Panel Paper: The Effects of Provider Choice Policies on Workers Compensation Costs and Outcomes

Friday, November 7, 2014 : 1:30 PM
Enchantment Ballroom F (Hyatt)

*Names in bold indicate Presenter

David Neumark, University of California, Irvine and Bogdan Savych, Workers Compensation Research Institute
We study provider choice policies in workers compensation.  We categorize these choice policies and explore their relationship with actual choices of primary providers in workers compensation cases, finding that polices that ostensibly grant more control to workers or employers are associated with greater actual choice by workers or employers, respectively, although choice policies by no means fully determine who chooses the provider.  We then estimate models for a wide variety of workers compensation outcomes, focusing on medical and indemnity costs, as well as recovery, return to work, and subjective measures of access to and satisfaction with medical care.  None of the evidence points to advantages of more employer control of the choice of provider.  Medical and indemnity costs are not lower, return to work is not faster or more likely, and access and satisfaction are not higher.  In contrast, in fact, a good deal of the evidence points to better outcomes on many of these dimensions for states with policies where workers have  more control of the choice of provider, via either actual control of the initial choice, or ability to change providers easily even when employers control the initial choice.