Universal Health Care and Work Comp - the Canadian Experience

Saturday, May 9, 2009 | 0

By Joe Paduda

International Association of Industrial Accident Boards and Commissions President Peter Federko had 20 minutes to discuss the impact of health reform on workers' compensation.

Before we delve into Mr Federko's comments, I'd be remiss if I didn't note that there already has been, and almost certainly will be, 'health reform' initiatives that will impact workers' comp - to greater or lesser degrees. These include S-CHIP and the Medicare Set-Aside language inserted into that bill at the very last minute (for those who thought that health reform would have little impact on comp, the insertion of MSA language into a bill for poor kids' health care is a big bucket of icy water smack in the face).

On to Mr Federko, president of IAIABC. Mr Federko is Canadian, CEO of the Saskatchewan Workers' Comp Board, so knows a lot about the relationship of universal health care and workers' comp. (I'd note that there are a variety of health reform proposals before Congress today, some of which call for universal coverage, others do not).

Speaking from his perspective as the boss of a comp regulator/seller/administrator. he noted that the fundamental principal of universal care is the access to medical necessary care regardless of the ability to pay. Canada, Norway, Denmark and Sweden use single payer systems, where money comes from the government and is paid to private providers. In the UK and Spain, the government owns the payer and providers. In Germany and Switzerland, there are many insurers which employers and individuals contribute to, who pay independent private providers to deliver care.

Note that in those systems that include 'private providers' the providers are not government employees. Most of the hospitals in Canada are privately owned by regional authorities or not for profit organizations. Physicians are independent, for-profit providers who bill and receive payment from the government.

In Canada, the same amount is paid for any procedure regardless of the payer type. Thus payment for a hernia is the same whether it is through workers' comp or 'regular' health. However, the work comp board negotiates with providers to ensure quicker access to care to facilitate quick scheduling, completion of reports, and compliance with communications standards. There are additional payments for reporting and communication, and in some instances the Board sends claimants south of the border to get treatment more quickly.

Federko noted that the US spends considerably more than the US for health care, while life expectancies in Canada are a couple/three years longer than in the US, infant mortality rates are lower in Canada, and the WHO reports that Canada ranks slightly higher than the US (30 v 36) on a ranking of industrialized nations' medical quality (paraphrasing here).

He also noted that the cost per claim in Canada for comp can sometimes be higher than in the US. Federko said this is due to their intense focus on return to work, which leads to the Board doing whatever they can, paying for whatever services may be suggested, in an effort to get their injured workers back on the job. However, this intense focus has led to significant savings in indemnity expense, and therefore, according to Federko, it is well worth it.

A couple other observations worth mentioning. First, Federko said that it is indeed possible that universal health care in the US may well reduce cost shifting to workers' comp resulting from underpayments to providers by Medicare/Medicaid/the uninsured.

Finally, Federko reiterated a key point: universal coverage is not socialized medicine, in Canada 95% of care is delivered by private providers.