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Challenges
Aging workforce
Medical costs and inflation
Managing care and costs
Return to work and indemnity costs
Aging Workforce
Average age is 40+
Vision and hearing issues
Back pain – 40/20/20
Economy and unemployment
Claims Severity
Obesity
Meeting the Challenges
Connected to wellness
Safety programs
Technology improving safety
Early identification
Prompt management
The Cost of Care
National trends: NCCI and WCRI
Pharmacy and narcotics
Costly treatments
Multiple surgeries
Are small medical-only claims becoming lost time?
Variance in States
© 2011 CorVel Corporation.
Medical Cost
Drivers
State ReformsUnderstanding the DriversManaging vs. PayingPro-active analysis
Controlling the Costs
© 2011 CorVel Corporation.
$1.4B Narcotic SpendBrand UsageOver-UtilizationBoutique DrugsUnmanagedMedicare
Pharmacy is 10-15% of Total Medical Spend
Pharmacy
Narcotic Study
Average Total, Medical and Indemnity Benefits by Opiate Agonist Level Indemnity Claims Only
Data for 3 years of incidents
Average Paid Benefits% Payment Increases by Level of
Opiate Agonist Prescriptions
# of Opiates Total Benefits Medical Indemnity Total Benefits Medical Indemnity
No Opiates $14,346 $7,633 $6,713
1 Script $14,722 $9,108 $5,614 2.6% 19.3% -16.4%
2-3 Prescriptions $34,264 $17,031 $17,233 138.8% 123.1% 156.7%
4-7 Prescriptions $37,508 $21,782 $15,726 161.5% 185.4% 134.3%
>7 Prescriptions $71,178 $30,550 $40,628 396.2% 300.3% 505.2%
© 2011 CorVel Corporation.
The Right Prescription
Pharmacy Benefits Manager (PBM)
Utilization management
State initiatives
Complete data
Clinical modeling
Target narcotic use
© 2011 CorVel Corporation.
Over utilizationUnmanagedFew state initiativesReimbursement drivers
Physical Therapy is30% of Total Medical Spend
Physical Therapy
© 2011 CorVel Corporation.
Flexing Your Muscles
Managed program
Clinical indicators
Take advantage of state initiatives
Sample Results for Physical Therapy
Pre CorVel CorVel$0
$200000
$400000
$600000
$800000
$1000000
$1200000
$1400000
$1,200,000
$978,000
$222,000 Savings in the First Year
© 2011 CorVel Corporation.
Inherent Delays
Lag time in reportingLack of referral Inappropriate careAdversarial environment
Managing Care as Well as Costs
WC Lost-Time Claim Frequency Increased in 2010
© 2011 CorVel Corporation.
Medical Cost
Drivers
Nurse TriageChannelingProvider PanelsCase ManagementManaged ProgramsHealthCare Approach
Proactive vs. Reactive
© 2011 CorVel Corporation.
Return to Work
Lack of a RTW programMore with LessUnion challengesRIFs
Indemnity Costs
Only 50% return to work if on disability for 6 months.
Only 5% return to work if on disability over 12 months.
Good News: Indemnity Claims Costs Declined in 2010
© 2011 CorVel Corporation.
Return to work, stay at work
Nurse triage
Early attention
Transitional duty
© 2011 CorVel Corporation.
Social MediaMobile Computing
Connecting quicker
Information at fingertips
Address inherent delays
Communication methods
© 2011 CorVel Corporation.
Making the Impact
Understand Your Workforce
Manage Care and Cost
Focus on Return to Work
Reduce Cost of Risk
Thank you.
