How To Measure if Medical Management is Cost Effective

Quantifying and measuring the success or failure of a medical management program is difficult. From the injured employee’s perspective, a medical management program is successful if the injury has healed, ; a partial success if the injury has improved; and a failure if the injury remains unchanged. The employer, however, measures pain management success by the program’s effectiveness in providing necessary, cost-effective medical treatment that returns the employee to work in a timely manner.

Easiest Way to Measure Effectiveness is with Mathematical Comparisons

The easiest and most used method of measuring the effectiveness of medical management processes and outcomes is to use mathematical comparisons by measuring either the cost of medical services incurred or the number of times a particular type of medical service is used.

A medical management company with access to a large pool of medical data can analyze the effectiveness of their programs by comparing results with the broader pool of comparable injury claims. Measurements extracted from the medical data include:

Number of visits to the primary care physician.
Number of medical procedures performed by the primary care physician.
Overall cost of the primary care physician.
Number of visits to a medical specialist.
Number of medical procedures performed by the specialist.
Overall cost of the specialist.
Number of hospital admissions.
Number of hospital days.
Number of hospital procedures performed per patient.
Cost of hospital treatment.
Number of pain clinic visits.
Number of medical procedures performed at the pain clinic.
Cost of pain clinic treatment.
Number of prescriptions.
Cost of prescribed medications.
Length of time off work.

Compare the Results of Your TPA to a Larger Pool of Medical Data

A medical management company can compare its results with the results of the larger pool of medical data for a particular industry or with medical treatment results for the general populace. If the number of medical visits and the number of medical procedures for claims overseen by the medical management company is lower than the numbers for the particular industry or the general population, the efforts of the medical management company can be viewed as successful. On the other hand, if the medical management company’s results are not much different than what would have occurred without its involvement, then the medical management company would be viewed as unsuccessful.

If the medical management company cannot or will not provide process outcome measurements, this may indicate a lack of confidence in the effectiveness of the company’s medical management and its ability to meaningfully influence the employer’s claim costs.

Other Ways to Measure Process Outcomes

In addition to a statistical analysis of the effectiveness of a medical management program, there are other ways to measure process outcomes. Process measurements can be obtained from tracking and monitoring service delivery. This involves the review of medical records to extract the necessary medical documentation.

A chart review is one such approach. Data is collected using a compliance checklist to compare the individual injured employee’s pain management treatment with the medical standards set for the nature of the particular injury. Chart reviews often are completed on a pre-set number of injuries that meet the specific criteria rather than a review of all injuries of that type.

Patient interviews are another approach. A designated number of injured employees are interviewed, each being asked identical questions. (The injured employees are given the opportunity to add their own comments at the end of the interview questions). Their responses are tabulated to give an overall synopsis of the injured employees’ experience with the pain management program.

Satisfaction surveys are similar to patient interviews with the printed survey of questions being mailed to the injured employees as opposed to an oral interview.

TPA Should Welcome Opportunity to Demonstrate Efficiency and Effectiveness

A medical management company confident in its processes welcomes the opportunity to provide clients with data reflecting how these services reduce costs in these areas: injured employee recovery time; medical costs; number of medical visits; and employees’ indemnity pay — returning injured employees to work in an overall shorter period of time. By measuring both the treatment process and the overall outcome of the medical treatment, the medical management company demonstrates efficiency and effectiveness.

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

Editor Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.