Short-cuts: It’s the Illinois Way

by Drew McKinley Last week the Illinois House passed HB1698, which attempted to reform Illinois’s broken workers’ compensation system. In the bill, the key mechanism for reducing spending is to cut payments to physicians and specialists by 30%. However, studies have shown that cutting reimbursements to physicians actually increases the cost of care. For example,...

by Drew McKinley

Last week the Illinois House passed HB1698, which attempted to reform Illinois’s broken workers’ compensation system. In the bill, the key mechanism for reducing spending is to cut payments to physicians and specialists by 30%. However, studies have shown that cutting reimbursements to physicians actually increases the cost of care. For example, one study by the Rhodes Orthopedic Institute found barriers to care, such as inadequate reimbursement rates; can increase the cost of treating carpal tunnel syndrome by as much as $200,000.

A different approach to reform would be to move towards a specialist-direct system, where a specialist assists a primary physician. One study showed that by having a specialist-direct system claim costs were 63% lower and claims were closed six months faster. Simply removing these barriers to treatment and allowing individuals to directly see a specialist can reduce the length of a worker on disability from47 months to less than six.

To add insult to injury, many doctors who provide services for which they are reimbursed by the state have yet to get paid, as Illinois cannot pay its bills. While Illinois must make reforms to lower its spending this is not the way. Trying to fix workers’ compensation by giving service providers less for their services is using a short-cut and will actually result in higher costs and worse results. Not to mention that reducing an injured workers ability to receive care defeats the purpose of worker’s compensation. Lower prices could be introduced by creating a less hostile environment towards physicians. For example, a neurosurgeon can save $180,000 in professional liability premiums by practicing in another state, savings that will then be passed on to consumers.

Workers’ compensation and healthcare reform will go hand in hand. Providing meaningful healthcare reform by opening it up to market forces would have the added benefit of reducing workers’ compensation costs, making Illinois more business friendly.