Florida Workers' Comp: Single Payer, Outliers, and Conclusions (11)

People are talking about workers' compensation, perhaps more today than ever. This is the tenth in an 11-post series (links to the first nine are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

Single-payer

In a single-payer system, all persons’ healthcare is covered, regardless of the cause of needing care. In such a system, work-relatedness would be irrelevant. The pathway to single-payer would require some method of generating sufficient revenue to cover costs. Revenue could be generated through mandatory insurance premiums in a voluntary marketplace or through taxation in a more socialized structure. In any revenue model, the single-payer process could have serious implications for workers’ compensation.

There are perceived advantages and disadvantages of involvement in workers’ compensation systems. Service providers such as physicians and therapists may perceive economic benefit or detriment in participation and may structure individual practices and participations thereon. Participating providers may be inclined to tailor opinions or conclusions in a manner to maximize economic advantage, resulting in the “cost-shifting” discussed herein.

In the 1990s, several states authorized employers to alter the manner in which workers’ compensation medical care was delivered, labeling the alternative “24-hour coverage. In some ways, this alternative was similar to the “opt-out” or “carve-out." The main purpose of this alternative was to eliminate coverage and treatment distinctions between work and non-work accidents and injuries. An employer was empowered to provide 24-hour medical care and disability coverage in lieu of the more limited work coverage. The plans enjoyed little acceptance among employers. Perceived detriments to acceptance included distinctions in medical coverage detail and inconsistency of provision of health coverage.

Medical coverage distinctions include the ability of employers to provide care in capitated or otherwise controlled delivery systems such as health maintenance organizations (HMO), preferred provider organizations (PPO), and inconsistency of regulatory definition and operation between health insurance and workers’ compensation constructs. These distinctions were perceived as challenging for an employer within any jurisdiction but were perceived as more problematic for large employers with employee populations in multiple jurisdictions. Without the adoption of the “24-hour option” many such employers operated health insurance programs across various states with a single program.

With the twenty-first century advent of “mandatory” health insurance for all Americans, there have been questions regarding whether 24-hour coverage viability is enhanced. That discussion is of course cautioned by the potential for repeal of mandatory insurance. However, the concept of distinction-less provision of medical care remains contemporary. In 2014 Vermont unsuccessfully attempted to implement a mandatory single-payer system; Colorado unsuccessfully attempted to mandate such a system in a 2016 referendum. Despite these failures, some economists believe that “single payer” is an inevitability for American health care.

The distinctions regarding work causation would be at least sidelined and perhaps eliminated in a single-payer system. Regulatory structures concerning the delivery of care, reporting, billing, and more could be implicated in such a transition. Financial concerns could also be important. In the event single-payer were funded through individual taxation, as proposed in Colorado, individual workers would become responsible (through payroll deduction taxation) for funding care for work injuries, contrary to current structures, at least in form. Such a program would seemingly cost-shift medical expenses from industry to labor. Some argue that the costs of workers’ compensation are already borne by labor, at least in part, as those costs similarly with other expenses limit the funds available or deployable as wages; this belief holds that without the expense of workers’ compensation, wages would increase.

Outliers

There is concern regarding disparity in cost and effort in the administration, processing, and adjudication of workers’ compensation claims in various systems. Summit attendees perceive that a small percentage of claims consume a disproportionate share of resources, both financial and otherwise. The attention paid to these “outlier” cases is seen as a distraction for system managers, regulators, and service providers.

Summit attendees see this disparity as affecting the experience of others, whose claims perhaps do not receive the attention they would otherwise. However, some contend that if the resource demand of these “outliers” diminished, resources would not necessarily be reassigned, but instead, the total volume of personnel and resources would be proportionately decreased. This, they argue, would result in either lower insurance rates or higher carrier profits, but would be unlikely to enhance the experience of any injured workers.

Conclusion

Without committed resources, a diverse, dynamic, and exceptional volunteer group identified and prioritized these 29 critical points that challenge American workers’ compensation. Recognizing that time and change are inexorable, there is a general consensus that challenges will consistently present in various forms. It is believed that these points bear consideration by systems, legislators, regulators, and vendors. However, it would be better still if these points, and the systems themselves, received the consideration of the critical system participants, all employers and employees. It is for these constituencies that the systems exist, and it is for them that Summit attendees contend these systems must both persevere and improve through continuous critical self-examination and analysis.

Thursday, January 4, 2018

Single Payer, Outliers, and Conclusions (11)