Cost of Unnecessary Surgeries For Employers

Unnecessary medical treatment is a major cause of higher health insurance premiums that affect both your employees and your company. The costs are staggering, with an estimated $210 billion spent on treatments that are considered above and beyond what is needed for the patient.

What can employers do to tackle these issues? One of the major causes of overtreatment in a workplace setting stems from how employers respond to on-the-job injuries. While the majority of these injuries are minor strains and sprains, the typical response is to head to the emergency room, which is the mostly costly point of entry into the healthcare continuum. 

Is there an alternative to this typical response to a workplace injury? How can employers help cut the costs of unnecessary medical treatments for their workforce?

What Are the Issues That Lead to Unnecessary Surgeries?

A national survey of more than 2,000 doctors found that physicians believe overtreatment is common and primarily caused by fear of malpractice, patient demand, or motives related to profit. The clinicians participating in the survey suggest up to 30% of medical care is simply not needed. The study broke down the types of medical treatments these doctors believe are unnecessary, including:

  • 22% of prescription medications
  • 24.9% of medical testing
  • 11.1% of medical procedures
  • 20.6% of overall medical care is unnecessary

 The problem is difficult to identify. For example, if someone has a knee replacement that is unnecessary, how would they even know that the joint pain could have been relieved with another less invasive procedure like physical therapy? To recognize that the procedure was unnecessary, something must go wrong or the patient must demand a second opinion that may not even be covered under insurance. 

 In 2020, a benefits management company teamed up with an actuarial accounting firm and found 30% of elective surgeries were clinically not needed. The cost of these unnecessary procedures was upwards of $30 billion. Given that medical treatment decisions are made privately between a doctor and their patient, is there even a way for an employer to raise awareness or otherwise affect the issue surrounding costly unnecessary healthcare treatments?

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2022 Workplace Injury Statistics Infographic

How Can You Cut Costs by Reducing Unnecessary Medical Care for Your Employees?

There are strategies that employers can use to take care of their workers while still managing healthcare costs. Nationally, we see efforts to push for payment reform and to put providers more at risk around performance quality, efficiency, and resource use. 

Some employers have created innovative programs designed to help cut healthcare waste. For example:

  • Walmart established a center of excellence (COE) for spine surgery to address variations in the appropriateness and quality of care for their workforce. They discovered that 50% of the spinal surgeries performed on their employees were unnecessary. The COE reduced healthcare costs for the organization and its employees. It also protected their workforce from the risks of these procedures. 
  • AT&T established a second opinion program that encourages employees to confirm their initial diagnosis and treatment plan.
  • The Virginia Center for Health Innovation (VCHI) started a pilot program to reduce unnecessary medical testing and treatments. They ended up identifying 2.07 million unnecessary healthcare services performed on Virginia residents that cost $747 million. VCHI launched a partnership with employers to make them more aware of low-value healthcare procedures and how they can reduce costs by encouraging employees to avoid them.

Ironically, the data also shows that more than half of employers are not tackling this issue at all. Many are likely unaware of the issue of unnecessary medical treatments, but most are certainly aware of the rising costs of providing healthcare benefits.

When studying the issue of unnecessary treatments, employers should also look toward the issue of on-the-job injuries as an avenue to apply some cost controls. Given that most workplace injury accidents are minor, why are they ending up in the ER?

Why Is the ER the Worst Place for Workplace Injuries?

Employers can take a more proactive role to curb unnecessary healthcare spending in one particular area in their business: Occupational health. Did you know the majority of workplace injuries are caused by:

  • Overexertion
  • Slips
  • Trips
  • Falls
  • Muscle strain or sprain
  • Contact with a stationary object

Visiting an ER for care for these routine musculoskeletal injuries is simply unnecessary, and a 2021 study shows that our overuse of the ER for non-urgent medical concerns costs $47 billion annually in the United States.

An ER doctor who sees these patients typically will discharge them with a referral to a specialist or will recommend they rest and avoid work following the injury. These clinicians are trained to stabilize, triage, and move on to the next crisis. They do not focus on short- or long-term efforts to rehabilitate from the injury and return to work.

While an ER visit may sound like the easiest course of action when an employee is injured, it ends up costing employers and their workforce time, money and creates an OSHA recordable event that drives up workers’ compensation costs. Is this the most cost-effective response if the employee has a sprained ankle or a tweak in their back? Certainly, some injuries require the ER, but how can you even tell which type of care is best when an injury occurs?

At OrthoLive, we deliver musculoskeletal care when people need it most. As the world’s only nationwide digital, virtual, and in-person musculoskeletal clinic, we provide members with access to orthopedic experts 24/7/365 so they can receive the comprehensive musculoskeletal care they need from anywhere on any device.