Average Medical Claim Costs Still Rising for Workers’ Compensation

The National Council on Compensation Insurance (NCCI), the national reporting bureau for workers’ compensation data reported its 2013 State of the Line Report yesterday. Those of you who have read my White Paper on the implementation of medical tourism into workers’ compensation will recognize the chart below as similar to the one in my White Paper.

The State of the Line report is given every year at the Annual Issues Symposium held in Orlando, Florida. This is the last year that the Chief Actuary, Dennis Mealy is giving the report, as he is retiring, according to Joe Paduda in his blog.

The chart shows the years from 1991 to 2012, with the average medical costs per lost-time claims (any claim beyond the statutory waiting period and for which the claimant is receiving benefits). In addition, the chart shows the average percentage change between the previous years’ medical costs and the current years’ medical costs.


As I mentioned in my paper, the trend still appears that medical costs are going up, even if the percentage change has gone down. The next chart highlights this trend for the average medical cost per lost-time claim.


To illustrate what this means, consider this exchange between Mr. Jones, who has a terminal illness, and his doctor:

Doctor:       “Good news, Mr. Jones. We’ve managed to slow the progression of your disease.”

Mr. Jones:   “What’s so good about that? I’m still dying, only slower.”

In each year’s report, the last year is a preliminary figure which is revised once all data is reported to NCCI. This is also true for other years, as the nature of workers’ compensation data reporting is to require insurance companies to report ten years’ worth of data to NCCI.

As reported by Joe, average medical claim cost was up 3 percent from last year, as you will see in the chart. Yet despite the cautious optimism, the trend is for the average medical claim cost to get closer and closer to $30,000, and may yet surpass that amount in the next several years.

While there is no way to tell if these figures include the cost of surgical procedures for lost-time claims, it is reasonable to assume that the total cost will be much higher. This is where medical tourism will benefit the workers’ compensation industry, because it can offer lower cost medical care at the same or better quality than that available in the US.

Why the workers’ compensation industry continues to delude itself and its insured’s that costs are coming down is beyond me? But one thing is certain, they are not availing themselves of an option that offers tremendous cost savings and will provide the patient with faster recovery and quicker return to work — medical tourism.

This entry was posted in Claims, Medical Tourism, Workers' Compensation and tagged , , , , on by .

About Transforming Workers' Comp

Have worked in the Insurance and Risk Management industry for more than thirty years in New York, Florida and Texas in the Claims and Risk Management spheres, primarily in Workers’ Compensation Claims, Auto No-Fault and Property & Casualty Claims Administration and Claims Management. Have experience in Risk and Insurance Business Analysis, Risk Management Information Systems, and Insurance Data Processing and Data Management. Received my Master’s in Health Administration (MHA) degree from Florida Atlantic University in Boca Raton, Florida in December 2011. Received my Master of Arts (MA) degree in American History from New York University, and received my Bachelor of Arts (BA) degree in Liberal Arts (Political Science/History/Social Sciences) from SUNY Brockport. I have studied World History, Global Politics, and have a strong interest in the future of human civilization in all aspects; economic, political and social. I am looking for new opportunities that will utilize my previous experience and MHA degree. I am available for speaking engagements and am willing to travel. LinkedIn Profile: http://www.linkedin.com/in/richardkrasner Resume: https://www.box.com/s/z8rxcks6ix41m3ocvvep

8 thoughts on “Average Medical Claim Costs Still Rising for Workers’ Compensation

  1. Jesse Grillo

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