The Workers Compensation Research Institute released on Thursday a new study addressing a long-standing policy debate about the role of workers’ compensation prices in outcomes of injured workers, specifically what happens to outcomes of injured workers when prices increase or decrease.

“One of the concerns that is often expressed is that when workers’ compensation prices are set too low, workers would experience problems getting timely access to medical care. This, in turn, would lead to poor recovery and problems with achieving timely return to work,” John Ruser, president and CEO of WCRI, said. “However, prior evidence about the relationship between workers’ compensation prices and outcomes was limited until this study.”

The study, Workers’ Compensation Medical Prices and Outcomes of Injured Workers, is the first to combine surveys of injured workers with claim data to examine the relationship between workers’ compensation prices for medical services and the outcomes that workers experience after a work-related injury.

The study reveals that the answer to questions about what happens to outcomes when prices increase or decrease is nuanced and depends on whether the workers’ compensation prices are higher or lower than those paid by group health insurers:

• In areas where workers’ compensation pays less than group health insurers, increasing the price to be similar to those paid by group health results in more care being provided to injured workers and a small increase in the duration of temporary disability, but little change in measures of access to care, recovery of physical health and functioning, and speed and likelihood of return to work.

• In areas where workers’ compensation prices are generally higher than group health prices, increasing workers’ compensation prices to be even higher may lead to fewer concerns about access to providers, somewhat faster time to non-emergency visits with physicians, and somewhat more care provided to injured workers, but little change in measures of recovery of physical health and functioning, speed and likelihood of return to work, and duration of temporary disability.

According to the study, little relationship between prices and many of the policy relevant outcomes (such as recovery of health and functioning and speed of return to work) suggests that factors other than medical prices are important in shaping differences in outcomes observed across states. While worker outcomes differ across states, the study suggests that these differences are not due to the differences in medical prices for workers’ compensation services. Future studies may need to focus on other system features that may explain large differences in outcomes across states.