The effect of a health care management initiative on reducing workers' compensation costs.

The effect of both a cost control and health care management initiative (HCMI) on Workers' Compensation costs at a self-insured University Hospital was assessed. Seven cohorts of injured workers were studied. Cost control measures started in 1993 included early return to work and injury prevention programs, internal administration of legal cases, and utilization of modified duty assignments. The health care management initiative fully in place in 1997 included aggressive case management and preferred provider panel utilization. Workers' Compensation indemnity costs and lost workdays incurred by each cohort were compared. A 41 to 59% reduction in indemnity payments and 46 to 67% reduction in lost time cases were realized after the health care management initiative was fully in place. During this time, accepted claims were reduced by 10 to 15%. The quality of the provider panel, as measured by academic credentials, experience and board certification, did not change. Cost control measures, without comprehensive case management, did not decrease these parameters significantly. The health care management initiative realized reductions in lost time cases and Workers' Compensation indemnity costs.