Industry Research

Study Supports Benefits of Evidence-Based Medicine

Researchers produced what they believe is the first scientific proof that consistently applied treatment guidelines are effective in treating injured workers.
By: | December 14, 2015 • 9 min read
Doctor, Healthcare And Medicine, Note Pad

Workers’ comp claims that follow evidence-based medicine guidelines have shorter durations and lower medical costs, according to a new study. The research suggests significantly improved outcomes and cost savings can result when medical providers follow recommendations based on peer-reviewed evidence in workers’ compensation treatment guidelines.


While nearly all jurisdictions either have or are considering the adoption of evidence-based medicine guidelines in their workers’ comp systems, there is almost no published scientific evidence confirming their efficacy or mechanism for improvements. But a team from a workers’ comp insurance carrier and Johns Hopkins University School of Medicine have produced what they believe is the first scientific proof that consistently applied treatment guidelines are effective in treating injured workers.

“We set out to prove or disprove empirically that adherence to EBM guidelines was impactful,” said Jack Tower, senior data scientist at the Accident Fund Holdings Medical Center of Excellence. “We were able to do that.”

The researchers developed a methodology to measure adherence to the Official Disability Guidelines from the Work Loss Data Institute and used an adherence score to compare the outcomes for different case mix adjusted claims populations. They found that claims in which there was at least a 50 percent adherence to the guidelines had 13.2 percent shorter durations and 37.9 percent lower medical costs.

“That kind of gives a strong impetus to implement new medical management strategies based on the results,” Tower said. “Carriers and the work comp industry could benefit from developing programs that embrace the concepts behind EBM.”

Evidence-Based Medicine

The idea of evidence-based medicine is to improve the medical decision-making process by emphasizing the use of scientific research and medical consensus. While it has been around for the last several decades, evidence-based medicine has only recently become widespread in the workers’ comp system.

“The application of evidence-based medicine in workers’ comp is much different from the application of evidence-based medicine in the group health world,” said Jeffrey Austin White, director of Innovation for Accident Fund. “In group health the evidence-based medicine guidelines have been scrutinized by the medical professionals as they are limited in scope and typically used to control cost in a hospital setting by limiting reimbursement rates.”

“This study provides a mechanism for evaluating an EBM guideline and can be used to identify how they might be improved in the future.” — Jeffrey Austin White, director of innovation, Accident Fund Holdings

However, White argues that the workers’ compensation guidelines are much more focused and comprehensive. “Evidence-based medicine [in workers’ comp] encompasses tens of millions of claims having similar incoming diagnoses. The guidelines provide outcome expectations at the diagnosis and treatment level for the majority of workplace injuries,” White explained. “When the diagnosis is made, the evidence-based medicine guidelines define how often a treatment is administered, along with the expected cost and time off from work. It’s a much different way to apply evidence-based medicine than is typically done in the group health setting.”


In addition to the Official Disability Guidelines, the American College of Occupational and Environmental Medicine has also created evidence-based medicine guidelines. A majority of states have adopted or are considering adopting either of the two national guidelines, a combination of the two, or homegrown guidelines that are state-specific to improve consensus around the definition of “necessary and appropriate” treatments for injured workers.

But “there’s a paucity of research around evidence-based medicine and best practice protocols,” said Dr. Dan Hunt, corporate medical director of Accident Fund. “We wanted to use our research to come up with hard facts — things that are true — to help improve the care for injured workers whether it’s Official Disability Guidelines, ACOEM, or another to say ‘here’s objective research that shows these guidelines work.’”

The researchers wanted to show whether and to what extent evidence-based medicine works specifically in the workers’ comp population. “There is a lot of literature that suggests the correct ways to do things medically but many times they are not really proven from an outcomes point of view,” said Dr. Edward Bernacki, professor of medicine and director of the division of occupational medicine at the Johns Hopkins University School of Medicine. “The medical care may be better, but does it really affect costs and return to work?”

The Study

Previous research from Accident Fund in conjunction with Johns Hopkins has highlighted some of the reasons for the increasing use of opioids in the workers’ comp system. One study, for example showed the use of opioids was an independent predictor of catastrophic claims costs while another identified physician dispensing as a driver of the increased use and costs.

“We found that physicians were contributing to [the opioid problem] and asked ourselves ‘Why?’ Our hypothesis was that providers were not using guidelines to help make administration decisions,” White said. “We thought by developing an algorithm or methodology to analyze a historical cohort of claims that we might be able to see a difference in outcomes between case mix adjusted claims that had various degrees of compliance with the guidelines.”

The idea of the study was to develop a technique for testing the safety and efficacy of an evidence-based medicine guideline rather than to drive public policy decisions on treatment practices.

It’s one of those situations where everyone wins — the employee returns to work and medical costs are constrained. To me, it’s a win-win.” — Dr. Edward Bernacki, professor of medicine and director of the division of occupational medicine, Johns Hopkins University School of Medicine

“If a state mandates the use of evidence-based medicine guidelines for the treatment of injured workers we are legally obligated to use them. If there are no mandated legislative guidelines, we are inclined to promote prospective guidelines that have been shown to reduce system costs and positively impact injured worker outcomes,” White said. “It’s important for us to know which guidelines work and why. This study provides a mechanism for evaluating an EBM guideline and can be used to identify how they might be improved in the future.”

Measuring Evidence-Based Medicine

The team developed two separate analytical techniques; one to stratify each claim for medical complexity and another to determine the adherence to the Official Disability Guidelines. The claims were divided into 10 levels of medical complexity and scored based on adherence.


“The number one challenge when doing claims research is being able to group claims into like claims,” White explained. “You don’t want to compare a claim with a broken finger to a claim with head trauma.”

The group started with non-catastrophic, indemnity claims that spanned the years 2008 to 2012 of the insurer’s data. They considered open and closed claims using a two-year development cutoff.

The researchers developed a compliance score to determine adherence to the Official Disability Guidelines. The score assigns a quantitative value to the claim indicating approximately how many of the treatments were consistent with the recommendations from the guidelines.

They case mix adjusted the claims and compared those with greater than a 50 percent adherence to evidence-based medicine guidelines to those with less than 50 percent adherence for the differences in claim durations and medical costs incurred. Using data from Official Disability Guidelines, the researchers identified the adherence of every procedure given a specific diagnosis for each claim based on the following four codes:

Green flags in the Official Disability Guidelines indicate the procedure is recommended based on prevalence, medical consensus, and historical claim outcomes.

Yellow flags indicate the procedure is a common treatment for that diagnosis and should be allowed on a limited basis with a restriction on the number of times it should be performed.

Red flags denote low prevalence in workers’ comp and that the treatment is not necessarily indicated based on current scientific research, i.e., recommendation is to review.

Black flags indicate inappropriate care and possibly denial of service.

“For every diagnosis and treatment, we label it with the corresponding colors; then we determine an adherence score at the claim level,” White said. “For a given claim, you can consider the cumulative number of green, yellow, red and black flags, and you can devise a score that indicates the level of compliance which can be compared against like claims.”

Based on the scores, the claims were separated. Those with mainly green and yellow flags, for example, were deemed as fairly compliant with the guidelines while those with many black flags were noncompliant.

“If you break the claims into two buckets, you can compare outcomes of the compliant group with the noncompliant group,” White said. “So for two broken finger injuries where one received compliant and the other noncompliant care, you can see how they differ in duration and medical cost.”


The average for all levels of medical complexity showed claims in the low compliance group had a 13.2 percent increase in claim duration and a 37.9 percent increase in medical costs compared to the high compliance group, the study found.

The numbers increased as the medical complexity of a claim increased. In looking at the top 10 percent of claims for medical complexity, there was a difference in claim duration of 18 percent and increased medical costs of 38 percent, between the low and high compliance groups.

The researchers also found there were more black flag procedures in the low compliance group — 3.5 times the number in the high compliance group.

“I think our research in essence provides evidence that if you do employ these guidelines the outcomes are better,” Johns Hopkins’ Bernacki said. “This is systematically over time that people return to work faster, for the insurers costs are a little lower, and for folks employing them the premium costs will be lower, so the cost of doing business will be lower. I think it’s one of those situations where everyone wins — the employee returns to work and medical costs are constrained. To me, it’s a win-win.”

Future Research

“It’s awfully exciting to be a part of a landmark study. No one else has done this before,” Hunt said. “The ability to develop an adherence process for claims management will have a lot of applications across the whole health care spectrum.”

Hunt, who called the study a “gargantuan undertaking,” hopes it will lead to additional studies that drill down more into the findings. “Age, jurisdictional differences — there are a whole host of really interesting things we can do now,” he said. “You’re going to see additional papers once this method is established.”


For now, the authors hope the findings will help spur action in states that currently do not use evidence-based medicine guidelines in their workers’ comp systems. With properly worded legislation and effective dispute resolution processes in place, evidence-based medicine guidelines should offer better outcomes for everyone.

They hope workers’ comp practitioners will begin using the methodology they’ve created to further refine evidence-based medicine guidelines. In fact, they have developed a 10-step process for companies to replicate the results.

“It’s like a recipe. With evidence-based medicine guidelines, you can quantify exactly how much of each ingredient you put in and therefore enhance your ability to refine, measure, and improve your results over time. At least that is what EBM tries to do,” White said. “It’s a recipe that applies to, say 80 percent of the population most of the time. The recipe should reduce system costs and facilitate cooperation from both sides of the business — payers and providers alike.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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In Depth: Workers' Compensation

The New Normal

Advanced care techniques and technologies are helping workers with brain and spinal cord injuries get back to living full lives.
By: | October 15, 2016 • 6 min read

Four years after a firefighter sustained third degree burns over 95 percent of his body, he’s not just alive, but he’s counseling other burn victims.


And several years after a 40-something forklift operator suffered a pelvic fracture, a traumatic brain injury and a spinal cord injury, the karate black belt returned to his dojo and hopes to teach karate from his wheelchair.

Five or 10 years ago, these injured workers wouldn’t have lived a week after their injuries, say their medical teams. Thanks to recent advances in medicine and technology, more catastrophically injured workers are surviving and, while not returning to their former functionality, are leading productive lives, said Sherri Hickey, director, medical management, Safety National.

As a result, the workers’ compensation community is “dealing with more, and longer, and more expensive claims,” Hickey said.

A virtue of workers’ compensation coverage, said Dr. Michael Choo, chief medical officer, Paradigm Outcomes, is that it “takes the long view” of the injured worker’s needs. “Generally, health care focuses on the first few weeks, a month, or a year, but effects from burns, spinal cord and traumatic brain injuries last forever.”

Because catastrophic injury claims often last for decades, the goal should be the best functional outcome possible in each case, said Choo, both for the patient’s quality of life and as a claims management strategy. “The best functional outcome translates to the lowest level of disability,” which itself translates to greater independence and lower care costs.

Kevin Glennon, vice president, home and health care services, One Call Care Management

Kevin Glennon, vice president, home and health care services, One Call Care Management

The best care doesn’t come cheap, said Michael Coupland, psychologist and rehabilitation counselor, network medical director, IMCS Group, but it’s cheaper in the long run than cheap care.

“Carriers and employers typically want the best doctors, the best rehab facilities, the best equipment, the best care management because they want to do the right thing for their workers and because the best care prevents returns to the hospital for complications such as skin wounds and infections” — the kinds of ailments that arise from fragmented care, oversight or neglect, said Choo, formerly CEO of a for-profit hospital before joining Paradigm.

“The financial payoff comes down the road.”

Management of these cases can be infinitely complex, he said, as medical conditions may change constantly, affected by comorbidities (such as high blood pressure and obesity, secondary effects of physical inactivity), psychological/social health (which can decline with pain, depression and isolation) and past medical issues.


They also involve a multitude of providers — all the physicians, therapists, home health aides, equipment suppliers and transport services — engaged in the patient’s care. A “big believer in teamwork,” Choo recommends keeping all stakeholders aligned to the same goal, an achievable degree of functionality.

When the financial payoff comes, Choo said, “we get five times better results at 40 percent medical cost savings,” than catastrophically injured patients who receive à la carte care.

The Technology

Because of the huge volume of traumatic brain injuries, burns, spinal cord injuries and amputations resulting from military engagements, companies have been researching and creating function-restoring technologies, Hickey said.

The results would stun a science fiction writer: skin grafts grown in the laboratory from the patients’ own DNA; drones launched from wheelchairs to conduct surveillance on the surrounding topography; brain-controlled robotic suits that restore some neurological function; exoskeletons.

Sherri Hickey, director, medical management, Safety National

Sherri Hickey, director, medical management, Safety National

Most technology is not the gee-whiz stuff. For example, the Apple watch will soon track fitness for wheelchair users. And a device called Pants Up Easy helps wheelchair users and people with spinal cord injuries get dressed.

Effective, low-cost technologies borrowed from smart phone fitness apps are producing a huge shift in patient monitoring, Coupland said.

For example, biofeedback apps measure heart rate variability, an indicator of stress and mood, and provide a mechanism for controlling them. Pain and mood diarizing are moving toward these technologies, as are sleep and activity tracking.

Telehealth technology can help providers manage vital signs all day, not just during an office visit by identifying changes from the baseline, said Kevin Glennon, vice president, home health and complex care services, One Call Care Management. And they’re useful for tracking medications.

“Patients hit a button when they take their meds,” he said, informing providers that they remain on schedule.

While technology can enable more independence, it can also contribute to more sedentary lives. Social media may contribute to inactivity — and obesity.

Obese people need greater doses of medications, and those who are also disabled may need a higher level of care for mobility, bathing and toileting. They may need bariatric or heavy-duty equipment. “If the patient weighs 300 pounds and the power chair weighs 325, the home would need assessment” for weight-bearing capacity, Glennon said.

“Generally, health care focuses on the first few weeks, a month, or a year, but effects from burns, spinal cord and traumatic brain injuries last forever.” — Dr. Michael Choo, chief medical officer, Paradigm Outcomes

On the other hand, technologies such as high-end prosthetics may allow greater independence and activity. “If the patient was a runner before the accident, we’ll buy running as well as walking prosthetics,” Hickey said.

Will carriers pay, especially for new technologies? With input from research and medical experts, payers review on a case-by-case basis, said Maureen McCarthy, senior vice president, claims, Liberty Mutual. “We seek input on experimental devices and treatments. Payment isn’t a barrier to care in the workers’ compensation environment.”

Beyond Medicine

Many factors contribute to a well-planned discharge plan, said Scott Peters, clinical director, neurorehabilitation and neurobehavioral system, ReMed: the worker’s abilities and prognosis, the medical and therapeutic treatment, home modifications, and family support as well as the worker’s outlook on life, ambitions before and after the injury, and likes and dislikes.


For example, said Zack Craft, vice president, rehab solutions, One Call Care Management, while the injured forklift operator — we’ll call him Job for his tribulations and the vigor of his spirit — was still in his high-end inpatient rehab facility, One Call started planning for discharge.

Job wanted to go home and re-engage in the community — itself a predictor of success — not to a step-down facility. However, his return to the split-level home he shared with his wife was impractical because of the cost of modifications; it would require an elevator. Besides, his wife had left him, leaving him with a single income equal to 66 percent of his former salary.

One Call arranged for a year’s lease on an apartment that needed only minor modifications and for a 24/7 home health aide while he sold his house. He applied the sale proceeds to buy a new house.

And he needed transportation. The transport van, although medically justifiable, was very expensive and didn’t fit Job’s idea of himself as a motorcycle and pickup truck sort of guy. A new van would cost a prohibitive $70,000 to $95,000.

Using its network of used vehicles, One Call located a year-old, pre-modified van for $40,000. It applied for and received approval from the Washington State workers’ compensation regulators.

Was Job happy?

“He wanted to return home and get back to living,” Glennon said. “Often, when workers can’t get past the depression and denial, they lose their will to strive for independence.” &


R10-1-16p40-42_3Catastrophic.inddFacing the Unthinkable: What happens in the hours, days and weeks following a sudden, disabling injury?


R10-15-16p38-40_4Catastrophic.inddRoad to Recovery: When it’s time to send patients home, there are new challenges to tackle, for both patients and payers.


Man on wheelchairCreeping Catastrophes: The final story of the series (coming in November) focuses on “creeping” catastrophic claims.

Susannah Levine writes about health care, education and technology. She can be reached at [email protected]
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Sponsored: Berkshire Hathaway Specialty Insurance

Why Marine Underwriters Should Master Modeling

Marine underwriters need better data, science and engineering to overcome modeling challenges.
By: | October 3, 2016 • 5 min read

Better understanding risk requires better exposure data and rigorous application of science and engineering. In addition, catastrophe models have grown in sophistication and become widely utilized by property insurers to assess the potential losses after a major event. Location level modeling also plays a role in helping both underwriters and buyers gain a better understanding of their exposure and sense of preparedness for the worst-case scenario. Yet, many underwriters in the marine sector don’t employ effective models.

“To improve underwriting and better serve customers, we have to ask ourselves if the knowledge around location level modeling is where it needs to be in the marine market space. We as an industry have progress to make,” said John Evans, Head of U.S. Marine, Berkshire Hathaway Specialty Insurance.

CAT Modeling Limitations

The primary reason marine underwriters forgo location level models is because marine risk often fluctuates, making it difficult to develop models that most accurately reflect a project or a location’s true exposure.

Take for example builder’s risk, an inland marine static risk whose value changes throughout the life of the project. The value of a building will increase as it nears completion, so its risk profile will evolve as work progresses. In property underwriting, sophisticated models are developed more easily because the values are fixed.

“If you know your building is worth $10 million today, you have a firm baseline to work with,” Evans said. The best way to effectively model builder’s risk, on the other hand, may be to take the worst-case scenario — or when the project is about 99 percent complete and at peak value (although this can overstate the catastrophe exposure early in the project’s lifecycle).

Warehouse storage also poses modeling challenges for similar reasons. For example, the value of stored goods can fluctuate substantially depending on the time of year. Toys and electronics shipped into the U.S. during August and September in preparation for the holiday season, for example, will decrease drastically in value come February and March. So do you model based on the average value or peak value?

“In order to produce useful models of these risks, underwriters need to ask additional questions and gather as much detail about the insured’s location and operations as possible,” Evans said. “That is necessary to determine when exposure is greatest and how large the impact of a catastrophe could be. Improved exposure data is critical.”

To assess warehouse legal liability exposure, this means finding out not only the fluctuations in the values, but what type of goods are being stored, how they’re being stored, whether the warehouse is built to local standards for wind, earthquake and flood, and whether or not the warehouse owner has implemented any other risk mitigation measures, such as alarm or sprinkler systems.

“Since most models treat all warehouses equally, even if a location doesn’t model well initially, specific measures taken to protect stored goods from damage could yield a substantially different expected loss, which then translates into a very different premium,” Evans said.

Market Impact

That extra information gathering requires additional time but the effort is worth it in the long run.

“Better understanding of an exposure is key to strong underwriting — and strong underwriting is key to longevity and stability in the marketplace,” Evans said.

“If a risk is not properly understood and priced, a customer can find themselves non-renewed after a catastrophe results in major losses — or be paying two or three times their original premium,” he said. Brokers have the job of educating clients about the long-term viability of their relationship with their carrier, and the value of thorough underwriting assessment.


The Model to Follow

So the question becomes: How can insurers begin to elevate location level modeling in the marine space? By taking a cue from their property counterparts and better understanding the exposure using better data, science and engineering.

For stored goods coverage, the process starts with an overview of each site’s risk based on location, the construction of the warehouse, and the type of contents stored. After analyzing a location, underwriters ascertain its average values and maximum values, which can be used to create a preliminary model. That model’s output may indicate where additional location specific information could fill in the blanks and produce a more site-specific model.

“We look at factors like the existence of a catastrophe plan, and the damage-ability of both the warehouse and the contents stored inside it,” Evans said. “This is where the expertise of our engineering team comes into play. They can get a much clearer idea of how certain structures and products will stand up to different forces.”

From there, engineers may develop a proprietary model that fits those specific details. The results may determine the exposure to be lower than originally believed — or buyers could potentially end up with higher pricing if the new model shows their risk to be greater. On the other hand, it may also alert the insured that higher limits may be required to better suit their true exposure to catastrophe losses.

Then when the worst does happen, insureds can rest assured that their carrier not only has the capacity to cover the loss, but the ability to both manage the volatility caused by the event and be in a position to offer reasonable terms when renewal rolls around.

For more information about Berkshire Hathaway Specialty Insurance’s Marine services, visit

Berkshire Hathaway Specialty Insurance ( provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, medical stop loss and homeowners insurance. The actual and final terms of coverage for all product lines may vary. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Boston, Chicago, Houston, Los Angeles, New York, San Francisco, San Ramon, Stevens Point, Auckland, Brisbane, Hong Kong, Melbourne, Singapore, Sydney and Toronto. For more information, contact [email protected].

The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.



This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Berkshire Hathaway Specialty Insurance. The editorial staff of Risk & Insurance had no role in its preparation.

Berkshire Hathaway Specialty Insurance ( provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, medical stop loss and homeowners insurance.
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