Workers Comp Medical Network Penetration Means Higher Use – NCCI Study
A recent NCCI Study indicates that a higher Workers Comp medical network penetration rate results in a higher rate of utilization. Check out the study here on their website. The study reads as a little complicated, but bear with the study. The details are worth the read and your patience. (NCCI > National Council on Compensation Insurance).
Blog and newsletter readers will benefit from reading the whole study and drawing conclusions from it. NCCI verified what I had been saying for over a decade. When the prices of workers comp treatment decrease, such as an adjustment in a state fee schedule, utilization increases.
The definition of network utilization is the quantification or description of the use of services by persons for the purpose of preventing and curing health problems, promoting maintenance of health and well-being, or obtaining information about one’s health status and prognosis.
The focus word here is quantity.
Previous Studies Had Same Conclusion
Many articles have appeared in J&L’s blog over the years on this subject. I have performed studies for physical therapy groups, medical networks, carriers, TPA’s and investment groups on the use of medical networks. One of the by-product conclusions was that utilization offsets price when comparing the two variables.
According to NCCI –
…a higher proportion of in-network claims in a state relates to comparatively greater utilization of services for in-network claims. In turn, this associates greater network penetration with greater utilization of services to treat in-network claims, compared with out-of-network claims.
Missouri Has Highest Network Use At Highest Cost??
Let us see each state’s Workers Comp medical network penetration rates. One of the more interesting states in the below chart is Missouri. Last week, J&L produced an article on the extremely high costs of medical care in the Show Me State. Missouri has the highest use of medical networks in the nation. Why are the costs so high if the Missouri medical network penetration rate is the highest?
My best estimate would be that the medical costs are so high in Missouri (304% above the median state) that the medical network price may still be high. The use of the medical network is very high due to carriers and employers attempting to reduce medical costs. The graph below and the one in the previous article on Missouri medical costs point this out exactly.
Click the chart for a better resolution. The bubble charts on pages 28 and 29 of the NCCI study on workers comp medical network penetration summarize the points very well.
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