Workers' Comp: Finding the Right Rx for Your Workers' Compensation Program

June 17, 2008
Despite a decline in the number of workplace injuries, workers' compensation costs continue to climb, with a sharp rise in the utilization of medical services to blame.

Those who oversee safety in the workplace have every right to be proud. There is no doubt that today’s workplace is safer than ever.

Since 1991, the frequency of workplace injuries is down approximately 50 percent, thanks to the hard work of safety professionals and engineers, the advent of OSHA in the 1970s, safe workplace practices, cordless tools, modular construction and even robotics, which have lessened human interaction with potentially dangerous machinery.

So if this increased attention to safety has led to a decline in the number of workplace accidents – which has resulted in fewer claims and lower rates – then why has the cost of the claims risen dramatically over the years? Why have some workers fallen through this safety net? The answer is simple: Rising medical costs are directly linked to the alarming increase in utilization of medical services.

What’s Driving Medical Severity?

According to a recent study by NCCI, the factor driving medical severity is the growth in the number and mix of medical treatments. The study compared 2001-2002 to 1996-1997 and found that the number of treatments for all diagnosis increased 45 percent, while the increase for injuries such as knee and leg sprains was as high as 80 percent.

Through negotiations, doctors have been cajoled to lower fees, and to counteract these lower fees, medical treatments have increased. Think of it like squeezing a balloon; when you pinch one end, it expands on the other. Doctors are, for the most part, not following evidence-based treatment protocol as set forth by the American College of Occupational and Environmental Medicine (often referred to as the ACOEM Guidelines). And by not doing so, we are witnessing medical treatment plans that are misdirected and unnecessary, coupled with increased levels of treatment, additional testing and the high cost of doctors to run those tests.

What we aren’t seeing is anyone challenging these recommendations. The reason is quite simple: no claims adjuster wants to be the first to be fired for agreeing with a doctor’s recommendation. The bottom line is that the only thing more costly than a good doctor is a bad doctor.

Employee Mindset

Another major danger with over-utilization is that the steady stream of doctor’s visits, MRIs, prescriptions, therapy sessions, etc., creates in the employee a mindset that says, “If I’m undergoing all this treatment, I must really be hurt.” The injured employee then slips into “secondary-gain behavior,” where his or her decisions are driven more by emotions than economic well-being, often resulting in litigation and the loss of a valuable employee.

Another negative by-product of over-utilization is the recent introduction of narcotics into the workers’ compensation system, which once were solely prescribed for individuals in their last months or weeks of life. Years ago, an employee might be given a couple of Advils for a backache, but today it is not uncommon for doctors to prescribe drugs such as Oxycontin for the same ailment. The overuse of narcotics in the workplace creates new problems. If an injured worker doesn’t get the prescription from one doctor, however, he can simply find another who is willing to prescribe narcotics.

If over-utilization is wreaking havoc on the medical costs associated with the workers’ comp system, then why would an overwhelmingly high percentage of doctors suggest treatment that is not evidence-based? Simply put, doctors have been trained this way throughout their lives. Since the day they picked up their first medical book, it’s been ingrained in them that their judgment is what’s best. That thinking is not going to change anytime soon.

Solving the Problem

The key to solving this problem is to make sure every effort is made to select the right doctor, one who will follow evidence-based treatment protocol and work towards returning the injured employee to the workplace in the appropriate time, even if in a modified position. And evidence shows that workers get better quicker when they are back on the job.

To find the right doctor, engage in dialogue with other companies and businesses in your area, looking specifically for those trained in occupational medicine. And once you find the right physician, remember: communication is key. Doctors shouldn’t have any doubt that their recommendations and restrictions will be respected. Furthermore, they need to fully understand the return-to-work possibilities that exist.

A steady flow of information between the doctor, employer and claims adjuster is the first step in changing a system that erodes the good work being done by safety professionals.

Frank Pennachio, CWCA, is co-founder and director of learning at the Institute of WorkComp Professionals, Asheville, N.C. He is president of a workers’ compensation insurance agency and a licensee and trainer for Injury Management Partners. A well-known speaker, his articles regularly appear in business and trade associations. He can be contacted at [email protected].

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