Monday, November 4, 2013

Myths and Facts About Workers' Compensation #1

MYTH #1: Large Discount Networks Are the Key to Success in Workers’ Compensation Managed Care
“Crisis” was the single word most often associated with workers’ compensation back in the early 90’s. The unprecedented rise in medical costs sent employers in search of innovative solutions. A few progressive companies looked at the health care model to better control medical costs and began to adapt the concept of networks to Workers’ Compensation. Most employers theorized that the more providers you had in your network the better your penetration rate and this would produce a better savings. However, today’s reality presents a very different picture.
We have found, over time, that while penetration and savings rates are good things, the real keys to a sustainable reduced medical cost are controlling utilization and targeting specialties such as pharmacy, physical therapy, high end radiology and other specific services. Instead of an increase in cost per treatment or per unit cost of a service such as a doctor’s visit, it is the amount of services and the types of services being used driving medical inflation. Thus, a broad based discount network, getting you discounts off of the charged amounts, has plateaued in terms of effectiveness in controlling medical cost.
The answer to workers’ compensation networks is based on a multi-tiered, multi-layered customized approach that addresses all of the dimensions of the cost equation at a jurisdictional and customer specific level. Only by using objective metrics can you identify the needs and cost drivers to build network solutions that are unique and specific to employers medical cost problems. This approach requires finding the right strategic partners and applying proprietary clinical intervention triggers that maximizes the reduction in total loss costs (claim and medical) to produce the optimal claim outcome.
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Contact Neil O'Toole and John Sbarbaro
Phone: 303-595-4777
Located in the Denver Metro area.
226 West 12th Avenue Denver, Colorado 80204

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