Managed Care in Workers' Compensation Plans

Workers' compensation plans have lagged behind most public and private health care plans in the adoption of managed care techniques. This is largely attributable to the underlying differences between workers' compensation and group health plans. Managed care techniques were developed within group health plans with the objective of health at the lowest cost. In workers' compensation, managed care must address a different objective—restoring a worker to health and productivity at the lowest cost. It is this fundamental difference that makes the application of managed care techniques to workers' compensation plans contentious and at times inappropriate. Research on the impact of managed care on the health and welfare of injured workers is sparse, and important questions remain about the appropriateness of care delivered under workers' compensation managed care plans. In this paper, we discuss the application of managed care to workers' compensation, and highlight the barriers to effective implementation.