The Impact of Provider Choice on Workers' Compensation Costs and Outcomes

Abstract

Using survey data collected in 2002 and 2003 in California, Massachusetts, Pennsylvania, and Texas on workers injured 3 to 3.5 years earlier, coupled with information on the associated workers' compensation claims from the Workers Compensation Research Institute, the authors examine how provider choice in workers' compensation is related to costs and to workers' outcomes. They find that employee choice of the provider, by comparison with employer choice, was associated with higher costs and worse return-to-work outcomes. Although the same rate of physical recovery was found for both groups, workers who chose their providers reported higher satisfaction with medical care. The higher costs and worse return-to-work outcomes associated with employee choice arose largely when employees selected a new provider, rather than a provider with whom they had a pre-existing relationship. The findings lend some support to recent policy changes limiting workers' ability to choose a provider with whom they do not have a prior relationship.