Expenditures on medical benefits in workers’ compensation programs have been increasing rapidly in recent years. Barry Llewellyn and Jim Stevens from the National Council on Compensation Insurance discuss a major source of increasing costs in the first article, "Workers’ Compensation Prescription Drug Study." From 1997 to 2002, the share of total medical costs due to expenditures on drugs increased from 10.1 percent to 12.1 percent. In part, the increased expenditures were due to higher prices for the drugs, but a more important factor increasing costs over the six years was greater utilization of drugs. Llewellyn and Stevens also discuss the efficacy of several policies designed to moderate the increasing costs of prescription drugs, including fee schedules and the use of Pharmacy Benefit Managers (PBMs). They conclude that "although the expanded use of PBMs in workers’ compensation could result in an initial drop in overall prescription drug prices, the year-to-year and long-term effects on reducing medical costs in the workers’ compensation system are not certain."

Annmarie Geddes Lipold examines the integration of workers’ compensation with employee benefits during recent decades. She carefully delineates the various approaches to benefit integration. One variant, sometimes referred to as 24-Hour Coverage, contemplated the elimination of distinctions between the medical benefits (and in some proposal, cash benefits) for occupational and non-occupational disability. After a number of starts in this direction in the early 1990s, the proposals for unitary benefit schemes have largely been abandoned. Another variant of integration involves the combined administration of workers’ compensation, short-term disability, and long-term disability programs. Integration of this type has rapidly increased in recent years, with over half of all employers surveyed by Mercer/Marsh in 2004 now integrating at least two disability programs.

Information on Workers’ Compensation Policy Review

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