<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=332896740218662&amp;ev=PageView&amp;noscript=1">
MENU

Our Posts

Direct To Specialist Or Managed Care: Which Reduces Costs More?

Posted by Mike Wright on November 05, 2015

OSP_-_Direct_To_Specialist_Or_Managed_Care-_Which_Reduces_Costs_More-

As more managed care (MC) organizations seek to fill their excess capacity with workers' compensation claims, it's worth examining their impact on claims costs, particularly as compared to a direct-to-specialist approach. Both approaches sit on fundamentally different foundations.

MC organizations keep costs down by contracting at discount rates with providers and handling a high volume of cases. Managing utilization of provider services according to predetermined treatment guidelines is a key part of their cost management efforts. Whereas a direct-to-specialist approach pays specialists a high rate, but keep costs down by removing the need to pay a referring physician and providing more effective care more quickly.

A study published in The Journal of Occupational and Environmental Medicine looked at two years worth of musculoskeletal injury claims from an employee pool of two hotels. It found that the direct-to-specialist claim costs were 63% lower than the claims that went through the discounted-fee MC system. Significantly, indemnity claims were more common under the MC system and claims under the direct-to-specialist system closed nearly six months faster.

These findings indicate that MC, as compared to direct-to-specialist, hits some main factors that increase claim costs: drawn out medical care and extended time off work, resulting in higher disability costs. Here are three reasons why that's likely the case:

Managed Care Doesn't Address Indemnity Costs

Typical WC treatment focuses on getting employees back to work, a goal that MC organizations and their providers aren't used to addressing. A provider experienced with WC injuries and claims process understands job modification and return-to-work considerations.  An MC provider may send a worker home because his injury prevents him from operating some machinery instead of returning him to work with specified task restrictions.

While this may be partly explained by lack of knowledge with WC claims, it's also an issue of priorities. Most MC organizations don't carry the disability risk as well as the medical cost risks. In fact, in some states, it's illegal for them to do so. As a result, factoring time of work and disability costs into their own costs for treating a worker just doesn't happen under an MC system.

Where's the Expertise for Catastrophic Workplace Injuries?

Catastrophic workplace injuries like spinal, brain, or burn injuries, are rare — accounting for only one percent of all workplace injuries. Yet they account for 20% to 30% of WC spending on medical costs. Due to their rarity and complexity, it's unlikely an MC organization has sufficient history and expertise to develop treatment guidelines or meaningful UR standards to properly respond to them.

Catastrophic injuries are generally comprised of a wide range of different injuries requiring their own specialists. In such injuries, having an employee treated under a direct-to-specialist system gets them access to a variety of specialists quickly as their needs evolve.

Access to Quick, Appropriate Treatment Lowers Costs

Whether an injury is catastrophic or the more common muscle strain, it's well established that early treatment translates into lower medical and disability costs. The process-heavy MC system adds layers of steps and referrals that delay appropriate treatment.

In contrast, a direct-to-specialist system can have on-site therapists who can provide definitive care at the time of injury. It also reduces time to treatment where more extensive treatment may be necessary. An MC organization simply doesn't have the experience or processes in place to manage WC injuries and claims as quickly or as effectively as both employers and employees need them to be.

On site physical therapy

National Benchmark Survey - Onsite Physio

Recent Posts:

Find a qualified physical therapist near you!

Locate one of our nationwide OnSite Physio therapists now.