Understanding Workers' Compensation Costs: Challenges and Solutions for New York's System

1. Kevin Walsh M.D. Partner: Industrial Medical Associates Staff Anesthesiologist University Hospital Member of Medical Advisory Committee to Chairperson of WCB

2. Background • Family Practice • Emergency Medicine • Occupational Health (IMA) • Anesthesiology • Interventional Pain Management

3. Today's Objective • Review WC in context of 2006 • Illustrate how the system is dysfunctional • Identify three pivotal cost drivers • How they may be better managed • Case management illustration

4. Are Workers Compensation Costs Important? • Business council of NYS • Major obstacles for recruitment & retention of jobs in New York State • Tax Structure • WC Costs • Energy Costs

5. History of New York’s WC System • Created by the Legislature around time of WWI • Legal framework to protect injured workers and employers. • Orderly litigation, predictable outcome • Medical sciences were in their infancy, medical costs were irrelevant.

6. 1980’s Conditions • Relationship between worker, family, and employers • Health benefits were comprehensive and improving. • Providers preferred to care for injuries under BC/BS - employees didn’t object. • Fewer MD’s • Fewer paramedical professionals • PT - OT - Chiropractic - Massage Therapy • Few diagnostic tools • Cat scans new to scene • Sparse legal interest locally • Pharmacy costs irrelevant • Biomedical engineering costs were non existent.

7. WC - The Players • The Legislature • Lawyers • WCB • Injured worker • Employer • Physicians & Paraprofessional Providers • Insurance Carriers

8. 2006 Conditions • Workers feel disenfranchised. • No loyalty between worker/employer. • Erosion or absence of benefits. • Private health insurers actively push cases to WC. • Patients and physicians see WC as default insurance. • Full force of best pharmaceutical marketing machine in the world with no constraints. • Biomedical engineering research funding. • Proliferation of medical providers and advanced technologies. • Lifetime medical care. • Inability to close cases.

9. Problem • Modern medical practice & Antiquated WC system • Square peg / Round hole • Trying to treat medical problems in a political versus market driven environment

10. The (Paradox/Dilemma) in WC Care • Medical technology abundant • Diagnostic capabilities much improved • Supply of medical and paramedical specialties abundant Why is the severity of WC cases escalating rapidly and outcomes of care are so poor?

11. Three Pivotal Cost Drivers • Nature & Severity of the injury. • Interface between the worker and employer. • Dynamic between the injured worker and medical providers.

12. Employer / Injured Worker Interface • Visceral response • Negative • Adversarial

13. Injured Worker / Medical Care Dynamic • Review in detail what happens through the course of long term workers comp case. • The Human condition + behavior and their implications

14. Workers Comp: Low back injury case review Day 1 - “I really hurt my back” Day 7 - “Feeling a little better thank you” 4 Weeks Later… Feeling Worse “The Pain Is Awful!”

15. Pain Pain Nociceptive PainSuffering • Alienation at Work • Fear of Job Loss • Disability • Financial Stress • Family Problems • Too much emphasis on investigating and treating pain. • Suffering is often the dominant factor and it is ignored

16. WC Care Walk-through cont’d • 6 weeks • In physical therapy • Request CT or MRI scan • 10 - 12 weeks • The pain is worse • Abnormal MRI scan • Request Pain Blocks / EMG study • 4 - 6 months • The pain is worse • Failure of conservative therapy • Request authorization for surgery

17. Request for Surgery • Based on abnormal MRI & report of persistent of pain. • The most common cause of poor surgical outcomes is not bad surgeons. • It is operating for the wrong reason.

18. Pain Pain Nociceptive PainSuffering • Alienation at Work • Fear of Job Loss • Disability • Financial Stress • Family Problems • Too much emphasis on investigating and treating pain. • Suffering is often the dominant factor and it is ignored

19. Case Continued • 6 months plus • Post operative visit • Still have pain • Repeat pain blocks & rehab • Chronic medication requirement • Including narcotics

20. Workers Compensation Cost Cascade In house health resource $ Off site health resource $$ Hospital based care - Emergency dept. $$$ Specialist consultation - Orthopedic $$$$ Imaging studies - CT, MRI, Pet Scans, EMG $$$$$ OT, PT, Chiro Massage therapy $$$$$$ Surgical Intervention Surgical fee $$$$$$$ Facility fee More rehab - Pain Management Nerve blocks $$$$$$$$ Pharmaceuticals

21. Managing the Cost Drivers-Nature & Severity- • Safety training • Safety culture • Ergonomics • Engineering

22. Managing the Cost Drivers-Employer / Injured Worker Interface- • Be positive and supportive. • Treat like a valuable athlete. • How can I help you recover? • You are important to the success of our business. • Maintain regular personal contact. • Facilitate timely medical care. • Make sure compensation checks arrive on time. • Make return to work pathway easy.

23. Managing the Cost Drivers-Dynamic between Injured Worker & Medical Provider- • This is really a triad: • Worker • Employer • Medical Provider • More Complex • Requires persistent effort • When I do right nobody remembers, when I do wrong nobody forgets.

24. Managing the Cost Drivers-Dynamic between Injured Worker & Medical Provider- • Keep it simple. • Engage with “problem solver” medical providers / systems. • Attentive patient management. • Mechanisms to resolve disputes quickly. • Utilization review. • Encourage early return to work.

25. Workers Compensation Cost Cascade In house health resource $ Off site health resource $$ Hospital based care - Emergency dept. $$$ Specialist consultation - Orthopedic $$$$ Imaging studies - CT, MRI, Pet Scans, EMG $$$$$ OT, PT, Chiro Massage therapy $$$$$$ Surgical Intervention Surgical fee $$$$$$$ Facility fee More rehab - Pain Management Nerve blocks $$$$$$$$ Pharmaceuticals

26. Workers Compensation Reform • Changes in law will never keep up with changing business environment. • Employers who manage the process and human behavior can effectively reduce losses regardless of reforms. • Reform efforts should address: • Direction of care. • Appropriate utilization of medical services. • Timely resolution of all disputes.

27. Employer Influence • Employers can influence the length of the disability more than they realize. • Manage the process. • Develop relationships/programs with medical community.

28. Wrap Up • Preemptive efforts: • Invest in the Recruitment Process • Invest in Safety & Training • Make it important part of culture • Patient Care management: • When accident or injury occurs don’t pass it off. Be involved in care management from day 1. • Medical management: Have a “Friend In The Business” • Safety person • Occupational health nurse • Contracted service offsite • Physicians • Positive ongoing relationship with Employee: • Treat like valuable asset • Frequent in person relationship • Facilitate medical care • Make sure compensation checks arrive on time • Make return to work pathway easy

29. Contact Information Kevin Walsh M.D. Industrial Medical Associates wcpainreview@aol.com IMA: (315) 478-1977 Digital Pager: (315) 441-1324