Occupational Health Services Project

Department of Labor and Industries
Olympia, WA

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Workers’ compensation systems throughout the U.S. are faced with the challenge of trying to improve health care in order to reduce workplace disability and control rising costs. Washington’s State Fund workers’ compensation system provides workers’ compensation insurance for two thirds of Washington’s workforce, about 2,570,000 employees working for 171,000 employers. Self-insured employers provide workers’ compensation for the other one third of Washington’s workforce.

The State Fund spends approximately $600 million a year on health care. Premiums paid by employers and workers, plus investment earnings, finance the program. Making sure that money is spent on high quality health care that reduces disability is a top priority for the Department of Labor & Industries (L&I) and our business and labor stakeholders.


Occupational health is not covered in any depth in medical schools or during residencies. In practice, care for injured workers is typically a small part of the primary care provider’s panel. Because care for injured workers is such a small part of their regular practice, providers struggle to understand and work within the complexities of workers’ compensation.

One aspect of workers’ compensation that is not familiar to most providers is the relationship between recovery and return to work. Approximately 20% of injured workers will miss more than four days of work due to their injury. For those workers, L&I will pay partial wage replacement (also known as time-loss). Data shows that 50% of these workers will return to work within 4 weeks, but once a worker misses three months of work their likelihood of ever returning is greatly reduced.

Providers aren’t taught about the importance of setting return-to-work goals in their initial treatment plan and helping the worker set an expectation of returning to work. They need to know, and share with the worker, that part of recovery is to maintain a connection with the workplace and to make returning to work a goal of the treatment plan. The window of opportunity for focusing on return to work is early in treatment. Efforts that are focused after this “early intervention” period are less likely to succeed.


L&I worked with Washington’s Workers’ Compensation Advisory Committee (WCAC) to design and implement the Occupational Health Services Project. OHS is aimed at improving injured worker outcomes and reducing disability through a community-based change in health care delivery. The project uses a combination of strategies that include incentive payments to health care providers linked to quality improvement, clinical leadership and organizational support, and training for providers in occupational health best practices.

The project works entirely within Washington’s existing workers’ compensation framework of free choice of physician and fee-for-service payment. The project goal is to expand occupational health care expertise and improve care delivery to achieve better outcomes for injured workers.

The project established community-based Centers of Occupational Health and Education (COHEs) through partnerships with two leading health care organizations. The two original COHEs provide support to over 1,000 health-care providers. One COHE is located in Western Washington and the other in Eastern Washington. The project design was created through careful research with feedback from a business-labor advisory board.

The project uses a variety of tools to achieve results:

  • Institutional and clinical leadership in occupational health.
  • Financial incentives and provider education for occupational health best practices, which include:
  1. Submitting reports of accident within two business days.
  2. Documenting work status and physical capabilities at each visit.
  3. Contacting the employer to help develop return-to-work options.
  4. Assessing barriers to return to work when the worker is likely to miss at least four weeks of
  5. Developing a plan to remove the barriers to return to work.
  • Health Services Coordinators to monitor the care of injured workers, provide return-to-work assistance and ensure better decision-making among health care providers, employers, and workers.
  • Business and labor support for the overall project, including local advisory boards.
  • Continuous quality improvement through performance feedback to providers.
  • Project evaluation by the University of Washington.

Outcome Measures

Based on ongoing evaluation by the University of Washington, the COHEs have substantially prevented long-term disability, reducing costs by an average of $480 per claim and lost work time by an average of four days. These savings continue to accrue three to four years after the claim is filed, even though the COHE intervention occurs during the first 12 weeks of the claim. In the first year alone, the Renton and Eastern Washington COHEs together saved approximately $8 million compared to control groups.

In Eastern Washington, workers in the COHE were 33% less likely to have time away from work. In Western Washington, workers were 17% less likely to have time away from work and were 23% less likely to still be off work 360 days after their injury.


Health care provider and injured worker satisfaction are high. In surveys conducted in 2003 and 2004, more than 75% of providers reported their ability to treat injured workers has improved through the project, and more than 50% reported they are willing to see more injured workers. These results were confirmed during provider focus groups in late 2007 and early 2008. Injured workers reported high satisfaction with the care they received for their work-related injury or illness.

Process Measures

Workers treated by participating providers received benefits faster and had fewer disputes. Providers are sending in the initial report of accident much faster (an increase from 8% to more than 80% within two business days). That has led to a 13-day reduction in the time it takes to determine validity of a workers’ compensation claim as compared to injured workers who are not treated by COHE providers. The faster processing contributes to reduced risk of long-term disability for injured workers.

In sum, the system was able to improve health care delivery to achieve better outcomes for workers while demonstrating significant efficiencies. Additionally, free worker choice of provider was maintained to ensure worker satisfaction with care. Participating health care providers felt their ability to treat workers’ compensation patients had improved. This community-based quality improvement model has proven to be very effective and has met the needs of workers, employers, and providers in Washington.


Since the Western and Eastern Washington COHEs began in 2002, there has been a constant increase in the number of providers who choose to participate. In December 2003, there were just over 300 participating providers. These same two COHEs currently provide services to over 1,000 providers. Approximately 25% of injured workers covered by Washington’s State Fund seek their initial care from COHE providers.

The Eastern Washington COHE has also grown geographically. At the beginning of the project, it recruited providers in three counties of the state. In 2005, it expanded its coverage to a total of 16 counties in Eastern Washington.

In 2007, L&I decided to add two smaller COHEs to see if the positive outcomes could be transferred to new areas. The smaller COHEs allow L&I to test whether similar outcomes can be achieved in a multi-disciplinary clinic and a regional trauma center. An evaluation of the trauma center COHE shows large improvements in processes and communication between L&I and the trauma center emergency department. An outcome evaluation of the clinic-based COHE is due in July 2009.

Based on the demonstrated success of the COHEs, L&I recently engaged the Workers’ Compensation Advisory Committee Health Care Subcommittee (WCAC-HC) in a formal collaborative process to determine a roadmap to the future. While COHE results have been positive, all parties want to make sure that any expansion is done in a deliberate way that enhances success and effectively manages costs.

The transition goals include:

  • End the pilot phase of the COHEs and report results to the Workers’ Compensation Advisory Committee (WCAC).
  • Work with the WCAC to determine the future role of a business-labor advisory function.
  • Expand the use of occupational health best practices in a methodical, systematic and disciplined fashion:
  1. Develop an ongoing funding mechanism for current and future COHEs.
  2. Develop criteria for implementing proven best practices statewide with a plan for monitoring utilization, quality and cost/benefit.
  3. Establish and implement standards for COHE certification.
  4. Recruit at least two new COHEs.
  • Work with self-insured employers and their Third Party Administrators (TPAs) to make occupational health best practices available for self-insured programs and workers. Self-insured employers provide workers’ compensation for one third of Washington’s workforce.
  • Make occupational health best practices available to all providers and workers in the workers’ compensation system by 2015.


The COHE is funded through the Medical Aid Fund, which covers medical expenses for injured workers. Initially, each COHE received $192,500 per year to pay for the administrative expenses associated with implementing and managing a COHE. Incentives paid to health care providers for using occupational health best practices added approximately $60 per claim. These costs were distributed over 18,000 workers who received care from COHE participating providers in the first evaluation year.


The challenges that we face in Washington are not unique. All workers’ compensation insurers rely on health-care providers who have limited exposure to occupational health in their training and experience. Providers struggle to understand workers’ compensation systems and the issues that are unique to injured workers. For example, providers are not trained to focus on return to work, which is a necessary focus of workers’ compensation. The additional paperwork required by workers’ compensation insurers can be confusing and frustrating to providers.

In Washington, we decided to develop a resource for providers within the community of health care. That allows the provider to get assistance from a knowledgeable peer or colleague rather than the insurer. This model works in Washington’s workers’ compensation system, but could work equally well in other models of health care delivery, both workers’ compensation and general health.

Once insurers agree to participate in the project, they could use the same process that we used in Washington; working with providers and/or researchers to identify best practices and provider incentives that are most applicable to their state. In Washington, we issued a Request for Proposals and negotiated contracts with the successful bidders. Contract management could be handled by a team appointed by the participating insurers. The administrative costs of setting up and running a Center of Occupational Health and Education (COHE) could be shared jointly by the participating insurers.

By working together to fund the community-based COHE, the insurers could help communities focus on improving outcomes for injured workers rather than trying to meet the requirements of different insurance products. Each insurer would see a return on its investment through decreased medical and disability costs, as well as increased access to providers who understand workers’ compensation and want to help injured workers recover.

We designed the Occupational Health Services Project as a change in the healthcare delivery system. The staffs of the Centers of Occupational Health and Education (COHEs) are recognized as resources to help the provider rather than someone who is interested in managing claim costs. Providers see COHE staff as a part of their team, not the insurer’s. Giving training and resources to providers helps them to deal with any injured worker who seeks treatment, regardless of who pays the bills.

Our approach worked particularly well in Washington because we are in a state-run workers’ compensation system that insures over two-thirds of injured workers (there are several hundred selfinsured employers who manage their own claims). Our system gets the direct benefit of the lower disability rates and medical and disability costs.

This model can also be applied in workers’ compensation systems with multiple insurers and in general healthcare. The concept is to provide modest incentives for using best practices and place resources within the healthcare community to help providers follow those practices. By investing resources up front, the entire system can benefit from improved outcomes in the long run.

Contact the Author:
Diana Drylie, MHA
Senior Health Policy Analyst
Department of Labor and Industries
Olympia, WA
Phone: 360-902-6807
Fax: 360-902-4249
Email: dryd235@lni.wa.gov
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