Employer Choice States See Lower Claim Costs

Introduction

When I started this blog three years ago, one of the first topics I covered was the issue of employee/employer choice of treating physician (see “Employee vs Employer Choice of Physician: How best to Incorporate Medical Tourism into Workers’ Compensation” and “Employee vs. Employer Choice of Physician Revisited: Additional Commentary on How Best to Incorporate Medical Tourism into Workers’ Compensation“).

Then in March of this year, ProPublica’s Michael Grabell and NPR’s Howard Berkes, wrote an article called, “The Demolition of Workers’ Compensation“, which was a first in of a series about the workers’ compensation system.

In the article, Grabell said that in 37 states, the worker cannot choose his doctor, or they are restricted to a list provided by their employer. This statement generated some concern from the industry.

My fellow blogger, Joe Paduda tried to get them to see both sides, but gave up the effort when it did not result in any discussion between them, as he wrote about the following day, calling the reporting a “public disservice”.

The next day, I wrote to Mr. Grabell, and told him that his facts were wrong. He told me in his response that he relied on data from the US Chamber of Commerce.

I told him that the WCRI and the state statutes were a more accurate source of information. My email thread covered eight messages that day. I provided him with the data I used in the articles cited above, and in the presentation I gave the previous November in Mexico.

Lower Costs When Doctor is Chosen By Employer

Business Insurance’s Stephanie Goldberg today reported on a study published in the latest issue of the Journal of Occupational and Environmental Medicine, that found that the average medical cost per work comp claim is lower in states where the employer chooses the worker’s initial treating physician.

Average medical costs were $308 lower in those states where the employer can choose the treating doctor for employees with low back pain, than in states where the workers were allowed to choose, Goldberg reported.

The study, sponsored by the Liberty Mutual Research Institute for Safety, said that states limiting treating provider change had higher medical costs than states that allow a one-time change.

There was however, the study found, no significant difference in average medical costs between cases in states that limit initial change and states that don’t, according to Goldberg.

Employers participating in a managed care organization, preferred provider organization or coordinated care organization in states like California and Florida, are allowed to to direct care. States like Arizona and Massachusetts allow workers to chose their providers.

The study also found, that the average medical costs ranges from $1211 in New York to $4514 in Texas, and length of disability ranged from 19 days in Missouri to 69 days in Texas.

The study was compiled using more that 59,000 low back pain claims between 2002 and 2009 from 49 jurisdictions, including Washington, DC, and did not include North Dakota and Wyoming.

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