by Steve Cattolica
“I can see clearly now the rain is gone; I can see all obstacles in my way….”
Johnny Nash, June 1972
For those of us around in 1972, Nash was speaking our language…rain gone, no dark clouds, nothing but blue skies, sunshiny days, bad feelings disappear, rainbows, a clear path…I better stop there.
‘Transparent’ can be defined as, “allowing light to pass through so that objects behind can be distinctly (clearly) seen.” The opposite of transparent is opaque.
As the costs of claims handling rise, employers and policy makers look for the reason why. Naming the causes - some are apparent, even obvious - does not fully answer the question. The picture is opaque. Individual contributors to the rise in costs are hidden. More can be done. More must be done.
Would-be explanations offer what could be boiled down to the adage, “be careful what you ask for.” Recently, I read about pricing of prescription drugs and was left thinking that it wouldn’t matter how much buyers learn about pricing. There’s almost nothing that can be done to change the outcome. The buyer ends up paying the same amount regardless.
Transparency should plainly show all the components of a service clearly and empower improvement, not reinforce the status quo.
I believe in the concept that short lines of direct communication work best. Injured worker to/from employer; employer to/from claims; employers and claims to/from medical providers; medical providers to/from each other. Of course, the legal profession is included. Name the exchange and shorter is always faster, better and costs less.
There’s no better example than what is now called “revenue cycle management.” A process ultimately between only two entities – provider and customer – that has grown into a complex industry of its own. It is part of an industrial complex of inordinate proportions; all for the sake of efficiency, accuracy and return-on-investment. Yet these three factors remain elusive and in the latter case, often undefinable in concrete terms.
It’s as if, in the kids’ game of “telephone,” a longer line of kids (or adults) passing along the message assures the message is more accurate and timelier. If there is any truth to this analogy, it disappears completely when responsibility for vital communication is allowed to occur without strong implementation of the maxim “trust and verify.”
Nowhere is this truer than with the proliferation of medical provider networks and the subsequent consolidation of these networks under single management conglomerates.
Please do not misunderstand, provider networks of all types are ubiquitous and for good reason. Maintaining hundreds, if not thousands of direct contract relationships is costly and time consuming. However, it is asking for trouble to abdicate responsibility for the quality of claimants’ health care, diagnostic testing, application of pseudo utilization review, interpreting services, transportation and who knows what else to mega corporations; one-stop shops whose business model puts them in the cashflow between their payor/customer and all those providers – without appropriate transparency regarding the specific services provided, their true costs, how the bills for those services are generated and where the money ends up.
There is a reason why the costs of claims have, at least in California, become an outsized proportion of the premium dollar. It’s not because lines of communication are shorter or systems more efficient. A proliferation of cottage industries has spawned on both the payor and provider side. In some instances, the ‘cottages’ are more like glass enclosed office towers.
‘Efficient’ can be defined as, “achieving maximum productivity with minimum wasted effort and expense.” One can add, “preventing the wasteful use of a particular resource.”
Premium dollars (the particular resource) are presumed to be held in trust for the benefit of the at-risk employer that paid the premium (or set the money aside if self-insured) and their legitimately injured workers. However, the telephone message about efficiency and waste has become garbled. “Minimum wasted effort and expense” and “wasteful use of a particular resource” becomes defined by whose “effort” and “resources” one is speaking about. The conversation has morphed from one benefiting the employer to one benefiting the cottage. Are there too many people on the “telephone” line?
Those who provide network and other services have the great opportunity to participate in maximizing efficiency and minimizing the effort and expense it takes to deliver benefits.
However, when delivery of services is engineered to be opaque and costs are disproportionate compared to the benefits delivered to the two main constituents - the employer and injured worker - something must change.
Published Feb. 21, 2019, by Steve Cattolica on WCC'S Work Comp World.
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