Workers Comp Medical Networks = Cost Saving According to NCCI’s Barry Lipton
Workers Comp medical networks reduce costs in most instances. At NCCI’s 2017 Annual Issues Symposium, Barry Lipton, Senior Actuary covered a very interesting topic – Medical Costs Then and Now <<slides available at this link.
I do recommend looking at the slides for a few minutes as they are beyond informative.
One of the more important aspects of his presentation was that medical costs were decreasing due to the increase (almost 2/3) of physicians’ charges were network-based. See slide 14 of the presentation.
Slide 13 of Mr. Lipton’s presentation shows that states without medical fee schedules dwindled down to just a very few (6 states).
Two of his conclusions stated
- Most physician fee schedules have been in place since 2000
- Higher provider network penetration reaps benefits of system efficiencies
The second bullet point used to be quite a concern with the employer clients that I consulted with to reduce WC costs. The network penetration rates were never that high in many of the employer’s medical treatment networks.
Slide 8 of his presentation points out the main reason for the reduction in costs. Surprisingly, it is physician utilization per claim. While the reduction only totaled 3%, one would have to say this is significant in a time of upward spiraling medical costs.
Slide 2 shows that Workers Comp medical increases on Lost Time claims grew much more slowly over the last five years. In fact, the costs decreased in 2015. However, costs increased quite a bit in 2016 compared to the last few years.
The NCCI analysis agreed with most of my findings on the importance of using workers comp medical networks.
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