For your biweekly risk roundup, check out the Thanksgiving Cavalcade Of Risk posted by Louise at Colorado Health Insurance Insider. Louise always does a great job curating the carnivals.
Is claim frequency on the upswing? – At Comp Time, Roberto Ceniceros says that claims data gathered by Liberty Mutual Group shows frequency trending up.
Another extension for Medicare Secondary Payer requirements – National Underwriter reports that The Centers for Medicare and Medicaid Services has agreed to delay certain mandatory reporting requirements for workers’ compensation cases under the Medicare Secondary Payer law until January 2012. These requirements had previously been extended to January 2011. The exemption is for liability claims that do not involve on-going medical responsibility, according to officials at the American Insurance Association.
Wheelchair checklist – at Complex Care Blog, Zack Craft offers checklist for wheelchair accessibility in the home for adjusters, nurse case managers and others who are involved in managing the care of injured workers. It’s intended to be used as a starting point for a review at the onset of a claim to to ensure the claimant’s needs are met and to minimize costs and legal issues over the life of the claim.
10 years of preventing needlestick injuries – Over at The Pump Handle, Liz Borkowski informs us that it is the 10th anniversary of the Needlestick Safety and Prevention Act. Her post includes links to current standards as well as an update of progress since the act’s passage.
Collision course At Today’s Workplace, Roger Bybee has posted a great article on an issue that is heating up: NFL Collision: Management Control vs. Player Safety. He tackles the issue of chronic brain injuries vs an industry with a culture that has touted its violent collisions as a feature. One interesting aspect that Bybee points out is that as advanced helmets got harder, the collisions became more dangerous, not less.
Cool tool of the week – If you’ve been frustrated that you can never access American Medical Association studies, research, and news directly, there’s some good news. Last week, the AMA announced it will open its 10 years of American Medical News archives to the general public. They say: “It represents a rich resource on issues confronting physicians and trends in medicine. Content includes in-depth reporting on the business and regulatory sides of health care, practice management and hot issues in public health and patient care.”
Pigeon poop safety – We admit that pigeon poop is a safety hazard we have never given much thought to, but that doesn’t mean it’s not an important issue. Safety Daily Advisor recommends proper personal protective equipment to protect workers from exposure to serious conditions, including histoplasmosis and cryptococcosis.
Florida’s Sinkhole Belt – OK, it’s not comp-related – at least not so far, but Emily Holbrook of Risk Management Monitor has a fascinating post on how Florida sinkhole claims are skyrocketing. “According to a new state report, for the years 2006 through 2010, sinkhole claims have cost Florida property insurers $1.4 billion — a number that could reach $2 billion by the end of this year.” She links to the state report and a video clip that offer more info about this problem which is one of the state’s major premium cost drivers. Yikes. (We confess that we have been inordinately fascinated with sinkholes since seeing reports of this Guatemalan monster last spring.)
Tweet this – Claire Wilkinson of III’s Insurance Industry Blog posts about a recent research report that notes a big uptick in Fortune-500 insurers who are using Twitter – up from 13 in 2009 to 20 in 2010. That’s either a sign that Twitter is here to stay or that it has jumped the shark, you be the judge. If you aren’t on Twitter yet, what are you waiting for? The following video is more than a year old so already outdated, but it is elucidating about the speed of change in the way we are communicating.
Posts Tagged ‘frequency’
Thanksgiving Cavalcade Of Risk, social media, pigeon poop & more
Wednesday, November 17th, 2010Older Workers and Comp: Low Risk and A Few Surprises
Tuesday, January 19th, 2010NCCI has issued its latest report (PDF) on the status of older workers in the comp system, with a particular focus on workers 65 and up. If nothing else, the study reinforces the notion that older workers are safety conscious and a relative bargain. For employers worried about workers comp costs, older workers are not a significant problem.
In 1988 eleven percent of workers 65+ participated in the workforce; now 17 percent of these older workers are still working. That percentage will likely increase as the long-term effects of the financial collapse continue to resonate through the damaged economy. Some people continue working because they want to; many more continue because they have no choice.
Injury Prone?
The frequency rate for older workers varies by occupation: in construction, older workers appear to be safer than younger workers – they are injured at a 4 percent rate, compared to 12 percent for their younger colleagues. The results are flipped in retail/sales: older workers are injured at a 23 percent rate, compared to 15 percent for all others.
As you might expect, the leading cause of injuries for 65+ workers are slips, falls and trips – 47 percent of all injuries for this cohort. (Younger workers suffer these injuries at a 24 percent rate). For strains and sprains – the overall leading cost-driver for workers comp – the results are reversed: the frequency for older workers is 23 percent, compared to a whopping 38 percent for all others.
It does take longer for older workers to recover from injuries: they have a median days-away-from-work rate of 16, compared to 12 days for workers in the 55 to 64 group and 10 days for workers 45-54. Despite this higher rate, overall indemnity costs are lower. Why? Because older workers make substantially less on average than younger ones. Wages peak in the mid-50s and then fall off dramatically after age 65, down to the same level as the entry level 20 to 24 group. So much for the notion of paying for experience!
The only red flags in the study involve the retail trade and service/hospitality industries, where older workers are showing higher-than-average costs for comp. These jobs probably offer ample opportunity for slips, trips and falls, the number one cause of injuries for these workers, .
It will be fascinating to watch NCCI’s study evolve over the next decade. The percentage of workforce participation for the 65+ group is going to increase steadily. With this growth, the risks will be enhanced. There is likely to be an upward trend in both frequency and severity, but perhaps not as much as feared. Certainly, the NCCI study reinforces the argument that older workers are safe, reliable and motivated. There is no reason to discriminate against them. If anything, you could make a good case for preferring an older worker to a younger one. Fodder for further thought, indeed.
NOTE: Special thanks to reader Soon Yong Choi for spotting an error in an earlier version of this post (see comments). Given my checkered track record with numbers, I can only hope that Choi and similarly adept readers continue to cast a critical eye on any of my postings where statistics are involved.
Workers comp and safety in a recession
Thursday, April 9th, 2009Recessions tend to place downward pressure on workers’ compensation frequency, according to NCCI economists who made a recent presentation to the Casualty Actuarial Society. That makes sense. Reduced payrolls means fewer claims. Plus, with potential layoffs looming, some employees may be reluctant to report injuries – which might be part of the reason why there can be an uptick in claim reports after a layoff. The folks at NCCI note that economic expansions are times when frequency spikes – more injuries occur as payrolls climb and new, less experienced employees are added to the work force.
But despite a drop in frequency, safety experts would caution that an economic downturn requires greater vigilance, not less. In a white paper entitled Leading Safety in a Downturn, staff at BST point out that like many other operational areas, safety budgets are often cut and staff are forced to maintain the same standards with fewer resources at their disposal. They also suggest that in a downturn, there is a more complex cultural risk posed by changes in the business: “Even if it is not intended, an organization responding to economic conditions can experience a climate shift that puts a higher focus on production than safety. These shifts are “loud” to the employees who will take away from these experiences long-lasting memories of how they were treated and what they perceive the organization to truly value.”
The authors suggest that a downturn can be a defining moment in a company’s culture, and note that “how you do the hard stuff matters.” They offer five critical actions that business leaders should take to be transformational leaders and to ensure continued safety excellence during a downturn.
More on recessions and workers comp
We’ve talked about workers’ comp and recessions before, specifically, the impact on claims. We cull out this quote from a California study of prior recessions:
“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.'”
In a prior post, Down the Rabbit Hole: The Economic Crisis and Workers Comp, my colleague Jon also talked about some other aspects of the current economic scenario that are playing out in workers’ comp. These include the impact of the economy on the illegal immigrant work force, the fact that older workers may be forced to work longer since retirement funds have been destroyed, and the downward pressure that poor investment returns are putting on insurers.
NCCI report: frequency trending down; severity trending up
Monday, January 12th, 2004Last week, NCCI reported on a recent study on workers’ compensation claim frequency and, as they reported last year, frequency continues to decline. They cite several potential reasons for this – employer safety initiatives, increased use of robotics and power assisted processes, and ergonomics, to name a few. Here is a breakdown by size of claim – note that the highest decreases are in the smaller claims, and the decreases in high-dollar claims are significantly less pronounced:
- For claims less than $2,000, a decline of approximately 35%
- For claims between $2,000 and $10,000, a decline of 18%
- For claims between $10,000 and $50,000, a decline of 8%
- For claims more than $50,000, a decline of 8%
The severity decrease is the good news. The flip side of the coin is that medical and indemnity costs are galloping full steam ahead in the wrong direction. Not so good at all.
In the early and mid-’90s following reforms, indemnity was relatively stable. But according to NCCI actuary Tony DiDinato, “The last seven years have seen the trend turn upward once again, with workers compensation indemnity claims increasing an average of 7.4% annually since 1996. In 2001 and 2002, respectively, claim costs rose 7.3% and 6.0%.”
DiDinato goes on to characterize medical claim cost trends are alarming, “with double-digit increases the last two years.” He attributes this to increased utilization and prescription drug costs.
Cleary, employers are making progress in workplace safety (although we would advocate that any injuries are too many injuries) but it would appear that they must do a much better job of managing injuries from the point they occur right on to an employee’s successful return to work. Perhaps the “buyer’s market” of the late 1990s lulled some employers into forgetting how vital this is?
It brings to mind an old Bob Dylan lyric: “And here I sit so patiently, waiting to find out what price you have to pay to get out of going through all these things twice.”
