Fending Off the Feds

The Department of Labor’s report on Workers’ Compensation – Does the Workers’ Compensation System Fulfill Its Obligations to Injured Workers– is the subject of much discussion among stakeholders in the workers’ compensation industry. Does the key to much of what ails today’s workers’ compensation industry lie in the adoption of the value-based healthcare model?

Many media outlets have reported on the Department of Labor’s findings. Forum speakers touched on issues ranging from benefit and wage inadequacy to cost shifting.

For the most part, the panel ignored the real problem – the cause and treatment of disability.

The issue plaguing injured workers, and all workers’ compensation system stakeholders was almost entirely overlooked by the discussion’s organizers. The issue? Iatrogenesis– treatment by health professionals that does not support the recovery goals of the affected patient. This is a topic that demands great scrutiny if the workers’ compensation industry hopes to change the perception that its practices are negatively impacting social programs.

As one panelist stated, Gary Franklin, MD, PhD, long-time Medical Director of the Washington State Department of Labor and Industries, “workers’ comp medical care is about the worst in the country”. (1)

Enough said.

Concurrent with the over-prescription of narcotics, injured workers have been subject to the over-utilization of treatment (such as with lumbar fusion as referenced by Dr. Franklin on the call) and prolonged physician-approved absences from work. This has gone on for decades. These examples can be pointed to by many outside the workers’ compensation industry as the result of a lack of accountability and high quality healthcare in today’s system. As a result, injured workers become disabled workers,which adds additional stress to both SSDI and the healthcare industry.

Could moving to a value-based healthcare model in workers’ compensation establish shared accountability for all members in the care and claim continuum? Could the use of an evidence-based alternate payment model create a unified focus on returning injured workers to productivity at the soonest medically-appropriate time?

One key element of a value-based healthcare model is to eliminate unnecessary and expensive medical treatment. For example, rewards based on outcomes and productivity would curtail the rampant over-prescription of narcotics on new claims. As a result, disability duration, indemnity costs, and iatrogenic disease would materially decrease and be replaced by improved healthcare outcomes – a result the workers’ compensation industry could, and should, embrace.

A move to value-based healthcare may, or may not, dissuade the federal appetite to intervene in state workers’ compensation systems, but it will reduce the burden to social programs caused by prolonged disability and prescription drug addiction.

  1. Paduda, J. (2016, October). Takeaways from DOL’s State Workers’ Compensation Report [Web log post]. Retrieved fromhttp://www.joepaduda.com/2016/10/takeaways-dols-state-workers-compensation-report/

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