ORLANDO, FLA–The medical cost of individual workers' compensation claims is being driven upward by increased use of prescription drugs and the proliferation of expensive treatments by healthcare providers, experts told an industry conference here yesterday.
That analysis by staff of the National Council on Compensation Insurance was presented here at the organization's Annual Issues Symposium.
The research findings were discussed by Barry Lipton, NCCI senior actuary-practice leader, and Harry Shuford, NCCI chief economist.
Mr. Lipton offered some positive news, saying there are some signs that the prescription drug share of medical costs is leveling off.
Outlining the trends in drug costs, Mr. Lipton said mature comp claims medical expenses are dominated by prescription drug costs. "This is a longer part of a long tail business," he explained.
He displayed graphs showing that the utilization of drugs had a 10-times-or-greater impact on cost than drug prices.
Highest costs among states for medication were in California and Texas, according to NCCI.
Mr. Lipton said that in 2005, the most-prescribed drugs by amount paid were pain killers, nervous system drugs, muscle relaxants and anti-inflammatory medicines.
The top five in that year were the generic pain killer Hydrocodone/Acetaminophen; followed by Gabapentin; Oxycontin; Carisoprodol; and Celebrex.
He noted that analgesic drug costs had dropped because Merck had withdrawn Vioxx, and Pfizer had suspended sales of Bextra and added warnings about use of Celebrex.
In haltering comp claim costs, "controlling the mix of drugs is key to controlling workers' compensation costs," he said.
Mr. Shuford discussed what he called a "slight drift to more expensive treatments."
The trend is that the number of treatments in all cases went up, he explained. According to NCCI, cases diagnosed with low medical severity have declined, while those rated mid-to-high severity have increased.
The economist said reasons for the increase included magnetic imaging resonance (MRI) supplanting cheaper x-ray technology, and an increase in surgeries due to the availability of less-invasive arthroscopic procedures, which patients are more willing to endure.
Mr. Shuford said the impact of a graying workforce filled with baby boomers was only a minor factor, with claimants' age accounting for a 6 percent increase in severity of claims.
According to NCCI, the number of treatments per claim increased in all injury categories. For the most frequently diagnosed injury–sprain of knee and leg– the number of treatments increased more than 80 percent.
Mr. Shuford said more research is underway to determine all the factors at work.
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