Were the press to actually check WHY the claims rates have fallen and actually dig deeper than the information plated up by self-serving pols in the state workers comp system, they would find the bodies and lives of injured workers who have had their ability to contest the poor or illegal behavior of carriers largely truncated and/or eliminated. When the system set up by the insurance industry carries the day with the legislature, who do you think will benefit, the people for whom the system was created to serve or the people who are the insurance company stockholders?
This report is clear evidence of the travesty of the system, certainly not evidence of serving the injured workers.
What information do you have that leads you to believe that insurance companies have the slightest bit of influence on any governmental body in Florida? I certainly don’t see any in my experience.
After reading this article I wanted to pose the question to regulators — Is the current rate reduction sustainable?
After working in the workers’ compensation system for more than 20 years, first as an adjuster and now as a consultant — I do not feel that the rate reductions are sustainable for the long haul.
The key factors that influence workers’ compensation cost are medical treatment and ancillary services like prescription drugs. Yes, the claims frequency is declining but the indemnity and medical severity continues to rise — this is from studies conducted by the NCCI. According to their 2006 report — medical cost inflation, increases in utilization of medical services including prescription drugs, are the significant cost drivers within the overall workers’ compensation system. Have we done anything to address these costs? — No! The 2003 reforms did not change the way injured workers receive medical treatment. In fact over the last 3 years, Florida has increased the medical reimbursement fee schedule and as of October 1, 2007 — we have also increased the hospital fee schedule. While this was necessary to attract quality providers to treat injured workers it does nothing to address the overall cost drivers built into the system.
The rate reduction for employers who have an injury free work environment is great but for employers who have injured employees the rate reduction will present new challenges. For those employers a rate decrease generally results in a significant premium increase, because their experience modification will be adjusted to reflect the new rate structure.
Another factor that is being glossed over is the fact that most claims take 3 years to develop or trend. Even the best claims models have been wrong — there is no magical crystal ball that will allow us to predict how many times an injured worker seeks medical treatment or fills a prescription. 2007 is the first year to really analyze the impact of the 2003 reforms — the data is still too raw to justify continued rate decreases.
The question we should be asking both the NCCI and our regulators is: how do you justify a rate decrease when medical cost are trending up?
My fear is 24 months from now Florida employers will have a reality check that they will not be prepared for. The reality check — a significant increase in premiums to recoup the imbalance between skyrocketing medical cost and premiums collected.
Margaret Spence, CWC is the President/CEO of Douglas Claims & Risk Consultants, Inc and WorkCompSeminars.com a Boca Raton, based workers’ compensation consulting company and author of a new book – From Workers’ Comp Claimant to Valued Employee – Injured Employee’s can Return to Work.
The legislature made it impossible to live off of the amount given out by the system, took almost all the compensation for lawyers out of the system and just generally gave Big Business a free hand in deciding what injured workers were due.
Big Business then gave alot of the money they gained by this back to the workers in the form of giant wage increases.
Were the press to actually check WHY the claims rates have fallen and actually dig deeper than the information plated up by self-serving pols in the state workers comp system, they would find the bodies and lives of injured workers who have had their ability to contest the poor or illegal behavior of carriers largely truncated and/or eliminated. When the system set up by the insurance industry carries the day with the legislature, who do you think will benefit, the people for whom the system was created to serve or the people who are the insurance company stockholders?
This report is clear evidence of the travesty of the system, certainly not evidence of serving the injured workers.
Please clarify the difference in your mind.
What information do you have that leads you to believe that insurance companies have the slightest bit of influence on any governmental body in Florida? I certainly don’t see any in my experience.
Jan’s comments indicate Jan is a trial attorney. Nobody else familiar with the industry believes that.
After reading this article I wanted to pose the question to regulators — Is the current rate reduction sustainable?
After working in the workers’ compensation system for more than 20 years, first as an adjuster and now as a consultant — I do not feel that the rate reductions are sustainable for the long haul.
The key factors that influence workers’ compensation cost are medical treatment and ancillary services like prescription drugs. Yes, the claims frequency is declining but the indemnity and medical severity continues to rise — this is from studies conducted by the NCCI. According to their 2006 report — medical cost inflation, increases in utilization of medical services including prescription drugs, are the significant cost drivers within the overall workers’ compensation system. Have we done anything to address these costs? — No! The 2003 reforms did not change the way injured workers receive medical treatment. In fact over the last 3 years, Florida has increased the medical reimbursement fee schedule and as of October 1, 2007 — we have also increased the hospital fee schedule. While this was necessary to attract quality providers to treat injured workers it does nothing to address the overall cost drivers built into the system.
The rate reduction for employers who have an injury free work environment is great but for employers who have injured employees the rate reduction will present new challenges. For those employers a rate decrease generally results in a significant premium increase, because their experience modification will be adjusted to reflect the new rate structure.
Another factor that is being glossed over is the fact that most claims take 3 years to develop or trend. Even the best claims models have been wrong — there is no magical crystal ball that will allow us to predict how many times an injured worker seeks medical treatment or fills a prescription. 2007 is the first year to really analyze the impact of the 2003 reforms — the data is still too raw to justify continued rate decreases.
The question we should be asking both the NCCI and our regulators is: how do you justify a rate decrease when medical cost are trending up?
My fear is 24 months from now Florida employers will have a reality check that they will not be prepared for. The reality check — a significant increase in premiums to recoup the imbalance between skyrocketing medical cost and premiums collected.
Margaret Spence, CWC is the President/CEO of Douglas Claims & Risk Consultants, Inc and WorkCompSeminars.com a Boca Raton, based workers’ compensation consulting company and author of a new book – From Workers’ Comp Claimant to Valued Employee – Injured Employee’s can Return to Work.
The legislature made it impossible to live off of the amount given out by the system, took almost all the compensation for lawyers out of the system and just generally gave Big Business a free hand in deciding what injured workers were due.
Big Business then gave alot of the money they gained by this back to the workers in the form of giant wage increases.