Insight, analysis & opinion from Joe Paduda

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May
19

It’s the price – and the network penetration – that drives cost.

That’s the conclusion I reached after reviewing WCRI’s latest treasure trove of research on medical prices paid for professional services in workers’ comp. [report is free to download] Sure utilization is a very important driver, but the biggest difference in medical costs across states is price.

Rebecca Yang PhD and Olesya Fomenko PhD  have outdone themselves with this edition, cementing their reputation as two of the most knowledgeable experts in the nation on medical costs in workers’ comp.

Kudos to WCRI for including data from the first half of 2020 in their report…the fine folk in Boston have done a great job speeding up data collection and analysis to the point where we have data that is less than a year old. This is helpful indeed for anyone trying to understand what’s happening and why and what to do about it.

Takeaways

  • Wisconsin’s professional services (MD, PT, etc) are darned expensive. WI has a very provider-friendly
  • While prices paid in non-FS [fee schedule] states generally increased more than in FS states, NJ is an exception. WCRI noted that NJ saw a pretty significant increase in network penetration during the study period; I’d suggest NJ’s employer direction laws directly contributed to lower price increases.
  • Network participation varies widely, and generally the more the growth in network penetration, the lower the increase in prices paid.  However, in some cases (PA), it doesn’t.
  • Finally, there’s a VERY useful chart on p 39 providing network penetration rates for each of the 36 states studied. 

What does this mean for you?

This is extremely useful information, with many nuggets buried in the 190 page report.  IF you aren’t a WCRI member – join now!


Joe Paduda is the principal of Health Strategy Associates

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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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