Online Program

Physician Prices for Workers' Compensation Plans

Tuesday, November 3, 2015

Darrell Gaskin, PhD, Department of Health Policy and Management, Hopkins Center for Health Disparities Solutions, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD

We examine the influence of market-level factors and state regulation on the prices of office-based services paid to physicians by small insurers like workers’ compensation (WC) insurers.  We hypothesize that these prices reflect physician supply prices because WC plans are price takers due to their small share of the market and little negotiation power.   Specifically, we estimate the impact of physician and hospital capacity, hospital competition, managed care penetration and state regulation on prices.

Study Design

We use administrative data from 2009 and 2010 from a large nationwide WC plan and estimate the price models for six procedures: three low and moderate priced procedures that are provided mostly by other healthcare professionals and three moderate and high priced procedures that physicians mostly provide.


We estimate regression models using GLM, correcting for skewedness and heteroskesdascity in the dependent variable. 


We find that market-level factors had statistically significant impacts on prices in the expected directions but were relatively inelastic.  Market factors that increase physician practice costs also tended to increase physician supply prices. WC plans were especially vulnerable in markets with high managed care penetration. While state regulation dampened the impact of market forces, it  substantially lower prices for WC plans.


WC plans are vulnerable to higher prices relative to other types of plans. Market forces given their directions and relative size do not provide much relief for WC plans.  State regulation seems to be an effective way to help WC plans obtain lower physician rates.

Learning Areas:

Biostatistics, economics
Social and behavioral sciences

Learning Objectives:
discuss the impact of regulation on physician prices for workers' compensation health plans discuss the impact of market forces on physician prices for workers' compensation health plans

Keyword(s): Physicians, Health Insurance

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: I am a health economist with 20 years of experience studying the impacts of market forces and government regulations on access to care, quality of care and provider behavior.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.