Although only a small piece of the total U.S. medical costs paid out annually in the U.S., the medical expense component represents roughly 60% of the total benefit payout by Workers Compensation (WC) Insurance systems. In addition, the annual trends in WC medical expense costs have been growing at rates well above the annual rates reported for total U.S. medical expense costs. What makes this a compelling issue is the fact that WC insurance is the largest line of P&C insurance in terms of premium volume and liability reserves in the US. Addressing the primary components driving these trends today may well prevent a collapse of the entire U.S. WC system tomorrow.
In this session, the presenters will be broadening our perspective on WC medical costs by making comparisons to general healthcare insurance data. They will explore differences and similarities in the utilization and price of medical services within the WC and Healthcare Insurance systems. With improved understanding of the primary inflationary factors underlying the medical component, actuaries will be better equipped to understand and adjust to the ever-changing dynamics of the U.S. Workers Compensation Insurance system.