Workers' Compensation: Friend or Foe?
There is some suspicion (and proof) that patients on Workers' Compensation with injuries incur more costs in the course of their treatment. Are they taking advantage of the system? Or is the system the problem?

Studies that seem to verify the increased utilization of health care services and thus increased costs associated with Workers' Compensation usually include all types of medical problems. That approach can skew results and generate conclusions that might not fit all circumstances.

In this study, the authors just look at patients with one type of problem: upper extremity disorders (shoulder, arm, and hand). They chose this particular area of work-related injuries because it is the most common Workers' Compensation claim. They compared various aspects of patient care (diagnostic testing, treatment, wait between diagnosis and surgery, number of doctor visits) between patients on Workers' Compensation and patients covered by standard health insurance.

A closer look at the specific diagnoses between these two groups showed some very similar patterns. The number of sprains/strains and cases of tendinitis was about the same. The Worker's Compensation group tended to have more traumatic injuries (fractures).

Carpal tunnel syndrome was equally represented in both groups. Cubital tunnel syndrome (ulnar nerve compression along the inside of the elbow) was far more common in the Workers' Comp group. Arthritis was a more common diagnosis in the standard insurance group.

The biggest difference between the two groups was the type of work performed. Not too surprising, there were more manual laborers in the Workers' Compensation group and more unemployed, retired, and desk job workers in the standard insurance group. Age and gender were also different between the groups: patients in the Workers' Comp group were younger and more likely to be male.

But despite those differences, it turns out the way in which patients are treated in the Workers' Comp group has more to do with the system than the patient. What do we mean by that?

Well, patients in the standard insurance group could have surgery right away when it was recommended by the surgeon. Workers' Compensation patients had to wait until all the paperwork was completed. This included letters of request and justification being filed and accepted. Often a second opinion was required adding to the total cost and delaying recommended treatment.

As a result, patients in the Workers' Compensation group also had a higher number of doctor visits at a higher total cost. In the end, Workers' Compensation patients were more likely to have surgery. This may be explained by the fact that these workers are trying to get back to work as soon as possible. It has also been suggested that the way surgeons are reimbursed by some state Workers' Compensation programs may influence who has surgery and how soon that surgery takes place.

The fact that patients on Workers' Compensation are in effect "on paid leave" has been suggested in the past as an explanation for why they take longer to recover from injuries and accidents. This concept is referred to as a moral hazard -- they are paid to stay in the sick role and they don't have to pay for their care so there is no incentive to get well.

Some experts suggest that moral hazard is the reason Workers' Compensation patients have more doctor visits, higher rates of surgery, and longer waits between diagnosis and treatment. But, at least from this study on individual clinical data, the authors suggest it's more a result of how the system is run than how the patient uses the system.

Besides the additional paperwork required, they point out that it's the surgeon who decides what tests to order. And some of those tests are probably ordered because the surgeon knows Workers' Compensation requires them for reimbursement. So Workers' Comp patients can't really be faulted for higher costs associated with more doctor visits.

In summary, a look at the bigger picture surrounding Workers' Compensation claims and the costs associated with treating patients on Workers' Compensation suggests that their policies and regulations may be what are driving higher costs. Greater utilization of health care services required by state laws or attorneys may not be the patient's fault.

Taking a look at a particular segment of patients (just upper extremity problems) has helped highlight some of the differences between patients under standard insurance and those covered by Workers' Compensation. The results of this study provide a jumping off point for future research looking for ways to reduce costs associated with state run Workers' Compensation programs.
Charles S. Day, MD, MBA, et al. Effects of Workers' Compensation on the Diagnosis and Surgical Treatment of Patients with Hand and Wrist Disorders. In The Journal of Bone & Joint Surgery. October 2010. Vol. 92. No. 13. Pp. 2294-2299.