Friday, June 13, 2008

Workers’ Comp Costs Rising is Pennsylvania

Another study from the Workers Compensation Research Institute (WCRI) shows that workers’ compensation costs per claim in Pennsylvania grew rapidly in 2005 and 2006.

The average total cost of claims filed by employees who missed more than seven days of work grew at a rate of 6 percent to 10 percent. The study compared Pennsylvania to 14 other states.

Total costs per claim in Pennsylvania were fairly typical of the 14 study states. This result, however, masked several offsetting factors. On the one hand, medical payments per claim with more than seven days of lost time were lower than the 14-state median and more workers returned to work in a week or less than in many other study states. On the other hand, compared to the median study state, Pennsylvania had higher indemnity benefits per claim with more than seven days of lost time and higher litigation-related expenses.

The study reported that medical payments per claim with more than seven days of lost time in Pennsylvania were 12 percent lower than the median of the study states for 2003 claims evaluated in 2006.

Another WCRI study found that the main reasons for the lower medical costs per claim were lower-than-typical prices paid for some services, physician visits that were less resource intensive, and hospital inpatient and outpatient costs per claim that were much lower than typical.

However, the average indemnity benefit per claim with more than seven days of lost time in Pennsylvania was 19 percent higher than the median of the 14 study states in 2003/2006 claims. This result, in part, reflects some characteristics of the Pennsylvania wage-loss benefit system.

The average expense of delivering indemnity and medical benefits to injured workers in Pennsylvania rose 10 percent in 2005/2006. During the whole study period, benefit delivery expenses per claim grew rapidly (9-15 percent per year), driven primarily by increases in medical cost containment expenses per claim.

The average benefit delivery expense per claim in Pennsylvania was 22 percent higher than the typical study state for 2003/2006 claims with more than seven days of lost time and expenses, a result driven mainly by higher litigation-related expenses per claim.

The study noted that Pennsylvania was not among the most litigious states. However, defense attorney payments per claim were 34 percent higher than the 14-state median for 2003/2006 claims, suggesting a somewhat more expensive and perhaps more complex dispute resolution process.

The study also found there was little recent change in Pennsylvania workers compensation in the speed of the first indemnity payment. The percentage of claims with more than seven days of lost time that were paid within 21 days of injury remained stable in 2005/2006.

For more information on the other states studied by the WCRI, visit www.wcrinet.org

1 comment:

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