Younger Workers Med Costs Higher Than Older Workers in Longtail Workers’ Comp Claims

For services incurred between 20 and 30 years after an injury, the average annual workers’ compensation medical payments for claimants younger than 60 were greater than for those older than 60 at the time of treatment, according to findings of a recent National Council on Compensation Insurance study.

According to David Colón, the report author, the number of services per claim, mix of injuries along with the narcotics prescribed contribute to the differences in treatment cost.

The study, The Impact of Claimant Age on Late-Term Medical Costs, examined medical services for workers’ compensation injuries occurring between 1983 and 1990 provided in 2011 and 2012.

California, Texas, Michigan, Wyoming and Washington were not included in the study since these states have independent bureaus that handle research.

Colón said he found the research findings “quite intuitive”. That’s because costs for long tail workers’ compensation claims tend to be more expensive for older claimants.

The differences in costs between younger and older claimants can be attributed to the number of medical services and average price paid for services, the types of injuries involved and the types of narcotic painkillers prescribed.

He said treatment services were broken into categories: prescription, facility, surgery, general medical and all other.

The mix of injuries is a factor because some workers may end up as a paraplegic or quadriplegic. As a result, life expectancy is noted to be shorter when there is a spinal cord injury involved.

The survey revealed that drug costs increased as claimants aged.
Additional key findings include:

• The average annual late-term medical cost per claim generally decreases gradually with increasing claimant age.
• The number of services per claim is a larger contributor to age-related annual late-term medical cost differences than is cost per service.
• Average annual late-term medical costs per claim are about 60 percent higher for claimants born after 1950 than for older claimants. About 80 percent of this difference is explained by:

– The mix of injuries being treated and, in particular, differences in the share of quadriplegic and paraplegic claims. This explains approximately 60 percent of the difference.
– Use of prescription drugs and, in particular, differences in the use of narcotics. This explains approximately 20 percent of the difference.

Prescription drugs service category showed the greatest utilization difference between early and late term care. For medical services provided within 20 years of the date of injury, drug costs were about 10 percent of total medical costs, while for services provided 20 to 30 years after the date of injury, drug costs were about 40 percent of total medical costs. This difference might be at least partly explained by the general late-term-care emphasis on relieving pain rather than curing the condition/injury. narcotics share of drug costs generally decreases with claimant age

This report is a follow up to prior research that examined the characteristics of claims open for many years. During that process, Colón said they found that older workers’ claims cost less than younger workers. No future follow up research is planned at this time.