New NCCI Workers Comp Medical Cost Discovery – One To Definitely Download and Read
A new NCCI Workers Comp medical cost discovery was met with a suspicious eye by me. Then again, the study, summary, and whitepaper came from the venerable organization. NCCI (National Compensation Council Inc) is headquartered in Boca Raton Florida. The NCCI rates approximately 40 states in one form or another.
The three medical cost inflation measures are:
- CPI – Consumer Price Index
- PPI- Producer Price Index
- PHC – Personal Health Care
Medical costs have long been a thorn in the side of many workers compensation programs. In the old days, the Indemnity Benefits dominated the payouts on workers comp claims. That day, however, has long since passed – sometime in the late 1990’s. Medical costs dominate the benefit payments. I see no end to this trend.
The measurement from the Bureau of Labor Statistics (BLS) and graphed by NCCI shadows Workers Comp costs very closely.
If one compares the two columns on the right, the similarities are very stark. From the summary and the whitepaper, I gathered that the main reasons for the similarities are:
- Utilization is measured more accurately
- Year over year estimates more accurately represent the changes in treatment and utilization
- The PHC consists of variables that come very close to Workers Comp
I may have over-generalized the comparisons. You may want to download the whitepaper provided by NCCI. Please see the above links.
According to NCCI , the stakeholders in the Workers Comp can benefit from using this new measurement –
- Carriers, TPA’s, Self Insured employers – can use to set reserves and to negotiate with medical providers
- Regulators – able to keep tabs on medical costs , better method of monitoring why medical costs need to change over time
- Employers – to see why loss costs change over time
- Employees – assist with providing proper access to WC medical care
If the NCCI workers comp medical cost measurements change in the near future, I will repost on the subject.
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