Einstein’s Theory on Work Comp Outcome

Einstein

Over the last decade, I have been fortunate to grow a physical therapy company that has provided hundreds of thousands of workers’ compensation visits. I have learned a great deal about the good, the bad and the ugly in our industry during this time. One lesson is most significant: The term “outcome” is among the most misused and misapplied phrases in workers’ compensation. Very few consultants, intermediaries and “experts” actually assess the value of their provider networks because they lack the ability to truly define an outcome.

A Lesson From Einstein

In 1905, Albert Einstein articulated the theory of relativity, including what must be the most recognizable formula in history: E = MC-squared. This theory has stood the test of time as an accurate reflection of the relationship between energy and mass. Similarly, in workers’ compensation, we have utilized a formula to allegedly explain the “theory of outcomes” as the relationship between cost and clinical performance. The problem is that our equation for outcomes is incomplete and inaccurate.

Ask your intermediary how they rank healthcare providers. Inevitably, most will articulate some iteration of:

Outcomes = Price x Utilization

Or, O = PU (ironic when you say it out loud). But this is a false promise. This formula uses data derived only from claims and has no capacity to reflect the quality of the clinical performance. An effective definition of outcome incorporates price and incorporates utilization but must balance that analysis with an understanding of functional improvement. Without incorporating functional improvement into the equation, you have a useless collection of letters and numbers masquerading as a mechanism for transparency and clarity. O = PU is to the “theory of outcomes” what E = C-squared would be to the theory of relativity – partially expressed and therefore completely wrong.

Continue reading full article on the Insurance Thought Leadership website.

Bardavon

Bardavon Health Innovations is an industry-leading, data analytics company focused on optimizing Workers' Compensation. Bardavon’s mission is to promote a culture of transparency in revolutionizing the employee continuum of care through innovative, quality outcome driven solutions.

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Bardavon

Bardavon

Bardavon Health Innovations is an industry-leading, data analytics company focused on optimizing Workers' Compensation. Bardavon’s mission is to promote a culture of transparency in revolutionizing the employee continuum of care through innovative, quality outcome driven solutions.