Program moves workers’ comp savings to community
In-house success leads to marketing PPO
A hospital system in Baton Rouge, LA, has had so much success with reducing its in-house workers’ compensation costs that it is now offering the same solutions to employers in the community. The program hinges on a preferred provider organization (PPO), and self-insured employers in the area see it as a way to get some benefits of signing on with a large insurer.
In July 1993, Baton Rouge (LA) General Medical Center implemented a series of changes at the hospital and its sister facility, Baton Rouge Health Center, to reduce the cost of workers’ compensation at the hospitals. Among other changes, they established a preferred provider panel and instituted post-accident drug and alcohol screening.
The improvements were immediate. Workers’ compensation costs fell 36% in 1993 from the 1992 figures, even though the number of reported incidents requiring medical treatment went up 33%. The number of reported incidents probably increased because of education efforts aimed at employees and supervisors. In addition, total workers’ compensation costs per full time employee (FTE) fell 38% from 1992 to 1993. The hospital spent $203 per FTE in 1992, which was typical for the several previous years, but only $125 per FTE in 1993.
Return-to-work rates also improved, partly as a result of more efforts at using modified duty. For 1993, 75% of workers with a lost time injury returned to work within two weeks, compared with only 58% of workers the year before.
That trend has continued through 1996, says Margaret Fontenot, senior account executive with General Health System, the parent company of the two hospitals. She previously was administrative director of the occupational medicine program but since has been given charge of the new PPO aimed at local employers. (For more on the original in-house improvements at the hospitals, see Occupational Health Management, July 1994, pp. 103-107.)
"We used a managed care approach with our own employees and saw great improvements, so now we’re using the same program for direct contracting with employers," Fontenot explains. "The main target of our marketing is self-insured employers."
Fontenot explains that the hospital’s PPO system is not meant to compete with larger providers, but it can offer self-insured employers many of the discounts and other benefits that come with larger PPO or health maintenance organization contracts.
"The self-insureds normally don’t have access to discounts on workers’ comp services, so that is a big draw for using our system," she says. "They also get access to good physicians at a discounted rate, including some doctors who would not sign with the other providers at a discount."
The PPO is known as the Occupational Health Managed Care Network, or OccNet, and operates as a component of the health system’s occupational health program. Not all occupational health clients are expected to sign on with the PPO, but Fontenot says initial interest has been strong. The program pays for itself because there is little overhead or initial expense required to get the program running.
Once an employer contracts with OccNet, most services are provided through the many subsidiaries of General Health System.
"We see this as a real opportunity to expand the occupational health services we provide to the community," Fontenot says. "Employers are interested and we expect them to benefit in the same way we improved our own situation at the hospitals."
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