Workers Compensation Predictive Modeling
One of the more popular buzz phrases now is Workers Compensation predictive modeling. If one looks at any of the WC groups on LinkedIn, there are many discussions on this very matter.
There are many predictive models on WC. Those models usually leave the observer with an empty feeling. Yes, you can forecast the Indemnity and Expenses almost to the penny. There are many modeling programs that will suffice in this case.
The inherent problem is valuing and forecasting medical benefits on any file. A health profile and background of the injured employee may shed some light on the subject. However, we are all very genetically unique individuals.
A ruptured spinal disc can vary in treatment from two months to two years or longer.Predictive modeling requires some sort of stability in the variables. As any adjuster will tell you, it is hellish to try to predict medical treatment at the outset of the file. There are medical outcome determining factors that are not known for many months.Workers compensation claims adjusters walk a very fine line with medical forecasting. Sixty days into the file development, the adjuster is supposed to make a medical reserve determination for the life of the file. This is not possible. Reserving files is an art, not a science. We analyze many reserves on files on a daily basis. Reviewing reserves is a complete exercise of hindsight which is usually 20-20. Discussing what reserves were placed on a file one or two years ago is an easy task. The reverse of discussing what the reserves should be on a file in one or two years is difficult at best.Communicating with the claims adjusters about the status of an employee can reap large dividends, but as they happen, not three months later. Emails work best for claims departments.
Bottom line – a well-trained experienced adjuster is the best predictive modeler in Workers Compensation.
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