Let's say you are playing with your family in the front yard and while throwing a ball, you get a terrible pain in your shoulder. The doctor discovers a torn rotator cuff and schedules you for surgery. The average cost: about $2,000.
Now, let's say you suffer the same injury, only you do it while you are at work. Same shoulder injury, same diagnosis, same operation. However, because it's a worker's compensation claim, the operation will now cost on average more than $10,000.
This isn't a hypothetical. These are actual numbers from the New Hampshire Department of Insurance report comparing group health medical costs versus worker's compensation medical costs. On average, the shoulder surgery was five times more expensive because it was a worker's compensation claim.
Recently, the Insurance Department compared identical services filed in workers comp to group health claims. The findings are eye-popping:
Surgeons in New Hampshire charge 2 1/2 times more for workers comp surgeries
Ambulatory surgery centers charge 3 1/2 times more in workers comp
Radiology charges are 2 times higher in workers comp
As a business owner, this is appalling. This is either a massive tax on businesses or a hidden fee to benefit health providers. Either way, New Hampshire inexplicably holds the dubious honor of having the highest worker's compensation costs in the region, and among the highest in the U.S.
The Department of Insurance report shows our comp costs are a whopping 58 percent higher than neighboring states. Surgeries, like the rotator cuff example, are 100 percent more expensive in New Hampshire than anywhere in New England.
I applaud Governor Maggie Hassan for recognizing this problem. It is a crippling cost for small business owners. The governor created a special commission this year and told members to recommend ways to lower worker's compensation costs in New Hampshire.
Unfortunately, as the commission wraps up its work this month, all we get is a split decision. We have two separate reports from the commission, because the group can't agree on the size and scope of the problem.
The majority report recommends the state create a database to track workers comp medical costs. Unfortunately there are several problems with this: the data is already available to the state, the database would cost the state and employers money to create, it would take years to develop and doesn't even address the problem at hand. This approach protects the medical community, but it does nothing to help business owners like me.
A minority report from the commission may have an answer. It offers a solution that's in place around the country and is also N.H. specific. We could create a cost containment schedule that ties workers comp claim payments to general health care payments. Sometimes, worker's comp cases are more burdensome to providers; where that occurs, an additional payment amount should be added.
The Insurance Department collects group health payment info in its Comprehensive Health Care Information System (CHIS). The CHIS database could act as the reimbursement rate benchmark for workers comp payments. Even Roger Sevigny, the Department of Insurance Commissioner stated a fee schedule would indeed reduce costs and encouraged the use of the CHIS database
A cost containment schedule is fair and transparent and not difficult or expensive to implement as it uses the CHIS database.
We also need to remember that worker's comp is only about 3 percent of the medical community business. The other 97 percent is general health care — not comp. If the medical community already accepts general health payments for non-work related injuries, why require businesses to pay upwards of 200 percent or 300 percent more for the same treatment? The focus needs to be on mending N.H.'s workers, not milking the system.
Employee access to doctors or hospitals will not be affected since the reimbursement will be based on existing N.H. general health costs which represent 97% of all medical costs.
Let's get these costs under control and fix our worker's compensation system. Stop adding insult to every employee's injury.
(Dennis Gaudet is CEO of AutoServ of Tilton. He chairs the N.H. Auto Dealers Workers Comp Trust.)
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