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Comparison of Workers' Compensation Costs for Two Cohorts of Injured Workers Before and After the Introduction of Managed Care

Green-McKenzie, Judith MD, MPH; Parkerson, John MD, MS; Bernacki, Edward MD, MPH

Journal of Occupational & Environmental Medicine: June 1998 - Volume 40 - Issue 6 - pp 568-572
Original Articles

A comprehensive safety and managed care initiative was instituted in 1991 at a large self-insured medical center in an effort to reduce workers' compensation costs. It features an on-site case management team, a preferred provider organization, and safety engineering efforts and ergonomic controls used proactively to aggressively identify and abate workplace hazards. Two worker populations were followed up longitudinally for three years before and after the initiative. Costs incurred by each cohort were compared. A 50% reduction in total expenditures was seen in the managed care cohort. The hospital component of the system saw a decrease in compensation of 62% for temporary total disability and 38% for permanent partial disability. Medical expenditures decreased 50%. Dramatic reductions in costs are achievable, without compromising quality of care, when managed care principles and safety efforts are emphasized.

From the Division of Occupational Medicine, School of Medicine, and The Division of Occupational and Environmental Medicine, School of Hygiene and Public Health, Johns Hopkins University, Baltimore, Md.

This article is based on a platform presentation at the American Occupational Health Conference, Orlando, Florida, May 1997 (J Occup Environ Med. 1997;39:361).

Address correspondence to: Judith Green-McKenzie, MD, MPH, Hospital of the University of Pennsylvania, 3400 Spruce Street, Occupational Medicine, Philadelphia, PA 19104-4283

© Williams & Wilkins 1998. All Rights Reserved.