Healthcare’s Transformation and Workers’ Compensation

At the 2015 National Workers’ Compensation and Disability Conference & Expo, a panel discussed how one employer’s workers’ compensation experience aligns with future healthcare models. The panel was:

• Kimberly George, SVP and Senior Healthcare Advisor of Sedgwick
• Lisa Kelly, Senior Workers’ Compensation Manager for Boeing
• Greg Moore, President and CEO of Harbor Health Systems

Employers are starting to look beyond just their health costs to the experience of their employees in their health system. The thought is employees who are engaged in their healthcare will be not only healthier, but more engaged in their jobs.

Right now, the healthcare system is advancing under ACO models that focus on achieving better outcomes for patients. Unfortunately, we are not seeing these same advances under workers’ compensation. There is a need for workers’ compensation to evolve and start focusing on quality of care, the patient experience, and patient outcomes. Workers’ compensation needs to realize that absence from the workplace not only drives claims costs, but has a significant impact on the productivity and profitability of the employer.

One of the first parts of this evolving model is identifying the physicians who can produce the best outcomes. This information can be determined through models that tap into a variety of sources including claims data, bill review data, satisfaction surveys, and other sources. Some of the outcome measures include duration of the claims, length of disability and total claims costs. Once you identify who the best physicians are, you need to get that information to your front-line claims handler.

This model has been in place with Harbor Health and Sedgwick out in California for a few years. Results show the higher ranked physicians produce significantly lower duration of the claims, lower claims costs, lower litigation rates, less TTD days, lower indemnity costs, and lower reopening rates. The actual statistics are stunning with the total cost with a 5-star provider running around $15,000 per claim where the total costs for a 1-star provider ran over $240,000 per claim. Even 4-star providers have more than double the cost of the 5-star physicians. Often times, the 5-star providers are being compensated at full fee-schedule or slightly higher. The savings are coming from getting the appropriate treatment faster and eliminating unnecessary care, not from cutting bills.

The scoring models must be dynamic. They are constantly being adjusted based on experiences. Communication with the physicians is also very important. You need to assist in educating physicians on the nuances of the workers’ compensation systems. The physicians need to know not only that they are being scored, but what the scoring is based on. Adjusters need to be involved in these discussions too so they understand the rationale behind the model and how it works.

Boeing is turning 100 years old next year. To stay in business that long, you need to be both innovative and productive. They realize that having a happy and healthy workforce is key to their future.

Boeing started working with the physician scoring in 2011. By 2015 they had 55% of their claims treating with 4 and 5 star physicians. Most of their claims are in Washington, where the employer does not have medical control so this is a fairly good statistic. By using the higher quality physicians and a strong return to work program, Boeing has 10% better outcomes than their manufacturing industry peers. Their surgery rates and percentage of narcotics in their total pharmacy have also declined under the new outcome based model.

In 2015 Boeing rolled out two group health ACO models for their workers in the Puget Sound area that were designed to improve quality of care and member experience and also make coverage more affordable. In order to incentivize workers to join the ACO, Boeing made it the most affordable option in their health insurance program. Boeing’s ACO model is focused on several contractual measures including clinical outcomes (blood pressure targets and use of statins), preventive screenings (for certain cancers), health status (weight management and depression), and member satisfaction. Some of the key service elements are quicker access to physicians and the availability of after-hours care.

Boeing’s experiences with the group health ACO model are leading them to investigate this same model for all their healthcare including workers’ compensation. They are creating a list of Boeing “certified” providers who are familiar with the work environment, job demands, return to work programs, and who perform impairment ratings timely. They are hoping to develop contractual outcomes around duration of disability, claims with lost time, and value based pricing.