milliman & robertson, inc managed care – a comparative analysis 1999 special interest seminar...
Post on 11-Jan-2016
213 Views
Preview:
TRANSCRIPT
MILLIMAN & ROBERTSON, INC
MANAGED CARE – A COMPARATIVE ANALYSIS
1999 Special Interest Seminar Health and Managed Care
HILTON HEAD, SOUTH CAROLINA
PANELISTS: BRIAN Z. BROWN, F.C.A.S., M.A.A.A.
STACEY MULLER, F.S.A., M.A.A.A.
OCTOBER 18-19, 1999
2
MILLIMAN & ROBERTSON, INC
OUTLINE
Objective of Workers’ Compensation Managed Care Initiatives
What are the Savings?
Types of Cost Savings Methods
Concluding Remarks
3
MILLIMAN & ROBERTSON, INC
OBJECTIVE OF WORKERS’ COMPENSATION
MANAGED CARE INITIATIVES
To combine medical cost containment with optimal medical treatment in order to:
Provide medical service at a lower total cost
Increase the quality of care
Expedite worker re-entry into the workforce
4
MILLIMAN & ROBERTSON, INC
Annual Trend in Medical Costs
Calendar/Accident Year
Workers’ Compensation Medical Severity
Medical CPI
1989 10.2% 7.7%
1990 7.7% 9.0%
1991 7.1% 8.7%
1992 1.3% 7.4%
1993 2.6% 5.9%
1994 0.0% 4.8%
1995 1.3% 4.5%
1996 6.3% 3.5%
1997 1.2% 2.8%
Data based on a presentation at the 1999 CLRS By Robert Blanco of The National Council On Compensation Insurance
5
MILLIMAN & ROBERTSON, INC
SAVINGS MEASURED FROM THREE MANAGED CARE
STUDIES
Managed Care Florida Study
HMO PPO
NH Assigned Risk Plan Intracorp Average Claim
Cost Change -60% -28% -7% to –12% -23%
6
MILLIMAN & ROBERTSON, INC
REASONS FOR SAVINGS VARIATION
Depends on procedures in place prior to managed care
What is managed care?
Degree to which workers and managers buy-into the program
Ability to direct injured workers to certain providers
7
MILLIMAN & ROBERTSON, INC
TYPES OF COST SAVINGS METHODS
Behavior modification methods
Financial arrangements
8
MILLIMAN & ROBERTSON, INC
BEHAVIOR MODIFICATION METHODS
Utilization Review
Case Management
Second Opinion Programs
9
MILLIMAN & ROBERTSON, INC
BEHAVIOR MODIFICATION METHODS
Utilization Review
Determine appropriateness of medical procedures
Types
Concurrent Review
Retrospective Review
Pre-admission Certification
10
MILLIMAN & ROBERTSON, INC
BEHAVIOR MODIFICATION METHODS
Case Management
Care oversight by a qualified professional
Appropriate Treatment
Timely Treatment
Work closely with all parties
Employee
Employer
Physician
Emphasis on return to work
Prevent worker from becoming conditioned to benefits
More difficult with longer periods away from work
11
MILLIMAN & ROBERTSON, INC
BEHAVIOR MODIFICATION METHODS
Second Opinion Programs
Goal: Reduce incidence of surgical procedures
Relies on sentinel effect
Is net effect a reduction?
12
MILLIMAN & ROBERTSON, INC
MANAGED CAREFINANCIAL ARRANGEMENTS
Discounted Fee For Service
Case Rates
Capitation Contracts
Dividend Programs
13
MILLIMAN & ROBERTSON, INC
MANAGED CAREFINANCIAL ARRANGEMENTS
Discounted fee for service
Reduction in fees for certain groups
Often 10% to 15% below fee schedule or “usual and customary” charges
Generally believed to have a small impact in isolation
Discounted services may lead to increased utilization
14
MILLIMAN & ROBERTSON, INC
MANAGED CAREFINANCIAL ARRANGEMENTS
Case Rates
Flat fee per claim
Varies by type of injury
Providers may substitute “bed rest”
Thus, indemnity costs must be monitored
15
MILLIMAN & ROBERTSON, INC
MANAGED CAREFINANCIAL ARRANGEMENTS
Capitated rates
Flat fee for all workers’ compensation costs for certain or all medical expenses
16
MILLIMAN & ROBERTSON, INC
MANAGED CAREFINANCIAL ARRANGEMENTS
Full Capitation
Carrier pays a fee to MCO
MCO agrees to provide:
All medical services
For the life of the claim
For all claims occurring in certain time period
Carrier transfers its medical exposure to MCO
17
MILLIMAN & ROBERTSON, INC
MANAGED CAREFINANCIAL ARRANGEMENTS
Common Capitation Limitations
Usually not responsible for the life of the claim
Certain claims may be excluded (especially those occurring outside the state)
MCO may not be responsible for the full medical expense on catastrophic claims
Therefore, workers’ compensation carrier may be transferring much of the predictable exposures and retaining the more risky exposure
18
MILLIMAN & ROBERTSON, INC
DIVIDEND FORMULAS BETWEEN CARRIERS AND MCO’S
Creates an incentive for MCO to return workers back to work
Rewards the MCO for efficient management of care
Has MCO guarantee payments to carriers if loss experience is adverse
Example: Loss ratio dividend plan
19
MILLIMAN & ROBERTSON, INC
MANAGED CARE PRINCIPLES IN HEALTH CARE
Can be Categorized Based on Influence
Utilization
Unit Price
Both utilization and price
Health risk
20
MILLIMAN & ROBERTSON, INC
CONTROL UTILIZATION
Utilization review activities
Certify hospitalizations / plan discharges
Direct level of care
Primary care physician directed care
Clinical guidelines / formularies
Benefit design
Patient cost sharing
Limits: annual or lifetime
21
MILLIMAN & ROBERTSON, INC
CONTROL UNIT COST
Fee schedules
Discounts
Global fees
Per diems
22
MILLIMAN & ROBERTSON, INC
CONTROL UTILIZATIONAND UNIT COSTS
Case rates
Capitation
23
MILLIMAN & ROBERTSON, INC
CONTROL HEALTH RISK
Preventive care
Disease management
24
MILLIMAN & ROBERTSON, INC
APPLICATION TO WORKERS’ COMPENSATION
Limited ability to direct care
Level of care
Provider
No cost sharing with beneficiary
Unit cost controls typically not available
Emphasis on safety programs may improve health risk
25
MILLIMAN & ROBERTSON, INC
POTENTIAL COST IMPACTS
Largest impact through cost sharing
Significant cost control through fixed reimbursement strategies
Fee schedules, per diems
Capitation, case rates
Long term potential in health risk management
26
MILLIMAN & ROBERTSON, INC
CONCLUSION
Changes in Healthcare Market Significantly Impact Workers’ Compensation
Many Managed Care Arrangements can Change the Nature of Workers’ Compensation Risk
Workers’ Compensation Actuaries Must Understand Healthcare Marketplace and Begin to Collect Additional Data
Must Assess Effect of Treatment Plans on
Quality of Care
Cost of Care
Worker Re-Entry to Workforce (Indemnity & Other Soft Costs)
top related