The Impact of Provider Choice on Workers’ Compensation Costs and Outcomes

By Richard A. Victor, Peter S. Barth, David Neumark

November 1, 2005 Related Topics: Outcomes for Injured Workers, Provider Choice

Health care providers play many important roles in the outcome of workers’ compensation cases, from diagnosing the condition and assessing its cause through medical management practices, assessing maximum medical improvement and making decisions on the degree of impairment. From the perspective of either the employer or the employee, these decisions can be important and warrant being able to control the selection decision.

Workers and their advocates have argued that the choice of treating provider should be left to the worker, allowing the worker to be treated by those whom they trust and whose interests align with the worker—return to work that is medically appropriate and the fullest possible restoration of physical recovery. Employer advocates argue that employer choice would ensure that incentives exist for keeping the costs of care reasonable and would help avoid excessive treatment. They also contend that providers familiar with the employer’s worksite could use that knowledge to expedite return to work. 

This study, which analyzes data from employee interviews in California, Texas, Massachusetts and Pennsylvania, examines whether costs (medical and indemnity) and outcomes (return to work, duration of time away from work, perception of recovery from the work injury, and overall satisfaction with the health care provided) are affected by who selects the health care provider.

Among our findings:

  • Comparing cases in which the worker selected the primary provider with otherwise similar cases in which the employer selected the provider, the study found that costs were generally higher and return-to-work outcomes poorer when the worker selected the provider. In these same cases, workers reported higher rates of satisfaction with overall care but similar perceived recovery of physical health.
  • When the worker selected a provider who had treated him or her previously for an unrelated condition (a “prior provider”), the cases may have had higher costs, but the evidence was weak. Satisfaction with overall care was higher when the worker saw a prior provider, but other outcomes did not appear to be very different between these cases and ones in which the employer chose the provider.
  • When workers selected a new provider, the cases had much higher costs, poorer return-to-work outcomes, generally no differences in physical recovery, and higher levels of satisfaction with overall care than when employers chose the provider.
  • Comparing cases in which the employee selected a prior provider with similar cases in which the employee selected a new provider, the study found that the worker treated by a new provider was less likely to return to work, returned to work more slowly if he or she did return, had lower levels of satisfaction with overall care and experienced no better physical recovery.

The Impact of Provider Choice on Workers' Compensation Costs and Outcomes. Richard A. Victor, Peter S. Barth, and David Neumark, with the assistance of Te-Chun Liu. November 2005. WC-05-14.

Copyright: WCRI

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