Cutting Costs in Worker's Comp
Project at St. Luke's shown to save $1,300 per claim on disability medical care
Emily Proffitt
The Journal of Business
May 29, 2008

The Center of Occupational Health & Education at St. Luke’s Rehabilitation Institute here says a recent study shows its efforts have reduced the cost and duration of workers’ compensation claims considerably since it began operations five years ago.

COHE, a pilot project funded by the Washington state Department of Labor and Industries, seeks to reduce injured workers’ disability and get them back to work more quickly by improving the quality of their care and coordinating that care more efficiently. St. Luke’s is one of two such project sites in the state; the other is in Renton, Wash.

A research team at the University of Washington, which is part of the pilot project, released a report in March that evaluates COHE’s effects on disability and medical care costs three and four years after an injured worker initially made claims. After three years, the average COHE patient at the centers had racked up nine fewer disability days than non-COHE patients, says Dan Hansen, project director for the Spokane center. The estimated savings in disability and medical costs per claim for the center here was nearly $1,300, compared with a savings of $500 per claim that researchers found in a one-year follow up report, he says.

Overall, the study showed that the two COHE centers had fewer rejected claims, fewer reopened claims, fewer protested claims, less frequent use of attorneys by participants, and a lower pension rate for time-loss benefits than their non-COHE counterparts, he says.

COHE was created through a collaboration of businesses, labor organizations, and L&I. Ultimately, the goal is to improve worker care and satisfaction and reduce the financial strain on the state and on businesses from the L&I system, Hansen says. On-the-job injuries cost the state roughly $500 million in medical care annually, he says. Workers’ comp premiums paid by employers are based on the number and extent of claims made by their employees and on ratings for the industries employers are in.

The COHE project focuses on claims for carpal-tunnel syndrome, lower-back injuries, and upper and lower extremity fractures, which account for more than 80 percent of disability costs in Washington state, Hansen says.

The UW study showed that the mean days of time loss for workers whose care was coordinated through the COHE centers was six to seven days shorter than that of non-COHE workers. Meanwhile, the average number of days from a patient’s first medical visit to the state’s determination of the claim was 13 days shorter in the COHE group of workers than the non-COHE group. In the COHE group, claims also are more likely to be accepted and workers receive their first time-loss payment quickly, the UW report says.

In addition, among hospital emergency rooms in the Spokane center’s network, 90 percent of claims are sent to L&I within two days, which speeds up the delivery of care to injured workers significantly, Hansen says. Non-COHE emergency rooms typically take an average of seven to 21 days to send claims to L&I, he says.

Expanding network

The COHE project here, which covered Spokane, Stevens, and Grant counties when it launched in 2003, expanded in July 2005 to include 13 additional Eastern Washington counties. The network includes 770 doctors, 32 hospitals, 20 mentor physicians, 600 employers, and 30 labor unions, Hansen says. Mentor physicians include specialists who agree to see injured workers promptly and advise on clinical issues. Although it has stopped recruiting doctors for the program, it continues to add them when they asked to be added, he says. It expects to add another 60 doctors, as well as a hospital in Omak, Wash., to its network soon.

“I think people can see the writing on the wall,” Hansen says of the reason behind the growing interest in the project.

Over the past two-and-a-half years, the St. Luke’s COHE has processed 41,000 claims, he says. It processes about 1,400 new claims a month, and Spokane doctors are responsible for reporting about 68 percent of those claims, he says. Some of the Spokane-area employers whose workers’ care has been managed by the COHE here include Huntwood Industries Inc., Cascade Windows, Garco Construction Inc., Goodwill Industries of the Inland Northwest, SL Start & Associates Inc., and Yoke’s Foods Inc., he says.

One of the keys to the efficiency of the Spokane COHE has been a Web-based information tracking system, called Athena, developed by the technology division of St. Luke’s parent, Inland Northwest Health Services, Hansen says. Doctors submit injury reports to Athena that include their assessments of when and in what capacity injured employees can return to work. The system helps track injured employees’ compliance with doctors’ orders and they can be denied workers’ comp benefits if they fail to comply. Athena is accessible by doctors, employers, employees, L&I, labor unions, and retrospective ratings groups, which are industry groups that self-insure for workers’ comp.

In addition to saving money, the COHE program has increased employee satisfaction and retention, asserts Tom Martin, health service coordinator at the Spokane center. Injured workers receive treatment from doctors who have expertise in occupational medicine, and typically get appointments with those doctors more quickly than they would otherwise, he says.

“Doctors and employees have us as a free resource in dealing with return-to-work issues and the difficulties in understanding and dealing with claims,” Martin says. “Efficient care is key in making sure these injuries don’t become chronic.”

Pam Cromer, supervisor and health services coordinator at the Spokane center, says doctors as well as employers, particularly small businesses, appreciate help in dealing with the mounds of paperwork associated with reporting workers’ comp claims.

“Mom-and-pop businesses can’t afford professional HR people to handle this for them. They’re flabbergasted at the paperwork when they get their first claim,” Cromer says.

She adds, “Doctors don’t want to deal with the process; they’re busy enough taking care of their patients. But now we hear from them that there’s been a significant reduction in the ‘hassle factor’ with L&I claims.”

Doctors involved in the COHE program receive continuing education credit for professional training on best practices in occupational medicine. They also receive financial incentives to participate in the project. They earn an additional $22 from L&I for every claim they report into the Athena system within two days after treating an injured worker. They can earn an additional $19 to $56 for calling employers to coordinate return-to-work plans.

They also can earn $48 above the standard allowed office charge for follow-up visits at two-week intervals with injured workers.

COHE requires doctors to fill out what are called activity prescription forms that include patients’ work status, physical capacity, and treatment plans, Cromer says. Last November, L&I implemented the forms’ use for self-insured claims and non-COHE doctors as well, she says.

Due to the COHE project’s results in improving case management of workers’ compensation claims, the state has funded the project for the past three bienniums, and the Spokane COHE now receives $1.2 million per year in funding, Hansen says. L&I plans to transition the COHE here from a pilot project to a test site in two or three years, which is one step closer in implementing the COHE concept statewide, he says. Hansen hopes the state will add the remaining counties east of the Cascades—Benton, Franklin, Kittitas, and Klickitat—to the network within the next few years.

The Spokane COHE, which employs six people, is located in a 1,300-square-foot leased space at 400 S. Jefferson. Hansen says COHE staff frequently travel across the region to meet with COHE participants. He hopes that eventually the state will add COHE centers in Yakima, the Tri-Cities, and Wenatchee, where the need for services is particularly high.

Meanwhile, the project continues to garner national and international attention, Hansen says. Representatives from WorkSafe B.C., the workers’ compensation board of British Columbia, frequently visit the Spokane COHE to learn more about the program, he says. Hansen says he receives calls from people all over the world interested in the program.

Increasing awareness

Despite its growth and positive results, the Spokane COHE still faces a lack of awareness among employers in the region about the services it provides, Martin says. Staff members contact chambers of commerce, human-resource professionals, and workplace safety groups to inform them about COHE.

They also frequently meet employers through meetings hosted in various communities by retrospective ratings groups, Hansen says. For instance, he spoke recently to employers at a “full house” meeting hosted by the Washington State Farm Bureau, which is an advocacy organization that represents farm and ranch families.

“We’re trying to encourage businesses to utilize this resource,” he says. “We tell them that they’re invested in the project whether they’re participating or not, because everyone has a stake in improving the system.”

The Spokane COHE also faces challenges stemming from high staff turnover at health-care centers, particularly at community health clinics, Cromer says. COHE’s staff trains new workers in those clinics in how to use the Athena system and the procedures involved in reporting claims. Changes in organizational systems at hospitals also pose problems, she says.

The large geographical area COHE’s staff must cover also presents challenges, which is one of the reasons why additional centers in other cities would be beneficial, Martin says.

Contact Emily Proffitt at (509) 344-1265 or via e-mail at emilyp@spokanejournal.com.

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