The Impact of Provider Choice on Workers' Compensation Costs and Outcomes

We study how provider choice in workers' compensation cases affects costs and outcomes. When employees choose the provider, costs are higher and return-to-work outcomes are worse, while physical recovery is the same although satisfaction with medical care is higher. The higher costs and worse return-to-work outcomes associated with employee choice arise largely when employees selected a new provider, rather than a provider with whom the worker had a pre-existing relationship. The findings lend some support to recent policy changes limiting workers' ability to choose a provider with whom they do not have a prior relationship.