Does the Workers' Compensation System Need a Prescription Change?
The delivery of medical benefits to injured workers is becoming more costly and difficult to administer. The medical care costs in workers' compensation claims are now increasing at double-digit rates. Overall, in excess of one-quarter of all dollars that Americans spend go to medical care. Emerging factors that were not existent in 1911 now influence the workers' compensation program: an aging national population; a shifting workforce; the increased use of prescription drugs; lack of affordable group health insurance and unreliable economic investments due to a politically unstable world; deregulation of insurance carriers; the decline of a manufacturing base; and an increased Federal effort to recoup benefits . The manner and method of the diagnosis, treatment and cure of diseases have change dramatically. Recent research indicates that many medical conditions do not the result from a single contributing cause, but as a consequence of a multitude of risk factors, making it difficult
Cost of Medical Benefits Continue to Soar in Workers Compensation
Medical benefits continue to soar in the workers compensation arena. They constitute the largest and most significant factor in the payment of workers' compensation claims. At a recent meeting of NCCI Holdings Inc. it was announced that data reflects a huge increase in the medical component.
What is significant is that medical now comprises 59% of the benefit dollar reflected in 2007 projections. The total indemnity in 2007 amounts to only 41% of the benefit dollar. In 1997 medical comprise 53% of the benefit dollar and in 1987. It comprised only 46% of the benefit dollar. This is a significant increase in a critical trend in the payment of workers' compensation benefits.
Workers compensation medical cost trends reflect a 6% increase in 2007. While this change is lower than the increase of 2006 which was 8.6%. The overall expenditures are increasing. Medical severity remains growing at a faster rate than the medical cost per loss-time claim.
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Now that Barack Obama is a going to be at the helm of the US, greater attention is being focused on the need for a national health care system incorporating workers’ compensation medical coverage. With private insurance companies failing, unemployment increasing, the cost of medical care soaring, more attention has now been placed on the elimination of medical care as a workers’ compensation benefit paid by Industry.
It is not all surprising that Dr. Peter Barth reported to the WCRI Conference in Boston, that workers’ compensation programs may be swept up into a national health care system. He reminds us that this was attempted in the Clinton proposal. The enactment of such a proposal looks even more urgent now.
The medical system overall is now being stressed by: an aging workforce; medical conditions manifested by stress and aging; consumerism in health care; the attempt to shift costs from major medical plans and CMS to workers’ compensation; new and expensive treatment modalities, procedures and pharmaceutical products,and the expansion of palliative and “end of life care.” It is anticipated that the average cost may amount to $500.000 per claim.
The workers’ compensation system just can’t deliver medical treatment quickly and cheaply enough. The systems are frough with administrative costs delay. It is adversarial requiring legal timetables of investigation, litigation, adjudication and appeals. The progress of disease is not subject to court rules or judicial administration. Immediate and emergent medical treatment protocols follow a biological timetable not a legal one.
National health reform that embodies workers’ compensation as an element is a long awaiting solution to coordinate and advance the delivery of health care to all Americans. Old, inefficient and archaic systems need to be abandoned if progress is to advance. Moving forward to the inclusion of workers' compensation into a universal and nationalized program for health care is an important and innovative change. The change is critical necessary to advance with science, the economy and the social structure of America.