Advertise Now
  Home > Home Insurance News > Data Analysis Tool: Managing Soaring WC Medical Costs For Liberty Mutual Policyholders

Data Analysis Tool: Managing Soaring WC Medical Costs For Liberty Mutual Policyholders

Boston-based insurer is the first to apply group health data analysis to WC

BOSTON - Over the past several years, risk managers faced a staggering one-two punch. First, workers compensation medical costs exploded, growing faster than inflation. Then, medical treatment passed wage payments to become the biggest slice of the workers compensation cost pie.

In response to this onslaught, Liberty Mutual launched a first-of-its-kind partnership earlier this year that brought the advanced medical cost analysis long standard in the group medical industry to workers compensation.

Working with Thomson Medstat, a leading provider of analysis to group health insurers, Liberty Mutual uncovers the two keys to managing wc medical costs. First, the statistical averages for treating specific injuries in any city or state – for example, how many office visits are needed to heal a torn rotator cuff in Denver, or what does it cost to set a compound arm fracture in Pennsylvania. Second, how individual caregivers and facilities in the area compare to that baseline.

The result? A risk management grand slam: lower workers compensation medical costs, better treatment for injured workers and faster return to work.

“It’s all about turning raw data into useful information,” says Mark Sidney, who manages workers compensation claims for Liberty Mutual’s Fortune 1000 clients. “Through a proprietary arrangement, our wc claims data filters through Thomson Medstat’s advanced software and broader medical cost database. A high-level report helps uncover ways to improve wc medical cost and care. The system then lets us explore each opportunity, drilling down to define the challenge and frame its solution.”

And here’s what this approach has produced so far:

Better networks – Only those providers and facilities who have demonstrated cost effective care – that is, treated within those statistical benchmarks – are included in the medical care networks available to policyholders in the states where employers direct the care of injured workers. Liberty Mutual is currently using such analysis to build provider networks in Texas, in response to that state’s recent wc reform.

Lower treatment costs - Even in states where employers cannot direct care, data analysis provides risk managers with lower medical costs from providers and facilities. How? Because it strengthens Liberty Mutual’s ability to negotiate by showing individual doctors and hospitals how they compare to others, and having them confront treatment and cost patterns beyond the statistical standard.

Better care and faster return of injured workers - Uncovering the most effective medical care for specific injuries lets Liberty Mutual share these best practices with medical providers. Everyone benefits from quickly providing the care that brings about the best outcome for injured workers and helps them quickly return to work.

Tighter bill review – Using data analysis, Liberty Mutual identified medical performance baselines in each state and the providers that routinely exceed these. Now bills from any of these caregivers are automatically reviewed to make sure they were properly coded. For example, the average primary care physicians in California bills 49 percent of their office visits as “complex,” that is, requiring more time and attention. Bills from providers in that state who code more than 49 percent of their office visits as complex are closely examined.

Greater pharmacy savings – A recent high-level report revealed that more primary care providers in California filled wc prescriptions than in other states. The problem? Such prescriptions bypass the cost savings and quality controls of Liberty Mutual’s managed pharmacy program. The solution? Liberty Mutual is working with providers in its California network so that they understand the need for wc drugs to be filled through the managed pharmacy program
“We’ve made a good start at using the sophisticated analysis to benefit our policyholders,” notes Sidney. “And we’ll continue refining this approach to bring even greater value to clients and brokers.”

Advertising Information for covermehomeinsurance
Back to Home Insurance News