As reported earlier this week by Nancy Grover in Risk and Insurance, workers’ compensation payers are losing billions in unnecessary costs. Her article focused in on the presentation given at the annual Workers’ Compensation Education Conference in Orlando, Florida by Richard Victor, the executive director of the Workers’ Compensation Research Institute (WCRI).
Victor said that nearly $9 billion in the workers’ comp system is spent on unnecessary medical costs, and represents the pro rata share of $765 billion of unnecessary medical costs spent in the general health care system. He also stated that unnecessary care and unnecessarily high or low costs were among the prime culprits for wasted spending in workers’ comp.
Some of the examples of unnecessary care that drives up costs are some opioids, as I have written about before, and will not address here, and surgeries.
The other culprit was prices, and a study of the prices paid for nonhospital services provided in the first half of 2012 showed difference between states. While the article did not address hospital services, it is safe to assume that such services are also part of the problem, as we have discussed in earlier posts.
According to Victor, “The medical prices in Wisconsin, Indiana, and New Jersey were about double the prices in California, Florida, and North Carolina.”
Prices that are too high are to blame for driving up costs unnecessarily; so too are prices that are too low and may reduce the number of providers willing to treat injured workers. Again, since we are only talking about nonhospital services, we can only speculate on those hospital costs that are too low and may reduce the number of domestic providers to treat injured workers.
This where medical tourism can be implemented into workers’ compensation, provided that prices are transparent and quality is equal to or better than what is available in the US. Not considering alternatives to high costs and low costs that reduce the number of treating physicians is not only a bad idea; it is the definition of crazy.
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