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Workers' Compensation & Managed Care

Challenges & Opportunities in a Changing Health Care System

Summary of a Workshop for Senior State Officials


The purpose of this workshop was to draw upon available health services research and the experiences of individual States to provide participants with a better understanding of the current issues, opportunities, and challenges of adopting managed care models and practices in workers' compensation medical programs. It was held in Chicago, Illinois, July 30-August 1, 1997.

About the Workshop Sponsor.


Overview

In recent years, there has been tremendous growth in the number of persons who are enrolled in some form of managed health care. Fueled by managed care's perceived potential to control health care costs and increase accountability—hopefully without sacrificing the quality of care provided—private employers, public health care financing programs, and other purchasers have launched initiatives designed to move employees, dependents, and program beneficiaries into capitated managed care plans, such as Health Maintenance Organizations (HMOs), or into other managed care-oriented arrangements.

To a somewhat lesser extent, this trend toward managed care has also occurred within workers' compensation (WC) programs where, until recently, increases in the program's medical costs have outstripped the growth in wage replacement costs. In a number of States, this trend was facilitated with the passage of legislation specifically authorizing managed care initiatives within their workers' compensation programs.

However, a number of important and unique aspects of workers' compensation insurance—including the program's historical roots and the fact that it serves the dual purposes of replacing wages for workers unable to work due to a job-related injury and paying for health care costs associated with treating injured workers—have made the development and implementation of appropriate managed care approaches within workers' compensation programs a challenging undertaking.

Indeed, the application of managed care to workers' compensation raises a number of important questions that policymakers and program administrators must consider:

  • What managed care models and techniques are most appropriate for different States' workers' compensation programs? What are the likely unintended negative consequences that may be associated with inappropriate approaches? In what way and to what extent might individual States' regulatory policies affect the adoption of different models?
  • What managed care-related State initiatives are currently underway in workers' compensation programs across the country? What lessons learned can be currently gleaned from the experiences of these States?
  • What are the appropriate measures to use to evaluate the performance of workers' compensation managed care activities? What strategies can be employed to effectively and efficiently monitor and evaluate program performance?
  • In what directions might workers' compensation medical initiatives evolve in the future? What other future considerations should policymakers keep in mind as they consider current changes to their programs?

Given the significance of these and other questions faced by State policymakers, the Agency for Health Care Policy and Research (AHCPR), through its User Liaison Program, designed this workshop to provide State officials with information to help them address the complex issues they face in this area.

Objectives

Like the highly successful workshop on workers' compensation medical costs that AHCPR sponsored several years ago, the purpose of this workshop was to draw upon available health services research and the experiences of individual States to provide participants with a better understanding of the current issues, opportunities, and challenges of adopting managed care models and practices in workers' compensation medical programs.

In addition to examining the application of different managed care models and activities within the context of workers' compensation programs, the workshop also examined the challenges associated with the development of appropriate performance measures that can be used to assess the impact of these new arrangements, and discussed strategies for collecting the necessary data to monitor performance.

This workshop was designed to address the information needs of State government officials from both the legislative and executive branches who have responsibility for policymaking that affects the planning, regulation, and evaluation of workers' compensation programs.

Participants

The participants included: senior State government officials; State health officials; State insurance officials; academic researchers focusing on workers' compensation issues; officials from health-related associations, coalitions, and labor organizations.

Workshop Sessions

 

The User Liaison Program (ULP) disseminates health services research findings in easily understandable and usable formats through interactive workshops. Workshops and other support are planned to meet the needs of Federal, State, and local policymakers, and other health services research users, such as purchasers, administrators, and health plans.

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