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Pandemic’s impact on workers’ comp financials has been…

A new report ($25 to download) from the National Foundation for Unemployment Compensation and Workers’ Compensation sheds light on the pandemic’s impact on work comp financials.

MCM readers will not be surprised that the impact has been pretty positive – Mark Priven and I predicted this back in September of 2020.

Several key takeaways.

  1.  Medical costs plummeted  – by over $3.5 billion – almost 12%, likely due to lower employment resulting in fewer claims, coupled with the relatively lower cost of COVID-related claims (much more on this here).
  2. Total benefit payments dropped by almost $3.9 billion…
  3. Over the last decade, the national average benefit cost per employee dropped by 10.2% – BEFORE adjusting for inflation. After adjusting for cumulative inflation of 17%, the real decline in benefit cost per employee was 27.3%. 

What does this mean for you?

Workers’ comp financials are pretty strong…for insurers and employers.

Mark Priven is a really insightful actuary. 


4 thoughts on “Pandemic’s impact on workers’ comp financials has been…”

  1. The pandemic in effect accelerated what I have called “The Big Fade” of work injuries into the fabric of workforce risk management…no longer an outlier that reasonably justified an entirely hermetically sealed separate system of social relations,, insurance, laws, and culture. A study would show that between say 2010 and today the percentage of involuntary worker absence due to work injury has significantly declined. However the arcane legal and amin structure remains a model of the 1910s. What is holding back the efficient integration of work injury risk mgt from non-occ workforce risk? Is there a state which looking forward is trying to restructure WC? At some point the overhead (state agencies, legal dispute resolution, distinctive medical system) will appear so overblown given the actual risk being managed.

    1. Hello Peter – in my experience change does not happen without significant force behind it – given WC rates, injury frequency, and costs continue to decline, I don’t see anyone spending much time worrying about WC when there are lots of other issues to be concerned about.

      be well Joie

  2. Joe,

    The other issue that is reflected in the medical costs is the closure of medical care facilities. Many claimants appear to have recovered themselves with no help from the medical community. The human body has fine healing capacity without help in many situations. My clients have had many claims close with takedowns on closure.

    1. Thanks for the note Jeff – you raise a great point – I’d add that given the problems that poor medical treatment can create, sometimes avoiding care is better than receiving substandard care.

      be well Joe

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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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