The Workers Comp Claims Explosion Due To Learning Curve
Will a workers comp claims explosion occur in the next few years? The economy is going to eventually recover from its recent lows. If there is a very quick rebound, insurance carriers, TPA’s, employers, and any type of insurance personnel must be prepared for an explosive increase in the number of claims.I often do phone consulting for investment groups examining Workers Comp vendors from TPA’s to translation services. One of the questions I am often asked is there anything out there that would turn the claims industry upside down.
The Learning Curve will be the bane of many Workers Comp insurance personnel and any employer that is large enough to have an Experience Rating (E-Mod or X-Mod). We have all heard of the studies that almost 90% of accidents occur the first time a person is using a new tool or machine. This number can be proven very easily using the learning curve.
I coined a term a number of years ago when I was working a claims desk. The number of accidents right after a hurricane spiked heavily in the construction industries. The investigation of almost all the claims showed a discernible trend. Due to such a heavy increase in demand for construction workers, there were many new unskilled workers on the job. I saw many power tool incidents. I called it the “Hurricane Syndrome.”The true formula for the learning curve is here. If you look at the graph on the page, you can see that it takes someone much longer to do a task than when the workers gains experience. OSHA does a great job of forecasting injury rates over 200,000 work hours. However, I do not see a study from OSHA on time the worker spent on the job before the accident.
The learning curve does not always apply to workers trying out a tool or machine for the first time. Workers that experience long standing layoffs will be much more likely to have accidents as they may not have used certain machines or tools for months or possibly years.
My advice for insurers/TPA’s is to heavily staff their claim departments when signs of the recovery become obvious. The learning curve has been tested since the 1800’s and was studied heavily by NASA starting in the 1930’s. The spike in injuries is not a theory. It is a proven fact.
Employers will need to be ever vigilant in reporting their claims and following up with their WC adjusting staff. Providing your insurance carrier of TPA with the First Reports of Injury in a timely manner will be very critical.
If anyone can locate the study on the exact % of injuries when someone uses a machine or tool for the first time, please email me the link and I will insert in this post. Thanks.
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