WCRI exec looks at medical, other comp costs in light of economic climate
The data is included in the latest Medical Price Index for Workers' Compensation from the Workers Compensation Research Institute. The Cambridge, Mass.-based research organization examined medical prices paid in 25 large states from calendar year 2002 through June 2010 for nonhospital, nonfacility services billed by physicians, physical therapists, and chiropractors.
"States that have fee schedules have lower prices and slower rates of growth than states that don't have fee schedules," said Dr. Richard Victor, WCRI's executive director. "In most of the states with no fee schedules, workers' comp medical prices rise just like they do in the commercial world."
The MPI-WC focuses on the prices paid for medical care that injured workers receive. It is designed to help policymakers and others in the workers' comp system better understand the growth in medical costs per claim per state.
The medical services included in the study are: evaluation and management, physical medicine, surgery, major radiology, minor radiology, neurological testing, pain management injections, and emergency care. The states included represent more than three-quarters of the workers' comp benefits paid in the U.S.
In WCRI's analysis, Wisconsin had the highest prices for nonhospital services, at more than twice the price in the 25-state median and nearly 50 percent higher than the median of the six states with no fee schedules. Prices also grew more rapidly in Wisconsin compared to the other states, with a 42 percent growth rate compared to 11 percent for the median.
Following Wisconsin, the states with the highest medical costs ranked as follows:
- New Jersey.
Of the top eight, only Illinois and Connecticut had fee schedules. "These [results] are from before Illinois' most recent change," Victor said, in reference to recent legislative reforms that reduced the state's fee schedule. "Connecticut's fee schedule for surgery is among the highest."
Information about WCRI's study comes as Victor and other workers' comp analysts ponder the overall effect of the current economic environment on the workers' comp system. Medical cost increases may be one effect of what Victor has referred to as the "elephant in the room" -- unemployment.
With 25 million people either unemployed or underemployed, injured workers will likely find it more difficult to return to their jobs, pushing up workers' comp costs overall. But if the first 100 years of the workers' comp system have taught us anything, Victor says it is that participants in workers' comp are innovative.
"My guess is that there will be either some big changes to state programs or, more likely, private sector innovation that will help injured workers get back to work," Victor said. "What might those innovations look like? I don't know. . . . It may be within workers' comp agencies leveraging unemployment insurance, job counseling, job searching . . . but I think those paying the bill have the strongest incentives to figure this out."
Victor says he's been told by an official in the federal workers' comp system that at least one agency is helping injured federal workers obtain jobs with other employers and providing some wage subsidy for a finite period of time.
"I think there will be innovation," Victor said. "The opportunities are for it to be a win-win -- the worker to get back to work and the payer to save money."
Read more at the WorkersComp Forum homepage.
December 12, 2011
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