How to Build a Boutique MPN That Works

Friday, April 18, 2008 | 0

The "chatter" in the industry is about building boutique MPN’s, presumed to mean medical provider networks where individual providers are selected based on some criteria. The term “boutique network” implies it will deliver something better than ordinary MPN’s. What exactly is that? How can we measure it? And is anyone actually moving in that direction?

The talk about boutique MPN’s is another confirmation that status quo in the Workers Comp industry is not working. Preferred Provider Networks (PPO’s) have been around 20 years or more.

Their value proposition is the individual providers involved have agreed to fee discounts in exchange for being included on the “preferred” list — really a marketing strategy disguised as a cost containment strategy. PPO’s have morphed into MCO’s and MPN’s, but name changes have not really altered the product or the results. Medical costs continue to grow and increase as the percentage of overall claim cost.

Networks discount medical service units. Utilization Review programs control the type and number of medical service units. Medical case managers monitor and manage the process. With so many medical cost containment programs working “hand-in-hand”, why are medical costs not controlled?

One has to question why we continue to do business as usual under this broader umbrella of Managed Care. What real evidence do we have that provider networks, medical case management or utilization review have any real effect on claim cost and outcome?

Therein lays the problem—but also the solution!

The problem is lack of evidence. We have no evidence, no proof of program or network effectiveness because we do not currently analyze medical data. We do not use the data as a management tool to monitor managed care programs as they relate to one another and to claim costs and outcomes.

We do not relate or integrate the data to gain the medical business intelligence that will lead to better decisions, interventions and outcomes. To strengthen managed care initiatives and actually contain medical costs, industry participants must leverage their data for medical analytics.
Medical analytics is a means of collecting, integrating and reconfiguring raw data from disparate sources to gain new business knowledge.

Raw medical billing data, for instance, can provide a constant feed of intelligence about the treatment process in a claim. Medical billing data integrated with claims data to add indemnity and disability knowledge, provides status and outcome information in context with the treatment process. Analyzing them together highlights effective practices and can be used to predict outcomes.

Analytics can be applied to managed care operational processes to create electronic alerts of potentially high risk or high cost events. Claims adjustors and medical case managers are more efficient using such data-driven alerts because they focus on claims needing the most attention thereby reducing administrative costs. Analytics can be used to automatically monitor utilization. Moreover, the data will tell us which providers qualify for Boutique Networks.

Using medical analytics to create Boutique MPN’s (read; Best Provider Networks) is easy. Provider performance is evaluated in terms of treatment of specific injury types, cost and outcomes, compared to peers. These are the criteria for network selection. The problem of managing providers, controlling utilization, appropriateness and cost is minimized.

The data, through analytics, continuously monitors performance to maintain quality and offers claims adjustors and medical case managers the tools they need to be more effective and efficient.

Everyone wins. Everyone wins because medical analytics is a very powerful, accessible, yet affordable solution.

-- Karen Wolfe, BSN, MA, MBA
President MedMetrics®, LLC