An analysis of data from approximately 327,000 closed claims supplied by over 900 insurance companies from 37 states revealed that the average medical cost per claim increased 73 percent from 1996-1997 to 2001-2002, with three primary drivers:
• Increased treatments per claim – this contributed to more than 50 percent of the increased costs
• Increased average cost per treatment – this contributed to approximately 25 percent of the increased claims costs
• Increase in more costly diagnoses (i.e., rotator cuff sprain, a more costly injury, broke into the top ten diagnoses, while lumbosacral sprain dropped in frequency, a less costly injury) – this contributed to approximately 20 percent of the increased claims costs
The actual average medical dollar cost per claim over the six year period increased $2,695.
The Bottom Line – How This Applies To Ergonomists
It should be realized that this study looked at all workers’ compensation claims – not solely ergonomic related injury/illnesses. Regardless, of the 10 most frequent claim diagnoses, nine were musculoskeletal conditions commonly associated with ergonomic risk factors (i.e., number 1: sprain lumbar region; number 2: carpal tunnel syndrome; number 4: lumbar disc displacement; number 5: tear knee medial meniscus).
If your average claim costs did not increase 70 percent over the study period, your ergonomic program has likely contributed to reduced injury severity and saved company resources. If you are trying to justify the development or expansion of your ergonomic program, this study identifies alarming cost trends that could be contained.
Other Key Points
For all diagnoses, the number of treatments per claim increased 45 percent, with the largest increases in physical therapy (up 67 percent), complex surgery and anesthesia (up 60 percent) and complex diagnostic testing (up 57 percent).
The average cost per treatment for all claims increased 19 percent. This was due to a combination of increased price for a treatment and changes to more costly treatments. The greatest cost jump occurred for shoulder and arm sprains.
When comparing data from the two time periods, the average age of a claimant increased from 36.5 years to 39.0 years.
Only lost time claims that closed within 24 months from the date of injury were included in this analysis (this involved more than 75 percent of all lost time claims in the database).
A potential study limitation was the exclusion of single payer funds (state of Washington, state of Ohio) and some state funds (California).
This position paper can be acquired at: http://www.joem.org/pt/re/joem/abstract.00043764-200902000-00013.htm;jsessionid=JHSQ6zSBspVGp9TQTyNKY29VkpcvyJCGXxtxMQhQWTdnZvLJ3wTc!-256325120!181195629!8091!-1
Article Title: Trends in Components of Medical Spending Within Workers Compensation: Results From 37 States Combined
Publication: Journal of Occupational and Environmental Medicine, 51:232-238, 2009
Authors: H Shuford, T Restrepo, N Beaven, and J P Leigh
This article originally appeared in The Ergonomics Report™ on 2009-03-25.