Claims Data Key to Finding and Reducing Workers’ Comp Cost Drivers

Harnessing workers’ comp claims data is the key to finding areas to decrease costs. A white paper released earlier this year by Advisen and sponsored by The Hartford, highlighted areas in workers’ compensation claims that could benefit from cost containment. These include employee tenure, using prescription painkillers to treat chronic pain and obesity. The report noted that claims data revealed these additional risks can drive up workers’ compensation costs significantly.

The report noted that medical costs account for more than 60 percent of total claim costs. According to the white paper, while claim frequency distinctions between older and younger workers have disappeared a new distinction has emerged – employee tenure.

The white paper cited a study by the National Council on Compensation Insurance (NCCI) that found that greater severity was the primary driver for older workers’ higher claims costs. This is likely due to medical issues other than the injury that arise with age.

“As people age, their ability to heal changes, since they have more co-morbidity issues,” such as diabetes, excessive weight, hypertension and coronary disease, said Robert E. Bonner, MD, MPH, vice president-medical practices and medical director at The Hartford.

The report, Mining Workers’ Compensation Data Nets Valuable Cost-Control Gems, states that the employee tenure risk can be mitigated with appropriate safety training and engineering changes in the workplace.

Another area where cost reductions can be made is in the treatment of chronic pain with prescription painkillers. The NCCI reported that narcotics accounted for 25 percent of drug costs associated with a workers’ compensation claim. Besides the risk of a deadly overdose there are side effects, of which there can be many.

Little Reduction in Long Term Opioid Use in Most States

Bonner cited common side effects in the report which include suppressed respiration, constipation, sexual dysfunction, depression, anxiety, sleep apnea and nausea.

“Often, doctors then have to prescribe additional drugs to deal with those side effects,” Bonner said.

In addition, the report noted that because most opioids cause drowsiness a stimulant is also typically prescribed.

“What happens is that people on opioids are taking two or three other medications just to deal with the side effects of the opioids,” said managed care expert Joseph Paduda, a principal with Health Strategy Associates, whose comments were included in The Hartford’s report.

The longer opioids are used as painkillers the greater the likelihood the patient will become more sensitive to pain. This leads to more use, according to Paduda.

The white paper suggests that the opioid problem can be addressed by carriers partnering with employers to use physicians that know the best practices for managing chronic pain. In addition, cognitive behavioral therapy may be helpful to the claimant, the report suggested.

Nearly half of the states have also developed programs to stem opioid abuse.

Longer workers’ compensation claims have also been linked to obesity, according to a 2013 NCCI study. The study found that the duration of temporary total and permanent total indemnity benefits for obese claimants was five times longer than for non-obese claimants.

Weighing the Obesity Factor in Workers’ Compensation

The report suggested that carriers can educate employers on programs that can be implemented to encourage a healthy weight.