Attendees of the Casualty Actuarial Society annual meeting were told that pre-reform measures already have started to impact workers’ compensation, and insurers and actuaries need to prepare for a shifting medical landscape.

“The stimulus bill, the American Reinvestment and Recovery Act, included funding for development and implementation of electronic health records (EHR),” Joseph Paduda, principal, Health Strategy Associates LLC and writer of the blog Managed Care Matters, told attendees at the meeting in Boston in mid-November. “EHR supports clinical decision-making, physician order entry for scripts or for imaging, and clinical data capture and sharing. Providers will all have access to the same amount of information instantly.”

Paduda explained that the funding will improve the quality and depth of the data available, and pointed out that the use of EHRs in workers’ comp would ultimately be beneficial for actuaries practicing in that field.

The stimulus bill also calls for an estimated $1.3 billion investment in various agencies and research to evaluate the effectiveness of specific procedures and the impact of medical care on functionality, outcomes, and quality of life.

This is likely to directly affect Medicare reimbursement policies and, over time, will impact private pay and workers’ compensation, according to Paduda. “In my view, this is a strong positive for workers’ comp,” he said. “A lot of medicine is more of an art than a science, so adding more science to medicine will dramatically improve outcomes and potentially reduce costs.”

Paduda highlighted drug pricing as one area of potential change where the likely impact on workers’ compensation will not be so positive. Currently, the United States is the only developed country where the government does not negotiate drug prices with pharmaceutical manufacturers, but this could change under several reform bills under consideration.

“The impact on workers’ comp, if the Department of Health and Human Services negotiates for drug prices, is uncertain but not positive,” he said. “Cost shifting is a distinct possibility. If one of the biggest payers of pharmaceuticals is suddenly paying them less, they’re going to want to make up their revenues from somewhere else, like workers’ comp.”

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