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Paduda: Price, Network Penetration Drive Costs

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That’s the conclusion I reached after reviewing WCRI’s latest treasure trove of research on medical prices paid for professional services in workers’ comp.

Joe Paduda

Joe Paduda

Sure, utilization is a very important driver, but the biggest difference in medical costs across states is price.

Rebecca Yang and Olesya Fomenko have outdone themselves with this edition, cementing their reputation as two of the most knowledgeable experts in the nation on medical costs in workers’ comp.

Kudos to the Workers Compensation Research Institute for including data from the first half of 2020 in the report. The fine folks in Boston have done a great job speeding up data collection and analysis to the point where we have data that is less than a year old. This is helpful indeed for anyone trying to understand what’s happening and why and what to do about it.

Takeaways:

  • Wisconsin’s professional services are darned expensive.
  • While prices paid in non-fee schedule states generally increased more than in fee schedule states, New Jersey is an exception. WCRI noted that New Jersey saw a pretty significant increase in network penetration during the study period. I’d suggest that the state's employer direction laws directly contributed to lower price increases.
  • Network participation varies widely, and generally the more the growth in network penetration, the lower the increase in prices paid. However, in some cases (Pennsylvania), it doesn’t.
  • Finally, there’s a very useful chart on page 39 providing network penetration rates for each of the 36 states studied. 

What does this mean for you?

This is extremely useful information, with many nuggets buried in the 190-page report.  If you aren’t a WCRI member, join now.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.

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