Executive Summary
New information on workers’ compensation claims in healthcare predicts that claims will drop in 2015. Most hospitals have a return-to-work program but don’t measure its effectiveness.
• The drop continues a trend from the past 10 years.
• Most hospitals don’t have a safety incentive program.
• Sixty percent of nurses worry that their job is negatively affecting their health.
There’s good news if the cost of workers’ comp claims has been a problem at your hospital. The latest outlook calls for claims to decrease this year, which continues a trend over the past decade.
The second Health Care Workers Compensation Barometer report from Aon Risk Solutions in Atlanta explores trends in frequency, severity, and overall loss rates related to workers’ compensation for about 1,150 U.S. healthcare facilities. The 2014 report projects workers’ compensation loss rates will continue to decrease 1% annually.
The report also shows frequency of workers’ compensation claims has been slowly and consistently decreasing over the past decade at the same 1% level, while claim severity has been slowly increasing at a rate of 2% per year, says Martha Bronson, ASA, MAAA, associate director and actuary in Aon Risk Solutions’ Global Risk Consulting practice in Radnor, PA.
The report also analyzes survey data highlighting the specific concerns and issues that the healthcare industry faces. Patient management, including handling and lifting, has been identified as the number one concern by risk managers as it accounts for one-third of all claims and has the highest average indemnity payment out of all causes of loss.
Patient handling is still the biggest concern for risk managers when it comes to workers’ comp claims, Bronson says.
“Across the board, frequency is going down, and that’s a positive for risk managers,” Bronson says. “Severity is either holding steady or rising slightly in some states, but I think that’s mainly because of inflation, the cost of care going up.”
The decline in frequency might be attributed to a better awareness that patient handling is a risk to employees, Bronson says. More hospitals are making use of safety committees and utilizing lifting devices and other strategies for reducing the risk from patient handling, she says.
Other noteworthy key findings from Aon’s report include:
• Ninety percent of survey respondents have a return-to-work program, but only 65% have metrics in place to test the effectiveness of the program.
• Ninety-five percent of survey respondents have a formal safety committee.
• Seventeen percent of survey respondents have a safety incentive program in place.
• For the 2015 accident year, Aon projects that healthcare facilities will experience an annual loss rate of $0.75 per $100 of payroll. This projection applies at the country-wide level and is made assuming a $500,000 per occurrence limit.
• Among the 11 states profiled within the report, California has the highest projected loss rate for 2015 at $2.18. Tennessee has the lowest projected loss rate for 2015 at $0.48.
• Home healthcare aides have the highest average indemnity cost among healthcare-related workers’ compensation claims.
In addition to survey data, the 2014 report examines other workers’ compensation trends in the healthcare industry, including claim frequency and severity by department and occupation. For the first time, the report analyzes the department and occupation fields within claim data to measure the relative frequency and severity of claims by department and occupation, separately.
The report also examines historical trends by state, providing statistical information on historical frequency, severity, and overall loss rates specific to 11 states: California, Florida, Kentucky, Maryland, Missouri, New Jersey, New York, Pennsylvania, South Carolina, Tennessee, and Virginia. (The full report is available online at http://bit.ly/1CeyS2N. You must provide contact information to gain access.)
Martha Bronson, ASA, MAAA, Associate Director and Actuary, Aon Risk Solutions, Global Risk Consulting Practice, Radnor, PA. Telephone: (615) 881-2679. Email: [email protected].
