"[This paper examines] the impact of reimbursement rates on health care supply by studying a policy that reduced reimbursement rates by 30% in one of the highest-reimbursing workers' compensation insurance systems in the nation. Despite the large decrease in reimbursement rates, [the authors] find no evidence that the policy affected the amount of health care that injured workers receive or recoveries after injuries. ... [E]stimates suggest that the policy reduced annual workers' compensation medical costs by over $400 million and indicate that providers may be operating on the inelastic portion of the supply curve for care paid for by high-reimbursing payers."

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