When managed care was introduced to the workers’ comp arena in the 1980s, it promised to be the cure-all for a system suffering astronomical costs and waning premiums.
Today, the atmosphere of workers’ comp in the western states has improved somewhat. Premiums are stable and, while medical costs are still increasing, many providers are experiencing costs well below the national average. Why? The response may depend on who’s doing the talking, but most agree it is based primarily on an increased effort to get workers back on the job as soon as possible. Some say the concept of care managed organizations (CMOs), also referred to as managed care organizations (MCOs), are to thank for that effort.
Jeff Acock, regional president of Managed Comp, an Orlando-based workers’ comp and managed care provider, said in order to determine just how well the managed care in the workers’ comp field is doing these days, one must clarify exactly what managed care is.
“When people think of managed care they think reduced costs. But that’s only half the picture,” Acock said. “Wage replacement is the largest cost in workers’ comp and managed care reduces the wage replacement drastically. Without that factor, it’s not really a managed care system even though some providers may call it that.”
Incident rates across the country are down considerably from 10 years ago, but medical costs are still a thorn for many providers and employers. But, as Acock points out, within the “true” managed care system in workers’ comp, lost time claims are a full 15 percent below the national average, which is running about 24 percent.
CMOs are a progressive trend utilizing Primary Occupational Physicians, giving them the responsibility to initiate case management upon a patient’s very first visit. Still, there are numerous workers’ comp cases where medical is either unmanaged or poorly managed, resulting in complications and long-term disability. These cases are offsetting the progress made by some programs, keeping the industry well above the 50 percent loss ratio mark.
“This is not just something you hire someone to do,” Acock said. “It’s a total involvementÐa 360 involvementÐwith the company, the employer, the doctor and the employee. Everyone has something to do with it.”
The programs missing this full-integration approach are working more as cost managed programs than care managed programs, according to Jennifer Christian, M.D., who says the programs simply change the way care is paid for. A 1997 report by Christian refers to a study in which medical care was given to patients with identical injuries. Some patients were in a group health insurance program and some were in a workers’ comp program. The average workers’ comp injury received three times as many health care services during a significantly longer period of time, compared to the same injury in a group health context.
The difference in service intensity and duration was not explainable by the severity of the injury, as they were comparable. Instead, it was claimed that managed care techniques were applied to workers’ comp injuries because charges were discounted and payment was denied for unnecessary services. However, in Christian’s opinion, unnecessary services were still provided and time was wasted.
“A company isn’t really managing care unless it simultaneously improves quality, outcomes and value by eliminating unnecessary services instead of just refusing to pay for them,” Christian wrote in her report. “Changing what happens to injured employees in the workers’ comp system is what heals them faster and gets them back to a normal life and productive work sooner. And this is what reduces costs most.”
Some hindrances to early return-to-work pointed out by Christian include: an employer’s policy against light duty; inability of an employer to modify a job; a doctor’s unwillingness to return the patient to work; a doctor not equipped to determine the correct restrictions and limitations; a doctor who feels trapped between the employer’s and employee’s versions of an accident; too little information provided to the doctor about physical demands of the patient’s job; and conflicts of opinion between doctors.
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