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Claims, analytics, good docs, and process improvement

For several years, the Accident Fund (HSA consulting client) has been making major investments in data analytics and working on ways to use their new-found knowledge to reduce costs and improve outcomes.  Now, the results of those efforts are becoming apparent.

Claims costs are coming down, driven by rapid referral of selected claims to top occ med physicians.

AF’s program identifies higher risk claims and claimants, alerts adjusters and case managers, and, when necessary seeks to move the claimant to one of the top docs.

The program, which recently won an award for innovation, is under the direction of Jeffrey Austin Whitedirector of Medical Management Practices and Strategy for Accident Fund Holdings.  In a press release Jeff said “It’s a huge honor to receive this award and it is truly reflective of the hard work of our claims representatives, risk case managers and operating companies…This is a major accomplishment of custom software development to meet our business needs and improve efficiency while also giving us a competitive edge.”

So far, the program has helped identify high-risk claims faster, improved policyholder satisfaction, and reduced claim costs for targeted claims in excess of 20 percent.

Jeff reported on these results at several recent conferences including August’s Workers Comp Institute in Orlando.  Here are a few highlights:

  • the more work comp experience a physician has, the better their outcomes are.
  • the most experienced docs’ claims costs were 20% below the least experienced
  • a lot of claims are handled by docs with zero experience in comp
  • claims handled by occ med docs were 20% less costly than average

The net -“change of provider based on experience is an effective cost containment strategy.”

While others are talking, planning, and getting ready to get ready, Accident Fund is doing.  Kudos to Chief Claims Officer Pat Walsh, VP Claims Lisa Riddle, and Jeff White.


15 thoughts on “Claims, analytics, good docs, and process improvement”

  1. Love the site, love the blog, shocked to see this in print. While many states allow for the direction of care in regards to workers compensation claims, many do not. A patient is free to treat at any physician they so choose. I am supportive of innovation. I am supportive of cost containment efforts so far as the integrity of the patient and their right to direct their own care is respected. Health care is a market whose main commodity centers around human beings. Should we forget that and base all decisions solely on cost, we will destroy the system and our own humanity. Not saying its a system that doesn’t need to be fixed because, um, yeah, the entire system is dysfunctional, but that’s an argument for another day. Can the writer comment on Accident Fund’s actions with worker’s comp claims in non direct states such as Illinois?

    1. Julie – thanks for the comment and welcome to MCM. I’m curious as to why you’re shocked to see this in print; for years payers have been talking about directing to and rewarding providers with better outcomes.

      I’d note that “outcomes’ is not the same as “cost”, and this work is not “cost containment”; it is identifying the providers who deliver the best outcomes and directing to those providers. Perhaps a better appellation would be “outcomes management”.

      Outcomes are disability duration, sustained return to work, claims closure, medical and indemnity expense.

      Finally, the stakeholders in workers comp are the employer, taxpayer, and worker – not just the worker. In order for the “system” to work, it has to work for all parties.

  2. I can’t help but ask how Jeff’s conclusion, “■the more work comp experience a physician has, the better their outcomes are.” squares with yesterday’s post, “The wages of sin in Maryland “. The Maryland doctors have a great deal of experience in Workers’ Comp, albeit fraudulent and abusive. Experience alone, if determined by the number of WC claimants a doctor has treated is not enough to discern the good doctors from the rest. Provider performance must be analyzed using multiple indicators, not just the number of claims.

    1. Great point Karen – two observations.

      1. the obviously fraudulent docs and practices have to be excluded – this is mandatory.
      2. even when one leaves those bad providers in the mix, the docs with the most WC claims still outperform their lesser-experienced brethren. makes one think how much better outcomes would be if we got rid of the Maryland Orthopedic-type providers…

  3. I am shocked because direction of care can be a very controversial subject, and there are plenty of States which respect a workers RIGHT, yes it is given to them as a legal right, to choose their own healthcare provider. Certainly from a legal standpoint, I would not readily admit in print the active direction of care in States which prohibited such actions and pat myself on the back for it if I were providing services in such jurisdictions. Sounds like a class action lawsuit could be lurking somewhere. Curious to know Accident Fund’s market share in employee directed States and their claim outcomes in these States. As far as “outcomes”, let’s see, I see idenitification of high risk claims listed, I also see improved policy holder satisfaction, and reduced claims cost. Where exactly in that is quality of care, quality of a patient’s life after injury, or satisification of the patient? Not there….At all…. Which makes it cost containment.

    1. Julie – I’m shocked that you’re shocked; your reaction sounds a bit overblown, hyperbolic actually.

      As for outcomes, you can read the press release, the award, and my post and see that it is NOT “cost containment” unless you define the term as preventing excess workers comp costs and thereby keeping premiums and taxpayers’ burden low. Most would not make that leap.

      You confuse employee direction with an outright ban on employer direction. In every state except NY employers can encourage/suggest/transport/recommend specific providers. There’s no “class action” issue here, and your attempt to make more out of this than there is is puzzling.

      Perhaps it is because you are affiliated with Athletico, a PT provider in Illinois? A state with the highest workers comp medical costs in the nation, driven in no small part by the nation’s second highest medical fee schedule and over utilization of physical therapy?

      1. I will entertain the idea my reaction was, as you’ve stated “overblown”, if you will entertain the idea that your subsequent reaction is downright defensive. I respect your opinion and position and while I can consider what you’ve presented, it does not mean I am required to accept it as an absolute truth . And vice versa. To draw conclusions, insinuate, and imply as you do in your last paragraph reveal an argument based in subjectivity. Please tell me where you have gotten your facts. It is my understanding that Alaska actually has the highest work comp costs; Illinois is 4th. It is also my understanding that a primary concern in the work comp costs incurred by employers in Illinois has more to do with the employer being responsible for aggravating an existing injury than over utilization of ANY medical service.

        1. Julie
          Allow me to respond in order
          1. My response is anything but defensive. It is merely pointing out that employers are free to send claimants to specific providers is legal in 49 states. I’m not sure if you aren’t aware of that or if you chose instead to use inflammatory language when you suggested a class action suit may be appropriate.

          2. Which leads to your statements about insinuation. Your comments re Accident Fund and implications re their motives are most certainly insinuations if not accusations. As you initiated the discussion of motives and basis of their results it was certainly appropriate to ask what your motives might be. And frankly your “class action suit” was so far afield it begged the question.

          3. Re costs, there’s ample research indicating Illinois’ workers comp medical costs and fee schedule are the highest in the nation that I’m sure you can track this down on your own. And yes, pt utilization not some unsupported blame placed on employers is a primary driver.

          4. This may not apply in this instance – I am wholeheartedly sick of providers claiming to advocate for claimants when their real purpose is to line their own pockets with funds taken from employers and taxpayers for over treatment with over-priced procedures. The wailing and gnashing of teeth from fat cat providers sucking money out of the system is becoming overwhelming.

    2. Julie and Joe –
      I can speak from first hand experience working in multiple jurisdictions that you are both right. There are some jurisdictions that allow direction of care and some that do not. The goal should be to have an effective approach for each type of state. In states that allow direction of care, using solid analytics as a resource has had a significant impact in the programs we have been involved in. Many states (like California) strongly defend the payers rights to direct care in certain programs, and the results reported here do correlate with other results we have seen when direction of care is allowed and when analytics are in place to find top performing doctors.

      I agree you should not just jump into a state and try to control care until you have a clear understanding of the regulations in that state. This would apply to both direction of care and whether the state has set rules related to scoring providers in workers compensation or other health markets.

      1. Thank you Mr. Moore. I do believe you are correct–there certainly are truths on both sides of the argument. Clearly by my comments, I advocate the provider’s interests, and more importantly the patient’s, but I am also a regular reader of a managed care blog which should observationally lead one to believe, and rightfully so, that I do not agree with any entity overusing, over utilizing, overcharging, overbilling, over anything within the system & it is my greatest disgust to see, learn, or hear of anything of the sort. At the same time, I do not agree with limiting, decreasing, or reducing the quality of care solely based on bottom line profits on the carrier side. Healthcare is a business. There is no shame in each side having a profitable business. This is America. It’s what we do. And it’s what should be done, so long as the very human commodity at the center of it, the patient, is treated with respect, dignity, value, and has their rights protected by both sides. That is all.

  4. So glad to see insurers looking at good outcomes and recognizing that Occupational Medicine specialists are a great value, as a group, and that within that group are an experienced and ethical sub-group who save insurers even more money and get even better health outcomes for workers and their employers. We could get even better results, but current reimbursement models are making it increasingly difficult for we Occ Docs to provide that superior care; docs are treated as fungible and paid “per click” by the large organizations who are coming to be dominant employers of physicians. Perverse pressures by these organizations on the physicians are a simple reflection of the reimbursement: to see more people per hour, and do more procedures, period. If insurers start paying for good outcomes, changes beneficial for everyone will happen quickly; a data driven insurance industry that buys value (health / dollar) is now possible, based on the power and affordability of modern data processing.
    George Anstadt MD, Past President, American College of Occupational and Environmental Medicine

  5. Hopefully the Accident Fund success story will spur other WC insurers to utilize predictive analytics. For the many organizations who have not begun work in this area, some useful facts:

    A recent article in Business Insurance documents the dollars and cents potential of predictive analytics:
    * 5% reduction of workers’ comp costs (Liberty Mutual’s VantageComp)
    *15% reduction of workers’ comp costs (Aon’s Early Claim Intervention model)

    Similarly, a Deloitte Consulting report cited in Insurance & Technology documents a 4% to 8% reduction in annual loss and expense ratios.

    Despite these large savings, a Towers Watson survey released in February 2012 and cited in Risk & Insurance indicates that only 41% of workers’ comp insurers use predictive analytics (PA). The researchers also found that 31% planned to use PA, and that 27% do not use PA and had no plans to use them.

    There is gold in them thar hills! Get your analytics program started!

  6. This is great work! Yet again, it is about time the comp world catches up with activities (in this case predictive modeling) that have been occuring in the health plan world for well over a decade.

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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