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Workers' Compensation & Managed Care

Issues, Models, & Challenges


Jay Himmelstein, M.D., M.P.H., Assistant Chancellor for Health Policy, Department of Family and Community Medicine, University of Massachusetts Medical Center, and National Program Director, The Robert Wood Johnson Foundation Workers' Compensation Health Initiative.

This session established a foundation for the workshop by providing an overview of the current state of the workers' compensation medical system. The presenter, Dr. Jay Himmelstein, examined managed care models as they relate to workers' compensation and discussed the challenges State officials may face with respect to the implementation of managed care initiatives into their workers' compensation programs.

Dr. Himmelstein began the session by describing how a number of aspects of workers' compensation medical care programs differ from those of general health care coverage. He explained that the role of workers' compensation medical benefits is to minimize the economic loss to the injured employee and his or her employer while maximizing functional and vocational recovery.

Of particular concern to States is the fact that historically the costs of workers' compensation programs have exceeded group health due to cost shifting, case shifting, and the high volume and intensity of services and benefits provided for the duration of the disability. As a result, a key workers' compensation issue is controlling costs while improving access and quality of care. Unlike group health, there are no established quality standards for workers' compensation medical care, and no studies that have systematically examined quality or access.

In addition, the assessment of outcomes is complex, because the degree to which disability affects a patient's life is determined not just by medical status, but by non-work factors, such as the degree to which a patient's work can accommodate his or her disability.

The use of managed care techniques in workers' compensation is relatively new and has focused on measures to control the worker's choice of physician or to establish workers' compensation-specific networks, as opposed to the implementation of the fully capitated managed care models used typically in group health care. States are just starting to realize that some managed care usage may decrease costs for workers' compensation medical care by increasing communication between employees, employers and providers, promoting timely return to work, and ensuring rapid access to the appropriate provider.

According to Dr. Himmelstein, State workers' compensation officials who are trying to design appropriate workers' compensation managed care programs and policies will need to be aware of what is happening in the group health marketplace, as broader developments in this market, including State and Federal regulations, are also likely to influence the evolution of workers' compensation models.


Himmelstein JS, Pransky G. Measuring and Improving the Quality of Workers' Compensation Medical Care. John Burton's Workers' Compensation Monitor November/December 1995:4-9.

Dembe AE, Himmelstein JS. New Directions in Workers' Compensation Medical Care. 1997-1998 Workers' Compensation Managed Care Sourcebook—A Practical Guide to Opportunities in the Growing Marketplace: Faulkner & Gray, Inc.:99-112.

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