Friday, December 11, 2015

Cost Shifting Nonsense

The Workers' Compensation Research Institute hosted a webinar yesterday about cost shifting to workers' compensation from general health. The premise was that due to the Affordable Care Act, there would be an increase in moving health claims into the workers' compensation system.

Richard Victor, who is retiring as president of WCRI, made the case that this shift trend is underway, based on research that looked at "capitated" health plans, namely from Health Maintenance Organizations.

A capitated plan is defined as a health plan that pays a flat fee for servicing patients; as opposed to a fee for service plan that pays per procedure. It was theorized by WCRI that capitated health plans would grow under the ACA so health carriers could control costs better, and consequently there would be an increase in shifting care to work comp.

A study (not by WCRI) back in 1996 had looked at federal ship yards, and the correlation between HMOs and workers' compensation - what that study found was a strong correlation between them: ship yards with an HMO, which were presumed to be capitated plans, were highly correlated with shifting care to workers' compensation.

But that's not the end of it - the type of "injury" being shifted was more responsible than simply providing care under capitated plans.

Look at the moon...
WCRI's research shows that if the injury claimed is a soft tissue injury that there was a greater likelihood that it would be treated under a work comp system than general health.

Victor said this was because the initial treating physician has the first, and consequently, disproportionately large role, in determining causation of an injury or complaint.

Specific trauma cases provide much less discretion in determining causation because an event was much easier to identify - thus lacerations and fractures aren't so easily recategorized than those requiring a more subjective analysis.

An inference was made by Victor, though there wasn't any hard data to support it, that workers' compensation's mostly fee for service reimbursement schedules influenced subjective determinations towards work comp - assuming that physicians and their teams were more motivated by money than health outcomes.

But blogger and principal of Health Strategy Associates pointed out that about 1/3d of HMOs don't use capitation for groups or individuals, or at least not for all services, so basing the research on HMO experience was not an apples to apples comparison, in his opinion.

Paduda also said that capitation has NOT grown under ACA, and presented some data to support that conclusion.

And in fact, Paduda challenged that physicians would be so motivated to move claims from general health to work comp because of the extra paper work, stating, "documentation that is perceived by physicians as irrelevant to patient care is the discontent of doctors - seems to me that's the definition of workers' comp."

Paduda also challenged the status quo view, and said he's not sure that any reverse shift DOESN'T occur (i.e. likely that there is cost shifting or case shifting going both ways).

Frankly, though, this is all academic.

It really doesn't matter and is a discussion that is relevant only to insurance companies seeking to eek out a better profit from their programs, because at the end of the day the employer is still paying for insurance, and employee is still trying to get treatment, and if one belongs in a certain silo or another is of relevance to the injured worker only in terms of deductibles, co-pays and indemnity (and even then, there may be an indemnity option under a state disability program such as in California or New York).

Cost shifting is pointing at the moon, and the dogs (us) looking at the finger instead of the moon.

There are only two real issues: is there an employer paying for medical care? is the employee getting medical care?

Whether that care is paid for via one system or another is irrelevant to the big picture.

Which brings me to another point - and that is whether universal care, or 24-hour care, or whatever you want to call it, will ever become available.

Both Victor and Paduda said "no" because powerful entrenched interests will never let go of their fiefdoms.

But this ignores the single most compelling prospect of the opt-out movement: consolidation of care.

Opt out can operate outside of the silos because it is not constricted by workers' compensation laws; it is governed by ERISA, a much broader system of governing employee benefits. I see the opt out movement as having an advantage to both employers, AND their workers, by providing medical care via a single platform.

Let the guys with white collars and ties in the back room argue about who's going to pay for what. The injured or unhealthy worker should not be concerned with who's going to pay for what - if the care is delivered quickly, timely, effectively - the vast majority of care recipients are going to be just fine with that.

Opt out has been the brunt of criticism the past couple of years with all sorts of legal challenges in Oklahoma, all sorts of anti-opt out lobbying in Tennessee and South Carolina, and public media reports that the promises of injured worker care are illusory.

I suspect proponents are actually listening and learning, and that modern offerings will refocus the discussion towards the bigger picture: an employer paying for the care of its workers regardless of causation.

Sure, universal care as a national, or even a state, program may not ever be realized because of the pesky, well positioned and entrenched special interests.

But when opt out comes to your state you can bet that plans will be a universal care model.

THAT's how single payer/universal/24-hour care (or whatever label you want to use) will creep into the modern economy.

That's my opinion. Ought to be yours!

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