2012 Outlook by Peter Rousmaniere at Risk & Insurance
I think his article delivers a critical message in that with workers’ compensation insurers incurring losses and other expenses of about $1.20 per every dollar of premium, 2012 apparently needs to be year to take action to control costs. But instead of tackling the cost drivers, we’re already noticing that cost cutting has been initiated in many claims operations. With Medicare settlements and opioid use being identified as two of the most significant developments in 2011, reducing staff is not the way to resolve those problems. Historically when this happens, we see that experienced staff is lost and those that remain end up with significantly increased case loads, not leaving them the time to address issues in their claims such as run amuck treatment and excessive opioid use. If those expenses are not addressed and controlled during the life of the claim, when it comes time to attempt to settle it, you end up financing outrageous MSAs. People rarely understand that CMS bases MSAs purely on historical data so excessive MSAs are a direct reflection in many cases of poor claim management. But given that physicians are more to blame for this problem that overworked claims administrators, hopefully 2012 will also bring us new trends in the treatment of pain that does not involve merely drugging the mind into temporarily ignoring the problem.