Title: Executive Vice President – Research, California Workers’ Compensation Institute
Resume: Applied Outcomes Research, Ernst & Young, William M. Mercer
Schools: U.C. Berkeley (undergrad) George Washington University (graduate school)
Awards: GWU International Fellowship
Inspiration: Will Murphey, Arnold Milstein, Ed Woodward
Favorite quote: Mentsch tracht un Gott lacht. (Men plan and God laughs.)

A familiar face in the industry, Swedlow is renowned for the research he does on various facets of the workers’ comp system. Over the past few years, his research has demonstrated the impact of the reforms from SB 899, including temporary disability, medical provider networks and utilization review. He’s always on hand at CWCI’s annual meeting to do a presentation on the institute’s latest research topic, and he contributes data to the Workers’ Compensation Insurance Rating Bureau of California and the Commission on Health and Safety and Workers’ Compensation.

What are the top three issues in California workers’ comp today?  
The first [issue] is…quality of care and medical cost. Medical has become a lightning rod issue today and it’s easy to forget how much of a consistent issue it has been over the past 20 years. Medical care is such a hotly debated issue on all fronts, nationally and for occupational carriers. We are struggling to find the right balance point. It’s particularly tricky in California. Second, the assessment and payment of benefits for permanently disabled workers. They’ve gone through significant changes in five years of modifying methods. I anticipate that being a key issue in the next 24 months. Third, I think overall the influence and cost driver effects of litigation.

Are we headed for a hard market, and if so, when will it come? How long should we expect it to last? What are the repercussions?  
The cycles of hard and soft markets have occurred for some time. We are heading into a harder market because of the rising influence of medical care and the growing debate over permanent disability. The complexity of implementing other reforms is so significant that it’s behind many of the expenses. Payers and self-insurers are taking a hard look at the true costs of the system. As things become more expensive and hard to predict, markets become harder. The length is anyone’s guess.

It looks like the State Fund sale isn’t going to happen, but it looks like we may be heading for a hard market. What does that mean for State Fund? Will its market share increase to the same levels as it did previously? Does State Fund need any additional reforms in governance that may make a difference in how it handles its business? For instance, a proposal this year—it looks like the bill is dead for this year—would require that board members be confirmed by the Senate. Is that a good idea?  
State Fund will continue to be a major player in California workers’ comp. Now they’re right back where their historic [market share] level is. The only time it goes above that is when there is a mass exodus of players from the market, but there’s nothing to suggest that’s about to happen. I don’t think there are any market conditions now that will put them back there. The current board members have experience in this field. I don’t think Senate appointments would be necessary.

Are medical provider networks a help or a hindrance? How should they be improved?  
I think networks are a definite benefit. There’s a growing body of evidence that networks have an ability to leverage practice patterns and efficiencies. They allow [members?] to provide higher quality of care at lower cost… There is a movement toward MPNs becoming smaller and more targeted. There will be a lot more attention to overall performance of a network, fine-tuning their performance.

How should utilization review be improved?  
That’s a tough one. In our system, we do not have the same options as group health and federal options… We have a series of very complicated rules, [regulations] and statutory language. It’s going to be more expensive and complicated to implement. That’s one reason costs are so much higher. In the future, [we] will try to simplify the rules in the system. It is my hope that we create a more elegant medical treatment guideline system with one set of rules instead of a patchwork of rules.

What needs to be done to improve return-to-work?  
Return-to-work is a very important issue and a very tricky issue from a policy standpoint. There are so many things contingent on employer and industry and type of occupation. The system can encourage return-to-work, but from a legislative standpoint we haven’t been very successful in giving incentives. We need to educate employers about value of return-to-work and physicians… they need the best possible evidence and incentives.

What do you see, other than medical, as the next big cost driver?  
I think that recent decision on permanent disability evaluations has a lot of potential to become a significant cost driver in the system. A lot of people will have their eyes on that issue.

Is it realistic to deal for more cost-cutting reforms in exchange for increasing PD benefits?  
That’s a tough question and I’m not sure I have an answer. The right thing to do is to set up the right incentives to make sure the right medical care is being delivered at the right price and we have the right system to assess permanent disability. There are a lot of hard social policy questions to look at before the cost question… I think we have to answer social policy questions first before we push money around.

Where do you see applicant attorneys focusing litigation in the future?  
Applicant attorneys and litigation are a result of confusion in the system. Litigation happens when people aren’t clear on what the rules are or feel they aren’t getting a fair shake. Continuing to clarify the rules about what is the right care and right benefits is the most important thing in reducing the lack of predictability in the system. The likelihood of litigation goes down [as confusion decreases].

Now that Obama’s health care bill is law, is there any correlation with workers’ comp? The language changed a bit. Is there a greater connection? Is there anything that has emerged in the law that would change their answer from last time?  
Much of it will have an impact, depending on a couple of things. There are no plans for formal integration between federal program and California’s workers’ comp system. [The federal bill included] changes in Medicare pricing and fees control. The degree to which the federal government changes those prices for inpatient and outpatient programs will have a big impact on our system. That’s one big dimension. It’s going to take some time to see what happens.

Will maintaining the right of injured workers to predesignate their own physicians drive up costs? What does previous research on predesignation show?  
There isn’t a lot of research about this. I would come back to the more important issue of solid standards of care that define quality of medicine and the right price. Physicians need to look at the whole patient instead of individual treatments. It’s not a vital issue in defining right care or right price.

What does research indicate are the three biggest cost drivers in workers’ comp? 
Our own research has shown that lack of standard care is a significant cost driver. If we can’t define what is appropriate care or what is appropriate price…it is a recipe for out-of-control medical [costs] development. We need to look at what is the best way of assessing permanent disability and what is an appropriate benefit level. Those are the two big issues. The last issue is what is the best way of incentivizing return-to-work.