WCIRB Long Tail Medical Expenses – 30 Year Study
The WCIRB Long Tail Medical Expenses Study was one of the better studies I have seen from them over the years. The WCIRB of course, is Workers Compensation Insurance Rating Bureau- California’s Workers Comp Rating Bureau.
The study covered 30 years of claims tail data. Yes, that is right, thirty years. I often have discussion with actuaries concerning overvaluing the current data by using such studies as loss triangles, etc. I am a fan of very long data tails as history repeats itself, even in the WC world.
The study can be found here. Please note it is a .PDF file. Kudos are appropriate for the Medical Analytics Director (Dr. Gregory Johnson) and his staff.
The study provided a data in 14 pages. This is one of the studies that I recommend reading completely if you are interested in Workers Comp data.
The main discovery is that in the area of Workers Comp medical expenses, California does not operate in a vacuum. In fact, one of the major findings in the study and report is the similarities between NCCI (National Council on Compensation Insurance) and the WCIRB.
NCCI analyzes data on approximately 40 states- sometimes even if the state has its own independent bureau. I found it interesting, yet ingenious that the WCIRB would compare their data one-on-one with NCCI.
One hot topic now, of course, is the use or abuse of opioids. The chart on page 12 of the study compares opioid use between California and the NCCI states as measured in RX payments.
The similarities were almost unanimous except for:
- California had a much higher use of Lidoderm 3.8% to 2.5% of NCCI prescription payments
- The NCCI states had a much higher use of Hydrocodone 4.2% to 2.0%
- California had a much higher use of Percocet and generic Percocet (Oxycodone) 4.3% to 1.9%
The Hydrocodone/Percocet(Oxycodone) percentages almost offset each other exactly.
Two interesting conclusions drawn by the study were:
- California medical treatment persists much longer than in NCCI states. One astounding part of this conclusion is that claims are reported long after the date of accident or illness. Risk Managers should be all over this statistic.
- The three to six year period of the claims being open is critical in developing the long tail medical treatment claims. After six years, the claims shift from acute treatment to long-term care for aging processes.
There was no much more info in the study that I did not cover due to length.
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