One of every seven workers in the US is foreign-born.

About half are Hispanic and a quarter Asian.  About a third of the foreign born workers are undocumented.

We’ll leave aside the problems with immigration regulation, drivers thereof, lazy Americans, and all the rest of the and focus on the impact of these foreign-born folks on workers’ comp.

Today’s WorkCompWire features a piece by friend and colleague Peter Rousmaniere on the subject; Peter’s been tracking this very closely for years, and is the most knowledgeable person I know on the subject.  Here’s a key passage:

When you estimate the number of future work injuries, taking into account the injury rates of the individual jobs and their expected growth of openings, you find that immigrant workers will likely sustain 20% — one of every five – of work injuries. (emphasis added)

Here are just a few of the implications I see; as the acknowledged expert Peter’s got a much deeper and broader perspective.

• Most of these workers likely won’t know much about the US health care system or workers’ comp, and will get that information from people they know and trust – their fellow countrymen.
• Many may not have primary care physicians, so will seek care at the most convenient/nearest location.
• The language issues are both obvious and subtle; even those with passable English skills may not fully grasp what they’re hearing and reading, leading to mis-interpretations and misunderstanding.

With the share of jobs held by first-generation immigrants going to increase steadily for the foreseeable future, payers and service companies alike are going to have to alter their practices to accommodate an evolving workforce.

What does this mean for you?

Recognizing the reality will be much more productive than ranting about it.

After a brief diversion yesterday to focus on breaking news and research, it’s back to the impact of health reform on comp, with today’s post delving in to cost-shifting.

Cost-shifting is a general term for provider behavior involving seeking more revenue from some patients/payers to make up for lower/insufficient revenue from others.  The term itself is not without controversy, but we’ll set aside semantics and focus on a simple question – will Obamacare lead to higher costs for comp payers as providers seek to make up for lower/lost revenue from other sources.

The short answer is – probably not.

The longer answer is this – more reimbursed patient car leads to less motivation to cost shift, and although many of the newly insured will be low-reimbursing Medicaid patients getting 85% of cost is a lot better than 11%.  Therefore, if anything Obamacare’s broader coverage will reduce the motivation to cost-shift.

The detailed answer follows…

Providers, particularly hospitals (which account for about a third of all WC medical costs) have to provide emergent care to patients without insurance.  Currently there are about 50 million folks without insurance in the US; post reform there will be about 20 million (estimates will vary, but regardless there will be a LOT fewer uninsureds).

Logic implies that more paying patients is better than fewer, and more providers will get paid for more patient care next year than this, leading to less motivation for those providers to shift costs to their workers’ comp patients.  The key word here is “motivation”; just because there’s less rationale for cost-shifting does NOT mean providers will suddenly decide to stop charging higher fees and doing more for their comp patients.  I’d also note that it is unlikely that most providers consciously decide to alter their treatment based on their patient’s reimbursement.

However, this being workers’ comp and health care, logic doesn’t necessarily apply.  Here are a couple things to consider.

First, a just-published analysis of the impact of lower Medicare reimbursement rates on private payer costs found:

“a 10 percent reduction in Medicare payment rates led to an estimated reduction in private payment rates of 3 percent or 8 percent, depending on the statistical model used. These payment rate spillovers may reflect an effort by hospitals to rein in their operating costs in the face of lower Medicare payment rates. Alternatively, hospitals facing cuts in Medicare payment rates may also cut the payment rates they seek from private payers to attract more privately insured patients.”

The analysis was based on hospital data from 1995 to 2009, a period during which Medicare hospital reimbursement was increasing quite modestly.  Of course, workers’ comp was not considered nor WC reimbursement analyzed by the study’s author, so we are left with more questions than answers.

It is also important to note that almost the entire study period was before anyone had even contemplated health reform and the dramatic impact on hospital reimbursement that will follow.  The world has changed dramatically, and this historical perspective may no longer provide much in the way of insight into future behaviors. 

Second, private payers have a LOT more bargaining power than work comp payers and network developers; WC insurers are already seeing significantly higher facility costs (anecdotal information from HSA consulting clients). And these higher costs are coming on top of research clearly indicating comp pays a lot more for hospital services than private insurers (see results of WCRI research on outpatient hospital costs).  So, comp already pays more, and until and unless networks and insurers figure out ways to better control utilization and price, they are going to continue to pay more.

Here’s what this means for you.

Third, some comp payers are beginning to figure out which hospitals are screwing them, and which are not, and doing whatever they can to direct away from the high cost facilities and to the low cost/high outcome providers.  Cost shifting will continue, but these smart payers will mitigate its impact while their less-smart competitors will wonder why their medical expenses are rapidly escalating.

 

That is the question I’m left with after reading WCRI’s latest reports.

One compares group health’s payments for outpatient hospital services to work comp’s; the other discusses the use of group health payments as the basis for a work comp provider fee schedule.  There is a wealth of insight in both studies; generally, states with fee schedules had lower work comp medical costs than those without

The latter is the subject of today’s post; it “focuses on the median nonhospital price paid for five common surgeries and four common established patient office visits in 22 large states for services delivered in 2009.”; it compares group payments to comp.  By focusing on actual prices paid, the analysis factors in network and other discounts taken, increasing the “validity” of the data.

I’ve long thought providers should get paid more for care delivered to workers comp patients than for group, medicare, or medicaid.  Comp involves disability management and all the communications, reporting, and complications inherent in considering disability in delivering care, and as we expect physicians and other care givers to take an active role in that process, by rights we should expect to pay them for that additional work.

That said, the dichotomy between pricing differentials for office visits vs. surgeries reported by WCRI strikes me as precisely the opposite of what should be.  Specifically, the prices paid for office visits under group and comp were typically within 30 percent, with a range of 15 percent in about half of the states studied; in several states comp paid significantly less than group for office visits. Office visits are where and when the “disability management’ stuff occurs as the physician discusses the return to work plan, engages with the field case manager (if one is involved), talks with the claimant about the claimant’s job functions, physical capabilities and limitations, and other factors affecting disability.  This takes time, thought, documentation, expertise.

Conversely, reimbursement for surgeries was generally much higher when the payer was workers’ comp than when a health plan was on the hook. Remember, the payment is specific to the surgical procedure; it does not include visits pre- and post-surgery. A knee arthroscopy is a knee arthroscopy; yes, there may be a little different documentation for WC surgeries, but the surgical notes should consider functionality, rehab plans, and prognosis regardless of who the payer is. Yet in only one state – Michigan – was the reimbursement essentially identical, while in the other 21 states, the reimbursement was higher for comp – in seven states comp reimbursed at least twice as much as group health. 

Surgeons may argue that the higher reimbursement is necessary to ensure access; that argument, should it be made, is easily addressed by noting physicians are willing to accept much lower reimbursement for the identical procedure for most of their patients; there’s no access problem for group health patients despite the lower reimbursement.

In contrast, reimbursement for office visits should be higher for workers’ comp, for the reasons noted above.  If not for the office visit code itself, than perhaps states should institute a different code for disability management (some payers already do this).

What does this mean for you?

From here, this looks like another example of under-valuing primary care and patient – physician interaction, while over-valuing procedures; doing stuff TO patients.