Late on Friday the true work comp nerds stuck around for the research workshop, while the smarter NCCI attendees headed home or hit the golf course.
Barry Lipton led off with the latest info on NCCI’s research into temporary total disability. Duration has been increasing significantly over the last 6 years, driven by the recession. Duration increases moderating over the last couple years, likely due to small claims coming back into the system and the improvement in employment.
One of the primary drivers is…SURPRISE our old nemesis, opioids.
The duration of claims with opioids is 50% longer, with some claims seeing disability duration twice as long when case mix adjusted. Opioids were defined as schedule II drugs plus tramadol. Liberty Medical Director David Deitz raised the point that looking at diagnoses and the potential impact of opioids on changes in diagnosis or severity may be helpful in assessing impact.
The next update was on the impact of comorbidities on cost. The work done by NCCI was enlightening. 4% of all claims (MO and LT) between 2000 – 09 had treatments, paid for by workers comp, for comorbidities, with hypertension the most common. These claims cost twice as much as those without comorbidities.
For those hoping health reform is overturned, remember over a quarter of the working age population in Texas and Florida is without health insurance…if reform sticks, many more of these folks will have coverage, and work comp won’t have to pay for these comorbid treatments.
Drug abuse was the second most common diagnosis followed by diabetes and chronic pulmonary issues; about 2/3 of comorbid claimants are male, with a much higher percentage of males diagnosed for drug abuse.
The vast majority of treatment for drug abuse is hospital-bsaed, unlike all other comorbid conditions.
The cost of claims with comorbidities is, not surprisingly higher. When case mix adjusted, comorbid claims cost twice as much as those without comorbid treatments. The audience raise a number of questions and brought up a number of points many of which will be factored into future research by NCCI.
And that wraps it up. Overall, an excellent conference, and no, I wasn’t able to make Peggy Noonan’s talk. Alas.

This was the tenth year NCCI Chief Actuary Dennis Mealy gave the State of the Line presentation (I’ll post the link when it’s available).
Claim frequency – on an adjusted basis – was down slightly (a single point). This continues a long term downward trend (interrupted last year by a big bump up, likely driven by employment factors) but the rate of decline may be flattening out.
Total premiums jumped 7.4%, and when state funds are included, premiums were $36.3 billion, down from a high of $47.8 in 2005. The increase was driven by higher payroll and audit results (insurers audit payroll to make sure employers are accurately reporting their employee count and payroll).
Mealy noted that data from Goldman Sachs indicates prices are firming; a survey of agents had over three-quarters of respondents indicating prices were increasing, with 11.5% reporting prices up more than 11%. These were markedly different from results from the 2011 and 2010 surveys. These trends indicate premiums will continue to grow in 2012.
If and when manufacturing and construction employment increases substantially, we’ll almost certainly see premiums rise even more. For now, employment in both sectors is still way under pre-recession levels, although manufacturing is recovering somewhat.
The calendar year combined ratio deteriorated; while the 115 stayed the same, three points of last year’s 115 number was driven by big additions to reserves from a single payer. When you remove that “outlier”, it is clear results have deteriorated.
Accident year losses were a touch lower at 114.
Reserve deficiency isn’t much of an issue as the ‘real’ deficit about half of the reported $11 billion due to accounting practices.
Medical cost per claim was up four points, with total spend (in NCCI states, including state funds) hitting $28 billion. (note California is not included)
Break time…