True or False – Healthcare Reform Impacts Workers’ Compensation Costs
In the wake of sweeping changes in the U.S. healthcare system, employers are forced to evaluate the potential impact to their bottom lines. One factor that was largely left out of the focus of healthcare reform—but is certainly linked to it—is workers’ compensation (WC) costs.
As most of us know, Massachusetts passed its very own version of healthcare reform in 2006 (fondly nicknamed RomneyCare). According to a study by RAND Corp., workplace claim rates in that state steadily declined 16.7 percent between 2006 and 2010, and WC hospital costs dropped between 5 and 10 percent. It’s also no secret that Massachusetts still ranks among the top five states for lowest WC rates in the country. Is this merely coincidence, or is there something to this whole healthcare reform thing and its impact on WC?
Beyond this speculation is the belief that an unhealthy workforce translates into higher medical costs overall – whether it’s a WC policy or employee benefits program that is footing the bill.
- Studies find that per capita medical spending for obese individuals is an additional $1,429 (42 percent) compared to individuals of normal weight (think coronary disease, diabetes, stroke, hypertension, elevated cholesterol…)
- Even more shocking is the impact of smoking on healthcare costs. Smokers cost their employers nearly $6,000 more a year than staff who don’t smoke. Think about medical costs associated with various cancers, pulmonary disease, lung disease…
We at Assurance (and our 1,500 employee benefit’s clients) like to see the glass as half full. The fact that more individuals are insured could mean an increase in preventive care and a healthier workforce in general, which could eventually decrease the number of WC claims, as healthier employees will heal faster and return to work more quickly.
Furthermore, workers will be less likely to attribute underlying health problems to occupational disease. They will be more likely to receive prompt treatment of diseases like diabetes or hypertension that, if left undetected, might exacerbate a WC claim by complicating surgery or other therapies.
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