An Alternative to High Cost Surgeries for Workers’ Compensation Claims under Wrap-Up Programs

Introduction

Are you a Contractor or an Owner who has a CCIP or OCIP program? Are you concerned about rising workers’ compensation claims costs? Do you worry about the high cost and poor quality outcomes of surgeries for injuries sustained on the job by your employees, your contractors’ employees, your sub-contractors’ employees, that end up costing you more money when premium audits and insurance renewals come around, and that impact your claims severity and Experience Mod? If you answered yes to these questions, this article is for you.

This is not a sales pitch, nor is it an advertisement for any particular product or service. What it is, is a way for you as a businessperson to learn about an alternative to high cost and poor quality medical care for injured workers that will actually save you and your insurance company money, which in the long-run will be beneficial to you, your carrier, your employees or your contractors’ employees.

Medical Tourism

The alternative I am proposing is called many names; some people call it “Medical Tourism”, others call it “Medical Travel”, or “Health Travel”, or other similar names. For sake of convenience, we will call it Medical Tourism, despite the vacation-linked connotation the word “tourism” has. People are travelling all over the world seeking health care that is lower cost and with equal or better quality than what they can get at home for a myriad of procedures and treatments, mostly either not covered by private health insurance or unavailable in their country.

The hospitals and clinics in these countries are accredited by the Joint Commission International (JCI), the international arm of the Joint Commission, which accredits US hospitals and other medical facilities. The doctors in most of these facilities have either been trained in the US, or in other Western countries, and the facilities are equipped with the latest medical technology found in today’s American hospitals.

For over the past year, I have been writing a blog about implementing medical tourism into workers’ compensation because I believe that it can offer lower cost and high quality medical care to injured workers. Having now written over eighty blog articles on the subject, with topics ranging from Employee/Employer Choice, Immigration Reform, Rising Hospital Costs, and how workers’ compensation is charged more for certain surgeries that general health care is being charged for the same exact surgery, I believe that Contractors and Owners such as yourselves should look into this new and growing industry to help you save money.

The Changing Demographics of the American Workforce

Much of medical tourism involves patients going to countries like India, Singapore, Thailand, and other countries in Asia, Europe, the Middle East, Australia, and even some places in Africa, like South Africa. However, I have been writing about implementing medical tourism for workers’ compensation in this hemisphere, particularly in Latin America and the Caribbean.

This is because the American workforce is becoming more Hispanic and Caribbean, as I have pointed out in an article earlier this year, Immigration Reform on the Horizon: What it means for Medical Tourism and Workers’ Compensation; a portion of that article appears below:

“According to the IIABA White Paper, which cited a Pew Hispanic Center report published in 2006, there are probably 11 to 12 million undocumented immigrants in the US, depending upon how many “self-deported” recently due to the current US economic slowdown, of which demographically, this represents 5.4 million men, 3.9 million women, and 1.8 million children. In addition, there are 3.1 million children who are US citizens having been born here (64% of all children of the undocumented) from one or more parent… Undocumented immigrants account for almost one-third of all foreign-born residents of the US, and about 80% of these are from Mexico and other Latin American countries…The report also states that out of the total number of undocumented adults, 9.3 million, 7.2 million (77%) are employed and account for around 5% of the US workforce. They comprise a disproportionate percentage in some industries, such as 24% of farm workers, 17% of cleaning workers, 14% of construction workers, and 12% of food preparers…These industries typically account for much of the claims filed under the US workers’ compensation system. Within a particular industry, undocumented workers comprise a higher percentage of more hazardous occupations, e.g., 36% of insulation workers and 29% of all roofing employees are estimated to be undocumented.”

In another article I wrote back in March, Survey says most immigrant workers unaware of Workers’ Compensation: What this means to Workers’ Compensation and Medical Tourism, I cited a report from New Hampshire that stated that:

“…227 participants out of 366, or 62%, were not aware of workers’ compensation. Only 76 individuals, the report states, out of 126 who said yes to understanding workers’ compensation wrote down who told them about it. This included supervisors, human resources personnel, family members, friends, doctors, co-workers, teachers and the New Hampshire Coalition of Occupational Safety and Health (COSH) through classes on safety…Twenty-nine of the 366 participants said they had been injured at work, with injuries to common body parts such as hands, fingers, wrists, backs, knees, feet, elbows, and abdomen. The majority of these injured had been in the US for either 4-6 years, or more than 6 years. 17 of the 29, who said they were injured on the job, had lost time claims…23 participants had told their supervisors about their injuries, 4 did not report because they left the job due to the injuries, a cut finger was not considered “serious”, one felt that if the injury was reported, “nothing would change”, and one said they would be fired.”

When they listed their continent of origin, “most of the respondents indicated that their continent of origin was Asia (44%), followed by the Dominican Republic/Haiti/Cuba at 14%, South America at 11%, Central America at 10%, Africa at 11%, Europe and the Middle East at 4% each, and 1% blank. If you add the Dominican Republic/Haiti/Cuba, South and Central America, you get 35%, indicating that the second largest region of origin is Latin America and the Caribbean…”

In a follow-up to the Immigration Reform article, I wrote, Immigration and Workers’ Compensation: Round Two, and cited additional statistics on the changing makeup of the workforce in the US provided to me by two bloggers I have sourced in the past, Peter Rousmaniere and Joe Paduda. The following paragraphs from that article expound on the implications of the changing nature of the American workforce and what it means for workers’ compensation.

“Joe’s post today, Immigrants in the workforce – and implications thereof, mentions that one of every seven workers in the US is foreign-born, and that about half are Hispanic and a quarter Asian.  About a third of the foreign born workers are undocumented.

Peter’s post, Foreign Born Workers Take Center Stage, in WorkCompWire.com, reiterates some of the statistics I mentioned in my posts on the subject, that foreign workers are skewed toward above average injury risk jobs, and sustain a large share of the nation’s annual three million work injuries.

He goes on to add that in 2012, there were 25 million foreign-born persons in the U.S. labor force, comprising 16% of the total workforce. Hispanics accounted for 48% of the foreign-born labor force in 2012, and Asians accounted for 24%. (Recently Asians have been entering the U.S. at higher levels than Hispanics.) Undocumented workers account overall for about 5% of the nation’s total workforce and roughly one third of foreign-born workers.

There are three key takeaways for those in the workers’ compensation arena to be aware of:

  • A foreign born worker poses higher injury risk due to language barriers, cultural miscues and poor health literacy.
  • The growing presence of immigrant workers is not temporary and reversible. It is part of global economic forces. Some 150 million workers globally are estimated to be working outside their country of origin.
  • Private sector employment growth has been and will continue be in fields with relatively high immigrant participation, ranging from software engineers to personal health aides.

Peter also details which industries are more likely to have high percentages of foreign-born workers and what that entails for future workers’ compensation injuries, something I also mentioned in an earlier piece. A key passage in his article states the following:

When you estimate the number of future work injuries, taking into account the injury rates of the individual jobs and their expected growth of openings, you find that immigrant workers will likely sustain 20% — one of every five – of work injuries.

The implications of this are clear as Joe points, out in his blog post today, and that I have already touched upon in the Survey piece, namely that:

  • Most of these workers likely won’t know much about the US health care system or workers’ comp, and will get that information from people they know and trust – their fellow countrymen.
  • Many may not have primary care physicians, so will seek care at the most convenient/nearest location.
  • The language issues are both obvious and subtle; even those with passable English skills may not fully grasp what they’re hearing and reading, leading to misinterpretations and misunderstanding.”

Based on these statistics, Latin American and the Caribbean is a logical place for medical tourism to be implemented into workers’ compensation. However, I am not the only one who has discussed the increasing Hispanic and foreign-born workforce and what challenges they present for workers’ compensation. A book published by Peter Rousmaniere with the assistance of Concentra and Broadspire, was reviewed this week by Tom Lynch of the Workers’ Comp Insider blog.

The review entitled, Review: Work Safe: An Employer’s Guide to Safety and Health in a Diversified Workforce, points out that of the 15 occupations that are expected to see the largest growth, numerically, between now and 2020, foreign-born workers, immigrants are over-represented in eight of them. And within the Construction industry, 65% of all “reinforcing iron and rebar” workers are immigrants. They only make up about 15.8% of all US workers, but they account for 20% of all reported injuries.

Peter is a fellow blogger with a Harvard MBA, and I have cited some of his blog articles in my online posts, and his blog, Working Immigrants, has been a source of some very important information in the past. He is also a connection of mine on the LinkedIn social media site, and we have corresponded by email in the past. To illustrate just how valuable a source his blog has been, my recent post, E PLURIBUS UNUM: Latin American and Caribbean Immigration, Workers’ Compensation and Medical Tourism, has a table I created from the International Organization for Migration website Peter alerted his readers to. The table appears below.

Image

The table is quite self-explanatory, and the grand total of 20.5 million migrants should be of considerable interest to any current or future employer, because those migrants will no doubt have children and grandchildren, and for the foreseeable future, many of them will find their way to employment in those industries like Construction that account for many of the injuries that give rise to workers’ compensation claims.

Cost of surgery in US vs. Latin America and Caribbean

Last November, I wrote a fictional case study, A ‘Case Study’ in Implementing Medical Tourism into Workers’ Compensation, in which I described how a company self-insured for health care and workers’ compensation, could implement medical tourism when three of its employees were hurt on the same job site. I compared the cost of surgeries for both hip and knee replacement in the US with the cost for the same surgeries in Colombia, Costa Rica and Mexico.

The table below illustrates the difference in cost between the US and Latin American countries. The figures shown are not the actual costs for these surgeries, but for our purposes, they will suffice to point out the cost savings that are available through medical tourism.

Image

Recently, I had a phone call with the president of a new medical tourism facilitator company that is looking to bring employees of self-insured companies to the -Lake Chapala/Guadalajara, Mexico area for medical and dental procedures. His company’s website, MexAmericare.com, compares costs between the US and Mexico for Hip Replacement, as well as for Dental implants. The comparison in prices and the cost savings are as follows:

In the US
Hip Replacement and Hospital Fees                                          $27,000
In Mexico
Hip Replacement                                                                           $10,000
Bed & Breakfast (six days)                                                                 $720
Company Fee                                                                                    $1,500
Round-trip airfare (Est.)                                                                      $728
Total Cost if going through Company                                         $12,948
Cost Savings                                                                                    $14,052

Conclusion

So now we have to ask this question, what is the benefit to the injured worker, his employer, your insurance company and to you as the Contractor or Owner of a project covered under a wrap-up?

The answer is threefold; one, by having the employee agree to seek treatment for surgery in his former country, in a medical tourism facility that caters to medical tourists, not only will he have the benefit of being treated in an environment that speaks his language and in his culture, or in a similar culture, his friends and family back home in that country can visit him and it will aid in his recovery and return-to-work, but also he and they will have the satisfaction of knowing that he is being treated in the best facility in their country.

Second, the cost of airfare and accommodation for the patient and usually one other person, a spouse or friend, is included in the price of the surgery, if going through a facilitator company. And third, with the savings from the cost of the procedure in that medical tourism destination, compared with the cost of that procedure in the US, a portion of that savings can be remitted to the injured worker as an incentive to seek treatment abroad.

A number of large and mid-size US companies like American Express, Google, Disney, Phillips Services Industries, etc., are already exploring or offering this option to their employees as part of their employee health plan, but it would be a logical step for workers’ compensation to follow, especially with regard to wrap-up programs in the Construction industry. All that needs to happen is for one or more companies to “get it” and explore medical tourism as an option to the high cost of workers’ compensation surgery. Anyone wishing more information can contact me at richard_krasner@hotmail.com. Feel free to check out my blog at richardkrasner.wordpress.com.

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This entry was posted in Health Care Costs, Immigrant Workers, Medical Tourism, Workers' Compensation and tagged , , , , , on by .

About Transforming Workers' Comp

Have worked in the Insurance and Risk Management industry for more than thirty years in New York, Florida and Texas in the Claims and Risk Management spheres, primarily in Workers’ Compensation Claims, Auto No-Fault and Property & Casualty Claims Administration and Claims Management. Have experience in Risk and Insurance Business Analysis, Risk Management Information Systems, and Insurance Data Processing and Data Management. Received my Master’s in Health Administration (MHA) degree from Florida Atlantic University in Boca Raton, Florida in December 2011. Received my Master of Arts (MA) degree in American History from New York University, and received my Bachelor of Arts (BA) degree in Liberal Arts (Political Science/History/Social Sciences) from SUNY Brockport. I have studied World History, Global Politics, and have a strong interest in the future of human civilization in all aspects; economic, political and social. I am looking for new opportunities that will utilize my previous experience and MHA degree. I am available for speaking engagements and am willing to travel. LinkedIn Profile: http://www.linkedin.com/in/richardkrasner Resume: https://www.box.com/s/z8rxcks6ix41m3ocvvep

One thought on “An Alternative to High Cost Surgeries for Workers’ Compensation Claims under Wrap-Up Programs

  1. Pingback: An Alternative to High Cost Surgeries for Workers’ Compensation Claims under Wrap-Up Programs |MedicalTravel.me

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