Key insights from our CEO, Joe Holtschlag.
CEO at Ascellus | Behavioral Health that gets people back to work | Healthcare Operator & Problem-Solver
With the recent economic uncertainty, I've been exploring how downturns historically impact workers' compensation claims. Looking at the data last night, the pattern is fascinating: for every 1% increase in unemployment, the industry typically sees a 2-3% decrease in claims initially. Then claim duration increases by 5-7%, followed by an eventual normalization. While each economic downturn is unique, this pattern tends to hold. (Hat tip to the researchers at NCCI and WCRI for this insight!) Why does this happen? Workers' comp claims drop at first because people get nervous about job security. They don't want to be seen as difficult or risk losing hours, so they push through injuries. Over the following months, durations for claims that are filed start creeping up - these cases become harder to close because injuries have compounded. The injured worker might not have gotten treatment soon enough, developed chronic pain, or begun struggling with behavioral health challenges like depression, anxiety, or fear of re-injury. Whatever the reason, they stay out of work longer. Once unemployment stabilizes or after layoffs occur, people who were holding off have no reason to wait anymore. The result? More claims, and typically more complicated ones. This consistent pattern creates a trap. The reflex might be to think, "Now isn't the time to solve mental health." But in reality, this is precisely when risk increases the most. The organizations that get ahead of this cycle - the ones with solutions already in place - are those best positioned to manage these claims before they spiral. #workerscomp #claims