When Doctors Disappear: Addressing the Human Cost of a Strained Workers’ Comp System

In the last few years, there has been a growing shortage of physicians to treat workers’ compensation cases across the country. Employees who are injured on the job are finding it increasingly difficult to access timely and appropriate medical care with both primary care and specialty doctors. Additionally, there is a lack of medical-legal doctors, such as agreed, qualified, or independent medical evaluators who are used for the purpose of obtaining second opinions to resolve disputes. While this shortfall is occurring everywhere in varying degrees, it is felt more in certain states and geographical areas than others.

The Complex Factors Driving Fewer Doctors into Workers’ Comp

The 2022 Dobbs decision significantly impacted medical residency choices, with studies showing decreased motivation for certain specialties and reluctance to train in states with abortion restrictions. This shift affects physician demographics and workforce patterns, leading to reduced availability of practicing physicians in affected states. The impact on workers' comp is evident in emergency room care and specialties like occupational and orthopedic care.

This shortage didn't happen overnight—it's been building for years. The physician shortage has been developing due to population growth, an aging society, and physician burnout. Increased regulations and administrative burdens have made the profession less appealing, compounded by lower reimbursement rates and high educational costs. Those focused on workers' comp cases face additional challenges, including stringent reporting requirements and lower reimbursement rates. Complex patient issues unique to workers' comp further deter physicians from entering this field.

The Impact on Injured Workers

The physician shortage is felt most acutely by injured employees who must rely on prompt and effective medical care to recover and return to work. Without an adequate number of physicians willing to provide treatment, employees are often forced to wait longer for appointments, receive inadequate care, or, in some cases, no care at all. The lack of quality care can also result in misdiagnosis and inappropriate treatment.

The delay in treatment not only affects the physical recovery of employees but also their financial stability and mental health. Many employees are unable to return to work for extended periods, putting their livelihoods at risk. Delayed or improper treatment can lead to long-term disabilities, prolonged suffering, and a feeling of hopelessness and frustration.

The Impact on Employers

Employers are seeing rising costs through increased premiums because of longer disability payouts, since injured workers can’t get into the doctor quickly to get a release to work.  Delays in scheduling med-legal evaluations and treatments recommended by these evaluators also prolong disability.

There are also indirect costs, such as the cost of hiring and training replacement workers while an injured worker is out on leave. Additionally, there are intangible costs like workforce morale. Other employees may not be happy about doing more work to fill in for injured employees.

Finally, the lack of readily available physicians may increase litigation costs. When injured employees experience delays in treatment, they often get an attorney, but this doesn’t usually improve the treatment experience.

What Are the Solutions to the Physician Shortage?

This is not a problem that can be solved by any single group alone. Insurers, employers, healthcare providers, and policymakers all need to come to the table to collaborate and work on solutions.

What Can Employers Do?

Employers need to be prepared for injuries before they happen by working with their workers’ comp carrier early on to understand local provider networks and how to access them. This way they can generate occupational physician panels for their workforce and be ready to assist their injured employees with finding appropriate care. Another proactive measure would be to offer employee wellness programs that reduce the risk of injuries in the first place, which may, in turn, reduce the strain on the workers’ compensation system.

Employers could also consider taking advantage of nurse triage services offered through their workers’ comp carrier or a third-party vendor, which can assist in proper diagnosis at the time of injury and determine the best medical care. These nurses can often establish that an injury is not as serious as initially thought and may only require over-the-counter or at-home treatment, avoiding the need to find a doctor altogether. Read this article for a deeper dive into nurse triage.

Telehealth is also a good option in some cases. Injuries that once required in-person evaluation by a physician might be addressed first via telehealth and/or by a physician assistant. This could improve the appropriateness of treatment based on accurate diagnostic testing and specialty consultations.

What Can Insurers Do?

Insurers need to be part of the conversation to help reduce red tape and the physician administrative burden. Ways they can make an impact include:

• Consider loosening utilization review guidelines, allowing greater leniency for adjusters to approve medical treatment and diagnostics in certain types of claims.
• Be available to assist newer doctors with proper completion of forms, such as the request for authorization (RFA) for medical treatment, to avoid treatment denials and delays.
• Make referrals to nurse case managers to facilitate locating appropriate medical providers and coordinate medical care for injured employees.
• Invest in technology solutions, such as electronic medical records and automated claim processing, to help speed up the system and reduce administrative overhead. An integrated platform would allow physicians to quickly submit claims, check on the status of reimbursements, and communicate with insurance companies.

A good example of a technology solution is California’s Division of Workers' Compensation (DWC) e-Form System. This is a state rather than an insurer system, but it is a unique shared online portal that integrates with insurer claim management platforms.

What Can Policymakers Do?

Regulators have a responsibility to evaluate the effectiveness of current workers' compensation laws and their impact on the availability of care. Legislative adjustments, such as reducing utilization review requirements, paperwork, and timeframes for treatment authorization, could make it easier for physicians to care for workers while maintaining the integrity of the workers' compensation system. Other ways regulators can make a positive impact include the following:

• Simplify the language and structure of workers' compensation guidelines to help reduce confusion and errors in paperwork.
• Consider restructuring workers’ comp medical fee schedules. While careful thought is needed to avoid the impact of increasing medical costs and workers’ comp premiums, targeting certain specialties for higher reimbursement rates might achieve balance.

In one example showing positive results, Michigan raised rates in the orthopedic specialty, which helped improve its physician shortage problem. Tax incentives or grants for physicians who dedicate a portion of their practice to treating injured workers might also be effective.

What Can Be Done at the Healthcare System Level?

At large, a long-term solution is to ensure that new generations of physicians are well-equipped and enthusiastic about serving the workers’ compensation community.  Introducing medical students to the field early on, offering rotations in workers' compensation clinics, and creating specialized programs and mentorship in medical school could all encourage young doctors to pursue workers’ comp medical care as a path.

The workers' compensation system is facing a critical physician shortage, impacting timely and appropriate medical care for injured employees. Addressing this challenge requires a concerted effort from all stakeholders to ensure the continued effectiveness of the workers' compensation system and the well-being of injured workers.