How Much You Spend On Claims Bigger Factor Than How Many
First, here is a practical rule of thumb based on our experience over many years: most insured’s who have 100 or more claims per year find triage to be justifiable by any measure, regardless of their industry or state. The savings from avoiding unnecessary claims and by improving in-network utilization far outweigh the cost of the triage call.
Also, many organizations with fewer than 100 claims find triage to be financially justifiable. Here’s an example. If an insured has 24 claims a year averaging $2,000 each, they would spend $48,000 a year on those claims. Even a mediocre triage service could help avoid 25% of claims, saving $12,000. (A top performing triage service could save almost twice as much!) The 24 triage calls would cost under $2,400, yielding a net savings after triage fees of $9,600 or 4 to 1 on the triage investment. In actuality, many claims incur much more than $2,000 each, and additional savings in claims administration fees and productivity are often realized.
The determining factor in cost justification is usually what an insured spends on claims, rather than its number of claims. High claims costs justify triage faster.
Here are some other considerations:
– Insured’s who are self-insured realize the savings from triage immediately. Even on referrals which become claims, good triage providers improve in-network utilization, generating savings on medical fees. Top tier triage providers also direct referrals to the right level of care (e.g. an occ health clinic vs an ER), generating additional savings.
– Employers in fully insured programs may think that they cannot benefit from triage because they incur the cost but the savings accrue to their carrier. In fact, they save in several ways, though it takes time – here is one example: they improve their experience modifier, which significantly impacts their premium cost in the future.
– Some insured’s in time-sensitive industries with specialty jobs calculate that triage’s ability to help keep workers on the job is worth more than the claims savings.
– One of the most important considerations is the medical outcome – call it the “human factor.” The best triage service is focused on getting the right care for the injured employee. Sometimes that means early identification of a serious condition, or an unrecognized risk, and making a referral that creates a claim because it’s the right thing to do for the injured employee.
Bottom line: insured’s can justify triage in a variety of ways, not just by cost or claims count. The quality and consistency of the triage provider is a key factor, too – poor triage risks poor clinical outcomes, disgruntled employees, and extra costs.
Author Curtis H. Smith, Executive Vice President, joined Medcor in 1995. He helped develop Medcor’s injury triage system and holds several US and foreign patents on injury assessments methods. Smith has taught and practiced in EMS as a paramedic and dispatcher.
He currently supports Medcor’s business development and marketing teams. http://medcor.com.