Lower workers’ compensation costs? Presented by: Diana Blaha

Lower workers’ compensation costs? Presented by: Diana Blaha

Challenges

Aging workforce

Medical costs and inflation

Managing care and costs

Return to work and indemnity costs

Aging Workforce

Average age is 40+

Vision and hearing issues

Back pain – 40/20/20

Economy and unemployment

Claims Severity

Obesity

Meeting the Challenges

Connected to wellness

Safety programs

Technology improving safety

Early identification

Prompt management

The Cost of Care

National trends: NCCI and WCRI

Pharmacy and narcotics

Costly treatments

Multiple surgeries

Are small medical-only claims becoming lost time?

Variance in States

© 2011 CorVel Corporation.

Medical Cost

Drivers

State ReformsUnderstanding the DriversManaging vs. PayingPro-active analysis

Controlling the Costs

© 2011 CorVel Corporation.

$1.4B Narcotic SpendBrand UsageOver-UtilizationBoutique DrugsUnmanagedMedicare

Pharmacy is 10-15% of Total Medical Spend

Pharmacy

Narcotic Study

Average Total, Medical and Indemnity Benefits by Opiate Agonist Level Indemnity Claims Only

Data for 3 years of incidents

Average Paid Benefits% Payment Increases by Level of

Opiate Agonist Prescriptions

# of Opiates Total Benefits Medical Indemnity Total Benefits Medical Indemnity

No Opiates $14,346 $7,633 $6,713    

1 Script $14,722 $9,108 $5,614 2.6% 19.3% -16.4%

2-3 Prescriptions $34,264 $17,031 $17,233 138.8% 123.1% 156.7%

4-7 Prescriptions $37,508 $21,782 $15,726 161.5% 185.4% 134.3%

>7 Prescriptions $71,178 $30,550 $40,628 396.2% 300.3% 505.2%

© 2011 CorVel Corporation.

The Right Prescription

Pharmacy Benefits Manager (PBM)

Utilization management

State initiatives

Complete data

Clinical modeling

Target narcotic use

© 2011 CorVel Corporation.

Over utilizationUnmanagedFew state initiativesReimbursement drivers

Physical Therapy is30% of Total Medical Spend

Physical Therapy

© 2011 CorVel Corporation.

Flexing Your Muscles

Managed program

Clinical indicators

Take advantage of state initiatives

Sample Results for Physical Therapy

Pre CorVel CorVel$0

$200000

$400000

$600000

$800000

$1000000

$1200000

$1400000

$1,200,000

$978,000

$222,000 Savings in the First Year

© 2011 CorVel Corporation.

Inherent Delays

Lag time in reportingLack of referral Inappropriate careAdversarial environment

Managing Care as Well as Costs

WC Lost-Time Claim Frequency Increased in 2010

© 2011 CorVel Corporation.

Medical Cost

Drivers

Nurse TriageChannelingProvider PanelsCase ManagementManaged ProgramsHealthCare Approach

Proactive vs. Reactive

© 2011 CorVel Corporation.

Return to Work

Lack of a RTW programMore with LessUnion challengesRIFs

Indemnity Costs

Only 50% return to work if on disability for 6 months.

Only 5% return to work if on disability over 12 months.

Good News: Indemnity Claims Costs Declined in 2010

© 2011 CorVel Corporation.

Return to work, stay at work

Nurse triage

Early attention

Transitional duty

© 2011 CorVel Corporation.

Social MediaMobile Computing

Connecting quicker

Information at fingertips

Address inherent delays

Communication methods

© 2011 CorVel Corporation.

Making the Impact

Understand Your Workforce

Manage Care and Cost

Focus on Return to Work

Reduce Cost of Risk

Thank you.