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The Effects of Provider Choice Policies on Workers’ Compensation Costs
Author(s) -
Neumark David,
Savych Bogdan
Publication year - 2018
Publication title -
health services research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.706
H-Index - 121
eISSN - 1475-6773
pISSN - 0017-9124
DOI - 10.1111/1475-6773.13045
Subject(s) - indemnity , workers' compensation , quantile regression , actuarial science , control (management) , compensation (psychology) , business , work (physics) , public economics , medical costs , demographic economics , economics , health care , econometrics , economic growth , mechanical engineering , psychology , management , psychoanalysis , engineering
Objective To examine the effects of provider choice policies on workers’ compensation medical and indemnity costs. Data Sources/Study Setting Pooled cross‐sectional analysis of administrative claims records for workers with work‐related injuries primarily in 2007–2010 across 25 states ( n = 4,489,729). Study Design We used linear and quantile regression analyses to evaluate differences in claim costs (medical and indemnity) based on whether policies give employers or injured workers control over the choice of provider. Principal Findings We find no difference in average medical costs by provider choice policies, although a distributional analysis indicates higher developed medical costs for the costliest back injury cases in states where workers control provider choice. The evidence for indemnity costs is similar, although the point estimates also indicate (statistically insignificantly) higher average costs when policies give workers more control of the choice of provider. Conclusions Our nuanced evidence suggests that policymakers seeking to reduce workers’ compensation costs may need to focus on the highest cost cases in states where policy gives workers more control over the choice of provider, rather than the simpler and broader issue of whether policy gives workers or employers more control.