CAPITATED PAYMENTS IN WORKERS COMPENSATION

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Capitation and managed care are considered powerful tools for controlling health care expenditures, and employers are increasingly considering managed care approaches, including capitated payments, in Workers' Compensation programs. Now capitated payment (CP) programs will be applied to medical services under Workers' Compensation, and the impact of capitated payments on the utilization of health care has not been well- studied in th context of occupational safety and health. There is virtually no information on the effectiveness of CP programs for the delivery of occupational health services. The proposed study addresses the programmatic interest of NIOSH in examining and evaluating Capitated models for the delivery of occupational health services. In 1993, a large municipality changes its Workers' Compensation and injured on Duty program for its 30,000 municipal employees from one that paid medical providers on a Fee-for-Service (FFS) to one that paid medical providers by capitated arrangements. The proposed research will analyze the impact of this CP system on health care expenditures and lost work time in this work force. To achieve this goal, the investigators will pursue four highly focused Specific Aims, which are; (1) Compare health care utilization and compensation program for medical services, focusing on three distinct departments, police, fire and streets. (2) Determine whether the observed changes are due to a change in behavior of health care providers or are the results of selecting new providers. (3) Compare the duration of disability and the duration of the claim for work-related injuries before and after implementation of the CP medical program. (4) Describe the lost work time associated with work-related injuries, comparing pre- and post-CP program. This work will provide important and useful guidance in t he design and operation of workers' compensation programs to a broad range of employers and organizations and will establish a benchmark for future longitudinal studies.