WCRI Insights into Medical Inflation in Workers' Compensation

Hey there! It's a rainy weekend here today, so I'll give you a quick breakdown on some of the insights into medical inflation in workers' compensation from WCRI, 2024.

In this study, they looked at how the prices of things have been going up over the past few years, especially for things like energy, food, and housing. Naturally, employers, risk professionals, (everyone really) are worried that the cost of medical care might start going up, too. So, WCRI wanted to see if this increase in prices affected not just regular medical care, but also the medical care that's paid for through workers' compensation.

To make a long, data-driven story short, they gathered a bunch of information about how prices for medical care in workers' compensation have changed from 2012 to 2022. They wanted to figure out what caused these changes and focused on things like how much different kinds of medical providers charge for their services. They also talked about how each state has its own rules about how much money workers' compensation should pay for medical care, and how these rules can change when prices start going up.

They also looked at fee schedules, (for our liability friends, think of these as lists of prices for different medical services). These fee schedules can affect how much money workers' compensation has to pay for things like doctor visits or hospital stays.

They say that this increase in payments is happening because of a few reasons. One is because there have been changes in medical care utilization. There are some places where there aren't enough nurses and other healthcare workers, so that makes it more expensive to get care, which adds to the cost of workers' compensation. Sidebar: I was surprised I didn't hear anything about the impacts caused by the increase in wages for medical staff.

Another important point made was that the cost of medical care in workers' compensation might keep going up faster than the cost of other things in the economy. This could happen because sometimes the prices for medical care don't go up as quickly as prices for other stuff, like groceries or gas.

So basically, the study was trying to understand how and why the cost of medical care in workers' compensation is changing, especially when other prices are going up, too. I've outlined the key factors Rebecca Yang summarized in her slide in the image above. Anxious to see how this all unfolds...

As always, many thanks to my employer, MTI America for the opportunity to attend and share this information with the incredible people in the risk and insurance community.

Nerdy Nikki