The Impact of Healthcare Reform was listed as “hot topic” at the California Workers’ Compensation & Risk Conference, a session where stakeholders gathered to gain better understanding of the Affordable Care Act (ACA) and its impact on workers’ compensation.
This session was moderated by Mark Walls, Vice President Communications & Strategic Analysis at Safety National, who was joined by Denise Algire, Director – Managed Care & Disability Corporate Risk Management at Safeway, Inc., and Kimberly George, Senior Vice President / Senior Healthcare Advisor at Sedgwick.
According to the panel, there has been non-stop change in healthcare delivery models since 2010. A process is now in place with the ACA that, contrary to popular belief, will not change if a Republican wins office, so it is time to adopt it.
The ACA was developed based on improving three key aspects:
1. Access – Meaning that Americans should have access to insurance and, if they do, they would likely seek treatment more often, improving their overall health.
2. Costs – Healthcare costs are currently out of control and the ACA is trying to fix that with transparency.
3. Quality – Healthcare has, in the past, been riddled with mistakes around patient safety, infections, etc. The ACA is trying to change that with incentives.
The panel stressed that, rather than taking the wait and see approach, we need to be at the table to help dictate and influence how the ACA will impact the workers’ compensation industry.
According to the panel, there are two major items causing speculation about the ACA’s impact on workers’ compensation:
1. There has been a lot of controversy around the changes to the healthcare market and physician availability as a result of those changes. What most aren’t aware of is that employers can be penalized depending on how you design your plan and the affordability it provides for your employees. Will this cause cost shifting or benefits to workers’ compensation? There has been lots of theorizing if this will have a positive or negative impact and we won’t know for a while.
2. The entire premise of the ACA is to create a healthier workforce. It theorizes that, if you get treatment for primary care, you will be healthier overall. We do know, for instance, that obesity currently impacts workers’ compensation – causing a 7% increase in costs on average. Will the ACA create a healthier workforce that won’t bring as many comorbidities to workers’ compensation claims? We won’t see this possibility materialize for some time.
The panel cited several potential opportunities related to the ACA:
• One area that the panel cited which could be helpful for employers is related to the “Cadillac Tax” that the ACA will apply to the most-costly health plans that are usually seen in strong union environments. As employers work with their unions to redesign these plans in an effort to try to get their plans out of the range that will be taxed, risk managers are participating and pushing to get return-to-work policies included as part of the negotiations.
• The ACA has non-traditional payment model compared to what we are used to. This might be an opportunity to hold providers accountable with value-based reimbursements. It could also be a potential opportunity for physicians because they will get paid for good performance. Quality really counts in this new model.
• Will the ACA create healthier employees that will transfer to a decrease in complications with workers’ compensation claims? The panel states that the ACA is based on consumer engagement, which could translate to more engaged injured employees with higher participation in recovery programs. One overall requirement is that the incentives and potential participation opportunities have to be easily accessible and easy to find. An employer also must provide alternatives so that all employees can participate. This might create a consumer-driven model that offers more participation and access points to drive change. This won’t be a quick fix and we won’t see results for several years.
Workers’ compensation makes up a small percentage of the overall medical spend in the U.S. – approximately $30 billion a year in total medical. They aren’t going to make adjustments based on what our industry prefers. Instead, we have to be creative and also be willing to pay providers for quality care, which might mean your company contracts with providers directly. This is no longer the discount-based model that we are used to. Incentivize your providers for great outcomes and you will get the best care for your employees to get them back to work.