September 24, 2019
A Radical Notion That Blurs the Lines
by Paul Carroll
I’ll be brief, because I’m running around at InsureTech Connect in Las Vegas (as are, I imagine, many of you. Come by and see us in Room 305 of the MGM Grand Conference Center, if you are.) But I do want to tee up an idea we’ve been discussing: What if we tried combining workers’ comp with health insurance?
Yes, they’ve historically been very different. Workers’ comp sprang from the grand bargain of a century-plus ago, designed to free both workers and employers from potentially debilitating claims of negligence. Health insurance grew out of charity when care was limited and cheap—even when Blue Cross began selling insurance, in 1929, it cost just $6 a year—and took a left turn during World War II when a government tax break established employer-issued health insurance as the standard in the U.S.
But history isn’t destiny. In fact, an idea like combining workers’ comp and health insurance could allow for some creativity, in the midst of uncertainty, that isn’t possible within today’s silos.
The combination would do away with a lot of today’s inefficiencies. While workers’ comp was set up to be no-fault, it’s more like fault-fault-fault today. Everybody reviews everything. Lawyers often get involved early. So do doctors—and not just those treating the injured directly; you have doctors reviewing the doctors, and maybe doctors reviewing the doctors who review the doctors. What if the goal just became keeping the employee healthy, whether the problem was a workplace injury or strep throat?
A lot of complexity would fall away. Perhaps even more than we know. The psychosocial approach to workers’ comp finds that workers react well when they feel they’re on the same side as the employer—trying to get healthy and back to productive work—and react poorly when they feel like the employer is being legalistic, uncaring, etc. If the whole goal was just a healthy employee, imagine what might happen.
A fair amount of administrative effort and expense goes into deciding whether workers’ comp or heath insurance covers a problem, but what if the two lines of coverages were combined…?
My innovation mantra has long been, Think Big, Start Small, Learn Fast, so how would we start small after having this big idea? I can imagine Texas and Oklahoma being hospitable, as long as they’ve been experimenting with ways to opt out of traditional workers’ comp. Perhaps a small county in California would allow a melding of workers’ comp and healthcare, so we could gather some data. In any case, let’s find a way to try the idea.
I can already see a major issue: deductibles. Workers’ comp doesn’t have them, while health insurance may have massive ones. So, there has to be some way to cover workplace injuries immediately while not providing carte blanche for employees to have whatever healthcare treatment they want.
But that issue feels like a detail, especially if we experiment before rolling out a new plan broadly. There has to be some way to assign responsibility for routine issues to individuals, while protecting injured workers.
Please let me know what you think. And, as I said, maybe we can even do this in person, if you’re at ITC this week.