Harnessing data to measure duration of disability

Arnold HaasArnold Haas, Director, Performance Analytics

We at the Ohio Bureau of Workers’ Compensation strive to be a world-class carrier of workers’ compensation insurance. But what does it mean to be world class, and how will we know whether we’re achieving that goal? One way is to listen to what others are saying about you.

I was recently copied on an email from Peter Rousmaniere to Ramona Tanabe, both national experts in the field of workers’ compensation. Peter is an “estimable industry consultant” (Michael Gavin, WorkCompCentral, 4/6/2016) with decades of experience in the industry, and Ramona is the Executive Vice President at the Workers Compensation Research Institute. And what did Peter have to say? “… the way BWC scores its MCOs on duration of disability … is probably the most sophisticated duration of disability measurement system in the country, addressing a host of issues not least of which is severity weighting. I recommend that WCRI has a hard look at the BWC system.”

High praise, indeed! What may be more amazing is that innovative measurement systems are nothing new to BWC. Shortly after the formation of the Health Partnership Program in 1997, Teresa Arms, who was heading our MCO Reporting Unit at the time, helped to design, develop and implement the Duration of Disability Measure (DoDM). It was a radical concept that set benchmarks for days absent that were calibrated both by injury and occupation. DoDM was used to measure MCO’s effectiveness for over a decade, and other insurers from around the country and as far away as Australia came to Columbus to take a closer look at how we did it.

But DoDM wasn’t without its flaws, the most significant of which was the fact that what happened after a claim was 15 months old never got measured. After years of using it and understanding more fully what behaviors it incented, BWC decided to up its game and produce something better. Something that built upon DoDM’s early successes and addressed some of its shortcomings. Something that would help push the Ohio system of workers’ compensation to a higher level. In 2012, the next chapter in disability duration measurement was developed by BWC’s Medical Services and Analytics sections in collaboration with BWC’s MCO partners.

mod graphicThat new chapter is actually a set of two performance measures, collectively called Measure of Disability (MoD).  The first piece measures duration of disability and the second measures medical costs after return to work. Between the two, fully 50 percent of MCOs’ compensation is at risk, so these are measures that are watched closely by all. They’re also included in the MCO Report Card – the very publication that prompted Peter Rousmaniere to inquire about these measures.  With each succeeding contract, BWC and the MCOs have agreed to implement enhancements that provide additional incentives for improved outcomes for injured workers and employers.

So what is MoD? Both the days absent and recent medical components measure claims against standards developed from our own historical data. Like DoDM before it, MoD standards take into consideration both the primary injury in each claim and the industry the injured worker is in, as these factors have been shown to significantly affect duration of disability and medical cost. But rather than simply comparing current outcomes to a singular benchmark, MoD standards are presented as a continuum that recognizes the fact that there can be significant differences in outcomes even for very similar injuries. For example, most people think of back injuries as being “really bad” and leading to lots of time off from work. You’d probably be surprised to learn that 40% of all construction industry claims with a lumbar sprain/strain miss no days from work at all, that 60% miss 3 days or less, and that 90% miss 33 days or less. Claims that are currently being managed by MCOs are measured against those historical distributions, and the better the actual outcomes the higher the score. The innovation Peter seemed most interested in is that scores among ‘more significant’ injuries are weighted more heavily than those among ‘minor’ ones. For example, cut fingers (883.0) are weighted at 1.12 or 1.23, depending on industry and whether the injury affects both hands, while traumatic amputation of the thumb (885.0) carries a weight of 47.86. Having a successful outcome in both cases is important, but a good outcome in a cut finger claim won’t help an MCO’s overall score nearly as much as a similarly good outcome in an amputation claim.

BWC could have rested on its laurels and continued to use DoDM to measure disability outcomes. World class players don’t rest – they improve. And we’re just getting started!

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