Outcomes-based networks: Are they all created equal?


With the buzz around outcomes-based networks in healthcare and now in workers' compensation, many are trying to understand what these are all about and if they are all created the same.

In workers' compensation, one of the main goals for risk managers is of course to control costs, but of more importance is to provide programs and resources to help injured workers regain their health in order to get back to work as quickly as possible.

For years, our industry has been providing employers with access to preferred provider network solutions that reduce bill costs and help manage expenses, but how do employers know if the fee reductions also mean good outcomes?

What has been needed is a more holistic approach where risk managers and human resource directors have access to information that provides an understanding of the impact a medical provider has on the claims management process – not just the medical bill review data. Fee reduction is a very important objective, but the primary goal for every employer should be to eliminate unnecessary care and related bills first and then address fee reduction on the bills for necessary care.

With these goals in mind Sedgwick embarked on a mission to create a truly outcomes-based network solution with two main components:

  1. Deploy the network solution throughout the daily claims and medical management process
  2. Measure how medical providers are doing across a broad spectrum of data points by creating scorecards

As many in the industry understand, a key component for successful claims management is locating primary care physicians and specialists associated with the best outcomes and utilizing them, as allowed by law, to treat workplace injuries.

Sedgwick's benchmarking program is doing just that. While the industry continues to debate what comprises a smart medical network, our benchmarking program and claims management services are consistently helping employers provide quality care for their injured employees and reduce workers' compensation costs.

Our program scores medical providers on a scale of one to five, and those earning four and five stars are the top-performing providers. This is a continuous process and takes into consideration more than medical bill review data such as litigation, return to work, recidivism, care utilization and cost. Sedgwick developed a total workers' compensation provider benchmarking solution that focuses on all of the components that impact employers' cost of risk.

As the first in the industry to create a quantitative methodology to measure the quality of care provided to injured employees and to use that knowledge to build superior networks, we are seeing great results. When injured employees visit top-performing providers identified in our benchmarking program at the onset of their injury, claim duration is shorter, incurred costs are less and employees return to work faster.

In a recent evaluation of 107,000 claims, using high-scoring providers resulted in:

  • 40% faster claim resolution
  • 61% less incurred expense
  • 62% less incurred medical expense
  • 73% less lost time days

To learn more read our recent white paper on this topic. What is your experience with outcomes-based networks? Let us know what you have learned.

James Harvey, SVP Managed Care Products & Products Development

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