1 Improving Workers’ Compensation in California by Improving Medical Care Robert Reville, Ph.D. CHSWC Research Colloquium on Workers’ Compensation Medical Benefit Delivery and Return-to- Work May 2, 2003

2 Widespread Dissatisfaction with Workers’ Compensation in California  All of the stakeholders are dissatisfied with medical care (DWC Focus Group)  The problems are not limited to medical care.  Workers are less likely to return to at- injury employer than other states (RAND)  Workers have worse long-term economic outcomes (RAND)  Employers have highest costs in country (Oregon rate study)

3 Both Wage Losses and Total Indemnity Benefits Are Highest in California 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 Ten-year earnings Losses Lifetime benefits CANMWAWIORCANMWAWIOR $

4 Medical Delivery Increasingly Important Part of Workers’ Compensation Source: WCIRB Paid Medical Costs As A Fraction of Workers’ Comp Costs

5 Solutions  Find ways to lower medical costs  Clearly needed in the short run  Improving fee schedules  Longer Term Solutions  24-hour care  System transformation based on renewing the workers’ compensation bargain

6 The Workers’ Compensation Bargain  Remarkable 1913 “Bargain” between workers and employers.  First social insurance program  1918 California referendum to create universal health insurance failed  Workers’ compensation provided a better basis for employer-labor consensus.  Manageable size of the program  More closely tied to work  Improving workers’ compensation health care is an incremental change compared to transforming health care.

7 Renewing the Bargain  Can improving the quality of medical care form the basis of a new employer-labor bargain?  Improving quality is an example of “treating workers with dignity and respect every day.”

8 What Does Improving the Quality of Medical Care Mean?  Eliminating overuse  About 30% of procedures performed in the U.S. are of questionable health benefit relative to their risks.  Reduces costs  Improves worker health  Eliminating misuse by reducing errors  Eliminating underuse?  May improve return to work and retention, reduce disability

9 Research Suggests that Reducing Underuse May Reduce Lost Time Health insured % filing claims 60 Average lost work days % losing wages Uninsured Source: Lakdawalla and Reville, RAND

10 How Can Health Care Quality in Workers’ Compensation Be Improved?  Certification of health care providers  Measurement and publication of report cards on quality of care  RAND/UCLA model of quality assessment  Develop specific standards, or indicators for particular clinical areas  Determine what data needs to be obtained to evaluate adherence to these standards  Collect data and publish results

11 Align Incentives With Improving Quality  When evaluating proposed reforms, improving quality of care can be the lens for evaluation  Choice of physician: Can we improve continuity of care?  Adjudication of disputes: Is quality of care the over-riding consideration?  We want problems with access to care  If the problem is access to low quality care

12 What Might This Lead To?  Can the renewed bargain provide the impetus for fixing the workers’ compensation system?  Will the benefits of improved workers’ compensation health care in California inspire other states?  Can the lessons learned on the value of improving quality of care inspire change in the rest of health care?  Imagine if we opposed 24-hour care because workers’ compensation provided higher quality care

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