When you discuss cost savings derived from medical case management with a risk manager, the first questions you hear are: “What is the rate of return on the investment?” and “How much can I save?” Most likely the risk manager has been previously sold by the medical management companies on measuring the value of their services by either a percentage reduction in the cost of medical care or by the net dollar amount they will save by using the medical case management company.
This type of thinking by the risk managers originated from the earliest efforts to control medical cost by medical bills reviews. The success of the medical bill reviews were measured by the percentage reduction between what the medical provider originally billed and what was actually paid to the medical provider. While it is easy for the risk manager to understand a “30% reduction in medical bill cost” or “approximately $350,000” the medical case management company and the risk manager are both overlooking other substantial cost savings of medical case management.
In the last 20 years, medical case management has grown from involving a very small percentage of the high dollar value workers compensation claims, to being involved in almost all work comp claims. There are various reasons that go beyond the medical fee bill reviews including other forms of medical case management – nurse case managers, utilization reviews, medical provider networks, pharmacy benefit managers, etc. – being utilized to reduce medical cost. Each of these medical case management approaches rely on a dollar measurement of the benefit provided.
What is more difficult for the risk manager to understand is the subjective benefits provided by medical case management. Medical case management techniques often result in benefits that are difficult to measure in dollars. The benefits of medical case management beyond the measurable dollars can be categorized in three general areas.
The three categories are: 1- medical guidance, 2- utilization control and 3- quality improvement.
Many of the employee’s concerns can be addressed by the nurse case manager’s medical guidance. Nurse case managers often can answer the medical questions for the injured employee preventing a needless visit to the doctor’s office by the injured employee.
The control of the utilization of medical services is a major but unmeasurable benefit of medical cost management. How do you measure the benefit of the nurse case manager who through her/his understanding of the employee’s medical issues was able to guide the course of medical care resulting in a needless hospital stay being prevented?The dollar savings are huge, but elusive. Since the medical cost was not incurred, you cannot accurately measure the savings of medical care prevented, as you can with medical bill reductions for medical care provided.
Medical case management benefits the employee by actively involving the employee in the medical care. This results in behavior management and encouragement of the employee to take better care of them. Plus, it lessens the employee’s feelings of alienation when they do not understand their injury or the ramifications of their actions on their medical condition.
The techniques of medical case management should be used because they will result in an overall improvement in the quality of care offered to the injured employee. This results in a shorter disability period for the employee. The medical case management will often prevent exacerbations and complication from comorbidity issues (obesity, diabetes, etc.). Additional benefits of medical case management include the control of medical tests, control of the use of medications and the control of durable medical equipment expense.
All of the benefits of medical case management do not involve a reduction in services. Gentle reminders to attend medical appointments, or to take medications as prescribed may add to the medical cost at the time, but reduce overall medical cost and disability cost by guiding the employee to the fastest possible recovery.
Other factors also influence the benefits received from medical cost management. This includes the design, the scope and operational details of the medical case management program. It includes the level of skill and expertise of the nurse case manager or other health care professional(s) delivering the medical case management services. In addition to the human element, the level of the technology supporting the medical case management services can impact the cost savings.
The risk manager should look beyond the return on investment or the reduction in dollars spent when evaluating medical cost management. Full consideration should be given to the dollars not spent and the improvement in the quality of care for the employee. The overall savings for medical case management goes far beyond the dollars that are measurable.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website 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. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
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