Posts Tagged ‘Workers Compensation’

Kaiser On-the-Job: Streamlining Workers’ Compensation Care

posted on April 22, 2014

Lincoln Cushing
Heritage writer

Previous part: “Injured on the job! The history of Kaiser Workers’ Compensation care

Beginning with Dr. Sidney Garfield’s pioneering developments in occupational medicine in the 1930s, and Henry J. Kaiser’s expansion of that care for thousands of workers in his seven West Coast shipyards and Fontana steel mill, further advances in programs for handling worker health care evolved as did labor in America.

After the end of World War II, the composition of the national workforce bagan to shift from blue-collar to white-collar occupations, and the percentage of the Kaiser Permanente Health Plan devoted to industrial care waned. Still, in 1967 over a fifth of the Permanente Medical Group’s (the entity of the KP Health Plan that represents doctors) income was derived from industrial medicine.[i]

Yet a prejudice about this sphere of medicine had grown where many doctors had become cynical about both employee and employer versions of injury. As PMG Director Dr. Cecil Cutting ruefully commented, “…we practice Industrial Medicine in a manner which ranges from half-hearted to reluctant, reserving our active interest and most attentive effort for the care of Health Plan patients.”

"New Occupational Medicine Clinic" Planning for Health, Santa Clara Valley edition, Winter 1994

“New Occupational Medicine Clinic” Planning for Health, Santa Clara Valley edition, Winter 1994

KP developed a bad reputation among insurers as being uncooperative in processing the admittedly large amount of paperwork required for industrial claims. Dr. Cutting found this unacceptable, and sought to overhaul and invigorate its industrial medicine practice. He hired the respected and experienced Dr. Walter Hook to oversee the creation of Departments of Industrial Medicine at all major medical centers, each headed by a Chief.

The efforts paid off, and in less than two years the number of industrial patients grew from 21,257 to approximately 33,892.[ii] These departments were not clinical services, but handled the reporting and billing functions required to process workers’ compensation claims.

 
Kaiser On-the-Job

During the 1980s California employers saw dramatic workers’ compensation cost increases. The workers’ compensation system quadrupled in size between 1983 and 1993, from $2.5 billion to $11 billion, and efforts were made to contain costs and streamline services.

KOJ-NW clip

Still from video story on KP Northwest KOJ, 1996.
Click on image to see video.

Kaiser Permanente responded with a program called “Kaiser On-the-Job” (KOJ), first started in the Northwest Region in 1991. The program was implemented with the goals of meeting employer needs to decrease employee time lost from work and to help reduce health costs related to workplace injuries. KOJ now covers more than 300,000 workers in the NW Region’s service area.

To achieve optimal patient outcomes, it incorporated prevention, case management, clinical protocols, and return to work programs with impressive results. Between 1990 and 1994, the NW Region reduced average loss time per claim by more than two days and achieved a cost savings of $666 in average cost per claim.

The program was so successful that it received the Northwest Region’s 1996 James A. Vohs Award for Quality.[iii] Soon afterward, the Hawaii Region started opening KOJ clinics on the islands of Oahu, Maui and Hawaii.

This approach was soon adopted in other KP settings. Dr. Doug Benner, Coordinator of Regional Occupational Health Services at the time, remarked: “We had a system that just wasn’t working for employers, and wasn’t working for our physicians and staff either…This model goes a long way toward fulfilling our members’ expectations for access and service.”[iv]

Kaiser On-The-Job brochure graphic, 2012

Kaiser On-The-Job brochure graphic, 2012

KOJ later expanded to California in 1993 when Northern California started building dedicated occupational health centers integrated with our KP program, eventually opening 30 KOJ centers.

In January, 1993 the first of the new KP “one-stop” occupational health clinics opened at the Bayhill Medical Offices in San Bruno. A network of occupational health clinics were fully equipped and staffed with physicians, nurses, and physical therapists specialized in treating work-related injuries. Whereas injured workers frequently used KP’s regional emergency rooms as a first resort, they are now directed by their employers to seek care at the Occupational Health Centers.  

Kaiser On-the-Job occupational clinics in the Northwest region were featured in KP’s Perspectives video magazine, promoting the innovative provision of “comprehensive array of services for the workplace.”

Four KP Divisions (Northwest, Northern California, Southern California, and Hawaii) now operate KOJ programs that share many of the same clinical guidelines, care philosophies and processes, and – most important – the same commitment to integrated managed care.[v]

Work will always pose hazards. But the treatment of injuries on the job, which was the spark that in 1933 led to the eventual formation of Kaiser Permanente, continues to be one of the many ways that this health care organization serves this nation’s working people.

 

Short link to this story: http://bit.ly/1i7dUup


Special thanks to Dr. Doug Benner, Coordinator of Regional Occupational Medicine Services (1993 to 2011) and Connie Chiulli (Director of Operations, Occupational Health Service Line, Regional Occupational Health, TPMG) for help with this article.

[i] Newsletter from the desk of the Executive PMG Director, June, 1967.

[ii] Newsletter from the desk of the Executive PMG Director, March 1970.

[iii] <http://kpnet.kp.org/qrrm/perf_imp/vohs2/winners/winspast_desc.htm>

[iv] “Designated Occupational Medicine Services: New Model of Care for Injured Workers, Opening Soon Everywhere,” Contact, 12/1993.

[v] http://xnet.kp.org/permanentejournal/fall98pj/works.html

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Injured on the job! The history of Kaiser Workers’ Compensation care

posted on April 16, 2014

Lincoln Cushing
Heritage writer

Part one of a two-part series

Unless one has the unfortunate experience of being injured on the job, one is usually unaware of a parallel health care system – the medical treatment provided as a benefit through the Workers’ Compensation Insurance system.

Regular health issues (diseases or injuries suffered while not at work) are handled through fee-for-service doctors or their insurance/health plan counterparts. But if something bad happens on the job, another set of rules apply. Employers are legally required to provide benefits to employees, including medical coverage, and treatment for these injuries is carried out by a separate system of insurance or self-insurance. Care is usually delivered by physicians specializing in Occupational Medicine. 

Early in the 20th century industrial injuries were rising, organized labor was becoming more powerful, and legislation was sought to mitigate the medical and legal consequences of on-the-job accidents. California’s first workers’ compensation law was the voluntary Compensation Act in 1911, followed by the Workers’ Compensation, Insurance and Safety Act of 1913 (the Boynton Act). For the first time, employers were required to provide benefits for all employees injured on the job. The employers benefited from expanded limitations on their legal liability. The Act also established a competitive state insurance fund, and it remains the foundation for workers’ compensation in California today.

Dr. Sidney Garfield’s desert experience

Worker-patient at Contractors General Hospital, under the care of Dr. Sidney Garfield, circa 1934.

Worker-patient at Contractors General Hospital, under the care of Dr. Sidney Garfield, circa 1934.

When Kaiser Permanente founding physician Dr. Sidney Garfield (along with partner Dr. Gene Morris) first set up his 12-bed Contractors General Hospital way out in the Mojave Desert in 1933, he wasn’t trying to revolutionize health care practice in America. He was simply a young doctor taking on a reasonably safe business opportunity, serving the medical needs of some of the 5,000 men working on the Colorado River Aqueduct Project who were insured through workers’ compensation.

Dr. Garfield soon found his practice foundering because the workers’ compensation insurance companies handling industrial injuries were sending the most serious – and most profitable – cases to favored Los Angeles hospitals. They also challenged many charges as unnecessary and were often late in paying. In addition, the remote setting of the work camps meant that these hospitals were the only place the workers could be treated for non-industrial diseases – something for which they could rarely afford to pay full fee.

Industrial Indemnity Exchange (which was one-third owned by Henry J. Kaiser) was the largest insurance company affiliated with the aqueduct project, and underwriter Harold Hatch offered a creative and mutually beneficial solution. In exchange for half of the 25 percent insurance premium that Industrial would have paid out for treatment, Industrial would pay that up front to Garfield and he’d promise to provide the requisite industrial care.

Garfield figured out that he could get the workers to also prepay a small, affordable amount (five cents a day), and he’d extend his services to cover comprehensive medical care.[i] 60 percent of Garfield’s income would eventually come from payroll deduction, 40 percent from workers’ compensation. The plan worked very well, and became one of the cornerstones of the Kaiser Permanente model.

Caring for wartime workers

Ambulances at Kaiser Richmond shipyard first-aid station, circa 1944.

Ambulances at Kaiser Richmond shipyard first-aid station, circa 1944.

This unusual integration of industrial and non-industrial medical care under one roof continued when Garfield directly partnered with Kaiser and operated the hospital at Grand Coulee Dam (1938-1941) and later at the seven West coast shipyards and one steel mill (Fontana) during World War II employing almost 200,000 workers.

Health care posed a significant challenge in operating the yards; because most of the able-bodied healthy men (the typical demographic for this industry) were serving in the military, those available for homefront needed job training and medical care.[ii] The option of affordable comprehensive health care was extremely attractive to the new workforce, and demand outstripped availability. Permanente Health Plan organizers struggled to add enough staff and facilities to handle new members.

Despite the superficial appearance to the end user that it was a single health plan, under the hood it still involved the bureaucracy and bookkeeping of two separate entities. The Health Plan Manual for the staff of Sidney R. Garfield, M.D., (circa 1942) clearly stated:

 Q. If a member is hurt while working on the job is he covered under the Health Plan?

A. No. The Health Plan does not cover Industrial accidents. These are covered under Workman’s Compensation.

Q. What is meant by Workman’s Compensation and how are we connected with it?

A. Under the Workman’s Compensation Act of California, most employers are required to provide medical and hospital care as well as weekly compensation to employees injured while working. The shipyards contracted with private insurance companies to provide and administer these benefits to the employees. We in turn made arrangements with the insurance companies to provide the medical and hospital services for a certain fee.

The combined health plans proved to be a powerful medical and economic engine. In August of 1943, A.B. Ordway, Vice President of the Richmond Shipyards, sent a report to B.K. Ogden, Director of the Division of Insurance, United States Maritime Commission, in Washington, D.C. He observed:

The shipyard management further realized that the type of medical and hospital care necessary to secure and maintain the best morale and productive results for shipbuilding could not be made available from the possible income that could be derived from industrial cases only.

Therefore, early in 1941 a plan was devised for offering to the employees of the above yards a Medical Health Plan at a fixed price per week. The possible income that could be secured through an Industrial medical plan and a medical Health plan was of sufficient size to justify expenditures of large amounts of money for buildings and equipment and to better enable the holder of the medical contracts to secure the large staff of doctors and nurses needed to adequately provide the best medical and surgical attention possible.

…Medical costs on industrial cases are lower than would be possible were it not for the fact that one organization handles industrial and non-industrial cases, and the industrial costs are controlled through one contract method.

Kaiser Richmond shipyard first aid station, circa 1944

Kaiser Richmond shipyard first aid station, circa 1944

In terms of running a huge industrial network, the advantages of a healthy workforce were obvious and quantifiable. Henry J. Kaiser himself noted:

In 1943, the average male industrial worker lost 11.4 days and the average female industrial worker 13.3 days of work due to sickness and injury. By far the greater proportion of this loss – 80 percent in men and 90 percent in women – was believed to be due to common ailments. This means that in the U.S. today there is a loss of more than 600,000 man-days annually. This is 47 times the amount of time lost through strikes and lock-outs of all kinds during 1943.[iii]

Kaiser used the above argument – and his successful experience with running industrial medical care programs – as the basis for a bold proposal for a nationwide pre-paid medical plan as the war waned in 1945. Dr. Paul Cadman, in an addendum to the proposal, laid out the premise:

The Health Insurance Plan follows the general pattern of the Workman’s Compensation Law, a law which has been in effect for over thirty years and has been found to be practical and workable.

Alas, the proposal never went anywhere, but Henry J. Kaiser’s health plan continued to grow bigger and better.


Next: Postwar evolution of Kaiser Permanente’s worker health care

Short link to this story: http://bit.ly/QdEFCz


Special thanks to Dr. Doug Benner, Coordinator of Regional Occupational Medicine Services (1993 to 2011) and Connie Chiulli (Director of Operations, Occupational Health Service Line, Regional Occupational Health, TPMG) for help with this article.

[i] A slightly different percentage is described by Rickey Hendricks in A Model for National Health Care: “Since Garfield was losing money yet providing needed services and model facilities, Hatch proposed that Industrial Indemnity prepay Garfield 17.5 percent of premiums, or $1.50 per worker per month, to treat industrial injuries.”

[ii] “…In 1944, with the [shipbuilding] program in full swing, it was rare to find a yard of five thousand employees or more who could boast of more than 5 per cent of workers with previous experience in shipbuilding.” “Health and Safety in Contract Shipyards During the War,” by Philip Drinker, Ch.E., in Occupational Medicine, April, 1947.

[iii] “Proposal for a Nation-Wide Pre-Paid Medical Plan Based on Experience of the Permanente Foundation Hospitals” Henry J. Kaiser, March 3, 1945.

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