The 130th Annual Meeting of APHA

Abstract #42369

William G Johnson, PhD, School of Health Administration and Policy and Department of Economics, Arizona State University, Box 874506, Tempe, AZ 85287-4506, 480-965-7442, william.g.johnson@asu.edu, Marjorie L. Baldwin, PhD, Department of Economics, East Carolina University, Brewster A-427, Tenth Street, Greenville, NC 27858-4353, and Tricia J. Johnson, MA, MS, Department of Economics, Arizona State University, Box 873806, Tempe, AZ 85287-3806.

INTRODUCTION: Recent studies indicate that health care networks for injured workers reduce health care costs. It is alleged that network care slows recovery and extends work absences. It is also claimed that the observed cost savings by networks are biased because of selection effects that permit networks to avoid treating patients with relatively severe injuries. We use a unique combination of methods to address the potential selection issues and to control for non-health related factors that influence durations of work absence to estimate the effects of network care on post-injury duration of work absence.

METHODS: Data consist of 130,000 workers’ compensation claims between 1995 and 1997, from three large insurers, in California, Connecticut and Texas. Most studies of occupational injuries focus on temporary disability cases only, but we include medical only and permanent partial disability cases in our samples to estimate the durations of work absence for network vs. non-network care. We construct two comparison groups: The first group is comprised of claims with 100 percent of health care payments to network providers versus 0 percent to network providers. The second group is comprised of claims with 75 to 99 percent of health care payments to network providers versus 1 to 25 percent to network providers.

RESULTS: Mean health care costs as well as mean durations of work absence and disability benefit payments, are lower for network cases than for matched non-network cases. The results indicate that network care is associated with thirteen percent fewer work loss days for the all network/all non-network group and seventeen percent fewer days for the mostly network/mostly non-network group.

CONCLUSIONS: The results show that, all else equal, workers treated by network providers return to work sooner than matched non-network cases. The potential savings in work loss days from shifting the non-network cases to network care are large: approximately 9,000 days for the all non-network group, and 4,500 days for the mostly non-network group. The results show that network care reduces both health care costs and duration of work absence, lending no support to the allegations that network care delays recovery from occupational injuries.

Learning Objectives:

• § Evaluate whether health care networks reduce health care costs for occupational injuries at the expense of extending durations of work absence
• § Identify other important determinants of post-injury duration of work absence
• § Explain the importance of duration of work absence in the costs of occupational injury

Keywords: Managed Care, Occupational Injury and Death

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.