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Paduda: Care Managers vs. Cost Centers

By Joe Paduda

Tuesday, April 20, 2021 | 0

All “discounts” are not bad.

Joe Paduda

Joe Paduda

Unfortunately, in comments and emails regarding a previous post, a few folks jumped to the opposite conclusion.

Let me explain. There are two distinctly different types of health care providers. Let’s call them care managers and cost centers.

Care managers are the treating physicians who are managing the patients’ care and are responsible for the patient’s outcome.

These are the primary care docs — and in some cases, surgeons — who are demonstrably better, delivering objectively and quantifiably excellent care. Think occupational med docs, orthopods, physiatrists, physical medicine and rehabilitation specialists — those who understand workers’ comp and return to work.

They schedule care promptly, treat conservatively, don’t dispense meds, don’t upcode and unbundle. They respond to information requests, assist with return to work and call for assistance when a patient isn’t actively participating in recovery.

Those physicians are valuable indeed and must be treated differently. Once you’ve established that a physician fits that description, treat him as such.

Don’t bother him, pay him well, send him as many patients as possible and show him via credible data that he's performing well compared to his peers. Have your staff assist the physician’s staff with scheduling and routing patients to network providers.

Monitor him, measure him by consistency with evidence-based clinical guidelines and don’t hesitate to query him if things appear to go sideways.

Then there are the cost centers — providers that do what the care managers ask. Generally, these are deeply discounted and/or management is outsourced to specialty vendors.

Cost centers are typically hospitals, ancillary care, ambulatory surgical centers (ASCs), pharmacies, physical therapy, radiology centers and, often, surgeons (can’t wait to hear the howls about naming surgeons as cost centers) and the like. These providers do what the treating doctor tells them to do.

Of course, one must assess their performance and preferentially and aggressively direct patients to:

  • Hospitals and ASCs that deliver the best clinical outcomes and value patient safety.
  • Physical therapists who focus on treatment modalities improving functionality, and mitigating pain and the impact thereof.
  • Imaging centers with demonstrably good results.
  • Surgeons who deliver excellent outcomes at a reasonable cost.

But make no mistake: There are thousands of facilities and imaging centers, and tens of thousands of therapists, surgeons and other specialists. You have what they want — dollars to pay for services — and should use it as bargaining leverage.

Understanding the difference between care managers and cost centers is key to delivering lower medical spend while focusing on quality care focused on helping patients recover.

What does this mean for you?

It is still not about the discount. It is about your spend.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.


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