Late in 2011 I predicted medical directors would begin to assume more authority and responsibility as workers’ comp insurers/TPAs realized the significance of medical management.
Boy was I wrong.
My thinking was logical (I know, that was my first mistake); with medical expense totaling three-fifths of claims expense, the powers-that-be would realize that managing that medical expense required medical expertise. Ergo, doctors (well, some doctors) should be heavily involved – in leadership roles – in managing that expense, setting policy, allocating resources, leading that effort.
Alas, with a few notable exceptions (Hartford, Broadspire), docs aren’t sitting in the big offices. Most are in high-level-but-primarily-supporting roles – advisers, conference speakers/representatives, in-house consultants, client and prospect presenters – while filling the traditional function of in-house medical expert addressing UR determinations and responding to claims queries.
That’s no knock – none at all – against the folks in the medical director role. I know a few pretty well and others a bit; they are very knowledgeable, thoughtful, extremely capable, and way under-utilized. That’s not to say they aren’t incredibly busy, but all too often they are busy doing things that, while necessary and important, aren’t the highest and best use of their expertise. More importantly, they aren’t setting policy and strategic direction for medical management – that remains the purview of business/claims folks.
Again, that’s not to say many claims folks are incompetent or unskilled or not capable. That’s not my point.
My point is simply this – medical management is increasingly important, yet most workers’ comp payers’ claims operations are run by folks who grew up in an industry where indemnity was deemed (appropriately) more important. They know and understand that world very well, and are well-equipped to deal with claims in that environment. Payer CEOs appear to view medical expertise as a supporting function.
The world has changed, dramatically. It is now 2013, yet medical management in workers’ comp is dominated by huge networks of deeply-discounted providers; results are measured by how much payers can squeeze out of providers on every bill (ignoring the services on that bill or how many bills come in) and how much margin their in-house “medical management” unit generates for the enterprise. Moreover;
Outcomes are a sound bite with little meaning beyond RFP responses and conference Powerpoints.
Medical management directors are evaluated based on the totally-wrong-headed percentage of savings model.
Non-medically expert claims personnel are tasked with making critical decisions about medical services, decisions for which they are woefully unprepared and unqualified.
So, any surprise that medical costs are escalating, opioid use has reached epidemic proportions, back surgeries are far more prevalent in comp than other lines, utilization continues to increase, and loss ratios are way above 100%?
There’s another contributor to this situation – the hoary meme that doctors can’t manage or lead. That is sooooo nineteen-nineties.
Fact is doctors are leading many organizations and business units within those organizations – and doing a damn good job. Think Mayo, Lahey Clinic, Oregon (Governor is a physician), CDC, Wellpoint, Partners (Boston), United HealthGroup, McKesson Health Solutions, CVS/Caremark – and many others. I know several workers’ comp medical directors that are more than capable of sitting in bigger chairs behind bigger desks, yet they aren’t.
Once again, we in the work comp world are stuck in the past.
What does this mean for you?
Those payers that recognize the critical importance of medical will be more successful than those that do not. And that means putting medical directors in positions of authority and responsibility.