According to the National Council on Compensation Insurance, “it is widely recognized that in recent years, workers’ compensation medical costs have grown dramatically.” There are several factors believed to be contributing to this increase. For example, over the last half of the 1990s, medical severity grew at a rate three times medical price inflation (over 70% vs. 21%, respectively, from 1996/97 to 2001/02).
An NCCI study had also been conducted in 2007 that was meant to identify the factors for this growth. That study revealed the following:
• The increase in treatments per claim contributed slightly more than 50 percent
• The increase in the average cost per service produced a little over 25 percent
• There was a shift to more expensive injuries, which accounted for approximately 20 percent of the increase in medical severity
In the current study, the National Council on Compensation Insurance sought to update the data used in the previous study and to examine the contributing factors to the increase in treatments per workers’ compensation claim, because that was the key driver in the 1990s study. Two approaches were used in the recent study, which included investigating claims with and without surgery and separating the overall growth in treatments per claim into its components.
The key findings of the study showed:
• The increase in the share of claims with surgery contributed to approximately 25 percent to the overall increase in treatments per claim. Surgical claims involved more than two times the number of treatments per claim, especially physical therapy and drug treatments.
• The primary drivers of the growth in treatments per workers’ compensation claim differed by service group.
• Physical therapy treatments significantly impacted treatments per workers’ compensation claim, which accounted for about 50 percent of all treatments per claim.
• Overall, the most noteworthy increases in treatments per workers’ compensation claim took place in 2000 and 2001, but have slowed in the most recent years. However, many of the more expensive service groups have continued to grow.