Relationship between Provider Choice Policies and Workers’ Compensation Costs Explored in New WCRI Study

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A study released today by the Workers Compensation Research Institute (WCRI) provides new insights into a long-standing policy discussion over whether the choice of provider in workers’ compensation cases should be left to workers or to employers.

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The Workers Compensation Research Institute (WCRI) released a new study today, The Effects of Provider Choice Policies on Workers’ Compensation Costs. The study found nuanced evidence about how provider choice policies are related to workers’ compensation medical and indemnity costs.

According to the study, there was little evidence of differences in average costs per claim between states where policies give employers control over the choice of provider and states where policies give workers the most control of the choice of provider. This is especially true for medical costs, where average cost differences were near zero.

The evidence, however, masks important differences across injury types. Policies that give workers the most control over the choice of provider are associated with higher medical and indemnity costs among the small share of the most expensive back-related injuries and, more generally, higher indemnity costs for the costliest cases overall. Back-related injuries appear to at least partially account for higher indemnity costs, overall, among the most expensive cases in states where policies give workers the most control over the choice of provider.

“Policy changes designed to restrict worker choice across the board may do little to reduce costs on average,” said John Ruser, WCRI President and CEO. “Rather, policymakers in states where policies give workers control of the choice of provider might focus on factors affecting costs for the most costly cases.”

This study examines the effects of provider choice policies on workers’ compensation costs for injuries that occurred mostly between 2007 and 2010 across 25 states in which either employers or workers control the choice of provider. It excludes states where workers can choose a provider within their employers’ established network.

To learn more about this study or how to purchase it, click on the following link: https://www.wcrinet.org/reports/the-effects-of-provider-choice-policies-on-workers-compensation-costs.

ABOUT WCRI:

The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Organized in late 1983, the Institute does not take positions on the issues it researches; rather, it provides information obtained through studies and data collection efforts, which conform to recognized scientific methods. Objectivity is further ensured through rigorous, unbiased peer review procedures. WCRI's diverse membership includes employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia, and New Zealand.

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Andrew Kenneally
WCRI
+1 617-661-9274 x 257 Ext: 257
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Workers Compensation Research Institute - WCRI
since: 06/2011
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