Posts Tagged ‘economy’

Health Wonk Review, medical costs, price hikes, joint & several liability, and more

Thursday, December 11th, 2008

Health Wonk Review — The “Just the Facts, Ma’am” Edition – hosted by Vince Kuraitis at e-CareManagement – Dragnet fans take note!
NCCI report on medical benefits – The medical share of total losses has grown dramatically — from just over 40% in the early 1980s to almost 60% today. NCCI takes a closer look: Analyzing the Shift in the Medical Share of Total Benefits (PDF)
Price hikes forecasted – economists at Swiss Re are predicting a deep recession and price hardening across all lines of insurance through 2010, insurance and reinsurance inclusive.
Walmart death – This topic has been making waves in the law blogs. Troy Rosasco talks about the likelihood that exclusive remedy will preempt any lawsuits in the case of the trampling death of a Walmart employee in a post-Thanksgiving sale stampede, and talks about how the retailer could face criminal investigations. Of course, that doesn’t mean that lawsuits haven’t been filed – Eric Turkewitz updates us on the family bringing suit; Walter Olson offers his perspective on “5 minute after” suits. My colleague Jon had blogged about this last week: Walmart’s Killer Bargains.
Can you say Joint & Several liability? – a recent study profiled in Risk and Insurance shows that small business owners are not fully aware of the financial risks involved in obtaining workers’ compensation insurance through self-insured groups. Despite several high-profile failures, “…85 percent of respondents indicated that they had not seen, read or heard about the closure of several self-insured groups over the past year. More than one-half (58 percent) of respondents reported that they were unaware that companies belonging to self-insured groups remain financially responsible — often for years — for the claims of all companies in their group, not just their own businesses.” See: joint & several liability.
Fumes and confined space – We noted a sad story last month about two amateur winemakers in France who died after being overcome by fumes while trampling grapes. While this might sound like unusual circumstances, the issue of confined space and the danger of fumes is a significant agricultural risk. Hydrogen dioxide-related deaths (PDF) also occur in manure pits – there have been several instances when rescuers enter the pit only to succumb to the fumes as well.

Workers compensation and recessions

Wednesday, May 14th, 2008

Are we in or headed to a recession? Each of us might have our own opinions based on the industry we work in, the number of times we have to fill our gas tank during the week, and the area of the country where we live. According to the economic cognoscenti, the jury is still out – some industry insiders say yes while others disagree. At least some industries say they are in a recession and in a recent survey, nearly 80% of affluent Americans believe a recession has already hit the U.S.
What would a recession mean for workers compensation? A few weeks ago, Insurance Journal looked at the issue of recession and its impact on insurance as viewed by independent agents in various sections of the country, who offer commentary on both actual and anticipated effects. Some note that it is somewhat unusual to have a recession occurring in conjunction with a soft market. There isn’t much mention in the way of workers comp, except in terms of noting that declining payrolls lead to lower workers comp premiums. Some agents note that significant business curtailment has been in evidence in the housing and construction industry.
The past may be the best predictor of the the future. The Minnesota Department of Labor & Industry compiled a 2002 report on the effects of recession on workers comp as evidenced by various state studies.
Conventional wisdom points to a preliminary spike in claim frequency as employers reduce ranks – there is some anecdotal discussion about an increase in fraud, although most data doesn’t support that. Overall, during a recession the number of claims tends to decline – there are fewer workers, and those workers may be more timorous about filing claims, fearing job loss.
While frequency drops, severity tends to increase. Researchers in MA suggested this might be because businesses find it more difficult to provide light-duty work; also, due to the fact that because more experienced workers are retained, the average injury will be more severe. A California study also noted that recessions may add to claim severity by increasing the time it takes for a worker to find a job.
In a six-state study, researchers noted that “…recessions increase back-end cost drivers (i.e., increase the cost per claim) to a greater extent than they increase front-end cost drivers (i.e., increase the number of claims). They state that recessions are ‘characterized by increased use of the system, longer duration claims, and more frequent and larger lump-sum settlements.'”
Minnesota also reported in some detail on their own state’s experience with a workers comp during a recession, a report which our colleague Joe Paduda discussed at some length.
During a recession, employers should be doing what they should always be doing: preventing injuries from occurring, tightly managing any injuries that do occur, and helping injured workers to recover and return to work as expeditiously as possible. While there is always cause to keep an eye on things during any sudden shift in employment, the stories about an increase in fraud may be overblown. As the researchers in the Minnesota report note, boom times pose a greater risk for a rise in frequency as organizations experience a sudden influx of inexperienced workers.

News roundup: blogs, RTW, meth users, ethics, and more

Monday, February 6th, 2006

Insurance weblogs. We are featured in an article about weblogs by Therese Rutkowski that appeared in the December issue of Insurance Networking News: Online Soapboxes Get Down to Business. Several of our fellow bloggers are cited too.
Returning to Work: Overcoming Injury and Achieving Success – an article written by Kurt Schuhl and Michael McMahon the January issue of Risk Management magazine.
Meth abusers cost employers millions – A recent study determined that each meth-using employee costs his or her employer $47,500 a year in terms of lost productivity, absenteeism, higher health-care costs and higher workers’ compensation costs.
Off-the-job injuries – A Stockton California police officer was denied workers comp for an off-duty injury he suffered while playing basketball. According to the court: “When an employee is injured during voluntary, off-duty participation in a recreational, social, or athletic activity, Labor Code section 3600, subdivision (a)(9) provides that the injury is not covered by workers’ compensation, unless the activity was “a reasonable expectancy of” the employment or it was “expressly or impliedly required by” the employment.”
The Weekly Toll. – Tammy at Confined Space reminds us all of the real reasons why we should be doing the work that we do – a grim reminder to redouble our efforts to keep workers safe.
Immigrant worker injuries – Our colleague Peter Rousmaniere points to a recent Massachusetts study that offers a breakdown of hospitalizations by medical diagnosis, job and ethnic orientation. The study shows a relationship between the type of job and the type of injury.
Drug dispensing by docs – Joe Paduda notes that workers comp prescription drug costs are driven by utilization and price. But are some docs compromised by a profit motive via on-site dispensaries now in vogue?
Looking out for the workers – RawblogXport reminds points to an item that paints a dismal portrait of the economic status of the American worker, who is working harder and longer for less pay. “For the first time on record, U.S. household incomes failed to increase for five straight years – and that record includes the Great Depression. And the minimum wage, adjusted for inflation, is actually worth less today than it was before the last increase was passed 10 years ago”
Is the U.S. economy strong? – In terms of wages and jobs, the U.S. economy is not as strong as it might appear, according to some recent economic studies, and as reported recently in the New York Times.
Ethics – According to a survey by theAmerican Management Association (AMA), pressure from management to meet unrealistic business objectives and deadlines is the leading factor for most unethical corporate behavior. The desire to further one’s career and to protect one’s livelihood are ranked second and third, respectively, as leading factors.
Scandal watch. Speaking of ethics, Business Insurance reports that an AIG settlement with the SEC and the NY AG may be pending. Meanwhile, Judy Greenwald speculates that there may be bigger fish to fry in the wake of recent indictments of senior execs at General Re Corp. and American International Group Inc.

Economic downturn effects changes in health insurance coverage

Wednesday, January 28th, 2004

Thanks to Pulse for pointing us to the study Changes In Health Insurance Coverage During The Economic Downturn: 2000 – 2002. The study reports that the uninsured population has grown by 3.8 million during that time period. Low-income Americans, particularly males and nonparents, fared the worst, as gains in public programs failed to offset lost employer-sponsored coverage. Look to the possibility of more uninsured workers trying to secure coverage where they can – this includes potential cost shifting to the workers’ comp system.