Consumer Directed Work Comp?

I've often thought that one of the primary drivers of dysfunctional behavior in workers' compensation claims is that it is a no-risk system, which in my mind is different than no-fault.

In a no-risk system there largely is no risk in the application for, acceptance of, and provision of, the benefits in making a claim.

Certainly there is some risk in falsifying a claim, but assuming the legitimacy of a claim no one along the claim feed line has any real risk other than being told "no."

For instance, an injured worker has no risk in asking for every available treatment protocol that can be devised other than being told "no."

Physicians likewise have no risk in asking for any form of treatment, and if they provide some treatment that might later be determined infelicitous, then they likely will still get paid something in settlement of the bill.

Insurance companies in reality have no relative risk in claims - sure there might be some penalties for failing to do something timely, or an actual claim may exceed actuarial calculations pinching cash flow, but the truth is that other than losing an account (which will be supplanted by the next employer policy) the failure to carefully watch money on a claim simply translates to an increased ex-mod for that employer that some other carrier may get paid on later.

Third party administrators likewise lack much risk - again if they don't manage the money correctly then perhaps an account will seek the services of a competitor, but unless an employer is self-administered, it's not their money.

The list can go on. Yes, I know, there is some risk to the various participants if they do something wrong.

But there is no risk for NOT doing something RIGHT.

For instance, most workers' compensation systems now rely upon some sort of guideline for directing the "right" thing - treatment guidelines and fee schedules are prime examples.

Follow the guideline and presumably there is no hassle in getting the treatment requested (I know, I know - that fantasy is far from reality, but usually the hassle experienced is a failure in documentation rather than a blatant failure in the guideline methodology); all that happens is that the request is denied - i.e. the answer is "no."

That is not really a risk. Maybe the expectation for surgery is deflated, maybe the want for more therapy or chiropractic services is deferred, but save for those very few instances where death may occur should a treatment request be denied there really is no true risk - i.e. those that make the request have nothing more at stake than maintenance at status quo.

Now status quo may not be a pleasant state of being. Constant pain is never a place where any of us wish to spend any lengthy period of time, but in the grand scheme of things there are generally alternatives that have established acceptance in the medical world, otherwise we wouldn't have physicians specializing in pain management.

Risk is always a variable setting - some things inherently are more risky than others - so we come up with techniques to manage risk.

For instance, in aviation the risk of death is always present. Fail to learn to communicate effectively and clearly and you die. Fail to navigate accurately and efficiently and you die. Fail to manage the aircraft sufficiently to keep adequate air flow over the wings and you die.

You get the picture - we learn how to do things that reduce risk, but the risk is always there: death if you don't so something correctly in flying an airplane.

The key is in most of life there is risk if one does not do something correctly; i.e. NOT do something RIGHT.

There certainly are risks in workers' compensation, but in general the risks are greatly mitigated to a point of near non-existence. Like I said above, for the most part, there is no risk in work comp claims other than the word, "no." There is no risk in NOT doing something RIGHT.

There is a theory in managed care called Consumer Directed Healthcare: if consumers are made more accountable for the cost of their healthcare, they will become more responsible healthcare consumers – and overall healthcare costs will decrease.

This theory springs from the reality that those without health insurance are less likely to use the health care system until something drastically is wrong, and then they avail themselves of the least costly, albeit presumably least effective, medical care - the emergency room paid for by either Medicare or Medicaid.

Those with "good" health care insurance will tend to use medical services more often, and the behavior patterns follow the discretion by which consumer participation is required (read deductibles, co-pays, etc.).

So can consumer directed workers' compensation work given that the laws and the culture of work comp spring from a "no fault" mentality which has been translated over the course of a hundred years into "no risk"?

We won't see deductibles or any other form of outgoing financial participation from claimants - that goes against a hundred years of culture, and many workers in the lower wage scales could not participate which would defeat the purpose of workers' compensation.

But there must be other incentives, ergo risks, that could be implemented to make the injured worker more engaged in the process.

Perhaps looking at medical services from a value perspective would provide some vision. Medical services have a certain value - we have fee schedules and ICD codes that help us establish the monetary value.

I have begun looking at value beyond the element itself. Content is a perfect example. In most media now, content has very little value in and of itself. Actually content has always been that way, but the mode and method of delivery and consumption were the value proposition because most of us lacked the ability or resources to provide those services.

The Digital Age has changed all that. Now delivery and consumption are easily provided and replicated. There is no perceived  value to delivery and consumption, and consequently the value of actual content to us (e.g. music, magazine articles, etc.) has diminished.

There has to be a layer provided that makes the content useful to us on a personal level that goes beyond the content itself.

In the digital world gamification - making a game out of the consumption of content - has provided that layer. The "risk" in gamified content is typically realized in a competitive setting: someone can do something with that content better than you raising your competitive hackles.

Likewise in workers' compensation medical treatment - if you consider that treatment is essentially content to be delivered and consumed, there is not much value in the traditional sense to the injured workers because there is no risk other than "no."

I don't have an answer, at least not yet. In my mind though this clearly deserves some academic attention. I think that if one can unlock the value layer that exists atop the treatment (i.e. gamify the content) then there may be some engagement, some consumer directed care.

Personalizing the experience beyond the victim role that the injured worker now assumes will require some imagination. I believe that can happen, that there can be some "risk" or gamification in workers' compensation. This has to happen if workers' compensation is to evolve beyond the present state of just managing costs versus benefits.