Friday, October 7, 2016

Worker Comp Insurance Cost Shifting Study. Leigh 2012

To finish today's marathon session I want to share this 2012 Study by Paul Leigh and James Marcin from UC Davis in California.  A study that revealed massive worker compensation insurance cost shifting.  Please think about it.  None of that was done in the interest of better patient care, it was all about making the system churn out more corporate profits.  Why do we put up with it?  Before complaining about the costs of Amendment 69, think about how much your health insurance cost is going to increase.  How much will your health care improve? 

Shouldn't our health care dollars go to providing our health care?  

Vote YES on ColoradoCare and Amendment 69.

{ hat tip to Dr. Tom Horiagon for sharing this and the previous Department of Labor 2016 study that provided further supporting evidence for these complaints and the need for substantive health care reform. } 

Of all the posts I've put up today, may I recommend 
"Passing Amendment 69 - Why the Fear?  Embrace the Challenge!" 
Workers' compensation benefits and shifting costs for occupational injury and illness.

Whereas national prevalence estimates for workers' compensation benefits are available, incidence estimates are not. Moreover, few studies address which groups in the economy pay for occupational injury and illness when workers' compensation does not.

Data on numbers of cases and costs per case were drawn from the Bureau of Labor Statistics and National Council on Compensation Insurance data sets. Costs not covered by workers' compensation were estimated for private and public entities.

Total benefits in 2007 were estimated to be $51.7 billion, with $29.8 billion for medical benefits and $21.9 billion for indemnity benefits. For medical costs not covered by workers' compensation, other (non-workers' compensation) insurance covered $14.22 billion, Medicare covered $7.16 billion, and Medicaid covered $5.47 billion.

Incidence estimates of national benefits for workers' compensation were generated by combining existing published data. Costs were shifted to workers and their families, non-workers' compensation insurance carriers, and governments.

Source:  J Occup Environ Med. 2012 Apr;54(4):445-50. doi: 10.1097/JOM.0b013e3182451e54.

UC Davis Health System Newsroom | May 25, 2012
Most occupational injury and illness costs are paid by the government and private payers rather than workers' compensation insurance, UC Davis study shows

Paul Leigh‚ Sacramento, California |

UC Davis researchers have found that workers' compensation insurance is not used nearly as much as it should be to cover the nation's multi-billion dollar price tag for workplace illnesses and injuries. 

Instead, almost 80 percent of these costs are paid by employer-provided health insurance, Medicare, Medicaid, Social Security and other disability funds, employees and other payers. ...

Authors of the study, published in the April issue of the Journal of Occupational and Environmental Medicine, said this cost shifting leads to artificially low workers' compensation premiums that should be used to cover wage replacement and medical care for employees injured on the job. ...

In a study he published last year, Leigh, an expert in health and labor economics, found that total annual costs for occupational injuries and illnesses in 2007 were nearly $250 billion: $67.09 billion related to medical care and $182.54 billion related to lost productivity.

In the current cost-of-illness study, Leigh showed that just 21 percent -- or $51.7 billion -- of those costs were covered by workers' compensation. 

He also identified who pays for the extra $198 billion -- or 79 percent.

By combining 2007 data from several government and nonprofit organizations, including the Bureau of Labor Statistics and National Council on Compensation Insurance, Leigh found that the medical costs for occupational injuries and illnesses were primarily paid by these sources:
Workers' compensation: $29.86 billion
Other non-workers' compensation health insurance: $14.22 billion
Workers and their families: $10.38 billion
Medicare: $7.16 billion
Medicaid: $5.47 billion

He also found that only $21.86 billion in lost productivity costs are paid by workers' compensation insurers, with the remaining $160.68 billion covered by other sources, including workers and their families, the Social Security Disability fund and state disability funds.

"Cost-shifting affects everyone, because we're all paying higher Medicare and income taxes to help cover that 79 percent," said Leigh.

Leigh suggests three changes in current workers' compensation and employee health practices to reduce cost shifting and overall costs and to help ensure workplace safety:
1 Eliminate the stigma often associated with filing workers' compensation claims by openly acknowledging the legitimacy of using workers' compensation insurance for occupational injuries.
2 Encourage more states to adopt single-payer government-managed workers' compensation systems to save administrative costs.
3 Link premiums with company-specific injury experience rather than industry-wide estimates, which would encourage companies to lower premiums by reducing workplace hazards.

"The ultimate goals should be to comprehensively address the way occupational health is managed and establish cultures of safety for workers," said Leigh.

James Marcin, a UC Davis professor of pediatrics affiliated with the UC Davis Center for Healthcare Policy, was the co-author of "Workers' Compensation Benefits and Shifting Costs for Occupational Injury and Illness." 

A copy of the study can be requested by e-mailing Marjory Spraycar at

Partial funding for the research was provided by the National Institute for Occupational Safety and Health (grants OH008248-01 and U54OH007550).

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