sam in health ecosystem

Innovation and Change: The 4 Keys To Solving America’s Workers’ Compensation Crisis

Written by George K. Lewis Jr., PhDChief Executive Officer and President, ZetrOZ, Inc.

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The workers’ compensation system in America has become so ineffective and plagued with questionable practices that some experts have deemed it “broken.”

The medical community, insurers, employers, and patients alike complain of feeling trapped in a system where costly, catastrophic cases dominate, becoming unmitigated “train wrecks,” which often could have been more simply resolved.

This sad reality has stakeholders scratching their heads in confusion. How did a system that was originally intended to protect the health and safety of American workers become so intractable, and how can we solve what has become a multi-billion-dollar workers’ comp crisis?

A panel of experts with deep experience in workplace injury, health care, insurance, and pain management tackled the question in a comprehensive discussion of the state of workers’ compensation today. The panel members agreed upon directions that, if adopted, could improve treatment and healing for injured workers while also keeping long-term costs in check for employers and insurers.

All agreed, however, that addressing the worker’s compensation crisis will require innovative approaches, a deeper understanding of diagnosis and worker lifestyle, and a willingness to challenge public policy.

The panel discussion was moderated by Michael Shor, MPH, Managing Director at Best Doctors Occupational Health Institute, and included: Dr. Ralph Ortiz, who is on the Board of Directors and a Founding member of the New York State Pain Society and Founder and Director of Medical Pain Consultants; Robert Woods, Senior Vice President of Energi, Inc, a company that provides risk management and insurance programs; David Cohen, Executive Vice President at Standard Oil of Connecticut, Inc; and Dr. Gerard Malanga, a Rutgers University Clinical Professor of Physical Medicine and Rehabilitation and Medical Director of Horizon Casualty Services, Inc., a subsidiary of Horizon Healthcare Services, Inc.

The resulting insights, summarized in this paper, can be translated into solutions that have the potential to bring the workers’ compensation system back on track, reducing costs and helping patients return to work safely and more quickly. In nothing short of a total paradigm shift, stakeholders in the system must embrace four essential changes to return America’s workers’ comp system to what it was intended to be -- a system that helps injured workers return to work safely. The panel’s recommendations are as follows.


1Eliminate unproven therapies in favor of accurate diagnosis followed by evidence-based treatment.

It’s my opinion that the classic model is not successful due to outdated modes of thinking. The current model of treatment consists of using lots of non-steroidal anti-inflammatories (which are meager in efficacy to begin with), referral to physical therapy that is often perfunctory, with a reliance on passive physical therapy (instead of active physical therapy). For persistent complaints, patients are often provided repeated cortisone injections, which are well known to inhibit tissue healing, rather than trying to regenerate tissue. When these treatments fail, patients then often undergo surgery, with various surgical procedures that have become embedded in classic traditional orthopedic treatment, such as partial meniscectomies (removal of a piece of cartilage in your knee that cushions and stabilizes the joint), and spinal fusion procedures. The current medical literature has demonstrated that in many patients, partial meniscectomy is no better than physical therapy or even sham meniscal surgery. And yet 700,000 partial meniscectomies are performed every year.

-- Dr. Gerard Malanga

Proper diagnosis is closely linked to proper treatment, and providers need to focus more heavily on accurate diagnosis to deliver appropriate care. Yet some 30 percent of patients are misdiagnosed: in the worst cases, what could have been an injury that might heal within weeks with proper treatment can, if improperly diagnosed and treated, snowball into a life-altering, permanent injury that prevents that worker from ever going back to work. Too often, providers choose a conservative intervention in the beginning of a workers’ compensation case, usually due to its low cost. But when applied in the wrong circumstances, conservative treatment can cost more in the long run, as later, more costly treatment is required.


30%of patients are misdiagnosed

2When we’re dealing with a work-related injury we’re dealing with a very specific population – they make a living pushing, pulling & lifting. In our research, it’s a high school education or less. They’re very ill equipped to really understand how to access the medical system, never mind judge what is good care from bad care, so that places a huge burden on what [the insurance company and company] do, in terms of trying to help that injured worker through that process.

-- Michael Shor

Identify at-risk workers early, and invest in wellness as well as sickness.

At the same time, preventing patients from spiraling downward at the onset of injury is crucial. Panelist Robert Woods, Jr., Senior Vice President, Claims Energi, Inc. has discussed his company’s demonstrable success with use of nurse case managers (NCMs) for those entering the workers’ comp system. Energi assigns NCMs to every patient, providing services from filing the claim, helping to guide treatment and care, and accompanying patients to doctor visits. Energi retained Risk Navigation Group, LLC (Risk Navigation) to conduct an analysis of medical management outcomes in two samples of claims. Risk Navigation examined incurred losses to determine if there was a distinction in the disability duration outcomes between two programs, one using NCMs for all claims and the other using NCMs in less than 40 percent of claims. Use of NCMs demonstrated a materially and financially advantageous effect on both overall medical management and, more particularly, a diminution of disability duration in similar

claims. Specifically, “days of disability” were reduced from 316.9 to 85.65 when NCMs were activated from “day one.” According to Woods, “Though some companies consider it an extra cost, nurse case managers have been known to help close workers’ compensation cases at 70 percent of what they would normally cost.”

Another example of a company investing in wellness is Horizon Casualty’s innovative Pain Management Medical Home. Anecdotally speaking, patients with an unhealthy lifestyle (e.g. smokers, overweight/obese, etc.) combined with the psycho-social aspects of negative relationships at work or at home tend to be more likely to have a negative post-injury experience. Strategic new initiatives such as the Pain Management Medical Home approach put people on the best therapeutic course early in their care by implementing a care team approach. The care team consists of a diverse set of healthcare providers, including a Physical Medicine and Rehabilitation physician, a functional rehabilitation provider, and a psychologist. This holistic approach to

the patient’s care applies a biopsychosocial model to health care. Early studies show that patients treated under the Horizon Casualty Services Pain Management Medical Home program, using evidence based medical guidelines, had significantly improved medical outcomes. In addition, there was a statistically significant 50% reduction in medical and wage replacement costs. Variables contributing to lower costs were: fewer steroid injections, fewer physical therapy treatments and no patients discharged on opioid narcotics.


3What is evidence-based medicine? It’s the publications and the journals, but it’s also the his-tory and knowledge of the physician with the different techniques, and the history and goals and desires of the patient. That’s evidence-based medicine.

--Dr. Ralph Ortiz

Embrace innovativetreatment solutions.

The panelists agreed that the physician “quiver” is short on “arrows” when it comes to treating musculo-skeletal pain, the most common form of workplace injury. Today, treatments offered may be limited to what’s reimbursable rather than what might work best for the patient. According to Dr. Ralph Ortiz, “Pills, passive physical therapy and injections only mask the pain – there are newer therapies available, showing real patient improvement - let’s get rid of the red tape, be the innovators and try them.”

Dr. Ortiz is mainly speaking of innovative, new treatments currently available, but not yet considered part of the generally accepted standard treatment protocol (and thus unlikely to be covered) by the insurance industry. However, more progressive workers’ compensation insurers such as Energi are thinking more flexibly. Such companies are allowing patients in some individual cases to have access to new and innovative treatment options where the treatment appears to most likely be successful given the patient’s medical circumstances because they view each injured worker as an individual, and not just another claimant.

Some of the novel therapies that may be useful in some circumstances that were discussed by the Panel include four distinct therapeutics that enhance the human body’s natural healing processes. Although well-supported and researched in the medical community, they are today largely “not covered” by insurance carriers:

ProlotherapyWidely considered the progenitor of each of the following treatments, it is also called proliferation therapy or regenerative injection therapy, a treatment of tissue with the injection of an irritant solution into a joint space, weakened ligament, or tendon insertion to relieve pain.

Platelet-Rich Plasma (PRP) InjectionsAn in-office procedure that uses the body’s own healing mechanisms by injecting the patient at the site of injury with a sample of their own blood enriched for platelets as a means to promote the healing of injured soft tissues.

Sustained Acoustic Medicine (sam®)A portable, wearable FDA cleared medical device that delivers long duration, low-intensity therapeutic ultrasonic energy to relieve pain and muscle spasms, and to increase local circulation that will accelerate the natural healing processes.

Stem Cell Therapy

An in-office procedure using the unique capability of stem cells to differentiate and proliferate into distinct cell types throughout the body; the harvesting of stem cells from bone marrow for reinjecting into the injury site aids the natural repair process for damaged or degenerated tissues and joints.


The Affordable Care Act had one key change that, intentionally or not, had major ramifications for the workers’ compensation industry. Historically, group health and workers’ compensation were billed as “fee for service,” meaning health care providers were reimbursed based on the services provided for a patient (including diagnostics, procedures, office visits, etc.) But post-ACA, workers’ compensation remains fee for service while group health is evolving toward more focus on capitation, in which doctors are reimbursed a lump sum per patient based on their diagnosis and thus must manage the patient’s healthcare within a fixed budget. The result: for patients with chronic degenerative conditions – a bad knee, a bad shoulder, a bad back -- it’s more efficient and more financially sound for insurance and medical professionals if patients can be classified under workers’ compensation because the patient’s cost of care is not capped.

While the primary goal of all stakeholders should be to ensure quality patient care, the financial motivations (where can a provider make the most money) and budget considerations (how can a payer save the most

4When group health squeezes the financial balloon, it’s workers comp that makes upthe difference.

--Michael Shor

Advocate for a paradigm shift that alleviates the implications of current public policy.

money) are real. Says panel participant and employer, David Cohen, “What all involved must keep in mind is, getting a patient back to good health – and work - faster, will always be the ultimate money saver.”

Reversing this trend requires the collaborative efforts of key stakeholders: workers’ compensation insurance carriers, workers’ compensation preferred provider medical networks, employers, and providers. Through productive and transparent collaboration, evidence-based medical care strategies can be established to support diagnostic and therapeutic products and services that deliver high-quality health outcomes. This represents a shift in the workers’ compensation industry from current practice to focus on referring claimants to medical providers that work in collaboration with likeminded providers within metrics based programs that consistently achieve improved medical outcomes at lower cost. Ultimately, this trend may result in a shift from “fee-for-service” to “pay for performance,” in which financial rewards are only realized upon production of quality health outcomes.

Where does the industry go from here? According to the most recent findings from the NCCI (National Council on Compensation Insurance), although claim frequency has generally declined over the last two decades, the severity of claims has continued to increase. And although recent increases in the average medical costs have been more modest than before, the underlying drivers of medical costs “are still present and remain a concern,” the NCCI says.

Beating back those “underlying drivers of medical costs” is in large part the answer to realizing lasting, meaningful reduction in workers’ compensation claims, according to Dr. George K. Lewis, whose progressive medical device company, ZetrOZ, sponsored the panel.

“Insurers, healthcare professionals, employers and medical innovators have to put aside dollars and differences and be open to exploring a combination of therapies - from the tried and true to the new and innovative - that better prevent and treat workplace injury,” Lewis said.

What’s more, the industry must move beyond the comfort zone of treating patients according to old patterns, Lewis and other panelists agreed. All players should take a fresh and unbiased look at evidence-based medicine and adopt a more open attitude to promising new therapies. Taken together, these recommendations have the potential to unlock a bright new future for all who are involved in America’s workers’ compensation system.


About ZetrOZ, Inc.

ZetrOZ develops wearable bio-regenerative devices for the delivery of sustained acoustic medicine, a new treatment form. sam® is an FDA cleared device which provides ultrasonic waves that penetrate 5 cm into the tissue, increasing circulation, oxygen and nutrient delivery, and the removal of waste products, such as lactic acid, from the site of a musculoskeletal injury accelerating the natural healing cascade.

Built on a proprietary miniaturized platform designed for the treatment of acute and chronic musculoskeletal conditions, ZetrOZ devices are clinically proven to enhance tissue recovery, accelerate the body’s natural healing processes, and relieve pain. Since the company’s founding in 2009, ZetrOZ has successfully applied this innovative technology to the development of two products now available on the market: sam®, an FDA approved device, and UltrOZ™ Elite for the maintenance and rehabilitation of equine athletes. For more information, visit www.zetroz.com.

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