This is a re-cap of the WCRI Conference that took place last week at in Boston
This past week the Park Plaza Hotel in Boston hosted the Annual Issues and Research Conference of Workers Compensation Research Institute (Institute) conference on March 12 and 13. The two-day conference brought together a nationwide audience of almost four hundred of the leading workers’ compensation policymakers, employers, labor advocates, insurance executives, healthcare organizations, claims managers, and researchers.
Along with technical presentations regarding the Institute’s current research projects, this year’s conference had a special focus on the impact the start of national healthcare might have on state workers’ compensation systems
Each Year The Worker’s Compensation Research Institute Sponsors A Conference
For over thirty years, the non-profit WCRI has conducted independent research studies regarding the workers’ compensation systems that operate within the United States. In the over 300 research studies that the Institute has published, the Institute has tackled major issues facing workers’ compensation systems along with comparative studies of how various workers’ compensation systems perform and how different workers’ compensation systems compare based upon objective benchmarks.
As a basic rule, WCRI does not take official positions on the issues it researches. It is a non-partisan entity with a diverse membership made up of large employers, insurance companies, claim service and medical service related providers, rating bureaus, labor unions, and state workers’ compensation commissions and divisions. The Institute requires that its studies pass unbiased peer review procedures and that all studies conform to recognized scientific methods. In addition, the Institute also maintains an extensive informational database.
The 2014 Conference focused on the sea change brought about by the Affordable Care Act and its effect on Workers’ compensation systems.
This year, the WCRI decided to focus on the impact that national healthcare reform would have on state workers’ compensation systems. While popularly known as “Obamacare”, the Patient Protection and Affordable Care Act or ACA for short, has a number of important provisions that take effect in 2014.
Although insurers and self-insurers pay substantial sums for health care through their workers’ compensation systems, the ACA includes no provisions per se that integrate or even recognize this financial source of health care dollars. There is no doubt that a law, as sweepingly broad as the ACA is, will likely have a major effect on workers compensation systems. During this year’s conference which focused on this issue, there were several interesting presentations that tried to divine what might the market and delivery of health care look like as the ACA takes hold and how might workers’ compensation systems have to respond.
What does the ACA augur for workers compensation systems? In the end, all of the speakers more or less agreed that whether all, some or none of these effects will actually occur is unknown because it was just too early to tell what exactly is going to transpire
In the end, all of the speakers more or less agreed that whether all, some or none of these effects will actually occur is unknown because it was just too early to tell what exactly is going to transpire
Of the four presentations related to the ACA, Dr. Joseph Gruber of MIT led off with an overview of the ACA from its inception as the Massachusetts health care act signed by Governor Romney. He emphasized that the ACA was a bipartisan bill signed with both Senator Ted Kennedy and Dr. Robert Moffit of the conservative think-tank The Heritage Foundation, present to take the kudos for the bill. The video of that signing with its disparate group of participants including Dr. Gruber is on YouTube. An abridged video with Governor Romney thanking a diverse group of Democrats, Republicans, liberals and conservatives who made the bill possible is here: Romneycare signing speech.
Dr. Gruber was instrumental in developing both the Massachusetts health care legislation and the ACA, but he did not believe that the Massachusetts experience with health care reform would necessarily repeat itself at the national level with the ACA.
Massachusetts politicians had obtained from the Bush administration substantial yearly subsidies measured in the hundreds of millions of dollars to support the legislative goal of providing universal coverage to the Massachusetts uninsured. This made the success of the new law almost certain.
As a result of the 2006 law, the percentage of persons in Massachusetts without health insurance has fallen from 16% in 2006, to 3% today.
Dr. Gruber praised the relative quick recovery of the federal exchanges from their disastrous introduction late last year. Nevertheless, he emphasized that the more serious problem caused by individual state opt-outs from federally funded Medicaid expansion was going to be problematical. In his opinion, these opt-outs will cause extreme hardship to a vulnerable segment of the population who cannot afford insurance and need access to Medicaid for their insurance.
Finally, to Dr. Gruber the ACA is a work in process that will require several more years of implementation before anyone will know whether the reform changed our health care coverage for the better.
The discussion of the unfolding scenarios of the ACA affecting workers’ compensation systems continued with the second and third presentations by Dr. Richard Victor, the Institute’s Executive Director, and the subsequent presentation of a distinguished panel consisting of David A. North, the president and CEO of Sedgwick, Donald C. Hurter, Senior Vice President, Medical Management Services at AIG and Christopher Cunniff, Senior Vice President and Product Manager for workers’ compensation at Liberty Mutual.
Dr. Victor cautioned that his comments were merely his considered speculations on the possible positive or negative effects of the ACA on workers’ compensation systems and not any official position of the Institute. He too stated that only time would tell how the ACA would play out in affecting the present workers’ compensation systems.
The panel reiterated much of Dr. Victor’s uncertainty of just how much the ACA would impact the present workers’ compensation systems.
During the course of these presentations, the consequences or effect in workers’ compensation systems were discussed as potentially resulting from the provisions of the Act. Most of the issues came down to the laws of supply and demand being dramatically changed by the ACA, which causes an increased in the demand for medical services. Surprisingly, although the present workers’ compensation systems purchase health care services for a certain percentage of the population at any given time the ACA does not integrate workers’ compensation into its regulations in any meaningful way.
Some of the possible points of inflection that Dr. Victor and the panel identified between the ACA and workers’ compensation systems were as follows:
- A doctor shortage worsened by the ACA’s expansion of health care coverage for more Americans that would vary by severity from state to state;
- States with lower fee schedules for workers’ compensation may have a harder time competing for doctors or for retaining newly trained doctors who will migrate to states with higher reimbursement rates;
- Insurers and self-insured may have to pay over the base workers’ compensation fee schedules where allowed to gain faster access for injured workers to medical services that will reduce claim severity;
- The ACA may concentrate medical providers and have the unintended consequence of cost-shifting the workers’ compensation systems. This could occur if the newly concentrated medical providers had the economic power to force higher payments from workers’ compensation systems to subsidize their operations because of lower payments required by the ACA;
- Where all workers will now have health insurance they may choose medical treatment outside the workers’ compensation system. This would reduce the so-called “Monday morning effect” where workers who had no health insurance advise their employer on Monday morning that they were injured on Friday or early on Monday in order to obtain insurance coverage;
- Depending on the transaction costs and on higher reimbursement rates, medical providers may exercise discretion in classifying injuries with an ambivalent etiology work-related;
- The ACA may over the long-run provide a healthier work force who have fewer co-morbidity factors, such as uncontrolled diabetes or hypertension that can exacerbate at work-related injury and increase claim costs.
In the end, all of the speakers more or less agreed that whether all, some or none of these effects will actually occur is unknown because it was just too early to tell what exactly is going to transpire. One possible indication of the effect the ACA may have on workers’ compensation systems, however, comes from right here in Massachusetts.
A 2012 study of the RAND Corporation entitled: “The Impact of Health Care Reform on Workers’ Compensation Medical Care, Evidence from Massachusetts” uses the experience of the 2006 Massachusetts’ health care reform package to estimate how health reform similar to the ACA impacts workers’ compensation hospital care. This study concluded that “this early quantitative, empirical evidence suggests that reform may reduce medical costs borne by the [workers’ compensation] system.”