Workers' Compensation and Managed Care
Christine, Brian, Risk Management
MANY PEOPLE in the insurance and risk management communities are concerned about the Clinton administration's decision to place the medical portion of workers' compensation into the new health care plan. Although the details of this scheme are unclear, "what is clear is that many in the administration have as their goal full integration of workers' compensation medical into the overall health care system," declared Edmund F. Kelly, president and chief operating officer of Liberty Mutual Insurance Group in Boston, Massachusetts. Speaking at Liberty Mutual's second annual Risk Management Forum entitled "Strategies and Practices that Work" held in Washington, D.C., on October 18 to 20, Mr. Kelly acknowledged that although workers' compensation reform is needed, risk managers and the insurance industry "must work together with the administration to ensure that any approach maintains the fundamental principles of our state workers' compensation systems."
Mr. Kelly refuted the claim that merging workers' compensation into health care would result in savings. "In fact, separating medical from disability management will lead to increased costs." Under such a system, "health plans would have little incentive to aggressively treat occupational injuries, maximize medical improvement, reduce duration of disability and hasten return to work," he added.
Furthermore, the inclusion of workers' compensation medical into the health care system would reduce the incentive for employers to maintain safe workplaces. "Under the president's proposal, workers' compensation medical costs would be community-rated, and would no longer be allocated to the industries and employers where the losses occur," he added. "Other countries are struggling with this very problem -- how to differentiate between safety-minded employers and their less socially conscious counterparts."
Although successful reform of the workers' compensation system involves restoring injured employees to health and returning them to work, accomplishing this goal requires "a complex set of interdependent activities such as pre-accident planning, managed care, rehabilitation and return-to-work programs," said Mr. …