Medical Cost Projection Evaluations: The Benefits

Wouldn’t it be good to be able to get a handle on medical costs before the claims came in? That’s the idea behind medical cost projection evaluations – to understand the injury, the treatment regimens, and future medical needs of workers’ compensation patients.

A good medical cost projection evaluation should include a definition of the area being evaluated, including all areas that incur cost in the lifecycle of the claim. This should encompass medical, pharmacy, durable medical equipment, and projected future needs should the patient have pre-existing or a comorbidity diagnosis.

A medical cost projection evaluation can help your health and wellness program through:
A clearer picture of efficiency. Do current processes work? What about the existing program needs modification? How is revenue being lost within the current method of business?
More accurate cost-to-charge ratios. A sound medical cost project evaluation can determine the lowest price for identical care or equipment. This can help companies locate vendors whose prices are better and whose equipment is identical or comparable, which can help reduce claim costs without reducing care to the patient.

Better provider negotiations. Knowing the true cost can assist with negotiating a better rate from hospitals and healthcare providers. This translates into better rates for you.
Better settlement negotiations. Armed with accurate data, companies can come to a more favorable settlement of claims, and in many cases can help companies avoid costly litigation situations.
Building better budgets. A clearer snapshot into the true cost of the claim can improve cost projection accuracy and allow for a tighter, more focused budget.

Identifying funding shortages. Thorough evaluation can uncover trending future needs or current shortages. It can also show areas in which projected costs are well above actual costs, allowing managers to reroute funds to more critical budget areas.

Better accountability. Program strength often relies on appropriate application of the processes, and of expense tracking. A good cost analysis can reveal how costs are actually being spent, adding another layer of transparency to the program.

Medical cost projection evaluations can create a welcome view of a company’s workers’ compensation claims processes and costs. By revealing all facets of the program’s processes, payments, and allocations, companies can see significant reduction in costs and build stronger, more efficient claims processes that address patient needs while keeping budgets in check.