Insight, analysis & opinion from Joe Paduda

Aug
13

Frequency’s down, severity’s up

Work comp claim frequency is down, but severity (claims costs) is up.
What to make of this?


Over the last ten years, claim frequency has dropped by almost 5% per year. At this rate, rare will be the injury in, well, a bunch of years (I’m too busy to do the math, but you get the idea.)
But, those injuries will be unbelievably stratospherically ridiculously outrageously expensive.
Why? Well, we’re getting older, and studies (and my personal experience) indicate the older we are the fewer injuries we get, but the more costly it is to put us back together again. And, medical inflation in workers comp continues to stubbornly stay a couple points higher than group health trend.
What does this mean for you?
Fewer claims means more time to focus on each one. And more expensive claims means that focus better be sharp.


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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