The “good health = lower cost” equation is an oversimplification of reality and needs to be better understood if we’re to address the causes that help drive up costs for workers’comp.
Yes, people with medical problems are generally more expensive to care for than those without the conditions, but consider the studies that found that:
- Reducing a significant risk factor did not produce lower costs or reduce absences. A successful weight-loss campaign did not produce any cost savings in the next two years, leading the authors to caution against expectations of a positive short-term return on investment.
- The length of absence because of an injury depends largely on the doctor. A study found that 3.8% of physicians in Louisiana accounted for 72% of all workers’ compensation costs. Patients who chose—or happened to have treatment from—“cost intensive physicians” could expect to have five times higher costs, even after adjusting for age, sex, medical condition, and other factors.
- Individual beliefs affect the number of absences for back pain. Workers who have high levels of fear that work will lead to pain are absent more than workers with similar pain severity but low fear.
- Health improvement alone does not improve return-to-work following extended absence. European researchers found that improved health did not guarantee return to work, especially when certain psychosocial factors—like depression and low self-efficacy— and work factors were present.
- Companies that self-insure their workers’ compensation benefit have fewer employees who are injured. After controlling for a large variety of other factors, authors concluded that companies that directly manage their experience rating invest more effectively in prevention and reduce injury rates.
In sum: Health improvement may not save money or result in someone coming back to work if: a) they believe their work is harmful; b) they dislike or have conflict at work; or c) they choose a doctor who prefers longer, more expensive treatments. Finally, a company’s commitment to prevention and safety today is driven in part by the financial risk it carries for injuries tomorrow.
Improving health is a worthy goal in itself, but, for a variety of reasons,cost savings will not be a certain result.
When we oversimplify the problem of health costs, we risk being disappointed when investments in health programs don’t bring the savings we expect. While there is no shortage of calls for programs that promote “health improvement,” that only gets us so far toward any goal of cost containment or absence reduction. Therefore, the right approach must reach beyond a condition-specific focus and provide personal expertise, aligned incentives, education, and support to the whole person and her or his family.