PERSPECTIVES
Illlplelllenting Managed Care in an Industrial Rehabilitation Progralll LINDA O. NIEMEYER, *t MARY FOTO,t AND DEBBIE HOLMES-ENIXt
* University of California, Riverside; t Rehabilitation Technology Works, San Bernardino, California
Managed care, with all its problems and potentials, is entering the scene in workers' compensation as a way to deal with escalating costs. Though the roots of managed care lie in cost containment efforts, its future depends on a shift in emphasis to quality of care. Clinicians must become partners with insurance companies and employers to evolve a "win-win" scenario that combines dficiency with effectiveness or risk both exclusion from provider networks and loss of control over what becomes incorporated into standards of care. Steps that can be taken by clinicians include developing a sense of accountability for final functional outcome, internal utilization management, and an internal case management protocol.
Keywords: Managed care; Case management; Utilization management; Industrial rehabilitation
Workers' compensation has changed irrevocably. Expanded notions of industrial illness and injury took root in the 1970s. Cumulative injury, industrial illness, and psychological stress claims have added complexity and higher costs to workers' compensation. Each month a new state experiences workers' compensation "meltdown," as insurers threaten to withdraw coverage unless they're permitted huge premium increases. Everybody agrees workers' compensation needs fixing, but nobody agrees how (Dent, 1990, p. 2).
Left to right: Linda O. Niemeyer, PhD (candidate), OTR, CVE, Psychology Department, University of California, Riverside, and Research Coordinator, Rehabilitation Technology Works; Mary Foto, OTR, FAOTA, President, Rehabilitation Technology Works; Debbie Holmes-Enix, MPH, OTR, CVE, Director of Employer Relations and Education, Rehabilitation Technology Works.
In the 1990s, reform in the workers' compensation system is in the spotlight- There is growing awareness of a prevalent "win-lose" mentality in which competing and conflicting interests of health care providers, legal representatives, organized labor, legislators, claimants, employers, and compensation or insurance agencies are being served at the expense of the system as a whole. Poor rehabilitation outcome in the form of delays in functional WORK 1994; 4(1):2-8 Copyright © 1994 by Butterworth-Heinemann
Managed Care in Industrial Rehabilitation
improvement, exaggerated disability, and inability of clients to successfully return to work within projected time lines is the cumulative result of conflicting messages and agendas from different sectors. The term "comalingering" has been coined as a label for this process of intentional or involuntary, passive or active, cooperative manipulation resulting in subversion of a disability compensation system (LeClair and Mitchell, 1992; Simental, 1993). One solution to this dilemma is to effect a shift in focus to the realization that a "win-win" situation is indeed possible if all providers, along with the employer, monitor cost and quality of care early in the disability process, with the common goal of achieving the highest functional outcome possible for the injured worker. What is required is the creation of an informed network of services that applies proven methods of preparing an individual to return to work (Dent, 1990; LeClair and Mitchell, 1992; Simental, 1993). This concept has been called partnering, and a ready-made vehicle through which partnering can take place is managed care. Beset by the needs to increase accountability for the quality, effectiveness, and cost of care and ensure that resources are directed to cost-effective treatments, workers' compensation has been following the precedent set by other health care delivery systems in the United States. Workers' compensation is in a process of transformation from emphasizing the freedom of individual health care providers to practice as they see fit to focussing on managed care. Managed care is defined as "an integrated financing and delivery system for health care benefits characterized by: selection standards for providers, contractual payer-provider relationships, and formal processes for monitoring the efficiency and effectiveness of provider networks" (Simental, 1993, p. 26). Forms of managed care include health maintenance organizations (HM Os), preferred provider organizations (PPOs), and various utilization review and management systems. A major goal of this approach is to "manage health care costs by influencing patient care decision making through case-by-case assessments of the appropriateness of care prior to its provi-
3
sion" (Dorwart, 1990, p. 1088). This decision making can take into consideration assessment of the medical necessity for care, the appropriateness of specific services, or even the particular treatment modalities used. This article will trace the history of managed care in the health care system in general and present some major issues that have been raised. Implications for clinical practice in workers' compensation will be discussed and recomendations will be made as to how clinicians can be partners in helping to create a win-win scenario for the industrial rehabilitation system. Finally, the initial efforts of a recently opened therapist-owned provider of industrial rehabilitation therapy services to do just that will be described.
A BRIEF HISTORY OF MANAGED CARE Although as early as the 1940s, Kaiser Steel established the precursor of its HMO managed care approach to serve its own employees, the main thrust of utilization management began with the establishment ofthe Medicare program in the mid 1960s. As the federal government became a major provider of financing for health care needs of the elderly, the alarming growth in health care expenses forced the government to place a greater emphasis on cost containment. Delivery systems participating in Medicare, such as hospitals and extended care facilities, were required to conduct retrospective utilization review. However, this type of review process had little impact on clinical practice or cost of care (Giles, 1991; Tischler, 1990). In 1972, amendments to the Social Security Act established a nationwide network of voluntary, nonprofit professional standard review organizations (PSROs). By means of retrospective review, PSROs were responsible for determining whether government funds were being spent only on medically necessary services rendered in appropriate settings in accordance with accepted standards of practice. Congress subsequently enacted laws in 1982 replacing PSROs with utilization and quality control peer review organizations (PROs), which emphasized continued stay rather than ret-
4
WORK / JANUARY 1994
rospective review and were given stronger sanctioning authority. Practitioners and providers who failed to met professionally recognized standards of care could be fined or excluded from Medicare (Tischler, 1990). This evolution of review activities in the public sector firmly endorsed the principle of peer involvement in judgements regarding the appropriateness of settings where patients were treated and the necessity, reasonableness, and quality of care. Many private third-party health insurance carriers followed suit. They developed their own independent peer and utilization review systems and incorporated retrospective review into the process for reviewing claims. By the late 1970s, prior review techniques such as preadmission certification, continued-stay review, second surgical opinions, and discharge planning were being implemented in the private sector (Tischler, 1990). There has been considerable growth and change in managed care over the past 10 years. A major trend has been the use of provider networks. In network-based plans, providers with cost-effective practice patterns are selected to furnish a comprehensive set of health care services to members. Financial incentives encourage enrollees to use providers and procedures associated with the network. Closed-paneled HMOs, for example, only pay for health care provided within the network, whereas open-ended HMOs offer limited reimbursement for services received from nonnetwork providers. A survey conducted by the Health Insurance Association of America showed that from 1982 to 1990, network-based managed care grew from 25 % of all member business (Hoy, Curtis, and Rice, 1991). Although in 1990, HMOs and PPOs were the predominant models for managed care, there is evidence of a convergence toward comprehensive point-of-service plans (Hoy, Curtis, and Rice, 1991). Point-of-service plans are a hybrid encompassing the characteristics of both HMOs and PPOs in an attempt to offer both cost containment and freedom of choice. Like other managed care plans, a network of contracted providers is used, but enrollees have the option of selecting a primary care physician to act as a gatekeeper who controls referrals.
A second major trend has been the acceleration of prior review. Preadmission certification, concurrent utilization review, discharge planning, mandatory surgical second opinion, and other programs designed to reduce the unnecessary use of inpatient services and assess the appropriateness of care are becoming almost universal in network-based managed care (Hoy, Curtis, and Rice, 1991). If enrollment in conventional health insurance plans with preadmission certification and concurrent utilization review is added to enrollment in systems of managed care, - 6 out of 10 Americans with group health insurance are in programs that have some form of utilization management (Tischler, 1990).
ISSUES IN MANAGED CARE Though the roots of managed care lie in costcontainment efforts, its future depends on a shift in emphasis from cost to continuous improvement in quality of care (Lynn, 1991; Dorwart, 1990; Tischler, 1990). It is a myth that utilization management alone will reduce costs in the long run or that managed care is entirely about costs. Implicit in managed care plans where cost containment is the primary focus is a trade-off wherein lesser quantity or lower quality is exchanged for lower costs. (Dorwart, 1990). We must be concerned about the methods and goals 'of proposed cost-containment measures because they can adversely affect the quality of health care as well as patients' access to it. Quality health care that is appropriate, efficient, and effective can only be achieved through prospective outcome research. Outcome research leads to scientifically based practice guidelines containing valid criteria for judging the necessity and adequacy of treatment. Obtaining hard evidence regarding the relative merits of various clinical approaches and therapeutic techniques requires understanding of the biomedical, psychological, and social factors that affect health and illness as well as clear and valid outcome criteria. Because so many variables are involved, this kind of research required huge data bases, consistency in
Managed Care in Industrial Rehabilitation
data gathering, and cooperative effort in data analysis and dissemination of information. Sophisticated outcome research is part of a growing trend in managed health care. Unfortunately, the system is presently hampered by poor information and an incomplete understanding of how best to incorporate research findings into daily decision making. The bulk of utilization management studies primarily address cost savings issues such as reducing length of stay, whereas more qualitative issues such as patient satisfaction, social function, and role performance are not analyzed. Accepted standards of practice that guide decision making by practitioners as well as reviewers are often based on tradition and beliefs about the value of various therapeutic techniques rather than on hard evidence (Tischler, 1990). For the health care delivery system to reach its full potential, there must be an ongoing dialogue in which health care purchasers propose standards of quality care and health care providers report their results. By means of this interaction, purchasers and providers could work together to identify potential problems, their sources, and their solutions. In its ideal form, managed care can provide the medical community with the information necessary to exercise sound professional judgement while holding providers accountable to the standards that are set based on that information.
MANAGED CARE AND INDUSTRIAL REHABILITATION Managed care, with all its attendant problems and potentials, now enters the scene in workers' compensation. As the scope of utilization management expands into industrial rehabilitation, networkbased managed care will become a critical mediator of change in this field. There are two major risks for health care providers in this process. First, clinicians who cannot demonstrate costeffective practice patterns may be excluded from provider networks and thereby from major sources of referrals. Second, by not providing information to guide the managed care revolution, clinicians relinquish control over what becomes incorpo-
5
rated into standards of care. There is natural tendency among insurance providers to let cost containment take precedence as the primary focus. The input from clinicians regarding the value of various therapeutic approaches provides needed balance. The question is, how can clinicians become partners with insurance companies and employers to help evolve a win-win scenario that combines efficiency with effectiveness and that controls cost without sacrificing quality of care? Efficient and effective industrial rehabilitation means that for most, ifnot all, injured workers, maximum potential for functional outcome is achieved, exaggerated disability is prevented, and return to work occurs in ~6 months. Published outcome research from multidisciplinary programs suggests that this is a valid goal that can be achieved through early intervention combined with attention to psychosocial barriers to rehabilitation. However, the relative strengths of these psychosocial barriers, and the most effective screening and intervention methods, have yet to be determined (Niemeyer, et al., in press). There are several steps that clinicians can take toward developing a partnership with managed care in therapy services. The first step is a shift in focus so that a greater level of importance is attributed to the outcome than the process. It is easy for clinicians, especially those providing care at the acute level, to become immersed in the process of taking a referral, evaluating, treating, and billing, and to lose sight of the final outcome, which is returning and successful sustaining of the injured worker at the job site. The clinician contributing to a part of the rehabilitation effort needs to develop an awareness of, as well as a sense of accountability for, the whole effort. The second step is to develop an internal system of utilization management, ideally, one that parallels and is compatible with the systems being used currently by insurance agencies. For example, insurance companies such as Blue Cross determine medical necessity for rehabilitation services based on functional loss, not impairment. Conversely, successful outcome is viewed in terms of improvement in function rather than just reduction ofimpairment. Clinicians dealing with hand or back
6
WORK / JANUARY 1994
injuries in industrial rehabilitation have traditionally focused on documentation that involves measurement of strength, range and velocity of motion, consistency of effort, and so forth, often using high-technology equipment to ensure accuracy. It is important that measures of impairment be related to functional loss and reduction in impairment to functional gain. Within the context of industrial rehabilitation, function refers to the ability to sit, stand, lift, push, pull, crouch, and so forth; in essence, function refers to the ability to perform physical demands of work. Internal utilization management "is an adjudicative process that applies a 'clinical' means test to justify admission and establish the appropriate level of care, to evaluate the medical necessity of specific services and procedures, to ascertain that services are provided in a manner consistent with accepted standards of care, and to ensure the timely implementation of the treatment plan" (Tischler, 1990, p. 1100). In other words, screen referrals prospectively to determine what type, level, and duration of intervention is appropriate. Then, retrospectively, see if projections were accurate. When a client outcome is worse than expected, investigate what factors might have contributed to this. Record why decisions were made during the treatment process, for example, nonacceptance into a program, early termination of treatment, or discharge. Document what interventions work and develop standards of care based on demonstrated methods of preparing a client for return to work. When sufficient information has been gathered, develop target outcomes for specific client groups and link billing data with clients' clinical information. Internal utilization management should at some point enable the clinician to tell the payor, for example, how much it costs to return an individual with postsurgical carpal tunnel syndrome to a clerical position, how many therapy visits are required to keep a worker with acute back injury at the worksite, or which clients will need early intensive remediation of psychosocial barriers to recovery. The third step is to develop a protocol for internal case management that parallels and supports the case management provided by the workers' compensation carrier. Case management is de-
fined as "the active monitoring and guidance of an individual during his or her participation in restoration and work return activities following an industrial or personal injury, illness, or chronic disability" (LeClair and Mitchell, 1992, p. 11-12). The goal of this proactive strategy is to reduce the impact of the industrial injury on the worker's ability to participate in employment and to expedite progression through the rehabilitation process. Good case management requires teamwork. Activities in an internal case management protocol include initial screening for early identification of potential biomedical or psychosocial barriers to rehabilitation, assessment to obtain a clearer picture when problems are identified, development of a plan of action regarding the kind of intervention needed, and coordination with other health care providers, insurance carriers, and outside participants, such as the employer, to ensure that timely and appropriate help is provided to the client. Factors that need to be identified early include, for example, complicated medical history, depression, history of alcoholism or substance abuse, a tendency toward somatization, the presence of significant pain, performance or labor relations problems on the job before injury, job dissatisfaction, or recent personal crisis such as divorce, financial problems, or illness in the family. Problem cases identify themselves eventually. Historically, - 20 % of industrial injuries receiving only traditional medical intervention have become chronic, and these have incurred 80 % of the cost of workers' compensation (Niemeyer et al., in press). The point is to identify potential barriers before they become problems: "Early identification is important because disability is habit forming. The longer someone remains disabled and off work, the less likely they are to return to work. Attitudes and work habits waste away as surely as do muscles. In a real sense, there's an early window of opportunity in which to favorably influence the course of disability. Miss it, and you'll be playing catch up the rest of the way" (Dent, 1990, p. 26). Another important activity that is part of an internal case management protocol is maintenance of ongoing data-gathering and information management systems to identify recurring patterns
Managed Care in Industrial Rehabilitation
and monitor the overall effectiveness in improving outcome (Dent, 1990; LeClair and Mitchell, 1992). This information, plus the data from internal utilization management, is absolutely essential for the managed care revolution in workers' compensation. Two things are provided by an information management system that compensation agencies really want. First, it can be used to demonstrate that the provider is monitoring both cost and quality of care. Second, it enables the provider to set a case rate structure based on expected course and outcomes at the beginning of care, allowing the payor to set aside actual monies early on. These three steps - accountability for final outcome, internal utilization management, and an internal case management protocol- are part of a win-win mentality that supports an attitude of partnership between health care providers, injured workers, insurance carriers, employers, and other players in the workers' compensation system. At this point, however, we are talking about a philosophy, a concept, something that must be packaged and promoted to the industry.
PROMOTING A PHILOSOPHY: REHABILITATION TECHNOLOGY WORKS Rehabilitation Technology Works (RTW) is an independent, therapist-owned practice in San Bernardino, California, that opened its doors in January, 1993. R TW consists of occupational and physical therapists who provide individually tailored rehabilitative therapy services to postoperative patients, injured workers, and injured sports participants, with the objective of returning them to functional life-styles as quickly and safely as possible. This 14, OOO-foot facility offers acute and postacute treatment, including specialty programs such as hand and back therapy, as well as returnto-work services that include functional capacity evaluation, work hardening, assessment of essentialjob functions and job analysis, worksite safety analysis, and work redesign consulting. Clinical psychology services are also available. R TW has based its philosophy on implementing a win-win managed care approach in an indus-
7
trial rehabilitation setting. This means that the company is structured to take the three steps outlined in the previous section, namely, accountability for achieving functional outcomes, internal utilization management, and an internal case management protocol. Primary goals are early intervention, effective application of rehabilitation therapies resulting in timely return to work and other customary activities, lowered reinjury rates, and decreased overall disability costs as well as total health care costs. To help achieve its goals, R TW has designed a state-of-the-art electronic information management system capable of collecting and analyzing data on all cases seen. When the system is fully implemented and working to capacity, it will enable R TW to provide employers and insurance carriers with up-to-date information on injuries, recovery patterns, and the effectiveness of treatment plans. This information will be used for case management, cost-benefit analysis, quality assurance monitoring, development of a per-case fee schedule, and development of in-house injury prevention and disability management programs for industry. Services provided by R TW are facilitated by means of a case management system that sets the rehabilitation process in motion and monitors progress, whereas the availability of return-towork services allows continuity of care to final outcome. When a client is referred, the intake includes an initial screening to identify potential barriers to rehabilitation. Areas assessed include educational and occupational history, social history, reported physical and social functioning, problems with customary roles, vitality (fatigue), bodily pain, general perceptions of physical and mental health, job satisfaction, use of alcohol or other substances, and expectations regarding outcome of therapy and rcturn to work. If potential problems are identified, a second level of screening assesses such factors as depression, somatization, quality and intensity of pain , personality factors, and life stressors. Each client is then assigned a level of care based on projected course, outcome, and need for services. Clients at Level I are expectcd to require visits one to three times per week for 4-8 weeks
8
WORK / JANUARY 1994
and to need a single therapy only, such as hand therapy or physical therapy. Level II designates clients that will need to be seen two to three times weekly for 8-12 weeks and who will most likely receive two or more therapy services. A Level II client might be seen for occupational therapy and functional capacity evaluation, for instance. Level III represents the most intensive level of care expected. Clients at this level might require therapy three to five times weekly for ~ 13 weeks and need three or more services that could include psychology, work capacity evaluation, or work hardening. Preliminary outcome research for internal utilization management is investigating the predictive validity of the intake process in determining levels of care required. In addition, this data analysis will help to conceptually flesh out or shed light on characteristics of clients who fall into each of the levels and to establish an appropriate base rate billing structure. To strengthen its partnership within the industry, R TW is in the process of adapting and revising a current format for rehabilitation case review used by insurance providers so that it is applicable to an injured worker population. The idea is to develop a data base consistent with existing authorization and review packages, and into which the payor's policies and procedures for preapproving and verifying the need for services can be incorporated. Another advantage of this kind of data base is that it facilitates networking and pooling of outcome data.
Development of this data base requires a system of documentation centered on functional outcomes. What does this entail? The medical history, for example, should specify those conditions that contribute to the client's loss in function. The reasoning behind the rehabilitation plan must be based on functional loss, and treatment planning for each individual should take prior functional level into account. Impairment is only important as it relates to loss of function, and a functional goal should be mutually agreed on by the client and rehabilitation team. Functional outcome reporting affords both employers and insurers the ability to match cost with results rather than merely with the number of services rendered, whether or not effective, and therefore to monitor and control their expenditures more reliably.
CONCLUSION There is an undeniable trend toward incorporation of the managed care model into workers' compensation. Much is at stake regarding the changes in the patterns of practice that could result from managed care approaches. Providers of care in workers' compensation are urged to become proactive contributors in this transition so as not to relinquish control over clinical decision making and standard setting. Partnering in this context involves understanding the goals and process of managed care, a win-win attitude, and the ability to creatively "go with the flow."
REFERENCES Dent, G. L. (1990). Return to work ... by design: Managing the human andfinancial costs ofdisability. Stockton, CA: Martin-Dennison Press. Dorwart, R. A. (1990). Managed mental health care: Myths and realities in the 1990's. Hosp Community Psychiatry, 41, 1087-1091. Giles, T. R. (1991). Managed mental health care and effective psychotherapy: A step in the right direction? ] Behav Ther Exp Psychiatry, 22, 83-86. Hoy, E. W., Curtis, R. E., and Rice, T. (1991). Change and growth in managed care. Health AiJ, 10, 18-36.
LeClair, S. W., and Mitchell, K. (1992). Rehabilitation
in industry: Staff mentoring and development program resource manual. Worthington, OH: National Indus-
trial Rehabilitation Corporation. Lynn, J. T. (1991). The promise of managed care: An insurer's perspective. Health AjJ, 10, 185-188. Niemeyer, L. 0., Jacobs, K., Reynolds-Lynch, K., Bettencort, C., and Lang, S. (1994). Work hardening: Past, present and future. The national work hardening outcome study. Am] Occup Ther, in press. Simental, L. (1993). Managing the costs of managed care: Partnering. Inland Emp J, June, 26, 76, 81. Tischler, G. L. (1990). Utilization management and the quality of care. Hosp Community Psychiatry, 41, 1099-1102.
Illlplelllenting Managed Care in an Industrial Rehabilitation Progralll LINDA O. NIEMEYER, *t MARY FOTO,t AND DEBBIE HOLMES-ENIXt
* University of California, Riverside; t Rehabilitation Technology Works, San Bernardino, California
Managed care, with all its problems and potentials, is entering the scene in workers' compensation as a way to deal with escalating costs. Though the roots of managed care lie in cost containment efforts, its future depends on a shift in emphasis to quality of care. Clinicians must become partners with insurance companies and employers to evolve a "win-win" scenario that combines dficiency with effectiveness or risk both exclusion from provider networks and loss of control over what becomes incorporated into standards of care. Steps that can be taken by clinicians include developing a sense of accountability for final functional outcome, internal utilization management, and an internal case management protocol.
Keywords: Managed care; Case management; Utilization management; Industrial rehabilitation
Workers' compensation has changed irrevocably. Expanded notions of industrial illness and injury took root in the 1970s. Cumulative injury, industrial illness, and psychological stress claims have added complexity and higher costs to workers' compensation. Each month a new state experiences workers' compensation "meltdown," as insurers threaten to withdraw coverage unless they're permitted huge premium increases. Everybody agrees workers' compensation needs fixing, but nobody agrees how (Dent, 1990, p. 2).
Left to right: Linda O. Niemeyer, PhD (candidate), OTR, CVE, Psychology Department, University of California, Riverside, and Research Coordinator, Rehabilitation Technology Works; Mary Foto, OTR, FAOTA, President, Rehabilitation Technology Works; Debbie Holmes-Enix, MPH, OTR, CVE, Director of Employer Relations and Education, Rehabilitation Technology Works.
In the 1990s, reform in the workers' compensation system is in the spotlight- There is growing awareness of a prevalent "win-lose" mentality in which competing and conflicting interests of health care providers, legal representatives, organized labor, legislators, claimants, employers, and compensation or insurance agencies are being served at the expense of the system as a whole. Poor rehabilitation outcome in the form of delays in functional WORK 1994; 4(1):2-8 Copyright © 1994 by Butterworth-Heinemann
Managed Care in Industrial Rehabilitation
improvement, exaggerated disability, and inability of clients to successfully return to work within projected time lines is the cumulative result of conflicting messages and agendas from different sectors. The term "comalingering" has been coined as a label for this process of intentional or involuntary, passive or active, cooperative manipulation resulting in subversion of a disability compensation system (LeClair and Mitchell, 1992; Simental, 1993). One solution to this dilemma is to effect a shift in focus to the realization that a "win-win" situation is indeed possible if all providers, along with the employer, monitor cost and quality of care early in the disability process, with the common goal of achieving the highest functional outcome possible for the injured worker. What is required is the creation of an informed network of services that applies proven methods of preparing an individual to return to work (Dent, 1990; LeClair and Mitchell, 1992; Simental, 1993). This concept has been called partnering, and a ready-made vehicle through which partnering can take place is managed care. Beset by the needs to increase accountability for the quality, effectiveness, and cost of care and ensure that resources are directed to cost-effective treatments, workers' compensation has been following the precedent set by other health care delivery systems in the United States. Workers' compensation is in a process of transformation from emphasizing the freedom of individual health care providers to practice as they see fit to focussing on managed care. Managed care is defined as "an integrated financing and delivery system for health care benefits characterized by: selection standards for providers, contractual payer-provider relationships, and formal processes for monitoring the efficiency and effectiveness of provider networks" (Simental, 1993, p. 26). Forms of managed care include health maintenance organizations (HM Os), preferred provider organizations (PPOs), and various utilization review and management systems. A major goal of this approach is to "manage health care costs by influencing patient care decision making through case-by-case assessments of the appropriateness of care prior to its provi-
3
sion" (Dorwart, 1990, p. 1088). This decision making can take into consideration assessment of the medical necessity for care, the appropriateness of specific services, or even the particular treatment modalities used. This article will trace the history of managed care in the health care system in general and present some major issues that have been raised. Implications for clinical practice in workers' compensation will be discussed and recomendations will be made as to how clinicians can be partners in helping to create a win-win scenario for the industrial rehabilitation system. Finally, the initial efforts of a recently opened therapist-owned provider of industrial rehabilitation therapy services to do just that will be described.
A BRIEF HISTORY OF MANAGED CARE Although as early as the 1940s, Kaiser Steel established the precursor of its HMO managed care approach to serve its own employees, the main thrust of utilization management began with the establishment ofthe Medicare program in the mid 1960s. As the federal government became a major provider of financing for health care needs of the elderly, the alarming growth in health care expenses forced the government to place a greater emphasis on cost containment. Delivery systems participating in Medicare, such as hospitals and extended care facilities, were required to conduct retrospective utilization review. However, this type of review process had little impact on clinical practice or cost of care (Giles, 1991; Tischler, 1990). In 1972, amendments to the Social Security Act established a nationwide network of voluntary, nonprofit professional standard review organizations (PSROs). By means of retrospective review, PSROs were responsible for determining whether government funds were being spent only on medically necessary services rendered in appropriate settings in accordance with accepted standards of practice. Congress subsequently enacted laws in 1982 replacing PSROs with utilization and quality control peer review organizations (PROs), which emphasized continued stay rather than ret-
4
WORK / JANUARY 1994
rospective review and were given stronger sanctioning authority. Practitioners and providers who failed to met professionally recognized standards of care could be fined or excluded from Medicare (Tischler, 1990). This evolution of review activities in the public sector firmly endorsed the principle of peer involvement in judgements regarding the appropriateness of settings where patients were treated and the necessity, reasonableness, and quality of care. Many private third-party health insurance carriers followed suit. They developed their own independent peer and utilization review systems and incorporated retrospective review into the process for reviewing claims. By the late 1970s, prior review techniques such as preadmission certification, continued-stay review, second surgical opinions, and discharge planning were being implemented in the private sector (Tischler, 1990). There has been considerable growth and change in managed care over the past 10 years. A major trend has been the use of provider networks. In network-based plans, providers with cost-effective practice patterns are selected to furnish a comprehensive set of health care services to members. Financial incentives encourage enrollees to use providers and procedures associated with the network. Closed-paneled HMOs, for example, only pay for health care provided within the network, whereas open-ended HMOs offer limited reimbursement for services received from nonnetwork providers. A survey conducted by the Health Insurance Association of America showed that from 1982 to 1990, network-based managed care grew from 25 % of all member business (Hoy, Curtis, and Rice, 1991). Although in 1990, HMOs and PPOs were the predominant models for managed care, there is evidence of a convergence toward comprehensive point-of-service plans (Hoy, Curtis, and Rice, 1991). Point-of-service plans are a hybrid encompassing the characteristics of both HMOs and PPOs in an attempt to offer both cost containment and freedom of choice. Like other managed care plans, a network of contracted providers is used, but enrollees have the option of selecting a primary care physician to act as a gatekeeper who controls referrals.
A second major trend has been the acceleration of prior review. Preadmission certification, concurrent utilization review, discharge planning, mandatory surgical second opinion, and other programs designed to reduce the unnecessary use of inpatient services and assess the appropriateness of care are becoming almost universal in network-based managed care (Hoy, Curtis, and Rice, 1991). If enrollment in conventional health insurance plans with preadmission certification and concurrent utilization review is added to enrollment in systems of managed care, - 6 out of 10 Americans with group health insurance are in programs that have some form of utilization management (Tischler, 1990).
ISSUES IN MANAGED CARE Though the roots of managed care lie in costcontainment efforts, its future depends on a shift in emphasis from cost to continuous improvement in quality of care (Lynn, 1991; Dorwart, 1990; Tischler, 1990). It is a myth that utilization management alone will reduce costs in the long run or that managed care is entirely about costs. Implicit in managed care plans where cost containment is the primary focus is a trade-off wherein lesser quantity or lower quality is exchanged for lower costs. (Dorwart, 1990). We must be concerned about the methods and goals 'of proposed cost-containment measures because they can adversely affect the quality of health care as well as patients' access to it. Quality health care that is appropriate, efficient, and effective can only be achieved through prospective outcome research. Outcome research leads to scientifically based practice guidelines containing valid criteria for judging the necessity and adequacy of treatment. Obtaining hard evidence regarding the relative merits of various clinical approaches and therapeutic techniques requires understanding of the biomedical, psychological, and social factors that affect health and illness as well as clear and valid outcome criteria. Because so many variables are involved, this kind of research required huge data bases, consistency in
Managed Care in Industrial Rehabilitation
data gathering, and cooperative effort in data analysis and dissemination of information. Sophisticated outcome research is part of a growing trend in managed health care. Unfortunately, the system is presently hampered by poor information and an incomplete understanding of how best to incorporate research findings into daily decision making. The bulk of utilization management studies primarily address cost savings issues such as reducing length of stay, whereas more qualitative issues such as patient satisfaction, social function, and role performance are not analyzed. Accepted standards of practice that guide decision making by practitioners as well as reviewers are often based on tradition and beliefs about the value of various therapeutic techniques rather than on hard evidence (Tischler, 1990). For the health care delivery system to reach its full potential, there must be an ongoing dialogue in which health care purchasers propose standards of quality care and health care providers report their results. By means of this interaction, purchasers and providers could work together to identify potential problems, their sources, and their solutions. In its ideal form, managed care can provide the medical community with the information necessary to exercise sound professional judgement while holding providers accountable to the standards that are set based on that information.
MANAGED CARE AND INDUSTRIAL REHABILITATION Managed care, with all its attendant problems and potentials, now enters the scene in workers' compensation. As the scope of utilization management expands into industrial rehabilitation, networkbased managed care will become a critical mediator of change in this field. There are two major risks for health care providers in this process. First, clinicians who cannot demonstrate costeffective practice patterns may be excluded from provider networks and thereby from major sources of referrals. Second, by not providing information to guide the managed care revolution, clinicians relinquish control over what becomes incorpo-
5
rated into standards of care. There is natural tendency among insurance providers to let cost containment take precedence as the primary focus. The input from clinicians regarding the value of various therapeutic approaches provides needed balance. The question is, how can clinicians become partners with insurance companies and employers to help evolve a win-win scenario that combines efficiency with effectiveness and that controls cost without sacrificing quality of care? Efficient and effective industrial rehabilitation means that for most, ifnot all, injured workers, maximum potential for functional outcome is achieved, exaggerated disability is prevented, and return to work occurs in ~6 months. Published outcome research from multidisciplinary programs suggests that this is a valid goal that can be achieved through early intervention combined with attention to psychosocial barriers to rehabilitation. However, the relative strengths of these psychosocial barriers, and the most effective screening and intervention methods, have yet to be determined (Niemeyer, et al., in press). There are several steps that clinicians can take toward developing a partnership with managed care in therapy services. The first step is a shift in focus so that a greater level of importance is attributed to the outcome than the process. It is easy for clinicians, especially those providing care at the acute level, to become immersed in the process of taking a referral, evaluating, treating, and billing, and to lose sight of the final outcome, which is returning and successful sustaining of the injured worker at the job site. The clinician contributing to a part of the rehabilitation effort needs to develop an awareness of, as well as a sense of accountability for, the whole effort. The second step is to develop an internal system of utilization management, ideally, one that parallels and is compatible with the systems being used currently by insurance agencies. For example, insurance companies such as Blue Cross determine medical necessity for rehabilitation services based on functional loss, not impairment. Conversely, successful outcome is viewed in terms of improvement in function rather than just reduction ofimpairment. Clinicians dealing with hand or back
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injuries in industrial rehabilitation have traditionally focused on documentation that involves measurement of strength, range and velocity of motion, consistency of effort, and so forth, often using high-technology equipment to ensure accuracy. It is important that measures of impairment be related to functional loss and reduction in impairment to functional gain. Within the context of industrial rehabilitation, function refers to the ability to sit, stand, lift, push, pull, crouch, and so forth; in essence, function refers to the ability to perform physical demands of work. Internal utilization management "is an adjudicative process that applies a 'clinical' means test to justify admission and establish the appropriate level of care, to evaluate the medical necessity of specific services and procedures, to ascertain that services are provided in a manner consistent with accepted standards of care, and to ensure the timely implementation of the treatment plan" (Tischler, 1990, p. 1100). In other words, screen referrals prospectively to determine what type, level, and duration of intervention is appropriate. Then, retrospectively, see if projections were accurate. When a client outcome is worse than expected, investigate what factors might have contributed to this. Record why decisions were made during the treatment process, for example, nonacceptance into a program, early termination of treatment, or discharge. Document what interventions work and develop standards of care based on demonstrated methods of preparing a client for return to work. When sufficient information has been gathered, develop target outcomes for specific client groups and link billing data with clients' clinical information. Internal utilization management should at some point enable the clinician to tell the payor, for example, how much it costs to return an individual with postsurgical carpal tunnel syndrome to a clerical position, how many therapy visits are required to keep a worker with acute back injury at the worksite, or which clients will need early intensive remediation of psychosocial barriers to recovery. The third step is to develop a protocol for internal case management that parallels and supports the case management provided by the workers' compensation carrier. Case management is de-
fined as "the active monitoring and guidance of an individual during his or her participation in restoration and work return activities following an industrial or personal injury, illness, or chronic disability" (LeClair and Mitchell, 1992, p. 11-12). The goal of this proactive strategy is to reduce the impact of the industrial injury on the worker's ability to participate in employment and to expedite progression through the rehabilitation process. Good case management requires teamwork. Activities in an internal case management protocol include initial screening for early identification of potential biomedical or psychosocial barriers to rehabilitation, assessment to obtain a clearer picture when problems are identified, development of a plan of action regarding the kind of intervention needed, and coordination with other health care providers, insurance carriers, and outside participants, such as the employer, to ensure that timely and appropriate help is provided to the client. Factors that need to be identified early include, for example, complicated medical history, depression, history of alcoholism or substance abuse, a tendency toward somatization, the presence of significant pain, performance or labor relations problems on the job before injury, job dissatisfaction, or recent personal crisis such as divorce, financial problems, or illness in the family. Problem cases identify themselves eventually. Historically, - 20 % of industrial injuries receiving only traditional medical intervention have become chronic, and these have incurred 80 % of the cost of workers' compensation (Niemeyer et al., in press). The point is to identify potential barriers before they become problems: "Early identification is important because disability is habit forming. The longer someone remains disabled and off work, the less likely they are to return to work. Attitudes and work habits waste away as surely as do muscles. In a real sense, there's an early window of opportunity in which to favorably influence the course of disability. Miss it, and you'll be playing catch up the rest of the way" (Dent, 1990, p. 26). Another important activity that is part of an internal case management protocol is maintenance of ongoing data-gathering and information management systems to identify recurring patterns
Managed Care in Industrial Rehabilitation
and monitor the overall effectiveness in improving outcome (Dent, 1990; LeClair and Mitchell, 1992). This information, plus the data from internal utilization management, is absolutely essential for the managed care revolution in workers' compensation. Two things are provided by an information management system that compensation agencies really want. First, it can be used to demonstrate that the provider is monitoring both cost and quality of care. Second, it enables the provider to set a case rate structure based on expected course and outcomes at the beginning of care, allowing the payor to set aside actual monies early on. These three steps - accountability for final outcome, internal utilization management, and an internal case management protocol- are part of a win-win mentality that supports an attitude of partnership between health care providers, injured workers, insurance carriers, employers, and other players in the workers' compensation system. At this point, however, we are talking about a philosophy, a concept, something that must be packaged and promoted to the industry.
PROMOTING A PHILOSOPHY: REHABILITATION TECHNOLOGY WORKS Rehabilitation Technology Works (RTW) is an independent, therapist-owned practice in San Bernardino, California, that opened its doors in January, 1993. R TW consists of occupational and physical therapists who provide individually tailored rehabilitative therapy services to postoperative patients, injured workers, and injured sports participants, with the objective of returning them to functional life-styles as quickly and safely as possible. This 14, OOO-foot facility offers acute and postacute treatment, including specialty programs such as hand and back therapy, as well as returnto-work services that include functional capacity evaluation, work hardening, assessment of essentialjob functions and job analysis, worksite safety analysis, and work redesign consulting. Clinical psychology services are also available. R TW has based its philosophy on implementing a win-win managed care approach in an indus-
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trial rehabilitation setting. This means that the company is structured to take the three steps outlined in the previous section, namely, accountability for achieving functional outcomes, internal utilization management, and an internal case management protocol. Primary goals are early intervention, effective application of rehabilitation therapies resulting in timely return to work and other customary activities, lowered reinjury rates, and decreased overall disability costs as well as total health care costs. To help achieve its goals, R TW has designed a state-of-the-art electronic information management system capable of collecting and analyzing data on all cases seen. When the system is fully implemented and working to capacity, it will enable R TW to provide employers and insurance carriers with up-to-date information on injuries, recovery patterns, and the effectiveness of treatment plans. This information will be used for case management, cost-benefit analysis, quality assurance monitoring, development of a per-case fee schedule, and development of in-house injury prevention and disability management programs for industry. Services provided by R TW are facilitated by means of a case management system that sets the rehabilitation process in motion and monitors progress, whereas the availability of return-towork services allows continuity of care to final outcome. When a client is referred, the intake includes an initial screening to identify potential barriers to rehabilitation. Areas assessed include educational and occupational history, social history, reported physical and social functioning, problems with customary roles, vitality (fatigue), bodily pain, general perceptions of physical and mental health, job satisfaction, use of alcohol or other substances, and expectations regarding outcome of therapy and rcturn to work. If potential problems are identified, a second level of screening assesses such factors as depression, somatization, quality and intensity of pain , personality factors, and life stressors. Each client is then assigned a level of care based on projected course, outcome, and need for services. Clients at Level I are expectcd to require visits one to three times per week for 4-8 weeks
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and to need a single therapy only, such as hand therapy or physical therapy. Level II designates clients that will need to be seen two to three times weekly for 8-12 weeks and who will most likely receive two or more therapy services. A Level II client might be seen for occupational therapy and functional capacity evaluation, for instance. Level III represents the most intensive level of care expected. Clients at this level might require therapy three to five times weekly for ~ 13 weeks and need three or more services that could include psychology, work capacity evaluation, or work hardening. Preliminary outcome research for internal utilization management is investigating the predictive validity of the intake process in determining levels of care required. In addition, this data analysis will help to conceptually flesh out or shed light on characteristics of clients who fall into each of the levels and to establish an appropriate base rate billing structure. To strengthen its partnership within the industry, R TW is in the process of adapting and revising a current format for rehabilitation case review used by insurance providers so that it is applicable to an injured worker population. The idea is to develop a data base consistent with existing authorization and review packages, and into which the payor's policies and procedures for preapproving and verifying the need for services can be incorporated. Another advantage of this kind of data base is that it facilitates networking and pooling of outcome data.
Development of this data base requires a system of documentation centered on functional outcomes. What does this entail? The medical history, for example, should specify those conditions that contribute to the client's loss in function. The reasoning behind the rehabilitation plan must be based on functional loss, and treatment planning for each individual should take prior functional level into account. Impairment is only important as it relates to loss of function, and a functional goal should be mutually agreed on by the client and rehabilitation team. Functional outcome reporting affords both employers and insurers the ability to match cost with results rather than merely with the number of services rendered, whether or not effective, and therefore to monitor and control their expenditures more reliably.
CONCLUSION There is an undeniable trend toward incorporation of the managed care model into workers' compensation. Much is at stake regarding the changes in the patterns of practice that could result from managed care approaches. Providers of care in workers' compensation are urged to become proactive contributors in this transition so as not to relinquish control over clinical decision making and standard setting. Partnering in this context involves understanding the goals and process of managed care, a win-win attitude, and the ability to creatively "go with the flow."
REFERENCES Dent, G. L. (1990). Return to work ... by design: Managing the human andfinancial costs ofdisability. Stockton, CA: Martin-Dennison Press. Dorwart, R. A. (1990). Managed mental health care: Myths and realities in the 1990's. Hosp Community Psychiatry, 41, 1087-1091. Giles, T. R. (1991). Managed mental health care and effective psychotherapy: A step in the right direction? ] Behav Ther Exp Psychiatry, 22, 83-86. Hoy, E. W., Curtis, R. E., and Rice, T. (1991). Change and growth in managed care. Health AiJ, 10, 18-36.
LeClair, S. W., and Mitchell, K. (1992). Rehabilitation
in industry: Staff mentoring and development program resource manual. Worthington, OH: National Indus-
trial Rehabilitation Corporation. Lynn, J. T. (1991). The promise of managed care: An insurer's perspective. Health AjJ, 10, 185-188. Niemeyer, L. 0., Jacobs, K., Reynolds-Lynch, K., Bettencort, C., and Lang, S. (1994). Work hardening: Past, present and future. The national work hardening outcome study. Am] Occup Ther, in press. Simental, L. (1993). Managing the costs of managed care: Partnering. Inland Emp J, June, 26, 76, 81. Tischler, G. L. (1990). Utilization management and the quality of care. Hosp Community Psychiatry, 41, 1099-1102.
