By DANIEL D. CROWLEY
Universal coverage. A public insurance option. Mandated coverage. Government fee schedules.
Sound like the language of health care reform? “Obama Care?”
These have long been features of California’s robust workers’ compensation health insurance system, yet few think of that system as “socialist” or a government takeover of health care.
As the debate about health care reform rages, there are lessons to learn from the workers’ compensation insurance system – a system that, by and large, serves the state well.
Across the nation, workplace injury rates continue to fall as employers focus on safety to reduce insurance premiums. Doctors compete to attract workers’ compensation patients. Insurers have healthy profits even as they compete against public insurers in California and 20 other states.
In California, workers’ compensation insurance premiums are at an eight-year low, and a recent study by the California Workers’ Compensation Institute found that the medical portion of the average workers’ claim was lower in 2007 than in 2002.
Insurance premium rates are set competitively by the market, state rating agencies or a combination of both.
Employees who are injured due to work-related incidents are fully covered for the care they need to recover to optimum health. There are also provisions to compensate them for lost work time.
Medical providers are typically paid from fee schedules that are regulated by state agencies, negotiated contracts with insurers or a combination of both.
Universal workers’ compensation coverage helps level the competitive playing field. All employers must provide the same level of coverage as their competitors. This eliminates cost shifting from employers without workers’ compensation coverage, so employers who do provide coverage aren’t handicapped.
Because all employers are required to have workers’ compensation coverage, and payments to doctors and therapists are typically controlled by fee schedules, employers try to lower costs by improving safety records, shopping for better premium rates and sending employees to more effective doctors and networks – not by simply cutting benefits or squeezing doctors’ incomes.
As we try to reform health care, we need reform that encourages this kind of healthy competition.
‘Total case costs’
When employers and insurers are responsible for “total case costs” – medical care, lost wages and lost ability – they don’t scrimp on care or want to let it drag on.
They want injured or ill employees to have appropriate comprehensive medical treatment as soon as possible so they can get back to work. Otherwise, the employer will have to pay someone else to do the job, pay lost wages for the injured employee and suffer higher premiums in future years.
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