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Jul
31

Why are workers comp medical expenses going up so fast?

Marsh has released a ‘report’ on managing workers comp claims. While it is undoubtedly a marketing piece, it doesn’t do the firm much good as it reflects a broad lack of understanding of the primacy of medical expenses as a cost driver in workers comp.


While the report does discuss medical expenses, the discussion is rather limited. There is a very brief section on hospital v non hospital expenses, a cursory overview of pharmacy and drugs, and a paragraph on bill review. The network section is even more puzzling – it appears to be based primarily on a two-year old WCRI report about provider selection, and not much else.
I’m not highlighting the limitations of the document to take shots at Marsh, acknowledged as the nation’s leading brokerage firm, but rather to point out these limitations reflect a lack of understanding of medical cost drivers at the firm. One could make the argument that Marsh is not going to reveal all it knows in a marketing document, and one would be right. However, the web intro to the document reinforces the perspective that Marsh just does not ‘get’ the primary importance of medical expenses.
Yesterday’s post highlighted a similar concern with another highly respected firm.
What does this mean for you?
If industry heavyweights Marsh and Conning don’t understand what’s causing medical expenses to increase twice as fast as the overall medical CPI, they aren’t going to be much help to their customers nor are they going to hold payers’ feet to the fire.
And that’s why WC medical expenses are going up so fast.
If you really want to address medical expense, here’s where to start looking for answers.
— why physicians are so important
California-specific information
— why bill review and networks don’t work
— NCCI has an excellent annual review of medical cost drivers.


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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