In February 2020, NCCI published the article “Comparing the Quantity and Prices of Physician Services Between Workers Compensation and Group Health.” A newly published article extends that work by also looking at a mix of services.
A model of component cost differentials of physician services between WC and GH for 12 common WC injuries showed that:
– – WC costs more than GH to treat comparable injuries, after controlling for claim characteristics such as age and gender
– – Utilization differences account for about 78% of the overall cost differential for WC
– – Chronic pain-related injuries, such as bursitis and back disorders, have larger differentials amongst the 12 injuries studied
It also found that:
– – Unit price differentials vary principally by state, with most states having higher unit prices for WC than for GH
– – Utilization differentials vary principally by type of injury, with all 12 injuries showing higher WC utilization
– – A WC physician fee schedule in a state is often associated with prices that are competitive with, or even below, GH prices
There are distinct patterns of medical services by service category. Comparing WC to GH:
– – Evaluation, management, and physical medicine costs are higher for WC due to greater utilization
– – For WC, the greatest proportional component difference is in the utilization of physical medicine
– – For chronic cases, radiology and surgery cost more for WC due to both higher unit prices and greater utilization
A greater volume of services is the primary driver of higher treatment costs for WC over GH for primary care (office visits and physical therapy). For specialty care (radiology and surgery), greater volume combines with a more expensive mix of procedures to drive WC treatment costs higher, especially on more complex injuries. For all age groups, quantity dominates mix in driving WC costs higher than GH and are greatest after age 40. For males and females and for all four physician service categories, the cost differential model has WC costs higher than GH; however, differences are greater for males than for females. More referral – based services, on average, to treat an injury drive greater differences for males.