Workers’ Comp Needs to Catch Up with Healthcare Changes: Economist Gruber

By Andrew G. Simpson | March 12, 2014

Workers’ compensation must align itself with the rest of the changing healthcare system to avoid increased cost-shifting by workers and medical providers, according to an economist involved in the Massachusetts and Obama administration healthcare reforms.

Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology (MIT), urged 400 attendees at the annual conference of the Workers Compensation Research Institute (WCRI) in Boston to consider where workers’ compensation is relative to the rest of the nation’s healthcare system.

Fielding questions on the impact of Obamacare on workers’ compensation, Gruber said that while workers’ compensation carriers should see fewer claims as a result of more Americans obtaining health insurance, there are other forces at play that could mean higher costs and other challenges for workers’ compensation.

“As more people have health insurance there is less need for them to have injuries covered by workers’ compensation and this should lower workers’ compensation costs,” he said.

However, that effect could be offset by employers moving to high-deductible plans and limiting provider networks as well as by health plans capping reimbursements to medical care providers.

“Other payors are going to get tougher at a quicker rate than workers’ compensation is and that is a challenge for this group and the workers’ compensation community,” he told the workers’ compensation professionals. “Is workers’ compensation going to keep up with the pace at which the rest of the system is changing?”

He said workers’ compensation is already “anachronistic in so many ways and it’s becoming increasingly so. That is the fundamental challenge: how do you get workers’ compensation to look more like the rest of the healthcare system?”

Gruber said the nation is transitioning from open provider networks to limited networks and that higher deductible plans are appropriate for higher incomes. “That’s what we should be doing,” he said.

But he questioned where these trends in health care leave the workers’ compensation industry. “If the workers’ compensation system stays behind, it will have the broadest possible network and the lowest possible cost-sharing, and it’s going to have people migrating into it more and more,” he said.

Gruber was asked about the effect on access to physicians of there being millions more Americans with health insurance. He said in Massachusetts the average wait for a doctor’s appointment went from 47 days to 51 days after the law went into affect. He said neither 47 nor 51 days is desirable but that the cause is really a shortage of family physicians across the country. “There are too many specialists,” he said, blaming a reimbursement system that he said needs fixing.

Gruber was an adviser to former Massachusetts Governor Mitt Romney in the design of that state’s universal healthcare law. He was also a technical adviser to the Obama Administration and Congress on the Affordable Care Act, which was modeled after the Massachusetts system.

Acknowledging his bias as one of the authors of health reform, the MIT professor said the Massachusetts law has had “spectacular” results, cutting the uninsured population down to three percent — compared to 18 percent nationally — and fixing a broken health insurance market.

He said the Massachusetts law was not written to address health care costs but it has had some mitigating effect there also.

As for Obamacare, he said it is too early to judge whether it is working.

“Both the advocates who say it’s working great are saying too much and the opponents who say it is working terribly are saying too much. We simply don’t know yet and we just need to be patient and let it work out,” he said.

He said the law should be judged after about three years, not now while it is in progress.

 

Latest Comments

  • March 26, 2014 at 11:34 am
    Dave Arthur says:
    While I like the fact that the discussion of W.C. medical payments in getting the attention it deserves, Mr. Gruber's analysis is not going to bend the curve. Let me explain w... read more
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