The American healthcare landscape continues to evolve as a result of the Affordable Care Act, and value-based healthcare has become a hot topic. While this new approach is positively impacting other areas of the healthcare system, it has yet to make broad strides in workers’ compensation.

In a report titled “Bringing Value-Based Healthcare to Workers’ Compensation,” Oliver Wyman analysts write that, contrary to the prevailing thought among many insurers, workers’ compensation would greatly benefit from value-based healthcare as a way to cut costs, improve efficiency and achieve overall better treatment outcomes.

In contrast to the traditional healthcare model, which pays providers according to fee-for-service, a value-based model compensates providers based on measurable outcomes impacting the patient’s health. This both reduces medical costs, and leads to overall better care for patients and their families. With more than 425 Accountable Care Organizations (ACOs) emerging in the past four years, the gradual implementation of value-based healthcare across many sectors shows encouraging results.

The Oliver Wyman report suggests three reasons why workers’ compensation may be more inefficient than general healthcare and thus well-suited for value-based healthcare:

1. Payment based on volume rather than quality
2. Micromanagement of care
3. State-by-state regulation

Each of these reasons can contribute to diminished quality, increased costs, poorly coordinated care and lower patient satisfaction. Since, value-based healthcare seeks to address all of these areas, incorporating at least some elements of this model into workers’ compensation would have several benefits. The authors note that workers’ compensation is “rich in forms of treatment that lend themselves to bundled or value-based payment, such as orthopedic surgery, physical therapy, and rehabilitation,” and employers in many states can direct injured workers to specific providers , thus solving the attribution problem of accountable care organizations (ACOs).

The authors single out Paradigm Outcomes as a company helping to move the industry in the right direction. The report states, “There is at least one value-based specialty provider targeting the workers’ compensation sector: Paradigm takes comprehensive care of catastrophic injuries (for example, spinal cord injuries and traumatic brain injuries) and guarantees both financial and medical performance.… Incentives are aligned with efficient, quality care.” Paradigm, by ensuring injured workers receive the right care at the right time from expert physicians, minimizes the financial and physical impact of catastrophic injuries.

Changes to the healthcare landscape and the effective implementation of value-based healthcare initiatives could positively impact workers’ compensation and those employees the system protects. To learn how Paradigm Outcomes is collaborating with employers and insurers to achieve better outcomes, contact us, visit  www.paradigmcorp.com, or follow us on LinkedIn.