Paduda: Provider Consolidation Means Higher Comp Costs, Longer Disability

Tuesday, December 19, 2023 | 0

Health care provider vertical integration increases work comp medical costs, increases disability duration and does not deliver better outcomes.

Joe Paduda

And, provider consolidation continues to increase.

The lede is the one-line summary of WCRI’s latest — and quite useful — research.

Olesya Fomenko and Bogdan Savich collaborated on a very well-done study of vertical integration of providers’ impact on work comp, and their research bodes ill indeed.

Summarizing the experts’ findings, vertically integrated providers had: 

• More services billed/provided per visit (increase of 0.9%  to 4.5%).
• Little changes in number of visits per claim.
• More evaluation and management services (increase of 10.5%).
• More providers seeing the patient (increase of 18.9%).
• More imaging services-major radiology (increase of 14.1%).
• More billing for higher-intensity office visits (increase of 2.7%).

These conclusions generally align with what we’re seeing from other payer types: Consolidation leads to higher prices and negative to neutral impact on outcomes.

That isn’t stopping consolidation — far from it.

What does this mean for you?

Find out how consolidated provider markets are where your business is. And watch for more consolidation, as that will predict higher costs.

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.