Explanation of what 24-hour care is and how it could affect small businesses.
State insurance commissioners and legislators panicked by the increase in workers' compensation costs have been studying "24-hour care," a concept you'll hear more about as Congress debates national health care. Florida, Oregon, and other states have authorized pilot programs in it, and California recently began its experiment with it.
Although the concept is simple, the details get messy. The term describes various plans to bundle health care and workers' comp into one system. Some insurance carriers already market a simple version of 24-hour care that's really just the combined administration of two separate systems. In the most comprehensive model, workers would have one plan for medical and disability benefits, whether they were hurt on the job or off, and would receive care from one set of doctors, as with a health-maintenance organization. In between are a number of partial measures.
So far, employers have mixed feelings about the concept. Some worry that 24-hour coverage would destroy the basic workers' comp contract, fearing that employees could sue for damages if they're injured on the job. But the optimists believe that cost-containment strategies introduced from the health-care side would rein in workers' comp costs. Some also hope 24-hour care would reduce administration costs, litigation, and "double-dipping" -- workers' getting payments from both workers' comp and health insurance for the same treatment.
Increasingly, workers who lack health insurance pursue treatment through workers' comp for injuries suffered off the job; and in an economy with more service jobs and more at-home workers, it has become difficult to determine what health conditions are job related. By erasing the line between on-the-job and off, 24-hour care might obviate such fraud.
However, differences between the systems could prove irreconcilable. Workers' comp is more generous than any health insurance. It pays for unlimited therapies, medical rehabilitation, and long-term care; it does not screen out high-risk workers; and it does not require deductibles or copayments. If health care is extended to match workers' comp, costs would increase significantly.
There are basic legal problems, too: About half the states prohibit employers from limiting a worker's choice of doctors, as an HMO-style system would. And the Employment Retirement Income Security Act (ERISA) prohibits states from meddling with regulation of health care outside the workers' comp system. All that and more must be worked out before 24-hour care is an option; meanwhile, powerful interests are arrayed against it. Stay tuned.
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The January/February 1993 issue of John Burton's Workers' Compensation Monitor features a detailed discussion of 24-hour care, written by Keith Bateman, a vice-president of the Alliance of American Insurers. For a copy ($30), call 800-341-7874, extension 310.