The Ripple Effect

While the life/health industry was building solutions for out-of-control health care cost increases, the workers’ compensation industry seemingly looked the other way. It was not until the medical cost shift from group health to workers’ compensation grew to be both undeniable and painful that the workers’ compensation industry embraced medical management. It has learned to be smarter and more proactive amidst the evolution of medical delivery and payment.

Nevertheless, the workers’ compensation industry somewhat glibly replied to early queries about the Patient Protection and Affordable Care Act (ACA) with a dismissive, “It really does not apply to comp.” This may have reflected a relief that the ACA did not mirror some of the more troubling aspects of the Clinton administration’s proffered solutions for universal health care in the early 1990s, such as sweeping occupational and non-occupational medical treatment into one big pot. At that time, it was successfully argued that keeping medical and lost-time coverage together in workers’ compensation provided direct incentives to encourage and reimburse medical services that would restore injured workers to preinjury functionality. So when the ACA was passed, many breathed a sigh of relief that workers’ compensation was left out of the mix.

However, that is not to say less direct and unintended consequences will not result within workers’ compensation once the ACA is fully implemented. The extent of the act’s impact will be quantifiable only retrospectively, but understanding the current health care landscape and logic can, at least, show us where to look. Here are the top three impacts.

1. Provider Shortages

Long before the ACA was a twinkle in President Obama’s eye, provider shortages were anticipated in the United States, specifically in primary care. While U.S. medical school enrollment is currently strong, so is specialty orientation. Potential income is a factor; the average salary of a primary care physician can be half that of a specialist (see Chart 1).

Until reimbursement changes occur, we can expect the trend of physicians eschewing careers in family practice to continue. (It also is interesting to note that average physician salaries vary regionally, with the Northeast being the lowest and the North Central states being the highest.)

If the ACA is successful in moving a significant percentage of our country’s uninsured population into the insured category, we can expect these underserved Americans to start being served. Instead of receiving emergency room care only, the newly insured will seek treatment at the already overcrowded offices of family and primary care practitioners.

Will greater demand cause more primary practitioners to leave the field, creating even more provider shortages? More specifically, might the injured worker be left holding the short stick? The answer probably is yes. The hassle factor with workers’ compensation generally is perceived to be higher than with non-occupational payers, so the overworked primary care doctor may choose to decline workers’ compensation patients.

This is a broad-brush prediction, and reality undoubtedly will vary depending on location. The difference in the percentage of state uninsured populations ranges greatly, from a low of about three percent in Massachusetts to a high of about 25 percent in Texas and Florida. Depending on the success of the ACA, the increased demand also will vary significantly from state to state.

Another key variable important to the regional impact is the current primary care provider (PCP)-to-patient ratio across various states. States like Minnesota have a PCP-to-patient ratio that is 25 percent higher than in Florida. States with poor PCP coverage today and a large previously uninsured population undoubtedly will have more primary care access issues going forward than states like Massachusetts, which has a small uninsured population and strong PCP-to-patient ratio.

In this arena, solutions will evolve to address access issues. Alternatives to physician servicing are bound to become more prevalent with nurse practitioners, physician assistants, and, more specifically, physical therapists and chiropractors treating musculoskeletal injuries at the primary care level. Additionally, technology to support virtual treatment and specialized distance-based services such as radiological evaluations will become more desirable and beneficial.

2. Improved Worker Health

The supposition is that expanded health coverage will result in healthier workers, and that healthier workers recover more quickly and easily than workers who have long-standing untreated, or barely treated, chronic comorbidities. Currently, there’s little data to support these two theories, but logic suggests the probability of both. As to the latter, a forthcoming study by the Workers’ Compensation Research Institute (WCRI) will show that the specific comorbidities of diabetes, hypertension, and heart disease have a statistically significant impact on an employee’s ability to return to work after an occupational injury. In other words, people without these comorbidities are more likely to recover successfully and return to work than workers with these health issues. Workers without comorbidities also had shorter durations of time off from work than those who had these chronic issues.

Another interesting study was discussed by Dr. Richard Victor, executive director of WCRI, during the Institute’s 2014 Annual Issues and Research Conference. He explained that researchers in Oregon found that having health care coverage significantly improved both the diagnosis and successful treatment of both diabetes and high cholesterol.

So the prediction of improved diagnosis and treatment for a newly insured population and the downstream supposition that these Americans, if injured on the job, will heal faster and return to work sooner is a good bet. Again, quantifying the actual extent of the improvement in worker health and the resulting improvement in claims severity both from a medical and lost-time perspective is years away. We can confidently expect that improvement will result; only the extent of the impact is uncertain.

3. The Shift Between Workers’ Compensation and Health Programs

In the pre-ACA world, there was a built-in incentive for gainfully employed workers with no health care insurance to ascribe a non-occupationally triggered injury to their workers’ compensation program. Coverage can easily trump no coverage and may trump honesty.

The movement from uninsured to insured for millions of working Americans may indeed result in a claims shift to the appropriate plan. In other words, folks who did not have health insurance in the past and, therefore, had an incentive to fraudulently submit a weekend back sprain to their employer under the guise of a workplace injury might no longer make that choice.

Participating in premium contribution on the health side of the equation also could encourage usage of group health insurance—getting something for their premium bucks. On the other hand, we see lots of high deductible plans with the ACA, which may, in effect, provide the newly insureds with no more coverage for run-of-the-mill health issues than they had prior to the ACA.

Yet another factor in potential claims shifting could involve a doctor’s willingness to deal with the additional hassles often involved in workers’ compensation cases. Given a choice, the treating physician may lean towards group health programs.

So while it would be naïve to assume that no claims or costs will shift between the workers’ compensation and health benefit programs, it is premature to predict which way things will go and the extent of the impact. Ideally, more accurate categorizations of occupational and non-occupational claims could result.

The workers’ compensation industry will be impacted by the implementation of the ACA. While the act itself defines no specific changes to statutory workers’ compensation programs, worker access to new health options and changes in provider supply and demand ultimately will affect all health delivery, including the treatment of injured workers. The degree of these changes will vary significantly from state to state, with some states experiencing little stress on the current delivery of services and others having much greater challenges. Prospectively, the actual extent of impact can be predicted only poorly. The real impact will be able to be quantified some years hence.

Unlike in the early 1980s, when the workers’ compensation industry largely ignored managed care and paid the price of serious unexpected cost shifts, workers’ compensation leaders are paying attention to the ACA. However, it is hard to identify a strategy or set of strategies to mitigate any predicted impacts of the ACA. There really are no bullets, silver or otherwise, available to help position the workers’ compensation industry today for what may evolve tomorrow. We are, all of us, relegated to the role of watchful observers for now.