Aon Sees Healthcare Workers’ Compensation Claims Dropping

January 19, 2015

Workers’ compensation costs and claims frequency in the healthcare sector are going down, according to a report that studied 1,1150 facilities in 11 states.

Aon Risk Solutions’ Health Care Workers’ Compensation Barometer report projects that workers’ compensation loss rates and frequency in the sector will decrease by one percent annually. Frequency of workers’ compensation claims has been consistently decreasing at the same level for 10 years, the report said.

Workers’ compensation claim severity, however, has been slowly increasing at a rate of two percent per year.

Survey data highlighting specific concerns and issues within the healthcare industry highlighted patient management, including handling and lifting, as the number one concern of risk managers. Patient management accounts for one-third of all claims and has the highest average indemnity payout of all causes of loss.

“Patient handling is clearly a leading concern in the healthcare industry; however, risks associated with emerging outbreaks like Ebola are driving new conversations in the boardroom,” said Barry Weiner, managing director and National Senior Care Practice leader.

Weiner said that risks, such as materials handling, used to be a small average indemnity paid relative to other causes of loss but the frequency of these types of claims appears to be on the rise.

Other findings from Aon’s report include:

  • 90 percent of survey respondents have a return-to-work program but only 65 percent have metrics in place to test the effectiveness of the program.
  • 95 percent of survey respondents have a formal safety committee.
  • 17 percent of survey respondents have a safety incentive program in place.
  • For the 2015 accident year, Aon projects that healthcare facilities will experience an annual loss rate of $0.75 per $100 of payroll. This projection applies at the countrywide level and is made assuming a $500,000 per occurrence limit.
  • Home health care aide, as an occupation, has the highest average indemnity cost among workers’ compensation claims. This is potentially due to patient management.
  • Among the 11 states profiled within the report, California ($2.18) has the highest projected loss rate for 2015; Tennessee ($0.48) has the lowest projected loss rate for 2015.

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