Managed care and clinical autonomy in the workers' compensation market

Despite increases in health care premiums, the effect of relaxing cost-containment mechanisms on health care utilization is not yet well understood at the microlevel. This study used a regulatory change in the California workers' compensation system to examine the effect of relaxing broad-based utilization management constraints and increasing clinical autonomy on methods of treatment and service intensity, and compared the responses of managed care network and fee-for-service providers. Between 1993 and 2000, the likelihood of a fee-for-service claim receiving a chiropractic treatment increased from 22% to 32%, the likelihood of receiving diagnostic radiology decreased from 24% to 15%, and the likelihood of receiving physical medicine with diagnostic services remained relatively stable. Treating fee-for-service claims with network care would have decreased the likelihood of receiving manipulations by 13 percentage points and physical medicine with diagnostic services by two percentage points. The likelihood of receiving office-visit-only treatment would have increased by 130% (14 percentage points), and the likelihood of receiving a diagnostic radiology treatment would have increased by 28% (4 percentage points). Treatment by network providers would have reduced the number of office visits by 18%, diagnostic radiology and ultrasound exams by 26%, passive physical medicine procedures by 40%, active physical medicine procedures by 43%, physical medicine assessments by 45%, and chiropractic treatments by 46%.