Thursday, May 26, 2016

Someone has to Pay

Some serious students of workers' compensation gathered in Dallas this month for a discussion of where workers' compensation stands in America. Many diverse perspectives sat around a table and described their individual perceptions about the purpose and promise of workers' compensation, its victories and failures. 

Like a fly on the wall, I listened and took extensive notes. The results were published by Bob Wilson on WorkersCompensation.com. As a primary note-taker, I can tell you that if reading these resulting documents does not cure your insomnia, there is no hope. But, we who "do" comp actually find all of this fascinating. I recently had a conversation with someone new to comp. I told him that my experience has been that people are either intrigued and enthralled by comp (love it) , or that they are disinterested and uninspired by comp (hate it). There just seems to be few in this industry that are "in between."

These folks gathered in Dallas were in the "love it" group, and their commitment and intellectual investment were obvious. One of the critical differences of opinion that was raised regards compensability, that is whether a particular accident, injury, or illness should be paid for by workers' compensation. It seems like a fairly simple question, but the varied opinions expressed belie the perception. There are a great many who believe comp should pay for more than it does. There are others who believe comp is paying for things that it shouldn't. Some details of that discussion will appear in a future post.

One analysis or theme suggested by some is that in any need for medical care or constraint on the ability to work, "someone has to pay." That is a truism in all likelihood. If we need medical care, it has to be paid for. If one is not working and receiving no income, that has to be compensated for. Payment may come in various forms.  Payment may mean actual money paid for care or compensation, or payment could mean detriment to the person injured. That is the injured person might not receive care and "pay" in pain and suffering for the injury. The person might not receive compensation and so "pay" in terms of change in lifestyle resulting from personal decrease in income.  But, "someone has to pay."

Imagine a worker is driving  one morning when there is an accident with another vehicle. The resulting impact results in scrapes, bruises and a fractured bone. The results are painful and require medical care of some degree. For the sake of this discussion, it is irrelevant whether it is a collision, a fall, a virus, an infection, etc. The critical point is that something affects a human body and decisions will be required regarding how to deal with the injury or disease. 

One of the Summit attendees casually reminded us all that "not everyone has health insurance." That took me by surprise, because I had understood that health insurance became mandatory in 2014. I understood (mistakenly apparently) that this legal requirement applied to everyone. I even thought that each American had to attest to compliance with the law. But the Summit attendees assured me that I am wrong and that millions of Americans do not have health insurance (several even laughed at me and one called me "naive" to believe "mandatory" meant everyone). 

As an aside, I am curious as to whether this is an enforcement issue. Are they required by law to have it and just don't, and the insurance police are not catching them. Or, are there Americans who are not required to have this insurance (and how did they get excused)? It seems perhaps incongruous to have "mandatory" health insurance, but allow it to be optional either through some exception or failure of enforcement? But I digress; if there are people without health insurance today then the situation remains as it historically has been: some people have health insurance and some do not. 

So, the injury described above (fracture, etc.) requires care. She/he might deem the injury worthy of expeditious care and head to the local emergency room (perhaps even by ambulance). Or, deeming it less imperative might wait until later in the morning and make an appointment with her/his family physician. In this sense, the analysis of which medical care and when would be influenced by how seriously the injury is perceived, and how convenient or expeditious these care alternatives are perceived. Some emergency rooms now advertise their "wait time" on billboards along the highway; convenience may influence choices. 

In another sense, the analysis of where and which care might turn on the probable financial results. Who will pay for the medical care? Does the worker have health insurance or automobile insurance that would pay regardless of whether the family physician or the emergency room was used? Is one alternative more or less expensive to the worker/patient (because of a deductible or co-pay). If the worker does not have health insurance (accepting that reality exists under "mandatory coverage"), does the worker have the ability to pay, either with cash or credit, for the care that is required? If the worker does not have either insurance or the ability to pay, is there a way to obtain the required medical care nonetheless?

If insurance or ability/willingness to pay does not exist, that does not mean that no one pays. It may mean that no one pays financially, but if no one pays financially it is because the worker/patient is not treated. That is, the worker goes without care, and thus physically (and emotionally) pays the cost of the accident or injury, the poor healing, and ultimately the resulting impairment or disability. This happens all the time. I knew a guy once that fell from a scaffold and complained of chest pain for years (probably broke a rib, but I am no doctor). He refused to see a physician. He saved money, but paid for it with daily discomfort.  

But, in America, it is perceived that this "no treatment" option is not the appropriate ultimate outcome. In America there are a variety of "safety nets" in place for the rendition of care in such situations. Through clinics, emergency rooms, Medicaid, etc. the perception is that medical care of some degree will be provided, despite the absence of health insurance, auto insurance (yes, some people do not have auto insurance either; I know, I thought it was mandatory also) or available cash/credit to provide treatment. One such safety net is Medicaid, which according to its website, is a federally funded program that uses tax money to provide care to "help with medical costs for some people with limited income." 

If the worker described above presents at the emergency room, care will be rendered for the fracture regardless of ability or inability (willingness) to pay. The worker/patient will be stabilized. The hospital will present a bill for that care, to the patient, an insurance carrier (health or auto or both).

The hospital may never collect for the services rendered. Emergency rooms have to provide some level of stabilization and care regardless of whether the patient is financially able (or willing) to pay. The hospital may be successful in obtaining payment from Medicaid, or other state or federal programs. But, if that care is not paid for by the patient, her/his insurance, or government, who pays for that care? Some would argue that the "big," "rich," hospital pays for it. And some might argue that this is not problematic, "they can afford it."

Others might explain that the hospital factors such unreimbursed care into its costs, and then adjusts all of its charges for all of its patients to compensate. According to Readers' Digest, "health care costs are largely arbitrary, inflated and unfair." It notes that the charge for a Tylenol during a hospital stay may be as high as $15.00 per pill, while at the store, they might be pennies. How is that charge justifiable? Some might explain that when people who can (and do) pay visit the hospital or emergency room, a portion of what they pay is actually subsidizing the cost of care rendered to those who cannot (and do or will not) pay for care. 

In other words, the hospital may charge everyone inflated prices. Then those who pay these inflated prices afford the facility a profit in some cases. This profit in some cases then offsets the loss that results when a patient presents and is unable or unwilling to pay the inflated price for their care. In the end, somehow all of this averages out and the hospital remains solvent and open for business.

Now imagine that this fracture instead is a workers' compensation issue. This could be because that accident did occur driving to work that morning, but driving to the bank to make a business deposit, or driving by the accountant's office to pick up documents for the worker's supervisor. The medical condition (fracture) may be identical, but the the payment process may change if it is workers' compensation.

Now that it is work-related, it may be workers' compensation. There is not yet enough information in this example to make that determination. Just because it occurs at work does not mean that it is workers' compensation. The worker may work for an employer that is small and is not required to participate in workers' compensation. The worker may work in a state where workers' compensation is not required of any employer. Or the worker may work in a state in which her/his contribution to the accident (perhaps being under the influence of drugs, or failing to wear a safety belt) may mean that workers' compensation is not responsible.

These are merely examples. There are multiple reasons that an injury at work might not be workers' compensation. And so, even if the accident and fracture occur at work, questions may still remain regarding who will pay for the care and treatment. 

But, if it is workers' compensation, then the worker is seen by an emergency room, a physician, etc., and the employer is responsible for paying the costs. Too often, the intuitive response is that the workers' compensation insurance company (workers' compensation carrier) is responsible. It is important to remember that a great many employers either do not have insurance (they are "self-insured") or have purchased insurance with a deductible (they are "self-insured" for some portion of each loss). 

The law, at least in Florida, puts responsibility for workers' compensation on the employer, and in many states how the employer elects to secure that compensation may present various options. It is important to remember this critical point. If a workers' compensation insurance company will not pay for care, this may result in a contract dispute between the carrier and the employer that bought the policy. 

If the injury is workers' compensation, and the employer or carrier does pay for that medical care, the costs will perhaps be inflated. The employer or carrier may in fact pay $15.00 for a Tylenol pill for the injured worker. That cost theoretically needs to be inflated to cover the cost of, to subsidize, some other patient of the physician or facility that has neither health insurance nor the ability and/or willingness to pay for their own care.  

Thus, in the world of health care, the decision has already been made that when there is illness or injury - someone has to pay (someone other than the patient paying through untreated conditions, pain, etc.). If a person walks into an emergency room (or worse has to be carried in), care will be rendered. Someone will have to pay. It may be the employer, the health insurer, the patient, or the tax payer. With this decision (there will be care) set in stone, the remainder of the discussion and debate is therefore destined to focus on "who has to pay?" And there is evidence that physicians' opinions about critical issues like causation may be influenced by their perceptions of what will be most expeditious or beneficial in terms of their payment. 

There is a great deal of debate in America about socialized medicine. Some dream of it and advocate for it. Some decry it and explain the various historical failures of socialism. But to a large degree, the simple fact is that socialized medicine is a reality in America today. Society has decided that care will be provided. It will be provided regardless of our personal responsibility (smokers will be treated for lung conditions, drinkers treated for liver conditions, and sunbathers treated for skin conditions). 

Those who take care, and take care of their bodies, will perhaps need less care, but will often pay as much for insurance. Those who have insurance or who pay their bills will subsidize those who do not. Someone has to pay. Society could return to that decision and reconsider. Some fear that such an analysis would mean rationing of care or even denial of care for some conditions. Others contend that this rationing has already begun and that it will worsen as the competition for resources becomes more intense. But for now, the decision is that care will be rendered, and the debate is about who will pay. From there we transition to debate of how those payment decisions can be made in the most efficient manner?

There are proposals discussed for removing friction from the "who pays" analysis. Some are convinced that "single payer" will solve all ills. This would be a system in which the government, or an organization designated by government, would pay all medical bills for all Americans. The funds would come from taxes or mandatory premiums (would this be "mandatory" like our current health insurance law?) As a result the need for health insurance would disappear or decrease (if there were some residual personal responsibility such as a deductible or a co-payment in a single payer plan, one might still purchase insurance to cover that).

Proponents claim that "single payer" would control health care costs. Hospitals would charge the same for every Tylenol and get paid the same for every Tylenol (less than $15.00 per pill) regardless of whether the patient overexercised, fell at home, fell at work, or just hurts. Hospitals and care providers would not bill an increased (inflated - profitable) amount in hopes of being paid more; they would be paid the allowed amount for the services rendered regardless of what was billed.

Of course the government would control the amount through regulation (perhaps not unlike the fee schedules currently in use by Medicare and various state workers' compensation programs). Therefore legions of lobbyists would be involved in the setting of rates. Some complain there is too much of that now, and predict that a broader government involvement ("Medicare for all" or "single payer") will only enhance the motivation to lobby for more beneficial billing rates and processes. 

There is promise that such a system might remove points of friction and complexity in the medical care business. Doctors and others might simplify their record keeping and billing, and perhaps thereby reduce staff and overhead. There is also promise that such a system would become as bloated and unresponsive as other federal agencies, leading to never ending tax increases and bureaucratic expansion of staff, regulations, and nonsense too often seen in Washington.  

As with almost anything involving the human condition, the "fairness" of the outcomes will be dependent upon the perspective, beliefs, and posture of the person expressing her/his opinion. Those paying the bill will tend to believe such a system unfair and those receiving the care will tend to believe it fair. Some of this might be tempered if everyone paid (if it were truly mandatory and all paid something regardless, with no exceptions or exemptions and the requirement were enforced). Some of this might be tempered if clear information on any rationing or constraint was provided up front ("this program does not provide care for illness related to smoking" or "this program does not provide transplant services to patients older than 70").

The debate will continue. It may remain focused on the "who" question that inevitably follows the conclusion that "someone has to pay." It may return to that conclusion, and focus on whether that "someone" will unquestionably be someone other than the patient (financially or otherwise). There will be discussion of how decisions are made regarding issues of causation (was that arm fractured falling in the driveway or in the vehicle accident on the way to the emergency room, or in the accident on the way to the bank) and who is responsible, the patient, some property insurer, an auto insurer, a health insurer, the government? And there will be debate about how such decisions are made, by what standards, and by whom. And what are the motivations of those expressing opinions on these questions?

I would suggest it is not a simple set of questions. But then this is the sort of thing that keeps us workers' compensation geeks intrigued and interested. Read the notes from the Summit and decide what you think is important. As Bob Wilson suggests, now it is time for you to weigh in with your thoughts.  

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