Texas Employers, Medical Providers Join Forces to Fix Workers’ Comp System

October 13, 2004

Texas’ workers’ compensation system is one of the worst in the nation with skyrocketing costs, mediocre care and a poor record of getting workers back on the job, according to Texans for Workers’ Compensation Reform (TWCR), a new coalition of small and large employers and medical providers dedicated to fixing the system.

“The Texas workers’ compensation system is out of control, broken and hurting patients, employers and health care professionals,” said Keith Rose, M.D., a general surgeon who treats workers’ compensation patients at clinics in Corpus Christi and the Valley. “Our system costs are markedly higher than other states, yet patient satisfaction rates are lower. The system is being gamed, and injured workers are getting unnecessary treatments—sometimes getting sicker as a result—and too few injured workers are getting healed and returning to work.”

The newly organized TWCR is supported by small and large employers and medical providers dedicated to fixing the state’s broken workers’ compensation system. Some of the coalition’s supporters include the National Federation of Independent Business (NFIB), which represents 36,000 small businesses in Texas; Texas Association of Business (TAB), which represents more than 140,000 small and large employers across the state; Texas Restaurant Association (TRA); American Airlines; Cooper Industries Inc.; GM-Arlington; Presto Printing; Watkins Motor Lines; American Electric Power Company; and Lockheed Martin Aeronautics Company.

Other supporters include the Texas Farm Bureau; Texas Retailers Association; and Dallas-based CHRISTUS Health, a faith-based, not-for-profit health system comprised of more than 40 hospitals, inpatient and long-term care facilities as well as dozens of clinics, physician offices and health care services in more than 70 cities in Texas, Arkansas, Louisiana, Oklahoma, Utah and Mexico.

“The impact of our broken system on workers and employers is real,” said TAB President Bill Hammond. “Largely because of the cost, nearly 40 percent of Texas employers have opted out of the workers’ compensation system—leaving more workers without coverage. The percentage of Texas workers employed by companies that do not carry workers’ compensation coverage has increased to its highest level since 1993.”

Texas workers’ compensation costs have risen to nearly $13,000 per lost-time claim—a rate 50 percent higher than the median state in a study of 12 states released in 2002. The system in August earned a “D” from the California-based Work Loss Data Institute in its 2004 State Report Cards for Workers’ Compensation.

“We pay more, but we get less,” said Wanda Rohm, chairman of the NFIB Texas Leadership Council and a small businesswoman in San Antonio. “Our workers suffer under a system that offers excessive yet ineffective treatments—leaving Texas workers far less satisfied on many levels including their ability to get back on the job.”

Dr. Rose noted that Texas remains last in ability to get injured workers back to work—a full 25 percent of injured workers in Texas never substantially return to work. Further, studies show that injured workers in Texas are less satisfied with the workers’ compensation process on several levels including recovery of physical health and functioning, return-to-work rates, access to care and satisfaction with their care.

Texas’ broken system directly impacts Texas jobs. During August 2004 testimony to the Texas House Committee on Economic Development, a Union Tank Car Company spokesman listed high workers’ compensation costs as one reason the company chose Louisiana over Texas for a new $100 million manufacturing plan—and 850 new jobs. The company currently has 600 employees in Sheldon, just outside of Houston, and has been operating in Texas for nearly 100 years.

“Our current system doesn’t serve workers or employers and is bad for our economy as a whole,” Hammond said. “TWCR is dedicated to pushing common-sense reforms during the 2005 legislative session to make this system more efficient and effective for everyone involved—workers, employers and health care providers.”

Creating networks of qualified, credentialed physicians—similar to popular group health plans offered by government and large employers—is the cornerstone of TWCR’s reform agenda. A network-based solution would:

· Provide injured workers a choice of qualified, credentialed medical doctors to serve as their primary doctor. That qualified medical doctor, in concert with the patient, would decide the best treatment for the injury. Under the state’s current system, chiropractors and even dentists can serve as a person’s primary doctor.
· Lead to better health outcomes as the treating physicians, workers and employers will be more familiar with job-related injuries and the best treatment options for those injuries.
· Ensure workers receive medical treatments that are consistent with nationally recognized, evidence-based treatment standards and guidelines.

Hammond estimated that using networks of treating physicians could save Texas employers between 11 and 21 percent in the medical costs associated with workers’ compensation claims.

“This is a common sense solution that will reduce medical costs while streamlining the system for workers, employers and health providers,” Dr. Rose said. “Injured workers will recover more quickly, because physicians, workers and employers will be more familiar with job-related injuries and the best treatment options for those injuries.”

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