Yes – at least medical prices did, but the drop wasn’t as much as the reduction in the fee schedule, and it was a LOT less for expensive procedures. Those are the quick takeaways from WCRI’s report (published yesterday).
The reforms brought a 30 percent reduction in the medical fee schedule as of September 2011, yet:
- Professional service prices dropped 24 percent, with the 6 percent difference driven by lower provider participation in networks (thus fewer providers delivering care at a discount) and higher prices from in-network providers.
- Radiology prices dropped 13 percent for MRIs and 22 percent for X-Rays, and ER services also only dropped by 18 percent; other than that, most service groups saw prices decrease somewhere in the mid-twenty-percent range.
- Utilization appears to be on the increase, as WCRI’s research found “more complex office visits with higher prices were billed more frequently in Illinois.”
- Surgeries are still waaaay more expensive in IL than in the median study state 2 1/2 times to be precise. That’s 242 percent more than employers pay in Michigan...
What does this mean for you?
1. Reducing prices does not lead to a corresponding decrease in costs as providers figure out how to make up for lost revenue by doing more, and more expensive, services.
2. Kudos to WCRI for getting this info out so quickly; in the past it has taken much longer, so they’ve upped their game considerably. This makes the information much more actionable for payers and regulators alike who can figure out where potential issues lie and take steps to mitigate problems.
When you force someone to lower their prices do they stay in business? That’s the unanswered question.
Thanks for the comment. So far the answer is “yes”. Remember WC is still far more profitable than Medicare. And more than group in most cases as well.
Good post Joe. I think the other interesting observation from the WCRI study was the reduction of the Primary Care provider fees (E&M codes) to below Group and Medicare rates and the potential negative impact that might have on access to front line Comp providers. Appears that has happened in IL.
thanks for the comment Greg. I didn’t see any evidence of access issues; what are you seeing?
I have not seen any data that shows that yet, nor any attempt to study it. However, I believe the IL Commission recently expressed concern, that with a potential flood of new ACA insured needing a PCP provider, there indeed could be an issue. Time will tell.
I am an Occupational Medicine Physician practising in the trenches in IL.
No incentives for physicians that counsel and try to avoid ordering MRIs and treat conservative avoiding unnecessary surgeries or interventions.
It is very hard for the non surgeons. Many practises have downsized and doing more with less or converted into additional services(Read Urgent care and Botox injections).
Work Comp patients are much more complex to manage eventhough the underlying medical problem is not complex.
The root cause of the IL WC issues is not the overall fee schedule.
It is basically 3 factors;
1) Threshold of work relatedness
2)WC Lawyer Industry
3)Unholy nexus between lawyer and some physicians.
The low threshold for work relatedness and the batallion of WC attorney industry and some unscrupulous surgeons conniving with the attornies.
Well said.