March 31, 2008

The Best Health Care in the World: Part Five: A recap, a few questions, a conclusion and a modest proposal

This series is meant to paint a realistic, well-sourced and objective portrait of American health care early in the 21st century as compared with that of our 29 partners in the Organization for Economic Cooperation and Development (OECD, all of us comprising the most developed democracies in the world), and to examine how workers' compensation fits into that mix. We've done a lot of the former and some of the latter. Now it's time to finish the job.

First, a bullet-point recap. In Parts One through Four we saw that:

  • American per capita health care spending is two and a half times the average in the OECD and 25% higher than our closest competitor, Switzerland.
  • American per capita health care spending on pharmaceuticals is double that of the average in the OECD.
  • We perform more sophisticated testing and surgeries than any other country.
  • Our physicians earn double the compensation of their OECD counterparts.
  • Our hospital stays are 25% shorter and our doctor visits 42% fewer than other OECD citizens.
  • Despite all the spending, we don't live longer and are no healthier than the average among OECD countries.
  • There has been explosive growth in the incidence of Type 2 Diabetes, much of it caused by an epidemic of obesity, and 27% of the per capita increase in our spending on health care since 1987 is attributable to obesity.
  • At nearly 31%, the percentage of obese adults in the US is the highest in the OECD and 25% higher than Mexico, the country that wins obesity's OECD silver medal, yet we been unable either to halt or reverse the growth of obesity in America.
  • Thirty-one percent of our total health care expenditures go toward insurance administrative costs, far more than any other OECD country.
Meanwhile, over on the workers' comp side of things...
It is indisputable that health care costs in America far exceed those for any other OECD country and have been sharply and steadily rising over the last 20 years. Bleak as that portrait is, the situation with health care costs in workers compensation is even more dire:
  • Since 1996, worker' compensation medical treatment costs, representing only 3% - 4% of total US spending on health care, have been rising at twice the rate of those sharply and steadily rising group health costs.
  • We spend significantly more to treat worker injuries than similar injuries in group health, principally because of over-utilization of medical services.
  • Pharmaceutical costs, representing 18% of total incurred losses at the fifth service year, are a large chunk of the ice beneath the water line, the costs that are often hidden and unknowable (When have you ever seen prescription drugs itemized on a loss run?). If you are an employer, ask yourself these questions: Do you have any idea of the prescription drugs your injured workers are taking? Do you have any idea of the extent to which your injured workers are being prescribed narcotics, such as OxyContin, Actiq, Fentora, Duragesic, even Vicodin? If not, you need to have an immediate talk with your insurer and your Pharmacy Benefit Manager. It's that important.
None of us can do much about the ridiculous costs of health care in America today. To quote Hercule Poirot, the problem is "a many-headed Hydra." But employers and insurers can do something about the ridiculous costs of health care in workers' compensation. What, you say?

At the end of this five-part series, here is a conclusion and a modest proposal, which to many will seem trite, even pedestrian, but 24 years working with more than 4,000 clients guarantees it works:

Conclusion: medical costs grow as indemnity costs grow, because injured workers stay out of work longer than is medically necessary.

The modest proposal: A caring, aggressive, systemic, performance-oriented and measured program that focuses on a) preventing injuries from occurring in the first place and b) if injuries do occur despite your best efforts, bringing injured employees back to work in some medically approved capacity of temporary modified duty as quickly as possible. This early return to work will keep injured workers connected to the workplace and the ingrained routine of getting up, getting dressed and going to work every day. Absent that, the injured worker will stay at home where he or she will create a new routine of staying out of work and making up his or her own, stay-at-home modified duty program. If I were injured and could not go to work because my employer had nothing for me to do, that's what I would do, and so would you. And that does not have to happen.

It's a lot of work, but it's as simple as that.

I've enjoyed writing this series. I hope it's given you something to think about.

| 1 Comment

1 Comment

"medical costs grow as indemnity costs grow"

I'll admit that I've never done research in this specific area, so perhaps this isn't a qualified critique, but I'd like to see some sort of data to back up this claim. I had always heard that indemnity costs decrease as medical costs increase, because (theoretically) the increased medical intervention can help heal the worker faster and thus get the worker back to work quicker.

I'm certainly not naive, and I know that this theory is supposing that the increased medical treatment is effective. Sometimes it is and sometimes it isn't, so perhaps both theories are true.

Subscribe

Submit your email to be notified when this site is updated

Need help with your workers' comp program?

Monthly Archives

About this Entry

This page contains a single entry by Tom Lynch published on March 31, 2008 7:49 AM.

Fodder for a Friday: Injured Workers and Injured Soldiers was the previous entry in this blog.

Health Wonk Review is posted; plus, weekly news roundup is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

OpenID accepted here Learn more about OpenID