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Managed care can reduce workers' comp costs.

Workers' compensation costs can be reduced significantly when injured workers are treated by occupational medicine specialists under managed care programs, according to a 1996 study in Washington state.

The study, conducted by the University of Washington and the state Department of Labor and Industries, found a 27 percent cost reduction among a select group of injured workers who received treatment from occupational medicine practitioners skilled in treating workplace injuries and illnesses.

The idea of occupational medicine in a managed care setting is a relatively new one. It allows physicians who have expertise in the area of workplace injuries to focus solely on those injuries in order to ensure a quick recovery and a timely return to work by the employee.

The study, the most comprehensive of its kind in the United States, started three years ago to measure the effects of an occupational medicine approach on the costs of managed care workers' compensation. Particular attention was given to medical costs, quality of care, employer satisfaction, time-loss payments and patient satisfaction.

Providence Health Plans and Kaiser Health Plan of the Northwest were selected to participate because of their expertise in occupational medicine. Overall, they enrolled about 7,000 employees from 120 companies in seven Washington counties.

The 27 percent savings came in medical costs, mostly due to the reduction in outpatient services such as X-rays and physical therapy. Recovery and return-to-work times for injured employees were comparable to a traditional program. Participating employers were pleased about the flow of information from the occupational medicine doctors concerning return-to-work and recovery prognoses. Finally, employers were more involved in the workers' compensation system generally through use of the occupational-medicine clinics.

The injured employees, on the other hand, were not as satisfied with their treatment and care as injured workers who were free to choose their own doctors. They were surveyed once at six weeks and then at six months, but the reasons for their dissatisfaction were inconclusive.

Additional studies are planned such as a national survey and a follow-up study of the workers who were part of the Washington study.

For more information, contact Steve Valandra, (360) 902-5406, or visit the Washington state government Web site at and scroll to the labor department link.
COPYRIGHT 1997 National Conference of State Legislatures
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Title Annotation:workers' compensation costs
Publication:State Legislatures
Date:Sep 1, 1997
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