A preliminary investigation of the effects of a provider network on costs and lost-time in workers' compensation

OBJECTIVE: We sought to compare lost-time days and average and median workers' compensation claims costs between injured workers managed by OMNET Gold (OG) physicians and those managed by physicians not participating in OG. OG is a statewide health care provider network coordinated by occupational medicine physicians and established by the Louisiana Workers' Compensation Corporation (LWCC) to manage the medical care of injured workers. METHODS: We identified and contrasted 158 lost-time claims managed by OG physicians and 1,323 claims managed by physicians not participating in OG during the first year of network operation (August 1, 2003 to July 31, 2004). RESULTS: The average and median costs for a non-OG claim was $12,542 and $5,793, whereas the average and median costs for an OG claim was $6,749 and $3,015. The average and median number of lost-time days for an OG claim was 53.4 and 34.0 and 95.0 and 58.0 for a non-OG claim. The mean differences were statistically significant. CONCLUSIONS: A small network of physicians may have an effect on the duration of lost-time and workers' compensation costs.     

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.     

Workers' compensation fraud and the physician

Some individuals in the health care system base their actions primarily on individual economic incentives rather than ethical and societal standards. These actions are considered fraudulent when they can be proven to have violated specific laws or statutes and can impact workers' compensation costs. Physicians and other health care providers involved in the management of workers' compensation claims may have little ability to affect employer or insurer fraud. Ethical and efficient practice style, in conjunction with the maintenance of clarity and objectivity in the evaluation of patient symptoms, can help to reduce the degree to which provider and patient fraud is allowed to develop and flourish. In understanding the factors that promote fraudulent behavior and being able to recognize and manage such behavior, health care providers may impact the perpetuation of fraud and its impact on the workers' compensation system.     

Work-related eye injuries among union carpenters

Union administrative records were combined with workers' compensation data to identify a cohort of 12,958 active union carpenters, their person-time at risk, and their documented work-related eye injuries between 1989 and 1995 in the state of Washington. The injuries were described using ANSI codes for injury nature, type (mechanism), and source or object associated with the event. Injuries which resulted in paid lost time from work were also described based on the ICD-9 codes attached to claims for their medical treatment. Overall rates of filing compensation claims for eye injuries as well as age, gender, and union local specific rates were calculated. To identify high risk subgroups and explore incident and recurrent events, the person-time and events were stratified by age, gender, time in the union, claim status, and predominant type of work of the union local with which each carpenter was affiliated for multivariate analyses with Poisson regression. Eye injuries were responsible for 12 percent (n = 1730) of workers' compensation claims during this time period, exceeded only by back and finger injuries. Thirty-one claims resulted in paid lost time from work and these cases accounted for one-third of all costs for medical care for eye injuries. At least 10 percent of all medical costs for eye injuries and 35.5 percent of medical costs for eye injuries which resulted in paid lost time were associated with injuries sustained while hammering--a very common carpenter exposure. Claims were filed at an estimated rate of 6.1 per 200,000 hours worked. Individuals with previous compensation claims for eye injuries had rates of injury 1.6 times higher than individuals without previous eye injuries. Rates decreased significantly with age and time in the union. Eye injuries among these union carpenters were very common, but the rate of injuries severe enough to require paid time off work was quite low. These findings raise questions about factors which might influence the failure to use appropriate protection including availability and acceptability of eye protection, use by peers, and perception of risk.     

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 social consequences of occupational injuries and illnesses

BACKGROUND: Most outcome studies of occupational injuries and illnesses have tended to focus on direct economic costs and duration of work disability. Rarely have the broader social consequences of work-related disorders or their impacts on injured workers' families, coworkers, and community been investigated. This paper examines a wide range of social consequences including workers' psychological and behavioral responses, vocational function, and family and community relationships. METHODS: Literature review and development of conceptual framework. RESULTS: Complex and multifactorial relationships are described whereby occupational injuries and illnesses produce a variety of social consequences involving filing and administration of workers' compensation insurance claims, medical care experiences, domestic function and activities of daily living, psychological and behavioral responses, stress, vocational function, rehabilitation and return to work, and equity and social justice. CONCLUSION: A research agenda is proposed for guiding future investigations in this field.     

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 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 costs: still a challenge

The workers' compensation system in the United States, comprised of independent state based and national programs for federal workers, covers approximately 127 million workers and has evolved and grown since its inception in 1911. Coverage has significantly broadened in scope to allow for the inclusion of most occupational injuries and illnesses. The cost of workers' compensation care has also increased. Some of the cost drivers have been identified,and various approaches have been taken to address medical cost containment. There is a need to balance cost control with ensuring benefit adequacy and quality of medical care. It is likely that managing workers' compensation costs will continue to be a challenge in the foreseeable future. The cost of workers' compensation care affects all stakeholders including workers, employers,providers, state workers' compensation regulators, legislatures,and insurers. A continued commitment to quality, accessibility to care, and cost containment, and being alert to emerging issues that can affect these elements, will help ensure that workers are afforded accessible, high quality, and cost-effective care.     

Ten years' experience using an integrated workers' compensation management system to control workers' compensation costs

This work presents 10 years of experience using an Integrated Workers' Compensation Claims Management System that allows safety professionals, adjusters, and selected medical and nursing providers to collaborate in a process of preventing accidents and expeditiously assessing, treating, and returning individuals to productive work. The hallmarks of the program involve patient advocacy and customer service, steerage of injured employees to a small network of physicians, close follow-up, and the continuous dialogue between parties regarding claims management. The integrated claims management system was instituted in fiscal year 1992 servicing a population of approximately 21,000 individuals. The system was periodically refined and by the 2002 fiscal year, 39,000 individuals were managed under this paradigm. The frequency of lost-time and medical claims rate decreased 73% (from 22 per 1000 employees to 6) and 61% (from 155 per 1000 employees to 61), respectively, between fiscal year 1992 and fiscal year 2002. The number of temporary/total days paid per 100 insureds decreased from 163 in fiscal year 1992 to 37 in fiscal year 2002, or 77%. Total workers' compensation expenses including all medical, indemnity and administrative, decreased from $0.81 per $100 of payroll in fiscal year 1992 to $0.37 per $100 of payroll in fiscal year 2002, a 54% decrease. More specifically, medical costs per $100 of payroll decreased 44% (from $0.27 to $0.15), temporary/total, 61% (from $0.18 to $0.07), permanent/partial, 63% (from $0.19 to $0.07) and administrative costs, 48% ($0.16 to $0.09). These data suggests that workers' compensation costs can be reduced over a multi-year period by using a small network of clinically skilled health care providers who address an individual workers' psychological, as well as physical needs and where communication between all parties (e.g., medical care providers, supervisors, and injured employees) is constantly maintained. Furthermore, these results can be obtained in an environment in which the employer pays the full cost of medical care and the claimant has free choice of medical provider at all times.     

The relationship between attorney involvement, claim duration, and workers' compensation costs

OBJECTIVE:: To determine the relationship between attorney involvement, claim duration and workers' compensation claim costs. METHODS:: We identified and compared 738 claims with attorney involvement and 6191 claims without attorney involvement submitted by individuals injured between August 1, 2003 and July 31, 2004 whose claims were paid by the Louisiana Workers' Compensation Corporation (LWCC). At the time of assessment (March 20, 2006), 97.7% of claims not involving attorneys and 57.5% of claims involving attorneys were closed (resolved). RESULTS:: After controlling for lost time (temporary/total days paid), attorney involvement was associated with consistently higher medical, indemnity and claims handling costs, as well as increasing claim duration (accident date to closing date). CONCLUSION:: Attorney involvement in workers' compensation claims is associated with increasing claims duration and costs.     

Health care utilization of carpenters with substance abuse-related diagnoses

BACKGROUND: Persons in the construction trades in the US have high rates of alcohol and substance abuse. We had the unique opportunity to evaluate health care utilization through private insurance and workers' compensation for a group of carpenters at high risk of injury and substance abuse. METHODS: We identified a cohort of union carpenters. Their claims for medical care through union insurance and workers' compensation, and appropriate measures of time at risk were documented. Using methods of indirect standardization, we compared utilization and costs between carpenters with and without alcohol and substance-abuse related diagnoses (ASRD). RESULTS: Through private insurance, those with ASRD had 10% higher outpatient utilization and 2.1 times higher rates of hospitalizations for injury care; 2.6 times higher rates of outpatient care; and 2.9 times higher inpatient admissions for non-injury care. Individuals with ASRD had only modestly increased rates (10%) of outpatient utilization through workers' compensation. CONCLUSIONS: These findings support the need for alcohol and drug abuse prevention and treatment services for this workforce. Operationalizing this among highly mobile workforces, such as the construction trades, is a challenge. While not intending to minimize the problems of alcohol or substance abuse on the job among carpenters, the focus of prevention should not necessarily be in the workplace.     

Work-related burns in Washington State, 1994 to 1998

This article describes an investigation of work-related burns in Washington State during 1994-1998. Workers' compensation data were used to describe the general characteristics of burn injuries, estimate industrial claims rates, and compare nonhospitalized and hospitalized burn cases. The completeness of workers' compensation data as a source for surveillance was evaluated. During 1994-1998, a total of 20,213 burn claims were accepted by the workers' compensation system. Hospitalized burn cases represented only 1.5% of burn claims but incurred 55% of the costs. In addition, workers' compensation data underestimated the frequency and rate of burns. Although workers' compensation claims rates decreased during 1994-1998, work-related burns remain a problem in Washington State. Several industries (e.g., roofing, foundries, and aluminum smelting) were identified as priorities for prevention of burn hospitalizations, which incur the greater cost and time loss.     

Use DM strategies to reign in out-of-control workers' comp costs

A medical director who manages a large national health plan's workers' comp cases claims appropriate standards of care are not applied to workplace injuries and costs are out of control as a result. But there is some good news: Managed care organizations could reap huge benefits if they applied disease management methods to workers' comp cases.     

The integration movement in California's workers' compensation market

Over the past two decades the California workers' compensation industry has been responding to rapidly rising medical costs. The first response was to attempt to adopt principles of managed care; the second, to increase efficiency by integrating activities, first within companies, then between companies and providers, and finally across companies providing both group health and workers' compensation. This article chronicles the integration movement, analyzes the forces driving it, and discusses how contradictory government incentives have both propelled and hindered integration.     

An epidemiological and risk analysis of Virginia workers' compensation burn claims 1999 to 2002: identifying and prioritizing preventive workplace interventions

OBJECTIVE: This study examines workers' compensation burn claims from Virginia to assess risk factors and costs associated with occupational burn injuries. METHODS: Virginia workers' compensation burn claims for the period of 1999 to 2002 were analyzed. Claim rates were determined by using the Bureau of Labor Statistics' Current Population Survey for the working population of Virginia. RESULTS: There were 5810 burn claims reported for the 4-year period examined, with the average burn rate estimated to be 4.3 per 10,000 workers. The total cost of claims was found to average $11,705,939 per year and $8059 per claim. There was over a sixfold increase for burn rates on weekends relative to weekdays. CONCLUSION: Burns are a common injury experienced by workers and are often severe. Assessing personnel issues affecting weekend employees may lead to valuable preventive interventions to reduce burn risk.     

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.     

The effects of medical group practice and physician payment methods on costs of care

OBJECTIVE: To assess the effects of payment methods on the costs of care in medical group practices. DATA SOURCES: Eighty-six clinics providing services for a Blue Cross managed care program during 1995. The clinics were analyzed to determine the relationship between payment methods and cost of care. Cost and patient data were obtained from Blue Cross records, and medical group practice clinic data were obtained by a survey of those organizations. STUDY DESIGN: The effects of clinic and physician payment methods on per member per year (PMPY) adjusted patient costs are evaluated using a two-stage regression model. Patient costs are adjusted for differences in payment schedules; patient age, gender, and ACG; clinic organizational variables are included as explanatory variables. DATA COLLECTION: Patient cost data were extracted from Blue Cross claims files, and patient and physician data from their enrollee and provider data banks. Medical group practice data were obtained by a mailed survey with telephone follow-up. PRINCIPAL FINDINGS: Capitation payment is correlated with lower patient care costs. When combined with fee-for-service with withhold provisions, this effect is smaller indicating that these two clinic payment methods are not interchangeable. Clinics with more physician compensation based on measures of resource use or based on some share of the net revenue of the clinic have lower patient care costs than those with more compensation related to productivity or based on salary. Salary compensation is strongly associated with higher costs. The use of physician profiles and clinical guidelines is associated with lower costs, but referral management systems have no such effect. The lower cost clinics are the smaller, multispecialty clinics. CONCLUSIONS: This study indicates that payment methods at both the medical group practice and physician levels influence the cost of care. However, the methods by which that influence is manifest is not clear. Although the organizational structure of clinics and their use of managed care programs appear to play a role, this influence is less than expected.     

Reducing workers' compensation costs

Employers can reduce their workers' compensation costs by encouraging internal communication and education before and after injuries occur. Comprehensive workers' compensation programs can be developed by integrating the management of employee benefits and workers' compensation claims.