Insight, analysis & opinion from Joe Paduda

< Back to Home


Obamacare and workers’ comp – Part 5 of 9

We are now getting into the meat of the matter; we are not going to get health care costs under control and quality improved without major structural change in the health care delivery and financing “system”.
Several components of PPACA address delivery system reform, the most promising of which are the Independent Payment Advisory Board (IPAB) and Accountable Care Organizations.
The IPAB kicks in if costs continue to increase faster than the rate of inflation, and no, it is not a death panel or rationing body – although we certainly could use the latter. ACOs re-structure the care delivery model, focusing on care coordination especially for chronic patients.  The emphasis is on global fees rather than fee-for-service, a good way to think about ACO payment is it is based on reimbursing health care systems for patient management and episodes of care rather than individual providers for procedures.
Given the relatively low frequency of WC injuries in any particular geographic region, and the wide severity range, it is highly doubtful an episode-of-care reimbursement system will work in comp.  There are just not enough cases in a service area, some of which are relatively benign and others quite severe, to make it possible to model out a global reimbursement methodology and reimbursement.
will not translate easily or immediately into WC.
However, the strong emphasis on primary care that is central to the ACO model, the focus on patient interaction rather than expensive and often unnecessary tests and diagnostics, and the additional pricing transparency coming with ACOs are all strong pluses for workers’ comp.
At a deeper level, the success of ACOs, if they are a success, will represent a sea change in health care delivery and financing, one that shifts the paradigm from pay-for-procedure to one focused on rewarding for health.
That would be a very, very good outcome.
There’s ample evidence that large payers and delivery systems are embracing the ACO model with both arms:

There are going to be disruptions, incidents of lousy patient care, and fraud eruptions.  And when those hit the news, remember – our current system is not sustainable, and change is never without disruption.

What does this mean for you?

ACOs are coming, and the shift in thinking, rather than the delivery system itself, bodes well for comp.

2 thoughts on “Obamacare and workers’ comp – Part 5 of 9”

  1. I have long been an advocate of “24 hour care” . The Ideal would be where regardless how a person contracted illness or injury the care would be consistent with evidence based medicine. I can see a day via ACOs or even a staff model like Kaiser where Comp medical treatment is underwritten into a policy. The barrier to this dream of course is the life of claim in comp versus the policy period covered on the health plan . The practice management software some of these providers are using would really help raise the level of care as they capture and make available the patients entire health record including diagnostics , thus making treating the whole individual possible. Im not sure how the IPAB are going to benefit workers compensation unless the various states attach their fee schedules to IPAB recommendations otherwise if the state fee schedules are higher reimbursement it may create pressure to cost shift. Just saying.

Comments are closed.

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.



© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.