The RWJF Workers’ Compensation Health Initiative: Findings And Strategies

State laws generally require employers to purchase or provide workers’ compensation insurance to pay the medical care and wage replacement expenses for employees who experience workplace injuries and illnesses. In 1999 nearly 124 million persons—97 percent of the U.S. workforce—were covered by workers’ compensation plans. Benefit payments in that year totaled $43.4 billion, of which 42 percent, or $17.9 billion, was for direct payment of medical care costs. Unlike general health insurance, employers must pay for the entire amount of this coverage (estimated at $53.3 billion in 1999), with no cost sharing or copayments normally required by the covered workers. ¹ Also, employers and their workers’ compensation insurance carriers typically retain extensive control over the choice of medical providers. Only three states allow injured workers full choice of medical providers throughout the course of treatment. ² Partly because of this, state policymakers and public health advocates have expressed interest in strengthening methods for measuring and assuring the quality of care provided under workers’ compensation plans.

The Workers’ Compensation Health Initiative (WCHI), a national program of the Robert Wood Johnson Foundation (RWJF), is aimed at improving the quality of medical care for persons suffering job-related injuries and illnesses. The foundation sees this program as a complement to its current focus on improving care for persons with chronic conditions and ensuring access to appropriate care for diverse populations. ³ Since its inception in 1995, the WCHI has awarded approximately $6 million in grants to develop and test innovative models of health services delivery and to conduct applied research into ways of measuring and enhancing the quality of medical care paid for by workers’ compensation insurance. ⁴ In anticipation of the end of this grant-making program in 2002, the WCHI sponsored a conference, held in September 2001 in Newport, Rhode Island, to consider the major findings of the initiative and its implications for future state and federal policy making. Attendees included WCHI grantees, academic and government researchers, leading occupational health specialists, state workers’ compensation officials, representatives of organized labor and employer groups, health system administrators, and authorities from the workers’ compensation insurance industry. Senior staff from the National Institute for Occupational Safety and Health (NIOSH), the primary federal agency promoting prevention and control of work-related injuries and illnesses, also participated.

The conference was organized around three central themes: quality measurement and monitoring; disability prevention and management; and health services research related to workers’ compensation. Leading experts made presentations in each area, and reports on the findings of relevant WCHI-funded grant projects were given. Following these presentations, attendees participated in workshops to synthesize major findings and to identify key strategies for future improvement in the field. This paper reports on the findings and proposals that resulted from the workshop sessions.

Key Findings And Proposed Strategies

Quality measurement and monitoring.

Many workers’ compensation reform efforts have been directed at containing costs rather than at enhancing quality of care. Attempts to advance quality have been impeded by the lack of a common definition of quality and the absence of uniform and standardized quality measures. A set of consensus medical care performance measures related to workers’ compensation recently were developed by URAC (the American Accreditation Health Care Commission) as part of a WCHI grant project. ⁵ The URAC measures emphasize treatment of specific occupational disorders, recovery of vocational functioning, and other areas not covered by the Health Plan Employer Data and Information Set (HEDIS) or other quality-of-care measurement systems.

Quality efforts also are hampered by a fragmented care system, in which the major stakeholder groups—employers, insurers, workers, providers, and state workers’ compensation regulators—often have divergent goals and do not coordinate their efforts adequately. While some employers may consider quality in their selection of medical care plans for workers’ compensation, others will opt for the lowest-cost approach with extensive controls over use of services. There is little hard evidence upon which to accurately weigh the pros and cons of different treatment strategies on ultimate employment outcomes or to construct a “business case” that shows employers that purchasing high-quality medical care supports corporate business objectives. Some employers push for conservative care and a rapid return of injured workers to normal job activities. Other employers, along with many labor advocates and occupational medicine specialists, prefer aggressive therapeutic and rehabilitative services for injured workers, with job modifications or light-duty assignments made before they return to work.

In theory, the fact that workers’ compensation links payment for medical care with the provision of wage-replacement benefits for lost work time should make it easier to evaluate the impact of various medical care approaches on job productivity and corporate profitability. However, additional studies of care processes and vocational outcomes are still needed to clarify these connections. Because the entire cost of workers’ compensation medical care is paid for by the employer rather than injured workers, it is particularly difficult to depend exclusively on market mechanisms to ensure the delivery of appropriate and high-quality medical services. Strengthened state regulation also may be needed.

Suggested strategies for improvement include the following: (1) Adopt state regulations requiring certification of health plans that provide medical care under workers’ compensation; (2) mandate reporting of quality-of-care performance measures in workers’ compensation (such as those recently established by URAC) to state or accreditation agencies; (3) insert specific quality expectations in contracts between purchasers of workers’ compensation medical care (employers, insurers) and provider organizations; (4) implement a uniform data collection process for workers’ compensation medical care that might include an injured worker survey such as that recently developed through a WCHI grant project; (5) encourage employees’ involvement in the design of workers’ compensation medical care plans and closer coordination of quality improvement efforts among employers, insurers, providers, workers, and labor representatives; and (6) conduct additional research aimed at establishing the business case for employers’ purchasing high-quality workers’ compensation medical care, emphasizing the potential impact of such care on absenteeism and productivity. ⁶

Disability prevention and management.

The goals of disability prevention and management are to provide timely and appropriate care so that an injury or illness is less likely to lead to a work disability; to help disabled employees regain functional abilities and return to work safely and quickly; and to help employers and employees minimize the costs associated with work injury and disability. Ideally, medical care and rehabilitation services also should be coordinated with primary prevention and work-place safety efforts.

Traditional occupational medicine aims to coordinate standard diagnostic and therapeutic services with special approaches to promote functional recovery and complete and safe return to vocational activity. Such coordinated care is often absent in much of today’s general primary care. WCHI projects have attempted to bridge this gap. ⁷

Such an approach means that clinicians providing workers’ compensation medical care need to be educated about disability prevention and the assessment of vocational capabilities. Providers need incentives to expand communication with employers and therapists during the course of care. Effective case management can play a useful role here, especially if it is financed and organized to be independent of employer and insurer control, as was evidenced by a recent WCHI grant project. ⁸ The development of standardized performance scorecards for workers’ compensation medical care providers that include disability prevention and management elements also may be useful in changing providers’ behavior and making care more effective.

Suggested strategies for improvement include the following: (1) Expand education for primary care providers in the assessment of vocational function and in techniques for preventing and managing disability; (2) establish reimbursement mechanisms that support delivery of prevention-oriented and disability management services, and allow providers to gain firsthand knowledge of patients’ job demands; (3) adopt performance scorecards to measure the adequacy of disability prevention; (4) expand workers’ ability to choose qualified providers and therapists rather than being restricted to clinicians selected by the patient’s employer and insurer; and (5) require employers to have effective disability prevention and management programs in place, including transitional or light-duty assignments for injured persons and job accommodations when necessary.

Workers’ compensation health services research.

Few controlled studies to date have evaluated the costs and quality of workers’ compensation medical care, or patients’ access to it. However, recent grant making by the WCHI and NIOSH has vastly expanded research in these areas. Four new NIOSH-sponsored, doctoral-level programs were established in 2000 and 2001 to train occupational health services researchers.

Attempts to study occupational medical care services face formidable obstacles, including researchers’ limited access to workers’ compensation insurance claims data, a paucity of medical care and functional status information in existing research databases, a lack of trained occupational health researchers, the absence of a national workers’ compensation data collection or reporting system, and the inability to link workers’ compensation data to general health information. As a result, we have only limited evidence regarding the impact of managed care, utilization review, practice guidelines, and case management on health outcomes in workers’ compensation medical care. ⁹

In addition, little attention has been paid to understanding the relationship between workers’ compensation medical care and the care provided under other private and public health insurance plans. There is growing evidence that psycho-social and other aspects of working environments affect overall health status and the risk of contracting cardiovascular disease, hypertension, osteoarthritis, and other chronic disorders. ¹⁰ Yet little research has probed the more general relationships between job conditions, occupational injuries and illnesses, chronic diseases, and general health status.

Suggested strategies for improvement include the following: (1) Promote uniform processes to define and collect data among states, with possible involvement of NIOSH or another federal agency to establish a national workers’ compensation medical care research database; (2) encourage further study of interactions between workers’ compensation and other health insurance systems to assess the advantages and disadvantages of more closely coordinating or integrating these systems; (3) advocate for state workers’ compensation agencies to establish research bureaus modeled after successful units in Texas and other states and encourage states to involve all major stakeholders in the research effort; (4) conduct additional research on the relationship between workplace illnesses and injuries, effective medical care and disability management, and patient outcomes, including social and vocational functioning and job productivity; (5) pursue studies that quantify the determinants of high-quality workers’ compensation medical care and optimal outcomes, including characteristics of effective employers and providers; and (6) undertake studies that evaluate variations in workers’ compensation medical care and outcomes based on workers’ sociodemographic characteristics, to ensure that all injured persons and groups have equitable access to timely and appropriate care.

Looking Ahead

The official conclusion of the WCHI grant-making program does not signify the end of national and state efforts to improve medical care for job-related conditions. Plans are now under way to build continuing systems for maintaining the WCHI’s leadership role in providing technical support to investigators and other stakeholders at the state and federal levels. Steps are being taken to collect resources—data, published literature, research tools, and other materials—so that they can be placed on Web sites and in other information repositories.

With WCHI funding, state agencies in Rhode Island and California have begun to develop “technical resource centers” for improving workers’ compensation medical care that will serve the needs of injured workers, employers, clinicians, and other affected groups. The Washington State Department of Labor and Industry, another WCHI grantee, is leading a similar drive—in this case, to establish regional “centers of excellence” for enhancing workers’ compensation medical care in that state. ¹¹ It is hoped that these efforts will improve care for workers suffering from occupational disorders and will improve the general health care provided for persons with disabilities and chronic conditions by giving physicians the tools needed to expedite patients’ functional and vocational recovery.

Eventually, other foundations and federal agencies, such as NIOSH and the Agency for Healthcare Research and Quality, will need to take the lead in sponsoring research and coordinating efforts to integrate improvement programs in workers’ compensation medical care with larger policy initiatives aimed at increasing access to care, eliminating disparities, enhancing quality, and averting unnecessary redundancy and friction between health care systems. Efforts to optimize workers’ compensation medical care will require a consideration of the trade-offs inherent in minimizing system costs while preserving or enhancing injured workers’ ability to receive high-quality care. For example, recent studies have shown that the use of special networks of occupational medicine providers can decrease direct medical costs by 20–30 percent but that patients’ satisfaction with care in those networks is much lower than with traditional care. Employers and state policymakers will be challenged to weigh costs versus quality issues when establishing new programs for the financing and delivery of workers’ compensation medical services. ¹²

As these efforts proceed, it is important to keep focused on the primary goal of ensuring that persons suffering job-induced injuries and illnesses or other chronic conditions have access to timely and appropriate health care that not only addresses their immediate medical needs but also includes services to help prevent extended disability, promote full recovery of vocational and social functioning, foster successful rehabilitation, and minimize the economic effects on themselves, their employers, and their communities.

Al Dembe is an associate professor and senior research scientist at the Center for Health Policy and Research at the University of Massachusetts Medical School in Worcester. Sharon Fox is an assistant professor at the center, which Jay Himmelstein directs. Himmelstein is national program director for the Robert Wood Johnson Foundation’s Workers’ Compensation Health Initiative; Dembe and Fox are co-deputy directors.

NOTES

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