WCRI Conference Morning Day 1 –
Dr. Bob Hartwig – Inflation
Impact of Disruptions Caused by COVID-19 on Workers’ Compensation
The 1980s were much worse – Inflation 2022 13.5%
2022 -7.5% Inflation
Misery Index –
Two years on, the disruptive impacts of the COVID-19 pandemic continue to reverberate throughout the economy. What began as a public health crisis has morphed into a hydra of economic turmoil and public policy uncertainty on a global scale, with no easy or quick solutions in sight. This presentation will explore the myriad challenges facing the economy today—including enduring labor market dislocations, inflation, concerns over economic growth, and financial market volatility—and their impacts on the workers’ compensation line in 2022 and beyond.
The following are among the questions that will be addressed in this session:
- How has COVID-19 disrupted and changed U.S. labor markets?
- What is the impact of these disruptions on the workers’ compensation line?
- Where is the economy headed and what will be the impacts on workers’ compensation?

COVID-19 Disruptions and Workers Comp: Outline
Inflation Overview & Outlook
Drivers of Inflation: Goods, Services, Wages and Medical Care
Russian Invasion of Ukraine:
Potential Impacts for Insurers—Inflation, Recession & Beyond
Labor Markets: A Post-Pandemic Paradox
Economic Outlook & WC: Turbulent Times
P/C Industry Financial Performance and Growth
Does inflation impact industry profitability and growth?
Investment Market Issues
– Inflation-driven volatility
– Rising interest rates and a newly hawkish Fed
COVID and Workers Comp
The unemployment rate has recovered back to where we were previous to the COVID 19 outbreak.
17 – 25 old age group fastest to return to work after COVID 19.
The average Wage increased from $28.56 to $31.58 during the pandemic
2021 – 10% growth rate in wages
Great Resignation
The sharpest increase in COVID-era retirements is among 65 to 74-year-olds
Pandemic retirees are more likely to be older white college-educated from the Midwest

The Combined Ratio for Workers Comp showed this line of insurance was one of the most stable during the pandemic.
SUMMARY
- The P/C Insurance Industry Remains Strong, Stable, Sound and Secure
- The WC Line Remains Among the Best Performing of All P/C Lines
- Payroll exposure base already exceeds pre-Covid levels
- Labor Markets Remain Tight (3.8% unemployment rate in Feb. 2022)
- Rising WagesRising Indemnity Severities
- Millions of workers remain out of the labor force…Will they return?
- Surging Inflation Is Now the Greatest Threat Facing the Economy
- Inflationary pressures led by energy, commodities, goods; Services lag
- Geopolitical turmoil (Russia/Ukraine war) will add to pressure—oil leading the way
- Probability of a “Hard Landing” Growing (e.g., Recession)
- Higher Interest Rates Will Benefit Long-Tail Lines (e.g., WC)
Download this presentation at www.uscriskcenter.com
Effect of Provider Consolidation on Payments for Medical Care Provided to Workers with Injuries
Consolidation of medical providers has been a steady trend in the United States. Hospitals often merge to create a health system, while physicians are increasingly more likely to be working at practices that are owned by hospitals and health systems. While the forces shaping consolidation of medical providers are external to workers’ compensation, they can affect prices of medical services, quality of care, access to providers, treatment patterns, costs of care, as well as worker outcomes.
In the session, Dr. Bogdan Savych, WCRI author and policy analyst, will share preliminary findings from the study Effect of Provider Consolidation on Payments for Medical Care Provided to Workers with Injuries while addressing the following questions:
- What are the trends in the consolidation of medical providers who provide care to workers with injuries, and how do these trends differ across states?
- What are the implications of increasing consolidation for access to medical providers?
- What is the impact of increasing consolidation of medical providers on payments for workers’ compensation medical care?
In 2012 44% of Primary Physicians were operating in a clinic
In 2018 45% of Primary Physicians were operating as part of a health system
Gradual switch from clinical operations to operating in a health system between 2012 – 2018
Orthopedics switched from 41% at a clinic to 33% as part of a hospital system
More than 50% of Primary Care physicians see less than 3 Workers Comp patients in a 3 year period
More than 1/3 of Orthopedic physicians have seen more than 30 Workers Comp patients in a 3 year period
Vertical integration increased payments per group of similar services by 14%
Vertical integration increased payment for the day of care by 12%
Non-fee schedule states had higher payments than states with fee schedules during physician vertical integration
–Still a work-in-progress study by WCRI
Patterns and Outcomes of Chiropractic Care
Chiropractors often participate in the delivery of physical medicine services to workers with low back pain in many states. It is important to know how they are involved and the outcomes of the care they provide. This is one of several preliminary studies we will be sharing at our annual conference, giving attendees a first look. Join WCRI Economist Dongchun Wang as she shares preliminary findings from her 28-state study Patterns and Outcomes of Chiropractic Care, which will address the following questions:
- How often do workers with low back pain receive chiropractic care across states?
- What are some reasons for the substantial interstate variation in the use of chiropractic care?
- How are chiropractors involved in delivering care?
- How do costs and temporary disability duration compare between low back pain claims with exclusive chiropractic care and those with non-chiropractic physical medicine care?
Minnesota uses chiropractic care more than any other state in Workers’ Comp – Minnesota allows employee choice of physician.
Chiropractic care is considered part of physical medicine treatment
Difference between physical therapists and chiropractors – physical therapists formulate a treatment plan, using a diagnosis from a physician. Chiropractors formulate their own diagnosis and treatment plan.
States that have employer-controlled medical treatment had a lower amount of chiropractic care.
Minnesota ad almost 35% of workers comp injuries treated by chiropractors. 7% was the 28 state median.
Thirteen states had less than 5% of workers comp injuries with chiropractic care.
Overall provider patterns
71% did not involve chiropractors
17% mix between chiropractors and non-chiropractors
12% exclusively chiropractic treatment
Comparing Costs and TTD Duration
Chiropractic care is associated with a shorter length of TTD and lower medical costs than claims with other types of physical medicine – an interesting finding (preliminary only)
Question – Are Doctors’ costs and pharmacy fees figured into the physical medicine cost when compared to chiropractic care? Yes
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