Category Archives: Severity

Trouble Ahead for Workers’ Comp

The Denver Business Journal today published an article by Steve Doss, VP of Commercial Lines at CCIG.

Here are the key takeaways from Conning, a Connecticut-based investment management company for the insurance industry:

  • Accident frequency has increased. A stronger U.S. economy has meant more inexperienced workers have joined the workforce, so high-hazard occupations like transportation and construction have seen increases in work-related injuries since 2012. For example, non-fatal work-related construction injuries jumped 9.5 percent from 2012 to 2013. Also, as older employees work longer, the number of accidents among those 65 and older rose 18.5 percent from 2012 to 2013.
  • Accident severity is rising. The Bureau of Labor Statistics reports that construction fatalities rose 5.6 percent from 2013 to 2015, and manufacturing fatalities rose 9.3 percent from 2013 to 2014. In addition, hospital and drug costs – the biggest expenses associated with workers’ compensation claims – are rising faster than inflation.
  • Evidence of cost-shifting. The Affordable Care Act may be driving physicians and hospitals to “leak” group health cases into the workers’ compensation system, where they can charge more for the same services than under a group health contract, according to Conning.

For those of you not familiar with workers’ compensation, and those of you who are, what each of the bullet points mean, in simple terms is this:

  • More accidents,
  • Degree of accident injury increasing and,
  • Cost-shifting is occurring.

Isn’t time to stop and realize that whatever programs are implemented, whatever analytical or predictive modeling techniques are utilized, whatever the so-called “experts” say is the cause of this or that problem, whatever so-called “reform” or work comp alternative is attempted, wouldn’t it be prudent to think outside the box, and outside the borders of your limited minds?

Schopenhauer said the following:

“Every man takes the limits of his field of vision for the limits of the world”

Those of you who will not listen to other ideas, no matter how far-fetched they may be, have limited your field of vision and taken them as the limit of the world. The world is globalizing, health care included.

Aerospace technology will very soon allow us to travel to any part of the world in under four hours. Don’t believe me? Ask Boeing why they are running commercials that tout that very same possibility.

Those who cite judges as saying no to medical travel must ask yourselves this question: Do doctors sentence people to death? (By that I mean execution, not natural death from disease or incompetence)

Those who say the laws won’t allow it, should know that laws can be changed, and laws written in the era of the horse and buggy should not dictate to the post-modern, jet-age, and soon-to-be sub-orbital space plane age. Would you like to live under the laws of Caesar or Charlemagne?

And finally, those who say the injured workers won’t go abroad to get better medical care, have you ever asked them, or are you just putting your words in their mouths?

Methinks you all doth protest a bit too much for the sake of injured workers and myself. Look in the mirror and ask yourselves why workers’ comp is failing. The answer is staring right back at you.


Want to Cut Your Litigation Costs and Lower Your Ex Mod?

Now that this year’s RIMS conference is over, and while we are all waiting for NCCI’S Annual Issues Symposium where they will present this year’s “State of the Line Report”, I thought I’d discuss two conversations I had today and yesterday with two individuals in CA, both of whom work for an insurance services company.

This company was mentioned in a video that was included in an article I wrote in December 2013. This video discussed how the company partnered with an insurance carrier to offer injured Mexican workers to get treatment in Mexico for injuries sustained on the job in CA.

From my conversations with these two individuals, I learned that not only are the employers covered by this insurance carrier saving money on medical care by having workers get treated in Mexico, but that it is also having the effect of lowering the litigation costs, as well as lowering the ex mod rates, because of the lower severity of claims due to the lower cost of total medical care spend.

With regard to lower litigation costs, one individual told me that 85% of all litigated cases in CA are from Latino workers. This is not due to their propensity to sue, but rather from the linguistic and cultural barriers they face working in Southern California.

I’ve mentioned the absence of linguistic and cultural barriers before with regard to the advantages of medical travel in work comp, but now I have outside proof that these barriers are responsible for higher litigation rates and costs.

On the other hand, having injured workers treated in Mexico at lower cost, and with better outcomes in facilities that are equal to or better than those across the border, especially the public facilities that may be impacted by budget cuts at the state level, and it is clear to see that employer severity (i.e., the overall cost of the claim) will have a tremendous effect on that employer’s ex mod.

In a past life, I worked on WC Statistical Reporting, so I know how important severity and frequency is to an employer. Frequency is the purview of safety people; severity can be dealt with, in part, by seeking lower cost, higher quality care outside the US.

The choice is yours.


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp. Connect with me on LinkedIn and follow my blog at: Share this article, or leave a comment below.