As a nation, we spent $3.65 trillion on healthcare in 2018, which is approximately equal to the entire combined economies of Canada and Spain.1 And healthcare spending is expected to grow an average of 5.5% per year from 2018 to 2027,2 eventually accounting for 19.4% of the American GDP.3
Healthcare spending has also risen steadily in workers’ comp as well and is now approaching 70% of total claims costs.4 So it did not come as a surprise that rising medical expenses was the number one challenge cited by workers’ comp industry stakeholders in a recent survey conducted by Healthesystems and Risk & Insurance magazine. In fact, all of the top five greatest challenges cited were related to costs, with the subsequent four – comorbidities and worker health, opioids/substance abuse, the growth of complex claims, and mental health exposures – direct contributors to higher medical costs, as demonstrated by the following examples:
Interestingly, claims professionals, one of several stakeholder groups whose responses were tracked separately in our 2019 Industry Survey results, did not cite rising medical costs as the number one challenge, expressing greater concern for the individual factors that contribute to those costs. This is likely because they face these challenges every day and, unlike physician fees, hospital rates, and drug prices, these cost drivers can be positively affected by claims professionals and case managers using best practices, such as:
Careful claim management focused on health outcomes can reduce return‐to‐work time by as much as 42%9 and, even more importantly, restore the well‐being of individual patients. Unlike physician fees, hospital rates and drug prices, patient health – arguably the biggest cost driver of all – can be positively affected by meticulous management from the claims team.
For deeper analysis and clinical insights on best practices, please see: healthesystems.com/better-resources