While the Insider tends to focus on trends relating to workers comp, our esteemed colleague Joe Paduda tracks health care at his Managed Care Matters blog. You don't have to follow health care for very long before it converges on comp. We've been here before and we will be here again.
Health care in this country is already rationed, although you rarely hear that term used. (Here's one doctor not afraid to use it.) Our rationing tool is, quite bluntly, based upon class. Those who can afford health insurance buy it. Those who cannot, don't. The dividing line is not employment: most poor people work, but they still don't have health insurance. They either have employers who don't offer it as a benefit, they work too few hours to qualify for the benefit, or they simply cannot afford it. Nearly 20% of Americans under 65 lack health insurance.
In his September 22 blog, Paduda engages in a hypothetical debate with a libertarian who supports Medical Savings Accounts (MSAs) -- a mechanism by which people are incentivized not to spend their health insurance dollars. Paduda directs us to a paper by the invaluable Kaiser Foundation, which dismantles the MSA approach one vital statistic at a time. Here's the bottom line: most health care expenses are incurred by those who are very ill (gee, that's a surprise!). In fact, 5% of the population burns up over half of all health care dollars. And the sickest 1% account for 40% of the dollars spent. Medical savings accounts would have a trivial impact on this spending, at best.
There are truly ominous trends in health care. Costs continue to go up. In addition to paying higher premiums, insured workers are paying higher deductibles, higher co-pays and more and more for brand name medications. As cost rise, coverage declines. Fewer employers opt to provide health care benefits: in the crucial small employer sector (with between 3 and 199 workers), 68% of employers offered health care back in 2000. In 2004 the percentage dropped to 59%. Beyond that, as costs rise, many people with low incomes are forced to opt out.
In a number of fundamentals, health insurance and workers comp diverge. Health insurance is an option; workers comp is mandatory. The employee portion of health care is free to rise at precipitous rates -- as has been amply demonstrated. In stark contrast, employees never pay a penny for the health care benefits associated with workers comp. To be sure, they are entitled only to payment for treatments directly related to their workplace injuries and illnesses. Nonethless, the treatments are free, prescriptions are free, and injured workers often can collect indemnity benefits while they are disabled.
Does this mean we will see more fraud in workers comp, more instances with employees trying to collect comp for non-work related problems? I don't think so. But we should all be concerned with the overall health of the workforce. On some level, those of us on the workers comp side depend upon the conventional health system to prevent illness, stabilize any non-work related conditions and ensure that our workers are fundamentally sound. It's hardly reassuring to think that uninsured workers are slow to report health problems, reluctant to seek treatment and unable to access preventive care. We can and should have a "best practice" approach to safety in the workplace, but no safety program can compensate for workers in declining health. These vulnerable workers stand at the very spot where the health insurance crisis and workers comp converge.