Unnecessary services ramp up workers comp costs

A national authority on workers comp has pointed the finger at self-interested medical professionals for rising insurance costs.

Workers Comp


Overly-frequent surgeries and opioid prescriptions are driving up workers compensation costs in the U.S., Workers Comp Research Institute president Richard Victor said Thursday.

Addressing a conference of insurance professionals, Victor explained that financial conflicts of interest between healthcare providers and the wellbeing of injured workers have led to sky-high workers comp claims in several states. In the WCRI’s view, much of this cost is unnecessary.

“[These are] expenditures that employers make in workers compensation for things that don’t improve the outcomes that injured workers achieve,” Victor said.

According to the WCRI’s findings, the financial interests of surgeons and physicians drained employers’ wallets to the tune of $8.9m in unnecessary expenses in 2009. Much of this cost comes from the over-prescription of opioids and minor surgery. Opioids, among the most common treatments for workplace injuries, are being prescribed more frequently and for longer periods of time. A legal provision benefitting physicians may explain why.

“Because of some quirks in pharmacy fee schedules, physicians can charge much higher prices than pharmacies for the same drug,” Victor explained.

A change in legislation in Florida points even more clearly to physicians’ financial interests taking precedent over necessary care.

In 2011, the Florida legislature banned physician dispensing for heavier opioids like hydrocodone unless the patient was in the early stages of post-surgery recovery. The result was an immediate drop in physician-filled opioid prescriptions from 3.5 percent to .5 percent. Simultaneously, physician-dispensed prescriptions of weaker NSAIDs rose from 23.8 percent to 26 percent.

“This raises the question: How necessary were those stronger opioids, and was that dispensation driven—in significant part—by the financial incentives that the physicians had to manage?” Victor asked.

Similarly, WCRI uncovered an abundance of unnecessary surgeries performed by surgeons who own their own facilities.

According to the institute’s research, hospital surgeons perform an average 90 surgeries a year treating common workplace injuries like carpal tunnel and knee arthroscopy. Meanwhile, surgeons who own their own clinics perform twice that number.

To control for the possibility that high-performing surgeons are more likely to open their own clinic, WCRI measured operations performed before and after a surgeon became an owner. On average, surgeons increased their number of surgeries by 20 percent after gaining their own clinic.

Victor closed his address with a plea to policymakers to “fix the system.”

“You have the opportunity to make better public policy and better fine tune your system to reduce costs to employers without adversely affecting the access that injured workers need,” he said.

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