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Affordable Care and Workers’ Comp – a miss

Kudos to NCCI for devoting an hour at their annual issues symposium to a discussion of medical care and cost drivers provided by the Mayo Clinic’s Douglas Wood MD.

Woods noted – “If the entire country could achieve [quality improvement and cost reduction] results like the top ten states we could reduce spending by a third without reducing – and likely improving – quality.” 

And that’s pretty much what ACA seeks to do, in its convoluted, politically-driven, sausage-making way.

Wood noted that we have to not “ration” but be “rational”.  He reviewed the SGR (something that has been covered in detail in this blog) as a way to show that price controls do not equal cost (or quality) management.

As the “Choosing Wisely” campaign demonstrates, many common procedures don’t add any value. (about 5 of the 800 attendees have heard of this campaign…) This isn’t value defined as improved patient safety/better clinical outcomes/patient satisfaction, but rather functional health (sound familiar, workers’ comp folks?).

Which leads to ACA’s components intended to improve value delivered for dollars spent, focusing on reimbursement based not on per-procedure but episode-based payment – with a warranty for complications.  Wood reviewed the basics of ACA (presentation here).  About 19 states will have their own exchange, 25 will use the federal exchange, and the remainder will have a hybrid, or partnership arrangement.  Some of the larger national insurers don’t want to participate, but may change their minds if lots of employers and individuals buy policies thru the exchanges.

Wood delved into several related topics, many of which are old news to the better-informed medical folks out there, but new news to most in the workers’ comp business.  This included shared decision making, appropriate use criteria, and creating healthy communities.

Now, what’s all that got to do with work comp?  ACA will help “make healthcare more affordable” was Wood’s initial statement, but beyond that he didn’t connect the dots; there are several potential impacts on workers comp (tight access to specialty providers, better health status of claimants, no need for WC payers to pay for non-WC conditions when caring for injured workers, etc.), none of which he noted.

On balance, an excellent presentation on PPACA, but no understanding of workers’ comp or how it will impact WC.


2 thoughts on “Affordable Care and Workers’ Comp – a miss”

  1. thanks Joe. I still have not seen how ACA will impact the “costs” of healthcare with regards to what providers have to pay. I suppose it will be “trickle down cost containment”. will Medtronic reduce the cost of a pedicle screw due to competitive pressure or Siemen’s make a cheaper MRI machine? Surely some economist has a white paper addressing this? I would love to read. thanks for the post


  2. Joe, I wish I could be as optimistic as you are. I foresee more cost shifting to workers’ compensation with ACA: WC fees will be even more attractive to medical providers who face shrinking payments and patients will still get completely free medical care in WC (no copayments, deductibles AND they will have access to indemnity compensation). Lastly, and I think very importantly, I do not believe we will have a healthier workforce with the ACA. Today, we do not have an unhealthy population due to lack of health insurance; there are many cultural and societal factors in play. Recently, a large randomized control trial came out of Oregon (published in the New England Journal of Medicine) that showed that two years after obtaining Medicaid there was no significant improvement in cholesterol, blood pressure and HbA1C (a marker of blood sugar level). Slate’s headline: “Bad News for Obamacare: A New Study Suggests Universal Health Care Doesn’t Make People Healthier”. Our problems in WC will not be solved–or even ameliorated–by the ACA.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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