Call or email us anytime
(805) 484-0333
Search Guide
Today is Wednesday, April 23, 2025 -

Industry Insights

Paduda: Cost Doesn't Equal Quality

  • National
  • -  0 shares

In the ever-changing world of health care economics, one thing is becoming more of a norm: high hospital costs. Crazy facility fees coupled with hospital/health system consolidation are leading to higher prices for payers.

Joe Paduda

Joe Paduda

Facility fees, viewed by some as the latest gimmick to generate additional revenue for hospitals, are accounting for upwards of 40% of countrywide workers' comp medical expenses.

Making matters worse is hospital/health system consolidation. Consolidation often leads to higher prices; the Federal Trade Commission’s director of the Bureau of Economics said hospitals have been seen to raise prices by 40%-50%.

Consolidation/M&A took a bit of a pause during COVID but has reemerged and is expected to keep going due to financial pressures and desire to gobble up market share.

Workers’ comp is already vulnerable due to its inability to rival group health’s scale, along with unfavorable regulatory dynamics.

As the smallest payers in health care, it is critical for WC payers to make sure they are utilizing high-quality facilities with reasonable costs.

Consider the following example: In Jacksonville, Florida, there are two facilities 21 minutes apart, same side of the city center, but with different profiles. The Mayo Clinic, widely regarded as one of the best hospital systems in the world vs. an HCA hospital, Florida Memorial.

According to Health Strategy Associates’ proprietary Facility Assessment Tool, the Mayo Clinic scores the same on patient safety, but much higher on clinical outcomes, person satisfaction and efficiency, all while being SIGNIFICANTLY less expensive than nearby Florida Memorial Hospital.

Using data provided by the Centers for Medicare and Medicaid Services, state entities and HSA’s proprietary algorithm to best reflect the medical treatment of workers' comp injuries, the tool enables adjusters and case managers to ensure that patients avoid poor-quality facilities and that employers pay a fair price for excellent care.

Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.

No Comments

Log in to post a comment

Close


Do not post libelous remarks. You are solely responsible for the postings you input. By posting here you agree to hold harmless and indemnify WorkCompCentral for any damages and actions your post may cause.

Advertisements

Upcoming Events

  • May 12-14, 2025

    NCCI Annual Insights Symposium

    NCCI's Annual Insights Symposium (AIS) 2025 will deliver data-driven insights, providing workers c …

  • May 12-13, 2025

    CSIA 2025 Annual Conference

    The Board of Managers is excited to announce that the CSIA 2025 Annual Meeting and Educational Con …

  • Jun 11-13, 2025

    CCWC 2025 Educational Conferen

    For two decades, CCWC has assembled the key players in the workers’ compensation arena for what is …

Workers' Compensation Events

Social Media Links


WorkCompCentral
c/o Business Insurance Holdings, Inc.
PO Box 1010
Greenwich, CT 06836
(805) 484-0333