Medical treatment reimbursement schemes continue to evolve over time. Decades ago, health practitioners we paid for “procedures” no matter how well they worked. The more procedures one was able to accomplish over time resulted in more revenue. This was a disincentive for quality, and a huge incentive for simple quantity. Today the emphasis is moving in the direction of higher payment for better outcomes. A recent article in Property Casualty 360 predicts this evolution to continue into workers’ compensation this year.
Larger employers are developing outcome-based networks, not only for workers’ compensation, but for their group health as well. They’re contracting directly with the healthcare networks to ensure that their workers receive the best medical care and tying compensation to outcomes. We’re seeing a shift from a focus on price to programs with an understanding that better outcomes lead to increased productivity and overall lower costs.
Employers also are recognizing the importance of mental health to wellness. We’re seeing a wellness revolution more focused on the patient as a whole person and the importance of managing health both physically and mentally.
The evolving health care model is tied directly to an evolving viewpoint on disability management. More employers are realizing the importance of managing all disability, not just that associated with workers’ compensation claims. This integrated disability management model is reportedly the future of claims administration. Employers who retain risk on the workers’ comp side usually do the same thing with non-occupational, short-term and long-term disability.
Coventry advertises the most recent addition to its suite of network offerings, an Outcomes-based Network program aimed at identifying workers’ compensation providers who have been statistically shown to contribute to effective patient outcomes and controlled claims costs. The Outcomes-based Network was developed in response to the market’s desire for smaller occupational health focused networks whereby clients can increase utilization with doctors who are associated with their most desirable outcomes. The Outcomes-based Network claims to differ from other focused network offerings as it addresses the importance of identifying providers based on total claims outcomes.
Sedgwick embarked on a mission to create a truly outcomes-based network solution with two main components. Deploy the network solution throughout the daily claims and medical management process. Measure how medical providers are doing across a broad spectrum of data points by creating scorecards. In a recent evaluation of 107,000 claims, using high-scoring providers resulted in: 40% faster claim resolution, 61% less incurred expense, 62% less incurred medical expense and 73% less lost time days. A company white paper provides details of its approach.
Liberty Mutual has Outcomes Based Networks in fifteen states including California. Provider selection was based on an in-depth analysis of medical and return to work outcomes for point of entry providers and orthopedic surgeons and extensive field knowledge of regional medical directors and claims and managed care professionals for all other providers.
Yet others are not convinced that this new payment model will deliver as promised. Aaron E. Carroll, a professor of pediatrics who writes a column for the New York Times, said after reviewing the medical literature in 2014 that pay for performance in the U.S. and U.K. has brought “disappointingly mixed results.” Sometimes even large incentives don’t change the way doctors practice medicine. Sometimes incentives do change practice, but even when they do, clinical outcomes don’t improve. Critics say that pay for performance is a technique borrowed from corporate management, where the main outcome of concern is profit.
Responding to public backlash to managed care in the 1990s, California health care plans and physician groups developed a set of quality performance measures and public “report cards”, emerging in 2001 as the California Pay for Performance Program, now the largest pay-for-performance program in the country. Financial incentives based on utilization management were changed to those based on quality measures. Provider participation is voluntary, and physician organizations are accountable through public scorecards, and provided financial incentives by participating health plans based on their performance.