Working Paper: NBER ID: w23611
Authors: David Neumark; Bogdan Savych
Abstract: We examine the effects of provider choice policies on workers’ compensation medical and indemnity costs. We find no difference in average medical costs between states where policies give employers control over the choice of provider and states where policies instead give workers the most control. But a richer distributional analysis indicates that developed medical costs for the costliest cases are higher in states where policies give workers more control over provider choice. We find similar evidence for indemnity costs, although the point estimates also indicate (statistically insignificantly) higher average costs where policy gives workers the most control over provider choice. Overall, the evidence suggests little relationship between provider choice policies and average medical or indemnity costs, but a higher incidence of high-cost cases when policies give workers more control of the choice of provider.
Keywords: provider choice; workers compensation; medical costs; indemnity costs
JEL Codes: H7; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| provider choice policies (I18) | workers compensation costs (J30) |
| worker choice (J29) | developed medical costs for the most expensive cases (I10) |
| worker choice (J29) | indemnity costs (K13) |
| provider choice policies (I18) | average medical costs (I10) |
| provider choice policies (I18) | high-cost cases (K41) |