Controlling workers' compensation medical care use and costs through utilization management.

Little is known about the performance of utilization management (UM) programs, which are now widely used within the workers' compensation system to contain medical costs and improve quality. UM programs focus largely on hospital care and rely on preadmission and concurrent reviews to authorize hospital admissions and continued stays. We obtained data from a large UM program representing a national sample of 9319 workers' compensation patients whose medical care was reviewed between 1991 and 1993. We analyzed these data to determine the denial rate for hospital admission and outpatient surgery and the frequency of length-of-stay restrictions among hospitalized patients. The denial rate was approximately 2% to 3% overall, but many of the denials were later reversed. On average, the UM program reduced the length of stay by 1.9 days relative to the number of days of care requested. The estimated gross cost savings resulting from reduced hospitalization time and decreased outpatient care was approximately $5 million. UM programs may offer a viable approach to cost containment within the workers' compensation system. Their value as a tool to improve the quality of care for workers' compensation patients remains to be demonstrated.     

Workers' compensation reform

Workers' compensation reform efforts respond to the competing interests of business, labor and insurers. Early reforms expanded programs in response to inadequate benefits and coverage while in the 1980s and 1990s states responded to increasing costs by tightening fee schedules, limiting physician choice, restricting eligibility,lowering benefits, and integrating managed care into workers' compensation. Although managed care has resulted in significant medical savings, the cost of workers' compensation is again rapidly increasing in some states, where workers' compensation legislation is again at the center of debate. Increasing the use of treatment guidelines, placing limitations on use of services, developing more objective criteria for determining level of disability, and streamlining dispute resolutions have been offered as solutions. Controlling costs alone, however, cannot solve other problems of workers' compensation. Future reform efforts will need to focus not only on the costs of the system but also its inclusiveness and support of the workers and their families it was intended to protect.     

Workers' compensation managed care: Preliminary findings

The cost of providing care that is effective to return injured workers to the workplace has risen in recent years in a manner that appears to be out of control in the workers' compensation system. In turn, medical care costs are an important component of the rapidly increasing costs of workers' compensation insurance. A model of health care delivery that emphasizes early intervention and return to work is presented. This model focuses on providing aggressive treatment of injuries that historically have been reported to be extraordinarily expensive. This paper is a case study of a managed care treatment model and presents costs of treatment in the first year of utilization. Medical care costs of 295 cases are compared with state and national figures and are found to be substantially better, especially with regard to soft tissue injuries and injuries that involve days lost from work.     

Workers' compensation claims from latex glove use: a longitudinal analysis of Minnesota data from 1988 to 1997

Allergic reaction experienced by health care workers from latex glove use has increasingly become the focus of researchers evaluating occupational sources of injury in health care settings. Many studies have attempted to estimate the prevalence of latex sensitization among health care workers by using various methods, but the findings have been inconsistent and do not predict reactivity. This study used workers' compensation data from Minnesota from 1988 to 1997 to assess allergic reactivity rates, injury severity, and costs associated with latex allergic reactions. The average reactivity rate was 7.1 claims per 100,000 health care workers, and total cost associated with the claims averaged $0.295 per health care employee. Using empirical cost data from another study, it was found that it is not cost-beneficial for health care institutions to globally adopt latex glove-free policies solely on the basis of workers' compensation costs.     

Access to medical care for occupational disorders: difficulties and disparities

Despite state laws guaranteeing full insurance coverage for work-related disorders, many injured workers have difficulty obtaining access to appropriate medical care. Barriers to access arise because: patients are unable to prove that their conditions are caused occupationally; they are discouraged by employers from reporting occupational injuries; workers' compensation insurance carriers aggressively contest claims; and other reasons. Evidence suggests that minority subpopulations of workers are most affected. Overcoming these barriers will require a multifaceted approach involving regulatory oversight, participation of workers in the design of health plans and the selection of providers, and specific measures to detect and prohibit discriminatory care.     

Medical costs in workers' compensation insurance

We examine whether patients covered by workers' compensation insurance, which covers the cost of medical care for injured workers without cost sharing and with relatively little oversight, are charged more for treatment or receive more services than patients covered by traditional insurance. Our findings indicate that workers compensation recipients are charged more for treatment. This difference persists in individual services--workers' compensation recipients are charged more per X-ray and per examination than our patients. We consider different explanations and argue that price discrimination probably plays a role.     

Service quality assessment of workers compensation health care delivery programs in New York using SERVQUAL

Preferred provider organizations (PPOs) provide healthcare services to an expanding proportion of the U.S. population. This paper presents a programmatic assessment of service quality in the workers' compensation environment using two different models: the PPO program model and the fee-for-service (FFS) payor model. The methodology used here will augment currently available research in workers' compensation, which has been lacking in measuring service quality determinants and assessing programmatic success/failure of managed care type programs. Results indicated that the SERVQUAL tool provided a reliable and valid clinical quality assessment tool that ascertained that PPO marketers should focus on promoting physician outreach (to show empathy) and accessibility (to show reliability) for injured workers.     

Occupational disease and workers' compensation: coverage, costs, and consequences

Most of the costs of occupational disease are not covered by workers' compensation. First, the authors estimated the deaths and costs for all occupational disease in 1999, using epidemiological studies. Among the greatest contributors were job-related cancer, chronic respiratory disease, and circulatory disease. Second, the authors estimated the number of workers' compensation cases, costs, and deaths for 1999, using data from up to 16 states representing all regions of the country. Unlike the epidemiological studies that emphasized fatal diseases, the workers' compensation estimates emphasized nonfatal diseases and conditions like tendonitis and hernia. Comparisons of the epidemiological and workers' compensation estimates suggest that in 1999, workers' compensation missed roughly 46,000 to 93,000 deaths and 8 billion US dollars to 23 billion US dollars in medical costs. These deaths and costs represented substantial cost shifting from workers' compensation systems to individual workers, their families, private medical insurance, and taxpayers (through Medicare and Medicaid). Designing policies to reduce the cost shifting and its associated inefficiency will be challenging.     

Barriers to workers' compensation and medical care for injured Personal Assistance Services workers

OBJECTIVES: We documented barriers to workers' compensation and injury-related medical care faced by homecare or Personal Assistance Services (PAS) workers. We explored differences between independent providers and agency-employed workers. METHODS: We conducted in-depth, semi-structured interviews with a diverse sample of 38 injured workers. Participants were primarily female and racial-ethnic minorities. RESULTS: Most participants (82%) were independent providers. Common barriers to reporting injury included commitments to clients and financial pressure. Unlike agency employees, many independent providers knew little about workers' compensation eligibility and injury reporting procedures, and frequently were given "the runaround" by the social service bureaucracy when they attempted to report injury and access injury-related medical care. Among independent providers, delays in filing a claim and receiving timely medical attention were common. CONCLUSIONS: The lack of a traditional employment infrastructure has important implications for vulnerable workers' health and the sustainability of consumer-directed PAS programs. We provide recommendations for improving workers' access to workers' compensation and injury-related medical care.     

Medical costs and sources of payment for work-related injuries among Hispanic construction workers

OBJECTIVE: To assess medical costs of occupational injuries and sources of payment among Hispanic and non-Hispanic construction workers. METHODS: More than 7000 construction workers, including 1833 Hispanic workers were examined using the Medical Expenditure Panel Survey, 1996 to 2002. Univariate and multivariate analyses were conducted using SUDAAN. RESULTS: Annually, work-related injuries in construction cost $1.36 billion (2002 dollars), with 46% paid by workers' compensation. Compared with non-Hispanic workers, Hispanic workers were 53% more likely to have medical conditions resulting from work-related injuries, but 48% less likely to receive payment for medical costs from workers' compensation (P < 0.05). CONCLUSIONS: This study suggests an urgent need to reform the current workers' compensation system to reduce the burden shifted to injured workers and society. Such reforms should include easier access and more assistance for Hispanic and other immigrant workers.     

Factors influencing the costs of workers' compensation

This article presents several factors believed to have shaped the costs of workers' compensation. Of these factors, the most notable influence on claims severity is related to the way medical care is delivered to treat occupational injuries and illnesses. Although medical care providers may have some influence on the other factors responsible for increased claims severity, such as attorney costs and differences in state workers' compensation laws, they have a tremendous impact on the way medical care is delivered and its resultant costs. This places physicians, nurse practitioners,physical therapists, chiropractors, nurses, and physician assistants in a unique role of being able to assist US business in improving productivity through a reduction in workers' compensation costs.     

Managing workers' compensation costs: success of initiatives to change outcomes

The cost of workers' compensation health care has been a challenge during the past few decades. Various programs have been initiated on the local, state, and national levels to address this issue. The purpose of this article is to examine some of the programs that have initiated cost control measures. Most of those published claim successful outcomes. The initiatives reviewed herein were instituted at medical centers in Maryland and Pennsylvania, at casino hotels in Nevada, at an occupational health clinic in Ohio, at an electrical union in New York State, and at an insurance company. Initiatives in Minnesota and Washington State are also described. Sharing the outcomes of initiatives may allow such research to be translated into action on a broader scale.     

The Workers' Compensation System: Worker friend or foe?

BACKGROUND: The workers' compensation system was designed to help injured workers who have substantial medical expenses and perhaps have lost a great deal of income. This study determines both similarities and differences in how workers experience their interactions with the workers' compensation systems in Florida and Wisconsin. METHODS: Ethnographic open-ended interviews with 204 workers from Florida and 198 workers in Wisconsin were conducted. All the workers had back injuries in 1990 and were either paid workers' compensation temporary disability benefits for at least 4 weeks or received permanent disability benefits or compromise settlements. RESULTS: Some interactions with the workers' compensation system were positive. However, the majority of respondents in both states experienced their encounters with the workers' compensation system as cumbersome, frustrating, and demeaning. CONCLUSIONS: Mistrust, stigmatization, payment delays, and refusal of insurer personnel to pay benefits contribute to workers' negative experiences with the workers' compensation system. These insurer behaviors raise the costs to injured workers of workers' compensation benefits and thus may reduce the propensity of eligible workers to apply for benefits.     

Assessing latex allergy among health care employees using workers' compensation data

Latex allergies among health care workers have garnered considerable attention from medical researchers and practitioners. However, the majority of research on natural rubber latex allergy has focused on clinical methodologies and emphasized the quantification of employee sensitization rates as opposed to actual incidents of reactivity. Workers' compensation data provide information on the number and impact of reactions to latex use. This article presents an analysis of health care workers' compensation data from North Dakota to estimate the prevalence, costs, and nature of claims associated with latex allergic reaction. The results show an annual average claim rate of 1.52 per 10,000 health care workers employed in the state, and annual costs averaging about $.08 per health care worker. Skin disorders were the most commonly reported condition. These findings are compared with previous studies of Minnesota and Rhode Island and demonstrate similar results.     

The Washington state workers' compensation system: a case study

Washington State workers' compensation has researched applying managed care in workers' compensation through a series of research projects. In 1995 and 1996, the managed care project evaluated the impact of managed care on medical outcomes, patient satisfaction, and the cost control of medical care and disability. The managed care project also evaluated the long-term outcome of the cases by reviewing the participants 2 years after the injury. Finally,the managed care project evaluated the satisfaction of the employer with managed care. The Department of Labor and Industries Centers of Occupational Health and Education project currently is evaluating the impact of an occupational medicine-directed,education-oriented, protocol-guided pilot project.     

Reexamining workers' compensation: a human rights perspective

Injured workers, particularly those with more severe injuries, have long experienced workers' compensation systems as stressful and demeaning, have found it difficult to obtain benefits, and, when able to obtain benefits, have found them inadequate. Moreover, the last two decades have seen a substantial erosion of the protections offered by workers' compensation. State after state has erected additional barriers to benefit receipt, making the workers' compensation experience even more difficult and degrading. These changes have been facilitated by a framing of the political debate focused on the free market paradigm, employer costs, and worker fraud and malingering. The articles in this special issue propose an alternate framework and analysis, a human rights approach, that values the dignity and economic security of injured workers and their families.     

Proposal to reimburse occupational medicine disease and injury claims through third party health insurance

The current system of compensation for the medical costs of occupational illnesses and injuries, a component of health insurance coverage for most workers in the United States, has recently come under scrutiny in the national health care reform debate. The cost of treatment of these conditions is significant, and there exist numerous disincentives for physicians and patients to use the workers' compensation system. Physicians who treat workers with occupationally related diseases may find compensation for a condition is disputed at the same time that it is excluded from payment by third party insurance coverage, leaving the patient selectively uninsured for at least some medical care services. In addition, most workers' compensation programs have been designed in a way that discourages efficient resource use by providers and claimants. We propose allowing health care providers to bill third party health insurers for all care, including work-related diseases and injuries. Insurers, in turn, would bill workers' compensation programs for associated treatment costs. The potential advantages of such a system include reductions in inefficiency and unfair burdens placed on providers and patients, in reporting bias, and in administrative costs balanced against the risks of insurers excluding workers in high risk occupations from obtaining low cost health insurance and shifting away from employers the administrative burden for workers' compensation.     

The effects of economic reform on health insurance and the financial burden for urban workers in China.

Since 1980, Chinese enterprises have been undergoing reforms in employment practice, taxation, and workers' health/welfare benefits coverage. In particular, Chinese businesses have been facing a major challenge with respect to the financial burden of providing medical benefits to their workers. The purpose of this paper is to analyse the impact of enterprise reform on workers' health care benefits and their financial burden due to medical expenses. This study is based on a 1992 survey conducted in 22 cities, and included 406 enterprises and 5920 workers. It was found that there were wide variations of coverage for health care benefits among urban Chinese workers. It was also found that workers with partial coverage were as likely to incur out-of-pocket medical expenditures as workers without coverage. These out-of-pocket medical expenditures could reach as high as 25% of a worker's annual income. Policy recommendations are discussed at the end of the paper.     

Workers' compensation reform in New York State: A proposal to address medical,ergonomic, and psychological factors associated with work disability

This paper presents testimony before the New York State Assembly Joint Hearings on Workers' Compensation. The testimony first establishes the background of the speaker in relation to the problems in the workers' compensation system. A brief summary of the problem including the increased prevalence of work-related musculoskeletal disorders and their contribution to work disability, the rising costs of insurance premiums, indemnity, and medical costs, and the percentage of payroll that workers' compensation costs consume in New York State is then presented. A review of problems injured workers and health care providers face is also considered. Following this, two proposals that represent a compromise position in relation to business and labor concerns are presented. The first relates to the implementation of state mandated prevention programs to reduce the risk of injury/illness and associated disability in areas accounting for the majority of the workers' compensation injuries/illnesses—low back and upper extremity disorders. It is proposed that individual employers receive incentives in the form of premium savings based upon actual program outcomes. The second proposal relates to the establishment of mutually agreed upon standards of health care for low back and upper extremity disorders similar to what currently exists in Minnesota. The potential benefits of these plans are discussed in relation to increasing costs and human suffering associated with work-related injuries/illness and disability. This paper is presented as an example of an approach to advocacy that health care providers can take to contribute to reform in the workers' compensation systems of their own states.     

Occupationally acquired HIV: the vulnerability of health care workers under workers' compensation laws.

Approximately 800,000 needlesticks and other sharp injuries from contaminated medical devices occur in health care settings each year, of which an estimated 16,000 are contaminated by human immunodeficiency virus (HIV). Health care workers who are occupationally infected by HIV are at risk of being left without workers' compensation coverage. In some states, the definition of an occupational disease is so restrictive that infected health care workers are unlikely to qualify for benefits. For those who are able to meet the definition, compensation is often inadequate. Recourse is also limited by statutory provisions that preclude health care workers from bringing civil suits against their employers. We recommend the amendment of legislation to provide more equitable remedies, including: (1) broadening the definition of occupational disease; (2) eliminating provisions that require a claimant to prove that (a) a specific occupational incident resulted in infection and (b) HIV is not an ordinary disease of life; (3) expanding the time for filing a claim; (4) assuring that lifetime benefits will be provided to the disabled health care worker; and (5) assuring that claims will remain confidential.