March 11, 2008

The best health care plan in America

In 1986, US workers' compensation medical costs were 44% of total incurred loss dollars. Ten years later, the percentage had grown to 48%. By 2006, medical costs amounted to 58% of total loss costs. And today, nearly a third of the way through 2008, they hover around 60%. The annual workers' comp medical cost rate of growth is nearly double the painfully steep rate of growth in the Group Health arena, and it has been so since 1996 (Source: NCCI and Insurance Information Institute).

And why not? Workers' compensation health care is the best health care plan in America, maybe even the world. Injured employees pay no premiums, co-pays, or deductibles. Prescription drugs are free, and tax-free indemnity payments cover most lost wages. No wonder acute and traumatic injuries cost nearly 50% more than similar injuries in the group health world, according to an NCCI Research Brief (Workers Compensation vs. Group Health: A Comparison of Utilization.)

No wonder chronic, soft tissue, musculoskeletal injuries cost more than double similar injuries in the group health world. And the disparity is probably even more than that, because NCCI could only examine and compare cost data for the first three months following injuries. Why? Because workers' compensation tracks injuries by claim numbers, but group health does not. Therefore, in group health, the further one gets from the date of injury, the harder it is to tie rendered medical services to a particular injury.

It's no secret that over-utilization is the biggest reason that workers' comp medical costs are so much higher than costs in group health. True, on the whole and with some notable exceptions, workers' comp medical fee schedules have caused prices for individual medical services to be only slightly higher than individual services in group health, but in nearly every part of the country workers' comp utilization dwarfs that of group health. Makes you wonder what the workers' comp case management and utilization review companies are actually doing, doesn't it?

The difference here is stark. The group health plans put systemic fences around utilization. Workers' comp does not. If you twist your knee mowing the lawn out in the back forty on a Saturday morning and require arthroscopic knee surgery, your health plan will approve a certain number of visits to a rehab facility after surgery, normally six or seven. After that, you'll need approval for any more. Of course, you can always choose to self-pay. But in the world of workers' compensation, that's one decision you don't have to make.

Because health care utilization and costs have become such large issues in workers' compensation, as well as group health, and because in this frenzied Presidential election season that seems to never end health care has become quite the political football, over the coming days I'm going to examine specific parts of it further. Next up - a bit of analysis of the current mantra all current presidential candidates seem to agree on (some might call it a "lie," but I couldn't possibly go that far), namely, that here in America "we have the best health care in the world."

If only that were true.

| 4 Comments

4 Comments

I would moderately expand your on point analysis to say that the utilization controls in place in many jurisdictions -- UR and treatment guidelines -- are ineffective when they are not taken seriously, and they also by themselves do not address the important issue of what is the best course of treatment for an injury among several plausible alternatives. A case in point: treatment of chronic pain.

What would be nice is a standard treatment plan for the most common injuries. If a physican, due to patient or other considerations, has to deviate, then provide an explanation, clearly documented new plan, and estimated impact- that would be nice.
I agree that over-utilization runs rampant without checks. I look forward to your upcoming analysis Tom! We need to better control medical cost whoile getting the best care to the injured worker.

Best health care in the US? You must not be aware that injured workers often cannot access the medical care that could get them back to work.

Case in point: An injured worker in need of a multi-level fusion. Surgery is approved by UR. Paperwork gets back to adjustor, who denies all but a single level,blaming "degenerative disc" disease. The work injury caused multiple disc fragments to lodge at multiple levels; at that point it really doesn't matter what is or is not going on in the other levels; no surgery would be necessary had the work injury not occured. What the adjustor has really done is SAVE money for the ins. co. and worked towards a higher end of year bonus. An injured worker would get better care if he/she committed murder and went to prison, where even sex change operations are approved.

I could go on ad infinitum, but I won't. Comp. carriers do everything they can do deny care, not provide it. Time you took your head out of the sand.

Andrea - review unfair claims practice laws. In the jurisdictions where I have worked, treatment is provided. If a medical issue arises, the adjuster can only deny payment if differing medical opinions exists - and I would state that upholding a denial of payment is unusual at best by the compensation judges, referees, or commissioners.

The goal is to get the injured worker back to the workforce as close to his pre-injury condition as possible.

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About this Entry

This page contains a single entry by Tom Lynch published on March 11, 2008 9:29 AM.

News roundup: transportation fatalities, managed care, combustible dust, and common WC mistakes was the previous entry in this blog.

Cavalcade of Risk is the next entry in this blog.

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