Max Dorfman, Research Writer, Triple-I
The workers’ compensation field “responds and adapts remarkably well to economic changes,” according to Donna Glenn, chief actuary, National Council on Compensation Insurance (NCCI). “The pandemic brought new occupational diseases into the system, but it was offset by a reduction in other types of claims already in 2020.”;
Glenn made his comments in a recent Executive Exchange with Triple-I CEO Sean Kevelighan. She noted that the labor industry was in a strong position before the pandemic and consequently in its aftermath. This includes seven years of insurance profitability.
“Strong employment and wages are rising, fueling the workers’ comp system,” Glenn said. “The strength of the labor market is amazing.”
Kevelighan and Glenn noted that changing work patterns will also affect workers’ claim rates.
“Frequency decreased in 2020 due to business closures,” Glenn said. “When the workers returned, the damage activity returned. But telecommuting reduces the overall claim rate. This is the new normal.”
They also discussed the potential for rising medical costs.
“Healthcare costs have been pretty stable, but some are talking about medical costs exploding out of control again,” Kevelighan said.
“Medicine prices have gone up,” agreed Glenn, adding that medical inflation “is tame compared to general inflation. The medical industry has benefited from regulations, including medical fee schedules, treatment guidelines and prescription drugs, which contribute significantly to the cost-control system among workers. “
Furthermore, fewer procedures take place in hospitals. Instead, they take place in an outpatient setting or ambulatory service center.
Glenn observed that physical therapy and the reduction in opioid use have also helped. But she signaled that there may be mental health issues.
“PTSD, especially with first responders, comes with workers,” she said. “But mental health is much broader than PTSD. We need to be very mindful of how we care for workers.”