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Utilization and costs of chiropractic care for work-related low back injuries: Do payment policies make a difference?
The Spine Journal 6 (2006) 146–153
Case Study
Utilization and costs of chiropractic care for work-related low back injuries: Do payment policies make a difference? Radoslaw Wasiak, PhDa,*, Eileen McNeely, PhDb a
Liberty Mutual Research Institute for Safety, Center for Disability Research, 71 Frankland Road, Hopkinton, Massachusetts 01748, USA b Harvard School of Public Health, Department of Environmental Health, Occupational Health Program, Landmark Center, Room 3-098, 401 Park Drive, P.O. Box 15697, Boston, Massachusetts 02215, USA Received 9 February 2005; accepted 25 May 2005
Abstract
BACKGROUND: Chiropractic care is frequently used in the treatment of work-related low back pain. Chiropractors have been shown to be more sensitive to cost-sharing than other providers. PURPOSE: This study examined the differences in utilization and costs of chiropractic care for work-related low back injuries in seven jurisdictions and whether these differences can be associated with workers’ compensation (WC) payment policies. STUDY DESIGN: A retrospective analysis of WC data from a single insurer. METHODS: Analyzed data included individuals with chiropractic care performed between 1999 and 2002. Utilization (visits and services per person, services per visit) and costs (cost per person and cost per visit) were examined. Actual reimbursement index was developed to proxy payment policies based on actual payments made to chiropractors. RESULTS: Utilization and costs varied significantly across the analyzed states. Restrictive payment policies were associated with lower costs of chiropractic care and lower number of services per visit, but had no impact on visits or services per person. CONCLUSIONS: Findings indicate necessary components of effective cost containment, even in the presence of utilization adjustment. Ó 2006 Elsevier Inc. All rights reserved.
Keywords:
Payment policy; Chiropractic care; Workers’ compensation; Utilization; Costs
Introduction Chiropractic care is a form of healing that is based primarily on spinal manipulation [1]. Utilization of chiropractic care has increased substantially [2], with that growth being matched by a substantial decline in out-of-pocket payments for chiropractic services [3,4]. Most group-health plans, however, introduced and continue to require some form of coinsurance, such as dollar limits, deductibles, copayments, or limitations on the number of encounters per incident. Unlike general health insurance, workers’ compensation (WC) provides injured workers with full coverage of all medical expenses related to an occupational injury FDA device/drug status: not applicable. Nothing of value received from a commercial entity related to this manuscript. * Corresponding author. Liberty Mutual Research Institute for Safety, Center for Disability Research, 71 Frankland Road, Hopkinton, MA 01748. Tel.: (508) 497-0242; fax: (508) 435-8136. E-mail address: [email protected] (R. Wasiak) 1529-9430/06/$ – see front matter Ó 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.spinee.2005.05.381
or illness. Cost sharing in WC involves income benefits onlydinjured workers do not receive full compensation for their work absences and have to wait at least three days before any compensation for lost wages occurs. Nonetheless, some expect that even such an indirect mechanism affects an injured workers’ incentive to seek medical care [5]. The lack of explicit coinsurance mechanisms in WC makes the analysis of chiropractic care in treatment of work-related conditions that much more important since it was shown that chiropractic care expenses are more likely than other health-care expenses to be decreased when some type of cost sharing is introduced [6]. In addition, the recent high growth of medical costs has led to the renewed interest in evaluating the effectiveness of various WC cost containment measures, including jurisdictional payment policies [7,8]. The payment policies in each WC jurisdiction are typically defined by the interaction between fee schedules and reimbursement policies. Only a handful of studies have investigated the efficacy of such policies, with the primary focus on WC medical fee schedules. Boden and Fleischman
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correlated state-level annual medical expenditure trends for 41 states with and without fee schedules during the period 1965–84 but failed to find any effect of fee schedules on medical costs [9]. A similar result was found in a study using a random sample of claims filed with WC carriers in 17 states over the 1979–87 period [5] and a study using a difference-in-difference approach to claims data from a single insurer in a single jurisdiction [10]. In another study [11], data from 33 WC jurisdictions for the 1964–84 period revealed an inverse relationship between the use of fee schedules and medical benefit payments. None of these studies examined if the way in which fee schedules are administered has any bearing on costs of care. This is particularly important because the level of WC maximum allowable fees in the most generous state is nearly two and a half times greater than that in the least generous fee schedule, but the cost of producing medical care differs by less than one-third [12]. Not only can states define the maximum reimbursable amount, but they can also specify whether a provider is reimbursed a full fee schedule amount, a usual amount (typically determined by the average or median charge), or a customary amount (most often set at the 90th percentile of all charges). It is, therefore, possible that two states with similar fee schedules but different reimbursement policies will have very different cost levels. In this study, we investigated differences in utilization and cost of chiropractic care for work-related low back injuries and examined if differences in jurisdictional payment policies impact these utilization and costs. It was hypothesized here that WC jurisdictions with more restrictive payment policies would have lower utilization and costs. We focused on work-related low back injuries because the pattern of chiropractic care for low back pain is well established [8,13]. Methods Data source We used claims data from a WC carrier with a 10% share of the U.S. WC private market to identify individuals
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with a compensable low back injury in seven states (Florida, Idaho, Illinois, Maryland, New Hampshire, New York, and Pennsylvania). From the total population of low back claimants, using detailed medical care information for each claim, we selected those with at least one visit to a chiropractor during a 4-year period (1999–2002), regardless of the year in which the work-related injury occurred. Subsequent analyses focused on chiropractic care provided to the claimants included in this study. The analyzed data set did not include medical care that individuals received from other health-care providers. Although such care may have had an impact on the extent and costliness of chiropractic care, the analysis of such interaction was beyond the scope of this study. The variables in the data set included the start and end date of chiropractic treatment, amount paid for this treatment, procedure type according to Current Procedural Terminology (CPT), nature of injury, worker’s job tenure at the time of injury, gender, and age. Although in most studies using WC data claimants are selected using their injury date, we decided to focus on calendar years, which is more appropriate for the analysis of the impact of payment policies on utilization and costs. In most WC jurisdictions, fee schedules are reviewed annually, and similar adjustments occur in Medicare. Therefore, both utilization and cost variables had to be expressed on a per calendar-year basis because WC claims often include medical benefits that occurred in different calendar years. Policy variables Table 1 presents state policies in WC jurisdictions of interest in this study. Two of seven WC jurisdictions in our sample did not have a fee schedule (Illinois and New Hampshire). Besides fee schedules, ceiling prices are set according to other specifications in each state. For instance, although Idaho has a fee schedule, maximum allowable reimbursement amounts are not set administratively; rather they reflect the 90th percentile of charges for a particular CPT code. Reimbursement policies define the allowable charges too. In Florida the lower of either the fee schedule
Table 1 Payment policies and waiting periods in selected workers’ compensation jurisdictions Measure
Florida
Idaho
Illinois
Maryland
Fee schedule Reimbursement policy
Yes Customary or fee schedule amount, whichever is less
No Charge should be reasonable and customaryz
Yes Fee schedule amount
Waiting period for lost time compensation
7 days
* Charge should not exceed the usual or customary amounty 5 days
3 days
3 days
New Hampshire
New York
Pennsylvania
No Full amount
Yes Fee schedule amountx
Yes Fee schedule amount
3 days
7 days
7 days
* Fee schedule is not set administratively; it includes a customary amount (90th percentile). y Customary amount defined as the 90th percentile charge for a particular Current Procedural Terminology code. z Reasonable and customary is based on the geographic area. x Amount paid subject to negotiations between the payer and the provider.
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or the provider’s customary charge caps the reimbursed amount. We created two variables to proxy jurisdictional payment policy. The first followed the convention of prior research and was a dummy variable denoting whether a jurisdiction had a medical fee schedule. Because of the unique nature of Idaho’s fee schedule, we coded Idaho as if it did not have a fee schedule. The second variable was a continuous index computed using the actual mean amounts paid in a given jurisdiction and was supposed to reflect the interaction between the fee schedule and reimbursement policy. The index was based on actual utilization patterns in each of the states; therefore, using CPT codes the most frequently reimbursed chiropractic procedures were identified in each of the service years. The number of considered procedures was capped at 10 or the 90th frequency percentile, whichever was less. The actual reimbursement index was computed using the following formula: X APi Actual reimbursement index5 si ð1Þ MCi i where APi5the actual mean reimbursement level for the ith CPT code; MCi5the reimbursement level set in Medicare fee schedule for the ith CPT code; and si5the frequency of the ith CPT code. The value of 1.00 for the actual reimbursement index implies that the frequency-weighted mean actual payment to chiropractors is equal to the Medicare amount. A value less than 1.00 implies that in a given calendar year the jurisdiction had a restrictive payment policy, whereas a value greater than 1.00 implies that such policy was rather liberal. There are important reasons why the use of Medicare fee schedules as the benchmark is appropriate. The Medicare reimbursement levels are relatively low compared with other available fee schedules, and Medicare payments constitute a significant share of health-care providers’ revenue, including chiropractors [14,15]. Also, the design of Medicare fee schedules allows comparison across various medical services and various geographies because Medicare fee schedules equalize ‘‘profit margins’’ across all services and incorporate differences in costs of producing medical services [12]. In this study, we compared utilization and costs in several jurisdictions in four calendar years with different distributions of chiropractic services in each; thus, using Medicare payments as the benchmark was particularly fitting. One of the many distinguishing features of the WC system in the United States is its highly jurisdictional nature. States vary in their approaches to controlling medical benefits as well as in their attempt to limit income benefits to workers. Cost sharing is a typical tool used in insurance programs, but in WC it involves income benefits only. One form of income cost sharing is a waiting period determining how long an injured worker must be off the job to
receive compensation for time lost. Although the length does not affect medical benefits directly, one may argue that it can indirectly impact the injured worker’s incentive to seek care [5,16]. Therefore, to control for that potentially confounding effect, we included the length of the waiting period in all regression models.
Utilization and cost variables Injured workers’ utilization and costs were evaluated in each of the calendar years. For instance, individuals injured in 1999 who received chiropractic care in both 1999 and 2000 had their utilization and cost variables evaluated for 1999 and 2000 separately. There were 4,840 injured individuals who received chiropractic care in more than one calendar year. To evaluate the impact of this method on our results, we performed all analyses reported in this paper only with individuals who had all their chiropractic care in a single calendar year, but did not find any significant differences in findings. Three types of utilization measures were created: visits and services per person, and person-mean services per visit. A single visit may have consisted of one or more services performed on the same day. Entries with the same start and end date of treatment and the same procedure code were considered as duplicates, and only one was used in the calculation of services per person and services per visit measures. Two cost measures were used: cost per visit as the aggregate of costs associated with all services performed on the same day, and cost per person as the aggregate of amount paid for all services associated with chiropractic care in a calendar year. Costs were adjusted to constant-year dollars using the medical care component of the Consumer Price Index. In addition to the adjustment for price level changes, costs were adjusted to achieve a direct comparison of costs between jurisdictions given differences in utilized procedures and the ‘‘cost of doing business.’’ Adjustment factors were developed using the Medicare geographic practice cost index, most frequently utilized CPT codes by chiropractors in a given jurisdiction (top 10 procedures or the 90th percentile, whichever was less), and the associated Medicare relative value units. In states with more than one Medicare locality, population weights were used to obtain the state-level adjustment factors.
Regression analysis Because the distribution of chiropractic utilization and associated costs typically has a long upper tail, utilization and cost variables in the regression equations were logtransformed. Each cost variable was used as the dependent variable in cost regressions, whereas all utilization measures were utilized as dependent variables in utilization regressions.
R. Wasiak and E. McNeely / The Spine Journal 6 (2006) 146–153
Two groups of independent variables were of primary interest. The first described cost containment policies using alternative variables (actual reimbursement index or fee schedule dummy variable). These variables were entered separately into each regression specification, and their significance was later compared. The second group were utilization variables in the cost regressions; in order to control for the impact of utilization on costs, we included visits or services per person in regressions with cost per person as the dependent variable, and person-mean services per visit in regressions with person-mean cost per visit as the dependent variable. Because each of the states can be characterized by a different utilization pattern, in cost regressions we clustered individuals by state and allowed both the intercept and the coefficient for the utilization variable to vary depending on the payment policy, calendar year, and the waiting period for lost time benefits. In addition, we allowed the effect of all policy variables to vary by year as well. In utilization regressions, individuals were again clustered by state, the intercept varied depending on the policy and year, and the effects of policy variables varied by year. In both types of regressions, we included service year dummy variables and person- and claim-specific variables, such as age, gender, job tenure, nature of injury, and if the claim involved lost work time. Furthermore, we interacted utilization, policy, and calendar-year variables to account for possible changes in policies and utilization during the study period. Results The data included information for 13,734 claimants who were primarily male (71%) with a median age of 38. For those claimants, the predominant nature of injury was low back strain (81%) and just over half received indemnity payments for lost time (51%). Among all individuals, 65% (n58,894) had all chiropractic services within a single calendar year. When utilization and costs were separated into calendar year values for those individuals with chiropractic care occurring over more than a single calendar year, the overall number of observations used in the analyses was 19,420. Table 2 reports the values of the actual reimbursement index. Three of seven WC jurisdictions can be considered as restrictive, with values of the actual reimbursement
149
index below 1.00. Both jurisdictions without an explicit fee schedule (Illinois and New Hampshire) have the highest values of the actual reimbursement index. Table 3 reports median values for chiropractic utilization and cost variables. Several general patterns of chiropractic behavior can be identified. New York has the highest number of median visits per individual, yet the lowest services per visit ratio. This represents a specific utilization adjustment by chiropractors treating work-related low back pain in that state because they are reimbursed for three CPT codes only and these codes exclude the potential for multiple services during each visit. Consequently, both median cost per individual and median cost per visit were substantially lower than in other states. Florida and Idaho were characterized by a relatively low number of visits but a high number of services per individual, which in the case of Florida was expected, owing to the explicit, 18-visit limit on chiropractic visits for a WC claim. A high number of services per visit led to a relatively high median cost per visit in both states, as compared with median cost per person. Maryland, Illinois, and Pennsylvania have a relatively high median number of both visits and services per individual, and quite a high number of services per visit. Not surprisingly, these three states have the highest median costs per individual. Finally, for New Hampshire, one of the two states without a fee schedule, we did not seem to observe a significant utilization adjustment. This could be due to the existing reimbursement policy in that state, which allows full reimbursement of submitted charges. The regression results are reported in Tables 4 and 5. In Table 4, we present the impact of independent variables on cost per person and person-mean cost per visit. In Table 5, we report findings on the impact of policy variables on alternative measures of utilization of chiropractic care. Excluding individuals with chiropractic services in multiple years from specifications (1)–(12) did not materially affect the results, as a similar number of individuals had utilization and cost overlaps in each of the calendar years and their costs were similarly distributed. For all cost regressions, person- and claim-specific variables had consistent signs and significance. In utilization regressions, age and job tenure had different impact when using alternative utilization measures. As expected, individuals who lost time from work were associated with
Table 2 High and low reimbursement states (low reimbursement!1.00)
Actual reimbursement index Service year 1999 2000 2001 2002
Florida
Idaho
Illinois
Maryland
New Hampshire
New York
Pennsylvania
0.78 0.75 0.76 0.99
1.11 1.15 1.04 1.30
1.35 1.34 1.27 1.92
0.80 0.70 0.74 0.80
1.23 1.21 1.14 1.59
0.64 0.57 0.52 0.52
1.15 1.06 1.12 1.28
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Table 3 Utilization and costs of chiropractic care in selected WC jurisdictions (medians reported) Florida*
Idaho
Illinois
Maryland*
Visits per individual 1999 7 5 9 12 2000 8 6 10 10.5 2001 9 6 10 10 2002 8 6 11 12 Services per individual 1999 17 14 21 25 2000 22 15 25 26 2001 23 15 24 26 2002 24 18 28 31.5 Services per visit 1999 2.8 2.7 2.5 2.6 2000 2.8 2.8 2.5 3.0 2001 3.0 3.0 2.7 3.0 2002 3.0 3.0 2.8 3.0 Cost per individual (in constant 1999 $ with geographic adjustment) 1999 504 598 1056 1162 2000 651 625 1240 969 2001 632 692 1103 912 2002 681 704 1478 868 Mean-individual cost per visit (in constant 1999 $ with geographic adjustment) 1999 80 116 116 102 2000 83 113 121 98 2001 80 114 110 85 2002 90 118 130 92
New Hampshire
New York*
Pennsylvania
8 6 7.5 8
15 14.5 15 15
8 10 9 10
16 13 14 17
15 15 15 16
18 22 20 23
2.0 2.0 2.1 2.0
1.0 1.0 1.0 1.0
2.2 2.3 2.3 2.3
716 548 599 772
350 298 274 259
717 827 708 862
81 84 79 91
24 20 18 17
90 86 84 89
* Denotes a jurisdiction with a restrictive payment policy.
increased utilization and costs in all regression specifications, as such cases typically denote more severe injuries. The policy and utilization variables in cost regressions were also consistent across specifications. The payment policy proxy was statistically significant in all cost regressions. The full impact of the reimbursement policy will vary by state, as it was found to be related to utilization levels (ie, some interaction coefficients were statistically significant); thus the impact will be highest in states with highest utilization (New York and Maryland). The fee schedule dummy variable was insignificant in all cost regressions. Alternative measures of utilization in cost regressions all point out to the same conclusiondas utilization increased, the cost of chiropractic care increased as well. In regressions with utilization measures as the dependent variable, neither the payment policy proxy nor the fee schedule dummy had a significant effect on visits or services per person. However, an increase in the actual reimbursement index was associated with an increase in the person-mean services per visit; fee schedules did not have a similar impact. As in cost regressions, the income-sharing policy had no significant effect on the utilization variables.
Discussion The main objective of this paper was to examine differences in chiropractic utilization and costs across several
jurisdictions and examine whether WC payment policies can be associated with higher or lower levels of utilization and costs. We found that states without explicit WC fee schedules have higher average payments for chiropractic services. There were significant differences between states in median utilization and cost of chiropractic care. Using regression analysis, we established that fee schedules by themselves were not associated with lower costs and utilization; however, more restrictive payment policies were associated with lower costs per visit and costs per person and lower services per visit. No effect was found of either fee schedules or payment policies on other utilization measures. The association between utilization and cost of chiropractic care and various policy variables generally reflected our expectations. In particular, the payment policy proxy had a statistically significant effect on both cost per person and mean cost per visit. This implies that the more liberal a payment policy (ie, higher value of the actual reimbursement index), the more expensive chiropractic care for work-related low back pain. At the same time, we found that in this setting fee schedules have no value as predictors of chiropractic costs. States that have the lowest costs of chiropractic care employ other methods to restrict costs. These include restricting reimbursement to a limited number of procedures (ie, New York), explicit visit limits (eg, Florida), and detailed utilization and bill reviews. This finding is consistent with evidence from studies using Medicare
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151
Table 4 Regression results for cost of chiropractic care variables (N519,420)* Dependent variable Cost per persony Effect Intercept Person-specific variables Agey Job tenurey Nature of injury (strain51)z Gender (male51)z Lost time claim (yes51)z Policy variables Actual reimbursement indexy Fee schedule (yes51)z Waiting period (in days)x Utilization variables Visits per persony Services per persony Person-mean services per visity Log likelihood
(1)
Person-mean cost per visity (2)
k
(3) k
(4)
(5)
5.411
4.026
4.409
4.154
4.523k
2.065k 2.014k 2.015{ .009 .052k
2.065k 2.014k 2.018{ .009 .052k
2.040k 2.007k 2.010 .015k .044k
2.041k 2.007k 2.013{ .015k .045k
2.054k 2.010k 2.010 .018k .022k
2.054k 2.010k 2.011{ .019k .023k
2.081 .980k
20,095.9
k
(6)
4.953
.599k
k
.570k 2.400 2.111
k
.708k
2.027
2.387 2.052
.931k
.945k
10,253.1
10,561.2
2.041
2.271 2.084
.766k 10,416.7
.705k 10,572.6
1.015k
20,321.5
* All regression specifications included calendar-year controls and interaction effects between utilization, policy, and calendar-year variables. Detailed results available from the authors upon request. All coefficients (unless otherwise noted) should be interpreted as elasticities, ie, a 1% change in that variable leads to an x% change in the dependent variable. y In natural logarithm form. z The impact of a dummy variable is interpreted in terms of the ‘‘percentage effect’’ of the variable, which is calculated as follows: 100*(exp(C )21), where C is the value of the coefficient. x The elasticity of the WAITING PERIOD variable is equal to B*x, where B is the regression coefficient for variable x; therefore, the elasticity varies as the value of this variable changes. k Statistically significant at the .01 level (two-tailed tests). { Statistically significant at the .05 level (two-tailed tests).
data, which pointed to the need for other measures than price controls to curb medical costs [17,18]. We did not find any significant effect of income-sharing policies on costs of chiropractic care in WC. This finding was consistent with some prior findings on the impact of this variable [5] but inconsistent with others [19]. The magnitude of the utilization variables coefficients in cost regressions underscores the importance of utilization in determining chiropractic care costs. This was consistent with prior research, which reported that chiropractors typically have more visits than other providers treating the same condition [8,20,21]. Utilization regressions allowed making certain conclusions on the nature of the adjustment by chiropractic providers in the presence of cost containment policies. Such adjustment can take the form of greater number of visits or services per person or the number of services performed during a single visit. We found no association between the payment policy proxy and per person utilization measures; however, as payment for chiropractic services increased, chiropractors tended to increase the number of services per visits. As suggested for other providers [22], this may be a perverse response by chiropractors of increasing the intensity of care in response to price controls. Our findings have to be viewed in the context of research literature evaluating the impact of price controls on the market for physician services. It has been argued that fee controls move quantity and quality (viewed as intensity
of care) of physician services below their optimal level and may reduce access to care [23–25]. Others argued that savings resulting from reduced prices may be at least partially offset by volume increases of the same or other services in order to maintain revenue levels [18,26]. We failed to observe a similar overall utilization adjustment in our study, but this may be due to the cross-sectional nature of our data and the focus on individuals and not providers as a unit of observation. However, the observed association between the intensity of chiropractic care during a single visit and more restrictive payment policies may indicate a behavior consistent with income maintenance hypotheses [22,27]. Several limitations of these results have to be acknowledged. First, the data from a single WC insurer may not be representative of trends in the United States. However, this finding is offset by the ability to capture all chiropractic utilization associated with a single injury. Given the specific nature of health care in WC, our findings may not represent trends in general health insurance. In our opinion, though, the behavior of chiropractors in response to certain cost containment strategies would most likely be the same in preferred provider network, because the main differences between the two systems are related to cost sharing arrangements faced by individuals. We expect that our findings have less applicability to chiropractic care in health maintenance organization plans.
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Table 5 Regression results for utilization of chiropractic care variables (N519,420)* Dependent Services per person
Person-mean services/visitsy
Visit per person
All observations Effect Intercept Person-specific variables Agey Job tenurey Nature of injury (strain51)z Gender (male51)z Lost time claim (yes51)z Policy variables Actual reimbursement indexy Fee schedule (yes51)z Waiting period (in days)x Log likelihood
(7)
(8)
(10)
(11)
(12)
2.261k
2.549k
1.222{
1.308{
1.071{
1.238{
.172k .009 2.028 2.047{ .409k
.172k .009 2.028 2.047{ .409k
.199k .016{ 2.023 2.037{ .389k
.199k .016{ 2.024 2.037{ .390k
2.027k 2.007k 2.005 2.011{ .019k
2.026k 2.007k 2.005 2.011{ .020k
.193k
2.049
.186 2.025 62,068.8
(9)
.311 2.114 62,073.7
2.010 60,051.4
.275 2.039 60,055.7
2.041 11,210.2
.040 2.075 11,208.4
* All regression specifications included calendar-year controls and interaction effects between policy and calendar-year variables. Detailed results available from the authors upon request. All coefficients (unless otherwise noted) should be interpreted as elasticities, ie, a 1% change in that variable leads to an x% change in the dependent variable. y In natural logarithm form. z The impact of a dummy variable is interpreted in terms of the ‘‘percentage effect’’ of the variable, which is calculated as follows: 100*(exp(C )21), where C is the value of the coefficient. x The elasticity of the variable is equal to B*x, where B is the regression coefficient for variable x; therefore, the elasticity varies as the value of this variable changes. k Statistically significant at the .01 level (two-tailed tests). { Statistically significant at the .05 level (two-tailed tests).
In this study, we purposely did not attempt to examine work disability outcomes associated with utilization of chiropractic care. Such analysis requires a careful evaluation of patterns of care throughout the life of a WC claim and has to include other modes of treatment for low back pain, which can potentially influence patients’ behavior. Given that we focused on evaluation of calendar-year utilization and the impact of annually reviewed payment policies, any evaluation of the relationship between chiropractic care and lost time due to injury would be, in our opinion, incomplete and likely produce biased results. The utilized data are claimant- and not provider-specific, which makes it difficult to evaluate the overall effectiveness of a policy. For example, providers may not be willing to treat WC claimants if reimbursement is very low and might submit claims for reimbursement to general health insurance. We believe that such behavior is rather unlikely among chiropractic providers who have attempted to increase the scope of their practice in recent years [13]. Finally, our policy variables could not account for all of the details of examined cost containment programs and their changes over time whereas the utilization variables did not fully correct for unobservable severity of low back injuries when used as explanatory variables. Conclusions Chiropractic care has become common in the treatment of work-related injuries, yet many aspects of chiropractic
care in WC continue to be under-investigated. Based on the results of this study, several conclusions can be drawn. Utilization and cost of chiropractic care varies significantly across WC jurisdictions. States with more restrictive payment policies have lower costs of chiropractic care for work-related low back pain and lower number of services per visit. However, we found no impact of medical fee schedules, a component of payment policies, or incomesharing policies on these variables. These findings should be of interest to policy makers, as they indicate the necessary components of effective cost containment, even in the presence of utilization adjustment. How the pattern of chiropractic care relates to duration of work disability and return to work remains unknown. Despite being recommended in clinical practice guidelines for the care of adults with low back pain in the United States, it has been suggested that its use should be limited to only a short period of time [28]. Such recommendation does not exactly match chiropractic lobby assertions that the nature of chiropractic care (ie, frequent visits to ‘‘maintain health’’) reduces the likelihood of negative outcomes. Research has shown that chiropractors have more visits and services per patient than other health-care providers, but their treatments are sometimes more cost-efficient [20,21,29–33]. Although the usefulness of chiropractic care in the treatment of work-related conditions was not studied in this study, such analysis is very much worthy of undertaking and the next logical step into the understanding of the role of chiropractors in the treatment of work-related low back injuries.
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References [1] Stano M. The chiropractic services market: a literature review. Adv Health Econ Health Serv Res 1992;13:191–204. [2] Meeker WC, Haldeman S. Chiropractic: a profession at the crossroads of mainstream and alternative medicine. Ann Intern Med 2002;136(3):216–27. [3] Goertz C. Summary of 1995 ACA annual statistical survey on chiropractic practice. J Amer Chiropr Assoc 1996;33(6):35–41. [4] Hurwitz EL, Coulter ID, Adams AH, et al. Use of chiropractic services from 1985 through 1991 in the United States and Canada. Am J Public Health 1998;88(5):771–6. [5] Pozzebon S. Medical cost containment under workers’ compensation. Industrial and Labor Relations Review 1994;48(1):153–67. [6] Shekelle PG, Rogers WH, Newhouse JP. The effect of cost sharing on the use of chiropractic services. Med Care 1996;34(9):863–72. [7] Victor R, Wang D, Borba P. Provider choice laws, network involvement, and medical costs. Cambridge, MA: Workers’ Compensation Research Institute; 2002. [8] Victor R, Wang D. Patterns and costs of chiropractor vs. physiciandirected physical medicine care. Cambridge, MA: Workers’ Compensation Research Institute; 2003. [9] Boden L, Fleischman C. Medical costs in workers’ compensation: trends and interstate comparisons. Cambridge, MA: Workers’ Compensation Research Institute; 1989. [10] Roberts K, Zonia S. Workers’ Compensation cost containment and health care provider income maintenance strategies. J Risk Insurance 1994;61(1):117–31. [11] Durbin D, Appel D. The impact of fee schedules and employer choice of physician. NCCI Digest 1991;6(3):39–59. [12] Burstein P. Benchmarks for designing workers’ compensation medical fee schedules: 1995–1996. Cambridge, MA: Workers’ Compensation Research Institute; 1996. [13] Cooper RA, McKee HJ. Chiropractic in the United States: trends and issues. Milbank Q 2003;81(1):107–38, table of contents. [14] Hawk C, Long CR, Boulanger KT, et al. Chiropractic care for patients aged 55 years and older: report from a practice-based research program. J Am Geriatr Soc 2000;48(5):534–45. [15] Astin JA, Pelletier KR, Marie A, et al. Complementary and alternative medicine use among elderly persons: one-year analysis of a Blue Shield Medicare supplement. J Gerontol A Biol Sci Med Sci 2000; 55(1):M4–9. [16] Tanabe R, Murray S. Managed care and medical cost containment in workers’ compensation: a national inventory 2001–2002. Cambridge, MA: Workers’ Compensation Research Institute; 2001. [17] Ginsburg PB, LeRoy LB, Hammons GT. Medicare physician payment reform. Health Aff (Millwood) 1990;9(1):178–88. [18] Nguyen NX. Physician volume response to price controls. Health Policy 1996;35(2):189–204.
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[19] Levy D, Miller T. Hospital rate regulations, fee schedules, and workers’ compensation medical payments. J Risk Insurance 1996;63(1): 35–47. [20] Carey TS, Garrett J, Jackman A, et al. The outcomes and costs of care for acute low back pain among patients seen by primary care practitioners, chiropractors, and orthopedic surgeons. The North Carolina Back Pain Project. N Engl J Med 1995;333(14):913–7. [21] Cherkin DC, Deyo RA, Battie M, et al. A comparison of physical therapy, chiropractic manipulation, and provision of an educational booklet for the treatment of patients with low back pain. N Engl J Med 1998;339(15):1021–9. [22] Wedig G, Mitchell JB, Cromwell J. Can price controls induce optimal physician behavior? J Health Polit Policy Law 1989;14(3):601–20; discussion 621–5. [23] Feldman R, Sloan F. Competition among physicians, revisited. J Health Polit Policy Law 1988;13(2):239–61. [24] Baumol WJ. Price controls for medical services and the medical needs of the nation’s elderly (second of two parts). Conn Med 1988;52(9): 542–52. [25] Baumol WJ. Price controls for medical services and the medical needs of the nation’s elderly (1). Conn Med 1988;52(8):485–94. [26] Mitchell JM, Hadley J, Gaskin DJ. Spillover effects of Medicare fee reductions: evidence from ophthalmology. Int J Health Care Finance Econ 2002;2(3):171–88. [27] Labelle R, Stoddart G, Rice T. A re-examination of the meaning and importance of supplier-induced demand. J Health Economics 1994; 13:347–68. [28] Bigos SJ, Bowyer O, Braen R. Acute low back problems in adults: Clinical Practice Guideline No. 14. Rockville, MD: Agency for Health Care Policy and Research; 1994. [29] Johnson W, Baldwin M, Butler RJ. The costs and outcomes of chiropractic and physician care for workers’ compensation back claims. J Risk Insurance 1999;66(2):185–205. [30] Meade TW, Dyer S, Browne W, et al. Randomised comparison of chiropractic and hospital outpatient management for low back pain: results from extended follow up. BMJ 1995;311(7001):349–51. [31] Skargren EI, Oberg BE, Carlsson PG, et al. Cost and effectiveness analysis of chiropractic and physiotherapy treatment for low back and neck pain. six-month follow-up. Spine 1997;22(18):2167–77. [32] Solomon DH, Bates DW, Panush RS, et al. Costs, outcomes, and patient satisfaction by provider type for patients with rheumatic and musculoskeletal conditions: a critical review of the literature and proposed methodologic standards. Ann Intern Med 1997; 127(1):52–60. [33] Hurwitz E, Morgenstern H, Harber P, et al. A randomized trial of medical care with and without physical therapy and chiropractic care with and without physical modalities for patients with low back pain: 6-month follow-up outcomes from the UCLA Low Back Pain Study. Spine 2002;27(20):2193–204.
Case Study
Utilization and costs of chiropractic care for work-related low back injuries: Do payment policies make a difference? Radoslaw Wasiak, PhDa,*, Eileen McNeely, PhDb a
Liberty Mutual Research Institute for Safety, Center for Disability Research, 71 Frankland Road, Hopkinton, Massachusetts 01748, USA b Harvard School of Public Health, Department of Environmental Health, Occupational Health Program, Landmark Center, Room 3-098, 401 Park Drive, P.O. Box 15697, Boston, Massachusetts 02215, USA Received 9 February 2005; accepted 25 May 2005
Abstract
BACKGROUND: Chiropractic care is frequently used in the treatment of work-related low back pain. Chiropractors have been shown to be more sensitive to cost-sharing than other providers. PURPOSE: This study examined the differences in utilization and costs of chiropractic care for work-related low back injuries in seven jurisdictions and whether these differences can be associated with workers’ compensation (WC) payment policies. STUDY DESIGN: A retrospective analysis of WC data from a single insurer. METHODS: Analyzed data included individuals with chiropractic care performed between 1999 and 2002. Utilization (visits and services per person, services per visit) and costs (cost per person and cost per visit) were examined. Actual reimbursement index was developed to proxy payment policies based on actual payments made to chiropractors. RESULTS: Utilization and costs varied significantly across the analyzed states. Restrictive payment policies were associated with lower costs of chiropractic care and lower number of services per visit, but had no impact on visits or services per person. CONCLUSIONS: Findings indicate necessary components of effective cost containment, even in the presence of utilization adjustment. Ó 2006 Elsevier Inc. All rights reserved.
Keywords:
Payment policy; Chiropractic care; Workers’ compensation; Utilization; Costs
Introduction Chiropractic care is a form of healing that is based primarily on spinal manipulation [1]. Utilization of chiropractic care has increased substantially [2], with that growth being matched by a substantial decline in out-of-pocket payments for chiropractic services [3,4]. Most group-health plans, however, introduced and continue to require some form of coinsurance, such as dollar limits, deductibles, copayments, or limitations on the number of encounters per incident. Unlike general health insurance, workers’ compensation (WC) provides injured workers with full coverage of all medical expenses related to an occupational injury FDA device/drug status: not applicable. Nothing of value received from a commercial entity related to this manuscript. * Corresponding author. Liberty Mutual Research Institute for Safety, Center for Disability Research, 71 Frankland Road, Hopkinton, MA 01748. Tel.: (508) 497-0242; fax: (508) 435-8136. E-mail address: [email protected] (R. Wasiak) 1529-9430/06/$ – see front matter Ó 2006 Elsevier Inc. All rights reserved. doi:10.1016/j.spinee.2005.05.381
or illness. Cost sharing in WC involves income benefits onlydinjured workers do not receive full compensation for their work absences and have to wait at least three days before any compensation for lost wages occurs. Nonetheless, some expect that even such an indirect mechanism affects an injured workers’ incentive to seek medical care [5]. The lack of explicit coinsurance mechanisms in WC makes the analysis of chiropractic care in treatment of work-related conditions that much more important since it was shown that chiropractic care expenses are more likely than other health-care expenses to be decreased when some type of cost sharing is introduced [6]. In addition, the recent high growth of medical costs has led to the renewed interest in evaluating the effectiveness of various WC cost containment measures, including jurisdictional payment policies [7,8]. The payment policies in each WC jurisdiction are typically defined by the interaction between fee schedules and reimbursement policies. Only a handful of studies have investigated the efficacy of such policies, with the primary focus on WC medical fee schedules. Boden and Fleischman
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correlated state-level annual medical expenditure trends for 41 states with and without fee schedules during the period 1965–84 but failed to find any effect of fee schedules on medical costs [9]. A similar result was found in a study using a random sample of claims filed with WC carriers in 17 states over the 1979–87 period [5] and a study using a difference-in-difference approach to claims data from a single insurer in a single jurisdiction [10]. In another study [11], data from 33 WC jurisdictions for the 1964–84 period revealed an inverse relationship between the use of fee schedules and medical benefit payments. None of these studies examined if the way in which fee schedules are administered has any bearing on costs of care. This is particularly important because the level of WC maximum allowable fees in the most generous state is nearly two and a half times greater than that in the least generous fee schedule, but the cost of producing medical care differs by less than one-third [12]. Not only can states define the maximum reimbursable amount, but they can also specify whether a provider is reimbursed a full fee schedule amount, a usual amount (typically determined by the average or median charge), or a customary amount (most often set at the 90th percentile of all charges). It is, therefore, possible that two states with similar fee schedules but different reimbursement policies will have very different cost levels. In this study, we investigated differences in utilization and cost of chiropractic care for work-related low back injuries and examined if differences in jurisdictional payment policies impact these utilization and costs. It was hypothesized here that WC jurisdictions with more restrictive payment policies would have lower utilization and costs. We focused on work-related low back injuries because the pattern of chiropractic care for low back pain is well established [8,13]. Methods Data source We used claims data from a WC carrier with a 10% share of the U.S. WC private market to identify individuals
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with a compensable low back injury in seven states (Florida, Idaho, Illinois, Maryland, New Hampshire, New York, and Pennsylvania). From the total population of low back claimants, using detailed medical care information for each claim, we selected those with at least one visit to a chiropractor during a 4-year period (1999–2002), regardless of the year in which the work-related injury occurred. Subsequent analyses focused on chiropractic care provided to the claimants included in this study. The analyzed data set did not include medical care that individuals received from other health-care providers. Although such care may have had an impact on the extent and costliness of chiropractic care, the analysis of such interaction was beyond the scope of this study. The variables in the data set included the start and end date of chiropractic treatment, amount paid for this treatment, procedure type according to Current Procedural Terminology (CPT), nature of injury, worker’s job tenure at the time of injury, gender, and age. Although in most studies using WC data claimants are selected using their injury date, we decided to focus on calendar years, which is more appropriate for the analysis of the impact of payment policies on utilization and costs. In most WC jurisdictions, fee schedules are reviewed annually, and similar adjustments occur in Medicare. Therefore, both utilization and cost variables had to be expressed on a per calendar-year basis because WC claims often include medical benefits that occurred in different calendar years. Policy variables Table 1 presents state policies in WC jurisdictions of interest in this study. Two of seven WC jurisdictions in our sample did not have a fee schedule (Illinois and New Hampshire). Besides fee schedules, ceiling prices are set according to other specifications in each state. For instance, although Idaho has a fee schedule, maximum allowable reimbursement amounts are not set administratively; rather they reflect the 90th percentile of charges for a particular CPT code. Reimbursement policies define the allowable charges too. In Florida the lower of either the fee schedule
Table 1 Payment policies and waiting periods in selected workers’ compensation jurisdictions Measure
Florida
Idaho
Illinois
Maryland
Fee schedule Reimbursement policy
Yes Customary or fee schedule amount, whichever is less
No Charge should be reasonable and customaryz
Yes Fee schedule amount
Waiting period for lost time compensation
7 days
* Charge should not exceed the usual or customary amounty 5 days
3 days
3 days
New Hampshire
New York
Pennsylvania
No Full amount
Yes Fee schedule amountx
Yes Fee schedule amount
3 days
7 days
7 days
* Fee schedule is not set administratively; it includes a customary amount (90th percentile). y Customary amount defined as the 90th percentile charge for a particular Current Procedural Terminology code. z Reasonable and customary is based on the geographic area. x Amount paid subject to negotiations between the payer and the provider.
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or the provider’s customary charge caps the reimbursed amount. We created two variables to proxy jurisdictional payment policy. The first followed the convention of prior research and was a dummy variable denoting whether a jurisdiction had a medical fee schedule. Because of the unique nature of Idaho’s fee schedule, we coded Idaho as if it did not have a fee schedule. The second variable was a continuous index computed using the actual mean amounts paid in a given jurisdiction and was supposed to reflect the interaction between the fee schedule and reimbursement policy. The index was based on actual utilization patterns in each of the states; therefore, using CPT codes the most frequently reimbursed chiropractic procedures were identified in each of the service years. The number of considered procedures was capped at 10 or the 90th frequency percentile, whichever was less. The actual reimbursement index was computed using the following formula: X APi Actual reimbursement index5 si ð1Þ MCi i where APi5the actual mean reimbursement level for the ith CPT code; MCi5the reimbursement level set in Medicare fee schedule for the ith CPT code; and si5the frequency of the ith CPT code. The value of 1.00 for the actual reimbursement index implies that the frequency-weighted mean actual payment to chiropractors is equal to the Medicare amount. A value less than 1.00 implies that in a given calendar year the jurisdiction had a restrictive payment policy, whereas a value greater than 1.00 implies that such policy was rather liberal. There are important reasons why the use of Medicare fee schedules as the benchmark is appropriate. The Medicare reimbursement levels are relatively low compared with other available fee schedules, and Medicare payments constitute a significant share of health-care providers’ revenue, including chiropractors [14,15]. Also, the design of Medicare fee schedules allows comparison across various medical services and various geographies because Medicare fee schedules equalize ‘‘profit margins’’ across all services and incorporate differences in costs of producing medical services [12]. In this study, we compared utilization and costs in several jurisdictions in four calendar years with different distributions of chiropractic services in each; thus, using Medicare payments as the benchmark was particularly fitting. One of the many distinguishing features of the WC system in the United States is its highly jurisdictional nature. States vary in their approaches to controlling medical benefits as well as in their attempt to limit income benefits to workers. Cost sharing is a typical tool used in insurance programs, but in WC it involves income benefits only. One form of income cost sharing is a waiting period determining how long an injured worker must be off the job to
receive compensation for time lost. Although the length does not affect medical benefits directly, one may argue that it can indirectly impact the injured worker’s incentive to seek care [5,16]. Therefore, to control for that potentially confounding effect, we included the length of the waiting period in all regression models.
Utilization and cost variables Injured workers’ utilization and costs were evaluated in each of the calendar years. For instance, individuals injured in 1999 who received chiropractic care in both 1999 and 2000 had their utilization and cost variables evaluated for 1999 and 2000 separately. There were 4,840 injured individuals who received chiropractic care in more than one calendar year. To evaluate the impact of this method on our results, we performed all analyses reported in this paper only with individuals who had all their chiropractic care in a single calendar year, but did not find any significant differences in findings. Three types of utilization measures were created: visits and services per person, and person-mean services per visit. A single visit may have consisted of one or more services performed on the same day. Entries with the same start and end date of treatment and the same procedure code were considered as duplicates, and only one was used in the calculation of services per person and services per visit measures. Two cost measures were used: cost per visit as the aggregate of costs associated with all services performed on the same day, and cost per person as the aggregate of amount paid for all services associated with chiropractic care in a calendar year. Costs were adjusted to constant-year dollars using the medical care component of the Consumer Price Index. In addition to the adjustment for price level changes, costs were adjusted to achieve a direct comparison of costs between jurisdictions given differences in utilized procedures and the ‘‘cost of doing business.’’ Adjustment factors were developed using the Medicare geographic practice cost index, most frequently utilized CPT codes by chiropractors in a given jurisdiction (top 10 procedures or the 90th percentile, whichever was less), and the associated Medicare relative value units. In states with more than one Medicare locality, population weights were used to obtain the state-level adjustment factors.
Regression analysis Because the distribution of chiropractic utilization and associated costs typically has a long upper tail, utilization and cost variables in the regression equations were logtransformed. Each cost variable was used as the dependent variable in cost regressions, whereas all utilization measures were utilized as dependent variables in utilization regressions.
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Two groups of independent variables were of primary interest. The first described cost containment policies using alternative variables (actual reimbursement index or fee schedule dummy variable). These variables were entered separately into each regression specification, and their significance was later compared. The second group were utilization variables in the cost regressions; in order to control for the impact of utilization on costs, we included visits or services per person in regressions with cost per person as the dependent variable, and person-mean services per visit in regressions with person-mean cost per visit as the dependent variable. Because each of the states can be characterized by a different utilization pattern, in cost regressions we clustered individuals by state and allowed both the intercept and the coefficient for the utilization variable to vary depending on the payment policy, calendar year, and the waiting period for lost time benefits. In addition, we allowed the effect of all policy variables to vary by year as well. In utilization regressions, individuals were again clustered by state, the intercept varied depending on the policy and year, and the effects of policy variables varied by year. In both types of regressions, we included service year dummy variables and person- and claim-specific variables, such as age, gender, job tenure, nature of injury, and if the claim involved lost work time. Furthermore, we interacted utilization, policy, and calendar-year variables to account for possible changes in policies and utilization during the study period. Results The data included information for 13,734 claimants who were primarily male (71%) with a median age of 38. For those claimants, the predominant nature of injury was low back strain (81%) and just over half received indemnity payments for lost time (51%). Among all individuals, 65% (n58,894) had all chiropractic services within a single calendar year. When utilization and costs were separated into calendar year values for those individuals with chiropractic care occurring over more than a single calendar year, the overall number of observations used in the analyses was 19,420. Table 2 reports the values of the actual reimbursement index. Three of seven WC jurisdictions can be considered as restrictive, with values of the actual reimbursement
149
index below 1.00. Both jurisdictions without an explicit fee schedule (Illinois and New Hampshire) have the highest values of the actual reimbursement index. Table 3 reports median values for chiropractic utilization and cost variables. Several general patterns of chiropractic behavior can be identified. New York has the highest number of median visits per individual, yet the lowest services per visit ratio. This represents a specific utilization adjustment by chiropractors treating work-related low back pain in that state because they are reimbursed for three CPT codes only and these codes exclude the potential for multiple services during each visit. Consequently, both median cost per individual and median cost per visit were substantially lower than in other states. Florida and Idaho were characterized by a relatively low number of visits but a high number of services per individual, which in the case of Florida was expected, owing to the explicit, 18-visit limit on chiropractic visits for a WC claim. A high number of services per visit led to a relatively high median cost per visit in both states, as compared with median cost per person. Maryland, Illinois, and Pennsylvania have a relatively high median number of both visits and services per individual, and quite a high number of services per visit. Not surprisingly, these three states have the highest median costs per individual. Finally, for New Hampshire, one of the two states without a fee schedule, we did not seem to observe a significant utilization adjustment. This could be due to the existing reimbursement policy in that state, which allows full reimbursement of submitted charges. The regression results are reported in Tables 4 and 5. In Table 4, we present the impact of independent variables on cost per person and person-mean cost per visit. In Table 5, we report findings on the impact of policy variables on alternative measures of utilization of chiropractic care. Excluding individuals with chiropractic services in multiple years from specifications (1)–(12) did not materially affect the results, as a similar number of individuals had utilization and cost overlaps in each of the calendar years and their costs were similarly distributed. For all cost regressions, person- and claim-specific variables had consistent signs and significance. In utilization regressions, age and job tenure had different impact when using alternative utilization measures. As expected, individuals who lost time from work were associated with
Table 2 High and low reimbursement states (low reimbursement!1.00)
Actual reimbursement index Service year 1999 2000 2001 2002
Florida
Idaho
Illinois
Maryland
New Hampshire
New York
Pennsylvania
0.78 0.75 0.76 0.99
1.11 1.15 1.04 1.30
1.35 1.34 1.27 1.92
0.80 0.70 0.74 0.80
1.23 1.21 1.14 1.59
0.64 0.57 0.52 0.52
1.15 1.06 1.12 1.28
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Table 3 Utilization and costs of chiropractic care in selected WC jurisdictions (medians reported) Florida*
Idaho
Illinois
Maryland*
Visits per individual 1999 7 5 9 12 2000 8 6 10 10.5 2001 9 6 10 10 2002 8 6 11 12 Services per individual 1999 17 14 21 25 2000 22 15 25 26 2001 23 15 24 26 2002 24 18 28 31.5 Services per visit 1999 2.8 2.7 2.5 2.6 2000 2.8 2.8 2.5 3.0 2001 3.0 3.0 2.7 3.0 2002 3.0 3.0 2.8 3.0 Cost per individual (in constant 1999 $ with geographic adjustment) 1999 504 598 1056 1162 2000 651 625 1240 969 2001 632 692 1103 912 2002 681 704 1478 868 Mean-individual cost per visit (in constant 1999 $ with geographic adjustment) 1999 80 116 116 102 2000 83 113 121 98 2001 80 114 110 85 2002 90 118 130 92
New Hampshire
New York*
Pennsylvania
8 6 7.5 8
15 14.5 15 15
8 10 9 10
16 13 14 17
15 15 15 16
18 22 20 23
2.0 2.0 2.1 2.0
1.0 1.0 1.0 1.0
2.2 2.3 2.3 2.3
716 548 599 772
350 298 274 259
717 827 708 862
81 84 79 91
24 20 18 17
90 86 84 89
* Denotes a jurisdiction with a restrictive payment policy.
increased utilization and costs in all regression specifications, as such cases typically denote more severe injuries. The policy and utilization variables in cost regressions were also consistent across specifications. The payment policy proxy was statistically significant in all cost regressions. The full impact of the reimbursement policy will vary by state, as it was found to be related to utilization levels (ie, some interaction coefficients were statistically significant); thus the impact will be highest in states with highest utilization (New York and Maryland). The fee schedule dummy variable was insignificant in all cost regressions. Alternative measures of utilization in cost regressions all point out to the same conclusiondas utilization increased, the cost of chiropractic care increased as well. In regressions with utilization measures as the dependent variable, neither the payment policy proxy nor the fee schedule dummy had a significant effect on visits or services per person. However, an increase in the actual reimbursement index was associated with an increase in the person-mean services per visit; fee schedules did not have a similar impact. As in cost regressions, the income-sharing policy had no significant effect on the utilization variables.
Discussion The main objective of this paper was to examine differences in chiropractic utilization and costs across several
jurisdictions and examine whether WC payment policies can be associated with higher or lower levels of utilization and costs. We found that states without explicit WC fee schedules have higher average payments for chiropractic services. There were significant differences between states in median utilization and cost of chiropractic care. Using regression analysis, we established that fee schedules by themselves were not associated with lower costs and utilization; however, more restrictive payment policies were associated with lower costs per visit and costs per person and lower services per visit. No effect was found of either fee schedules or payment policies on other utilization measures. The association between utilization and cost of chiropractic care and various policy variables generally reflected our expectations. In particular, the payment policy proxy had a statistically significant effect on both cost per person and mean cost per visit. This implies that the more liberal a payment policy (ie, higher value of the actual reimbursement index), the more expensive chiropractic care for work-related low back pain. At the same time, we found that in this setting fee schedules have no value as predictors of chiropractic costs. States that have the lowest costs of chiropractic care employ other methods to restrict costs. These include restricting reimbursement to a limited number of procedures (ie, New York), explicit visit limits (eg, Florida), and detailed utilization and bill reviews. This finding is consistent with evidence from studies using Medicare
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Table 4 Regression results for cost of chiropractic care variables (N519,420)* Dependent variable Cost per persony Effect Intercept Person-specific variables Agey Job tenurey Nature of injury (strain51)z Gender (male51)z Lost time claim (yes51)z Policy variables Actual reimbursement indexy Fee schedule (yes51)z Waiting period (in days)x Utilization variables Visits per persony Services per persony Person-mean services per visity Log likelihood
(1)
Person-mean cost per visity (2)
k
(3) k
(4)
(5)
5.411
4.026
4.409
4.154
4.523k
2.065k 2.014k 2.015{ .009 .052k
2.065k 2.014k 2.018{ .009 .052k
2.040k 2.007k 2.010 .015k .044k
2.041k 2.007k 2.013{ .015k .045k
2.054k 2.010k 2.010 .018k .022k
2.054k 2.010k 2.011{ .019k .023k
2.081 .980k
20,095.9
k
(6)
4.953
.599k
k
.570k 2.400 2.111
k
.708k
2.027
2.387 2.052
.931k
.945k
10,253.1
10,561.2
2.041
2.271 2.084
.766k 10,416.7
.705k 10,572.6
1.015k
20,321.5
* All regression specifications included calendar-year controls and interaction effects between utilization, policy, and calendar-year variables. Detailed results available from the authors upon request. All coefficients (unless otherwise noted) should be interpreted as elasticities, ie, a 1% change in that variable leads to an x% change in the dependent variable. y In natural logarithm form. z The impact of a dummy variable is interpreted in terms of the ‘‘percentage effect’’ of the variable, which is calculated as follows: 100*(exp(C )21), where C is the value of the coefficient. x The elasticity of the WAITING PERIOD variable is equal to B*x, where B is the regression coefficient for variable x; therefore, the elasticity varies as the value of this variable changes. k Statistically significant at the .01 level (two-tailed tests). { Statistically significant at the .05 level (two-tailed tests).
data, which pointed to the need for other measures than price controls to curb medical costs [17,18]. We did not find any significant effect of income-sharing policies on costs of chiropractic care in WC. This finding was consistent with some prior findings on the impact of this variable [5] but inconsistent with others [19]. The magnitude of the utilization variables coefficients in cost regressions underscores the importance of utilization in determining chiropractic care costs. This was consistent with prior research, which reported that chiropractors typically have more visits than other providers treating the same condition [8,20,21]. Utilization regressions allowed making certain conclusions on the nature of the adjustment by chiropractic providers in the presence of cost containment policies. Such adjustment can take the form of greater number of visits or services per person or the number of services performed during a single visit. We found no association between the payment policy proxy and per person utilization measures; however, as payment for chiropractic services increased, chiropractors tended to increase the number of services per visits. As suggested for other providers [22], this may be a perverse response by chiropractors of increasing the intensity of care in response to price controls. Our findings have to be viewed in the context of research literature evaluating the impact of price controls on the market for physician services. It has been argued that fee controls move quantity and quality (viewed as intensity
of care) of physician services below their optimal level and may reduce access to care [23–25]. Others argued that savings resulting from reduced prices may be at least partially offset by volume increases of the same or other services in order to maintain revenue levels [18,26]. We failed to observe a similar overall utilization adjustment in our study, but this may be due to the cross-sectional nature of our data and the focus on individuals and not providers as a unit of observation. However, the observed association between the intensity of chiropractic care during a single visit and more restrictive payment policies may indicate a behavior consistent with income maintenance hypotheses [22,27]. Several limitations of these results have to be acknowledged. First, the data from a single WC insurer may not be representative of trends in the United States. However, this finding is offset by the ability to capture all chiropractic utilization associated with a single injury. Given the specific nature of health care in WC, our findings may not represent trends in general health insurance. In our opinion, though, the behavior of chiropractors in response to certain cost containment strategies would most likely be the same in preferred provider network, because the main differences between the two systems are related to cost sharing arrangements faced by individuals. We expect that our findings have less applicability to chiropractic care in health maintenance organization plans.
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Table 5 Regression results for utilization of chiropractic care variables (N519,420)* Dependent Services per person
Person-mean services/visitsy
Visit per person
All observations Effect Intercept Person-specific variables Agey Job tenurey Nature of injury (strain51)z Gender (male51)z Lost time claim (yes51)z Policy variables Actual reimbursement indexy Fee schedule (yes51)z Waiting period (in days)x Log likelihood
(7)
(8)
(10)
(11)
(12)
2.261k
2.549k
1.222{
1.308{
1.071{
1.238{
.172k .009 2.028 2.047{ .409k
.172k .009 2.028 2.047{ .409k
.199k .016{ 2.023 2.037{ .389k
.199k .016{ 2.024 2.037{ .390k
2.027k 2.007k 2.005 2.011{ .019k
2.026k 2.007k 2.005 2.011{ .020k
.193k
2.049
.186 2.025 62,068.8
(9)
.311 2.114 62,073.7
2.010 60,051.4
.275 2.039 60,055.7
2.041 11,210.2
.040 2.075 11,208.4
* All regression specifications included calendar-year controls and interaction effects between policy and calendar-year variables. Detailed results available from the authors upon request. All coefficients (unless otherwise noted) should be interpreted as elasticities, ie, a 1% change in that variable leads to an x% change in the dependent variable. y In natural logarithm form. z The impact of a dummy variable is interpreted in terms of the ‘‘percentage effect’’ of the variable, which is calculated as follows: 100*(exp(C )21), where C is the value of the coefficient. x The elasticity of the variable is equal to B*x, where B is the regression coefficient for variable x; therefore, the elasticity varies as the value of this variable changes. k Statistically significant at the .01 level (two-tailed tests). { Statistically significant at the .05 level (two-tailed tests).
In this study, we purposely did not attempt to examine work disability outcomes associated with utilization of chiropractic care. Such analysis requires a careful evaluation of patterns of care throughout the life of a WC claim and has to include other modes of treatment for low back pain, which can potentially influence patients’ behavior. Given that we focused on evaluation of calendar-year utilization and the impact of annually reviewed payment policies, any evaluation of the relationship between chiropractic care and lost time due to injury would be, in our opinion, incomplete and likely produce biased results. The utilized data are claimant- and not provider-specific, which makes it difficult to evaluate the overall effectiveness of a policy. For example, providers may not be willing to treat WC claimants if reimbursement is very low and might submit claims for reimbursement to general health insurance. We believe that such behavior is rather unlikely among chiropractic providers who have attempted to increase the scope of their practice in recent years [13]. Finally, our policy variables could not account for all of the details of examined cost containment programs and their changes over time whereas the utilization variables did not fully correct for unobservable severity of low back injuries when used as explanatory variables. Conclusions Chiropractic care has become common in the treatment of work-related injuries, yet many aspects of chiropractic
care in WC continue to be under-investigated. Based on the results of this study, several conclusions can be drawn. Utilization and cost of chiropractic care varies significantly across WC jurisdictions. States with more restrictive payment policies have lower costs of chiropractic care for work-related low back pain and lower number of services per visit. However, we found no impact of medical fee schedules, a component of payment policies, or incomesharing policies on these variables. These findings should be of interest to policy makers, as they indicate the necessary components of effective cost containment, even in the presence of utilization adjustment. How the pattern of chiropractic care relates to duration of work disability and return to work remains unknown. Despite being recommended in clinical practice guidelines for the care of adults with low back pain in the United States, it has been suggested that its use should be limited to only a short period of time [28]. Such recommendation does not exactly match chiropractic lobby assertions that the nature of chiropractic care (ie, frequent visits to ‘‘maintain health’’) reduces the likelihood of negative outcomes. Research has shown that chiropractors have more visits and services per patient than other health-care providers, but their treatments are sometimes more cost-efficient [20,21,29–33]. Although the usefulness of chiropractic care in the treatment of work-related conditions was not studied in this study, such analysis is very much worthy of undertaking and the next logical step into the understanding of the role of chiropractors in the treatment of work-related low back injuries.
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