Use of workers' compensation medical care: Health insurance matters

The workers' compensation system and the general health care system are meant to be kept separate, with medical care provided through workers' compensation if and only if the care is for a work injury. The objective of this investigation was to determine whether workers are able to influence the source of their care in response to economic incentives. Use of workers' compensation medical care was compared between workers who had health insurance and those who did not. The insured face a low out-of-pocket price for the alternative of obtaining care through the regular health care system, so the hypothesis was that they would be less likely to rely on workers' compensation. The focus was on conditions whose work-relatedness is ambiguous, such as low back pain.;The hypothesis was tested using data from the 1996–1997 Medical Expenditure Panel Survey. Propensity score matching methods were used to control selection bias. Workers' compensation paid treatment costs for 8.1% of the conditions of interest among the uninsured and 3.3% among the insured. In a logistic regression model controlling for occupational risk and other factors, treatment was much more likely to be paid by workers' compensation for uninsured workers (odds ratio = 3.5, p < 0.0001). The empirical results supported the hypothesis and were less consistent with alternative models.;These results indicate that workers' compensation is either paying for too many cases among the uninsured or paying for too few among the insured, or both, but they do not indicate which prevails. Limited evidence from this and other research suggests that workers' compensation pays for only a fraction of compensable cases. If use of workers' compensation medical benefits by insured workers were to rise to the level observed for uninsured workers, annual US workers' compensation medical expenditures would increase 51% to ;Policy implications include the following: Public and private health insurers may benefit by identifying treatment provided for work-related injuries, and returning costs to the workers compensation system. Worker' compensation premium discounts should be considered for employers who provide health insurance. This research may support proposals for integrated health and workers' compensation benefits.