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In workers’ comp, it’s the tail that’ll kill you

More than 10% of workers comp medical costs are for claims more than 20 years old.

And that percentage may well increase.  That’s the finding from NCCI’s latest research, courtesy of Barry Lipton, John Robertson, and Dan Corro. There are a few striking findings well worth considering:

  • Diseases were the largest contributor to costs, followed by complications from medical care.
  • Drugs (38%), home health, implants/orthotics/prosthetics and other supplies make up 58% of costs compared to 16% of costs for claims less than 20 years after injury.  Notably, the authors predict that drug costs for today’s injuries 20 years out may well account for more than 50% of total spend.
  • About a quarter of drug costs were for opioids – drugs that are not indicated for musculoskeletal conditions.
There is a wealth of information in the report, information that should be carefully considered by any and all payers with a significant number of legacy claims.  And, those payers with claims that look like they may well be around in 20 years.
Here are my top four takeaways.
  1. How new claims are handled has a dramatic effect on where they are in 20 years. The vast majority of those claimants should probably NOT be on opioids; the fact that they are indicates a) they will likely never get off and b) the reason they are not closed is very likely because they are taking opioids.
  2. There are two very different types of home health/DME; the commodity-type for relatively young claims that need a cane crutch or wheelchair for a few days and the legacy claims that need a van, home mods, and nursing assistance forever. Huge implications that are NOT well understood by most vendors and buyers.
  3. Far too many claimants get far too much care in hospitals, when they may well be better served in a less-intensive inpatient facility.  Hospitals LOVE workers’ comp; it is very profitable and there are few controls on length of stay.  Payers would be well-served to figure out how to use less hospital care.
  4. Payers should also carefully examine medical records for patients suffering from complications due to medical care.  Poor medical care, lack of diligence on the part of treating providers, and flat-out malpractice are likely contributing to higher claim costs.
And kudos to NCCI for conducting this research.


3 thoughts on “In workers’ comp, it’s the tail that’ll kill you”

  1. #3,4 on the list are particularly problematic over a decades long time frame, unnecessary orthopedic and back surgeries (with subequent failures such as FBSS-failed back surgery syndrome) come to mind as a cause of opiod addiction and subsequent need for more -(almost unlimited?) hospital or surgery center procedures (revisions, fusions, spinal canal interventions and/or infusion pump -catheter placement,etc.), not to mention the patients who never make it back into the workforce and become essentially technically disabled.

  2. Good article, right on the money! This has been the trend the last five years for all WC products.

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Joe Paduda is the principal of Health Strategy Associates



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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