Workers’ comp and medical benefits traditionally have been separated, but the costs and inefficiencies of operating two systems to handle worker health have become unsustainable, highlighting the need for an integrated medical and workers’ comp benefits solution. And despite what you may have heard, integration is possible, and preferable.
Direct and indirect costs of workers’ comp claims can be burdensome, amplified by the hassle of having to secure medical care from separate systems simply because of where the injury occurred (on the job). Additionally, treatment provided as part of workers’ comp tends to be more expensive than health plan-covered treatment. Physicians, facilities and pharmacy benefit managers charge workers’ comp payers more for the same services than they typically charge health plans, simply because they offer high volume discounts to the health insurers, which account for 98% of the total medical spend. Medical bill clearinghouses also charge more per bill for workers’ comp bills, for the same reason. Consolidating the two silos into one program that provides members with the best of both worlds reduces costs and provides better service.
Patient-centered
Unions are beginning to explore options that provide a more consistent healthcare experience for members that integrates medical treatment, whether it’s for an on-the-job injury or not. Bringing these components of workers’ comp claims and personal medical care under the umbrella of a single vendor simplifies the process for the member, while increasing system efficiency, reducing costs, increasing transparency, and saving time and energy.
Integration not only benefits members, but also employers, through decreased costs and less need for
administrative oversight. This in turn makes union employment more attractive, as it helps employers decrease their costs while improving member satisfaction through better coordinated care and higher service levels.
One of the main stated goals of all workers’ comp programs is to reduce injuries and shorten the time needed to return to work. But injuries or poor health both on and off the job can affect productivity and absenteeism. To illustrate, members with even minor back pain or other health conditions are more susceptible to workplace injuries. However, chronic health conditions like back pain are also among the most preventable and would benefit from robust preventive care. By linking preventive care, wellness, and disease management services, the likelihood of injury is reduced, and return-to-work time is improved.
The integrated model transitions future workers’ comp programs to a patient-centered model that focuses on prevention and timely care, as opposed to an injury-based model activated only in the case of a work-related injury. In addition, enhanced preventive care contributes to member wellness, such as access to behavioral health services (for anxiety, depression, substance abuse disorders and more). Early detection and screening of at-risk populations can also identify health issues before they become more burdensome for the member and the employer.
Overcoming obstacles to Integration
Integration of workers’ comp and medical services is not as simple as flipping a switch. Very often, differences in state laws make it difficult to accomplish integration. For example, some states do not allow employers to manage workers’ comp treatment and/or put limits on it. Some states have laws against self-insurance for workers’ comp or limit the ability to self-insure. Most health insurers and/or PPO networks do not offer workers’ comp coverage and services.
This is where third party administrators and PPO networks can step in and help. These partners can create programs that are compliant with applicable laws. Some may possess expertise in both health plan management and workers’ comp programs, as well as the capacity and ability to negotiate with and educate provider communities about integrated programs.
In states where self-insured workers’ comp programs are not permitted, a union-based captive solution may be an attractive option. All employers can contribute premiums into a union-based captive, which can be used for general liability and other coverage. In this arrangement, employers benefit from savings created by the program through decreased future premiums and/or dividend payments. Unions benefit from increased enrollment, and happier union members. Ultimately, the goal is to allow employers and their unions to collaborate and create their own programs, select their own vendors, and control their own risks.
When a worker is injured, whether on or off the job, it’s important for them and their employer to receive the highest-quality treatments possible and return to health and work as soon as possible. Integrating medical and workers’ comp programs brings two traditionally disparate systems together in a patient-centered arrangement that over time will decrease both workers’ comp and medical plan expense.
Our Magnacare team has been working with union management for over 30 years to improve the workers’ comp experience and deliver health outcomes for members. If you’d like to learn more, please contact [email protected]
