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Health Insurance Less Expensive Than Workers Comp For Medical Treatment

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WCRI Study – Health Insurance Medical Treatment More Economical Than Workers Comp

The health insurance vs Workers Comp medical treatment costs have long been a concern for employers, carriers, and TPA’s. 

Medical costs for Workers Compensation claims have always been seen as very expensive when compared to Health Insurance.  WCRI (Workers Compensation Research Institute) recently conducted a study that compared Workers Comp claim medical costs with health insurance claim costs.  

Picture Of Medical Personnel Health Insurance Pouring From Pill Bottle
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The states that were covered in the study are at the end of this article.   The study compares hospital outpatient payments made by workers’ compensation and group health for treatment of common surgical cases in 16 large states, which represent 60 percent of the workers’ compensation benefits paid in the United States. 

The study covers hospital outpatient services delivered in 2008. As there were very few changes since 2008 in the medical fee schedules for the states in the study, the numbers should be considered almost, if not completely current. 

Medical costs are slowly increasing to the level of 2/3 of the Workers Comp costs in certain states.  Most of those are states without fee schedules.  Even the states with fee schedules are feeling the effects of increased medical costs.   Medical claim costs in excess of 70% of total claims value will be the norm if  the recognized trend continues for a few more years. 

Medical Health Insurance Stethoscope
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One of the more stark figures in the study is that Workers Comp carrier pay 43% more for the same medical procedure than if the claims were filed with health insurance.   The medical procedure studied was outpatient shoulder surgery.  

One question the study abstract posed is the difference in outpatient surgery costs necessary to induce outpatient facilities to treat WC patients?   My answer to that has always been WC pays very well for medical procedures.  I have rarely seen any medical practitioner turn away WC patients regardless of what a fee schedule would pay for rendered services. 

The following 16 states are included in this study: California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia and Wisconsin.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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