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The Effect of a Health Care Management Initiative on Reducing Workers’ Compensation Costs

Green-McKenzie, Judith MD, MPH; Rainer, Sharon MSN, CRNP; Behrman, Amy MD; Emmett, Edward MD, MS

Journal of Occupational and Environmental Medicine: December 2002 - Volume 44 - Issue 12 - p 1100-1105
ORIGINAL ARTICLES: CME Article #1

Identify recent trends in workers’ compensation (WC) cases and the use of managed care in this setting.Describe the cost control and health care management measures introduced in an attempt to control WC expenses.Distinguish between the changes in WC costs growing out of changes in health care management and those effected by cost control measures. The effect of both a cost control and health care management initiative (HCMI) on Workers’ Compensation costs at a self-insured University Hospital was assessed. Seven cohorts of injured workers were studied. Cost control measures started in 1993 included early return to work and injury prevention programs, internal administration of legal cases, and utilization of modified duty assignments. The health care management initiative fully in place in 1997 included aggressive case management and preferred provider panel utilization. Workers’ Compensation indemnity costs and lost workdays incurred by each cohort were compared. A 41 to 59% reduction in indemnity payments and 46 to 67% reduction in lost time cases were realized after the health care management initiative was fully in place. During this time, accepted claims were reduced by 10 to 15%. The quality of the provider panel, as measured by academic credentials, experience and board certification, did not change. Cost control measures, without comprehensive case management, did not decrease these parameters significantly. The health care management initiative realized reductions in lost time cases and Workers’ Compensation indemnity costs.

From the Hospital of the University of Pennsylvania, 3400 Spruce Street, Occupational Medicine, Philadelphia, PA 19104-4283.

Address correspondence to: Judith Green-McKenzie, Hospital of the University of Pennsylvania, 3400 Spruce Street, Occupational Medicine, Philadelphia, PA 19104-4283; e-mail: jmckenzi@mail.med.upenn.edu.

Dr Green-McKenzie is currently Assistant Professor of Emergency Medicine & Associate Director of the Occupational Medicine Residency at The University of Pennsylvania School of Medicine. This article is based on a platform presentation at The American Occupational Health Conference in Philadelphia, Pennsylvania, May 2000. J Gen Int Med. 2000;15, Suppl 1.

Copyright © by American College of Occupational and Environmental Medicine

Copyright © 2002 by the American College of Occupational and Environmental Medicine