From the Desk of Matt Condon: My Thoughts on the Healthcare Industry

The perception of true healthcare has suffered significantly over the last few years.  How we define and measure value has perhaps suffered the greatest as we work to transform an industry.  Many questions loom:

  • How will we pay for the inevitably increasing costs?
  • How will we service the huge numbers of people that are entering the system?
  • Why do we pay so much right now?
  • Why does our country continue to become less and less healthy?
  •  What happens to our economy?
  • What happens to our service quality?
  • What happens to the next generation—now my kids?


If we all “know” there are huge problems within our industry, why do we continue to look for inspiration and innovation from within this same industry?  “Market Dominators” cannot and will not bring innovation and change until they lose market share.  Market Dominators benefit from the current trajectory of skyrocketing costs—they don’t want to change.  It’s how our system works.  Market Disruptors are innovative startup companies like Apple, Amazon and Tesla that are driven not by profits but by righting wrongs and minimizing mediocrity in industries they believe in.  They entered their industries with idealism and irreverence and eventually became change agents and forces of good. To be clear, I am not comparing ARC Physical Therapy+ to Apple, Facebook, etc.  Our journey is a collaborative one with all of our referral partners, but I do believe that together “we” can create huge shifts in the direction of this market.


 As we embark on this collaboration, I have a few questions for you:
  • Do you believe there should be change in the industry OR do you think the industry should just continue ‘as is’?
  • Do you believe “value” is really important in healthcare – and are “value” and “price” the same thing?
  • Are all providers the same?  (…and therefore should be paid the same?)
  • Are all case managers the same?  (…and therefore should be paid the same?)
  • Are all adjustors the same?  (…and therefore should be paid the same?)
  • Are all TPAs the same?  (…and therefore should be paid the same?)
  • Are all insurance companies the same? (…and therefore should be paid the same?)
  • Why did you get into this industry?  Did you choose healthcare so that you could make a difference OR is it simply a means to a paycheck?


I believe that change is essential to the healthcare industry, that healthcare cannot be commoditized and that quality does make a difference in value.  The workers compensation industry affords us all the most immediate ability to make a statement in healthcare.  Workers’ compensation (in MO, KS, etc.) is employer directed so we can coordinate a system that reflects our belief in quality.  Workers’ compensation has a HIPAA waiver so we can track data and truly compare provider to provider or “apples to apples.”  Most importantly, workers’ compensation financially combines medical cost with indemnity cost.


Some groups slice medical costs for short term financial wins. Unfortunately, if the injured employee fails to achieve adequate function, claims settlement costs balloon up and the employer/insurance company eventually pays for the sins of seeking short term benefit over long-term value.  It may take years (and often does due to the court system) but eventually the short sighted approach (and all the partners and resources that recommended that approach) are exposed.  I believe that time is upon us.


Healthcare needs bold changes and innovation.  Healthcare must have it. Healthcare will have it.  Change is coming – I promise you.  The question today is, “Who will be a part of that change and who will slowly recede into mediocrity by continuing to rely upon the industry processes of last year?”


Making Bold changes in Healthcare—What I See for 2014:

Medical Claims Management Processes will be re-evaluated in 2014.
There are great partners who assist employers in managing medical claims cost, and there are partners that lack the initiative and drive to be trusted financial stewards.  How you select your claims partners will ultimately affect your bottom line.


Claims management partners that treat medical providers as commodities that can be evaluated, chosen, and managed based solely on your ledger is a faulty assessment.  It denigrates the provider, it vastly undervalues the role of case management, and it assumes that claims can be managed with simple algorithms.  It does not demonstrate innovation and in fact is a regurgitation of the managed care movement of the 1990’s.   It didn’t work then and it won’t work now.


Commoditized networks managing claims costs without knowing your business, your industry and your jobs creates secondary costs that prove to be catastrophic.  If yours is a narrow focus limited to “medical claims cost” – these commoditized networks can look attractive.  But closer scrutiny reveals much beneath the surface… and it costs.


The impact of sending your employees to subpar providers translates to increased costs.  What is the cost for employees that return with limited function?  What is the cultural impact on your organization when employees are treated by providers with limited expertise in workers’ comp?  You send an important message to your most valuable asset (your people) when you work with networks that choose their providers defined primarily as “the cheapest” in town.


Secondarily, what is the long term impact?  In the short term, your Workers’ Compensation medical payments may decrease – but what is the lagging (2-5 year) impact on indemnity?  We are just beginning to see that the long term impact of treating your medical providers as commodities is at best more expensive, at worst can lead to the ultimate destruction of your business.


Networks matter.  Networks can work, and successful networks are almost always managed locally.  Successful networks allow communication freely and efficiently across all provider groups.  Successful networks partner with their clients and direct care in ways that are beneficial in BOTH the short and long term.  These are the networks that will succeed – and those that apathetically or outwardly support the commoditized network system will be exposed as either deceptive or uninformed – and not a true partner.


Providers will be re-evaluated in 2014.  Reactive only providers will be deemed inadequate. 
The new healthcare era is upon us and providers will win by proving themselves, not by taking people donuts.  We, the healthcare provider community, cannot rely on providing services to our clients only after they become sick or injured.  If we are truly to be “solution providers” we must work as aggressively to avoid cost as we do at providing reactive services and sending bills.  Providers must redefine themselves and truly collaborate with their clients.  We must know their workplace, know their culture, know their processes and know where their financial pain points are.  Otherwise, they should be replaced by a provider that can and will work with their clients in a meaningful way.


Clients (employers, etc.) should evaluate their medical providers in one simple way: Do they only provide reactive services (send bills for services provided) OR do they work to help us avoid cost as well?  If your provider only sends you bills, fire them.  That is how marketplaces change — and we need change.


Outcomes will dominate the conversation in 2014. Data is the future of our industry.  The information is key to any successful workers’ comp program—it can and should be part of your provider conversations.
  • Do your providers show you data and outcomes?  If not, fire them.
  • Do your case managers/adjustors/TPA’s refer based on data and outcomes?  If not, fire them.
  • If you (the employer) abdicate the responsibility to direct your medical care to someone else (TPA, insurance company, doctor, etc.) – your intermediary should be able to defend their provider selections with data.  If not, fire them
  • You must demand the data and if you don’t get it, then your success in managing claims costs will be no different than it has been in the last decade.
While we are on the subject of Outcomes and Data – don’t let people fool you about the access to data.  You can get it, you should get it, and if you don’t – you will lose.  Your competitors are getting it, and they are using it to beat you in the marketplace.


New service models will become mandatory for employers. Word alone does not define a provider. They must put actions behind their words, do things differently, INNOVATE. PT/OT providers not focusing their efforts on the essential functions of a patient’s job is unacceptable. If your PT/OT provider doesn’t ask you for the essential functions of the job of the employee they are treating, fire them. They are planning to treat your employees based on conjecture and hope– and they will cost you money.

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