Researchers analyze significant shift in medical share of total benefits
A recent report from the National Council on Compensation Insurance examined the significant shift of the medical share of total benefits.
The medical share of total losses in workers' compensation has grown significantly over the past few decades.
According to the study, the medical share of total losses in workers' comp jumped from slightly more than 40 percent in the early 1980s to almost 60 percent today. These ratios, researchers said, are based on actuarial estimates of ultimate accident year losses.
NCCI researchers found that the rising importance of medical losses is pervasive, whether they looked at estimated ultimate losses, reported data, or incremental payments by accident year and report period. Among the findings of the report, researchers highlighted:
- Report periods. Researchers said that looking at the data by report period reveals that the medical share has been increasing over time for most report periods.
- Patterns by accident year. Researchers said that by looking at the pattern by accident year shows that the medical share starts out high, falls until the fourth or fifth report, and rises slowly again.
- Medical and wage inflation rates. NCCI found that slightly more than half of the increased medical share was the result of differences in medical and wage inflation rates, while the balance was attributed to differences in the growth in medical and indemnity utilization.
- Mix of states. Although there are differences in the medical share by state, researchers said the change in the relative mix of states has had very little impact on the estimated countrywide share of medical and indemnity benefits.
January 19, 2009
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