Thomas M. Wickizer, PhD, Department of Health Services, University of Washington, Box 357660, Seattle, WA 98195-7660, 206:616-2983, tomwick@u.washington.edu

Vocational rehabilitation (VR) services have engendered wide debate and concern for high costs and poor outcomes. Workers' compensation programs rely on vocational rehabilitation to provide training and education for injured workers who by virtue of their injury cannot readily resume their normal occupational duties. The Washington State Department of Labor and Industries (DLI), which administers the state workers' compensation program, initiated a performance monitoring system to improve outcomes and manage costs for its VR program. The DLI performance monitoring system tracks each referral and generates a complexity-adjusted cost outcome (CACO) score. These scores are summarized in a Provider Performance Report and are used by claim managers for purposes of making referrals. This study analyzed 45,000 referrals made for VR services from October 2001 to March 2003 to examine costs and outcomes for the vocational rehabilitation program for the purpose of recommending changes that could improve the performance system's operation. Both descriptive and multivariate analyses were used to conduct the study. During this 18-month period, the DLI spent $173.3 million on VR services, including $45.7 million in direct vocational costs and $127.6 million in indirect costs associated with lost work time. The results of the study suggested the performance monitoring system would be improved by: (1) increasing the weight of return-to-work in the calculation of the CACO score, (2) revising the weights of the complexity factors to better reflect their influence on return to work and costs, and (3) aligning CACO scores more closely with referrals to provide added incentive for achieving improved outcomes and cost control for vocational rehabilitation services.

Learning Objectives: After this presentation, participants should be able to

• Discuss the major problems with vocational rehabilitation services.
• Describe the features of an effective performance monitoring system.
• Explain how Washington State has improved its ability to control costs and improve outcomes in vocational rehabilitation by developing a performance monitoring system.

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.