return to healthy, productive living. Employers are more likely to see better results in claims durations, long-term medical costs, and total cost of claims.
After all, this is how we would treat a family member or close friend needing health care treatment. Less emphasis would be placed on achieving volume discounts and treatment utilization, and more emphasis would be placed on seeking the best care available at a reasonable cost.
Applying this approach to workers’ compensation requires change. It creates a burden on employers and their administrators to provide an efficient referral model to connect the injured worker with the correct doctor promptly. Under this model, the challenge becomes identifying those physicians who are most capable of providing quality health care and showing them how to work more effectively within the workers’ compensation system.
This notion of providing quality health care to injured workers at the onset of injury shows much promise for the future. This movement was advanced at a combined meeting of the American College of Occupational and Environmental Medicine (ACOEM) and the International Association of Industrial Accident Boards and Commissions (IAIABC) in April 2010.
During the meeting, a number of workers’ compensation stakeholders were brought together to explore how quality healthcare providers could be identified and best utilized within the system. The discussion included representatives from employers, healthcare providers, governmental agencies, insurance companies, third party administrators, and other industry experts.
One of the important outcomes of the meeting was the development and release of a set of criteria used to define the ideal physician for treating workers’ compensation injuries and conditions. Summarized in The Guide to High-Value Physicians Services in Workers’ Compensation, the group suggested ideal physicians would exemplify the following characteristics:
- Are willing to accept patients covered by workers’ compensation insurance.
- Employ best practices in providing high quality and compassionate medical care.
- Respect and fulfill the extra responsibilities that the workers’ compensation system creates.
- Produce better overall outcomes at comparatively better total cost over the course of an injury or illness.
The continued discussion and exploration of new ideas cannot stop here. It is paramount upon industry leaders to redefine the role of managed care and embark upon advanced initiatives such as provider benchmarking. Healthcare providers must be held accountable and incentivized for the outcomes they achieve. Further, as the discussion expands, greater emphasis needs to be placed on wellness and taking care of the total person rather than just focusing on specific work related injuries. The end game is to address both employee and employer needs in an effective, efficient, and compassionate way.
It is this type of collaboration and progressive thinking that will be the key to sustaining and strengthening the 100-year old social system that we call workers’ compensation.
About Dave North
Dave North is President and CEO of Sedgwick Claims Management Services, Inc. (Sedgwick CMS).
Dave has nearly 30 years of experience in risk management services. He joined Sedgwick CMS in 1995 to provide overall corporate leadership in strategic development and growth.
Prior to joining Sedgwick CMS, Dave was the global practice leader for risk services at a major brokerage and risk management consulting firm. There, he led the development of a Total Cost of Risk strategy that included the property and casualty loss control services, claims management and consulting, risk management information services, structured settlements, law advisory and workers compensation consulting. These services were expanded around the world under his leadership.
Dave is a frequent speaker at many CPCU chapters and at national and local RIMS meetings. He developed and taught the American Management Association course on Advanced Risk Management Strategies: Managing the Total Cost of Risk. In 2002 he was recognized by Business Insurance as one of the 35 “Rising Stars” in insurance worldwide. In 2003, he co-authored the book “The Art of Self-Insurance”. He serves on the Board of the Workers’ Compensation Research Institute. He is Past Chairman of the Board of the Integrated Benefits Institute.
About Sedgwick Claims Management Services, Inc.
Sedgwick Claims Management Services, Inc. is the leading North American provider of innovative claims and productivity management solutions. Sedgwick CMS and its affiliated companies deliver cost-effective claims administration, medical management, risk consulting and related services to clients through the expertise of approximately 8,500 colleagues in more than 150 offices in the U.S. and Canada. The company specializes in workers’ compensation; disability, FMLA and other employee absence; general, automobile and professional liability; alternative market; and warranty and credit card claims services as well as Medicare compliance solutions. Sedgwick CMS and its affiliates design and implement customized programs based on proven practices that meet client needs. To learn more, visit www.sedgwickcms.com.