Over the last couple of months I’ve spent considerable time with work comp managed care companies and investors therein, and one of the questions that persists in every conversation is ‘how do we/they demonstrate value to our/their customers?’
That one question has as many answers as there are ‘customers’, defined as individuals who have some role in the buying/decision. And that is why the definition of ‘value’ is so elusive and ephemeral.
For the managed care exec, value can be easily defined as costs that are lower, usually on a per-service basis, than they would otherwise pay. X% less than current pricing is better than current pricing, so the benefit is obvious and clear.
For the adjuster, the definition isn’t quite so apparent. With a desk swamped under case files and a screen stuffed with flashing ‘red flags’ on critical diary entries, there’s less focus on finding the cheapest wheelchair and more interest in picking a vendor that can take work off the adjuster’s desk, do it competently and without claimant complaint, and provide documentation that, at a maximum, is readily cut-and-pasted into the claim file.
For the claim manager, it’s about closing files, minimizing litigation, and avoiding those calls from Home Office management about low network penetration and excessive use of non-authorized vendors, while struggling to keep overworked, underpaid, and unappreciated adjusters on the job and out of the clutches of headhunters.
For the employer, value is fast, thorough medical care that gets the injured worker back on the job and keeps her/him there…unless the employer is dealing with declining revenues, in which case they don’t want John/Jane Doe back at work no matter what, as there isn’t any job for her/him and they sure don’t want to yet another unemployment claim.
For the TPA, value is defined as the savings below fee schedule or U&C, which is the basis for calculation of their managed care fees, typically around 25 – 30%. The more services, the bigger the bills, the more ‘savings’ generated and the more fees ‘earned’.
So the next time you take your vendor to task for lousy cost savings reports, think about all the masters they are serving, and ask yourself if you could do any better.
And be honest…
What does this mean for you?
Walk a kilometer in the other gal/guy’s shoes.
Jan
13
Each of the examples you use are examples of the small thinking when it comes to choosing a case management vendor, i.e., lower cost per service, lower hourly fee, cheapest wheelchair, savings below fee schedule.
The ONLY valid measure of the value of the case management firm takes 6 months to a year to accomplish, and a buyer willing to invest the time to analyze what they’ve done. The buyer needs to compare average TOTAL case cost (medical, indemnity, legal) before and after the use of the case management firm.
Our customers who do this have been able to measure value in dollars and cents.
Unfortunately we never make a sale to those customers focused on cost per hour, fee savings, etc. They’re focused on the small picture and they will never be satisfied nor score the big savings that can be had from using a competent case management firm.
Small picture view = small thinking. Truly, many case management buyers do not see the forest for the trees.
In my 30 years in business, my biggest marketing challenge has always been selling to small thinkers. I can say in all honesty that small thinking purchasers are never happy. And they almost always choose our competition.
Joe great summery. One stake holder you left out . The injured employee who wants quick accurate care , help navigating the medical maze and at the end of the day to reengage life.
There is one other party that is left out and that is the healthcare provider. Often, the managed care industry views the provider as an obstacle someone who does not understand the care process and is at odds with the goals of all the constituents that you have listed. In reality the provider acquainted with the workers compensation industry wants to meet the care needs of the patient and also assist the others in meeting their goals. Providers are frustrated when they see care moved from provider to provider my managed care staff who have a narrow focus on a goal that does not align with the employer, patient or other entities listed. The provider see the result of disjointed care, delayed care, increase in the cost of care, and poor outcomes for the patient. As an example we will have managed care staff with the goal of reducing cost pull a patient who needs and MRI to a separate provider. When the MRI is returned, it is not what the physician ordered and another MRI study has to be ordered, resulting in higher cost, delayed care, inconvience to the patient and higher indemnity cost and labor replacement cost to the employer. Other clinical interventions (PT, specialist, etc) are additional examples. Care is an integrated system and pulling in apart “fractures” the care process. The result might be lower units of care cost, but most likely results in higher case cost, a lower standard of care, and longer duration of care. Tom Brink, Methodist Occupational Health Centers, A Clarian Health Partner. Indianapolis, IN.
Thank you for your comment Mr. Swan.
Indeed, if the case management firm does the right thing, the payer will see efficiency but not at the expense of the injured worker.
The injured worker is, after all, the most important stakeholder. S/he is why the entire system exists and should be the biggest winner at the end of the day.
I note that none of the parties, with the exception of the employer (which is outclassed unless it is large and well staffed with WC experts) is incented to resolve the claim early.
With all due respect Mr. Rousmaniere, my company is very incented to resolve the claim quickly. This is how we help the injured worker and accomplish the measurable cost savings on the total case.
My company retains customers precisely because we do the right thing for the injured worker as well as move the case to early resolution.