Workers' compensation medical expenditures: Price vs quantity

This study compares the medical costs for treating workplace injuries covered by workers' compensation insurance to the costs of treating similar injuries not occurring at work that are covered by group health insurance. Dramatic differences in total medical costs are observed: Medical costs in workers' compensation are double those for similar injuries covered by group health. After controlling for demographic and claimant characteristics, the differences can be entirely explained by a greater utilization of services and a different mix of medical care providers. There is no evidence that health care providers price discriminate or charge workers' compensation claimants any differently for the same services.