A few weeks ago, I sat through an hour-long webinar on mega claims where medical care, costs, variation, location, provider type and trends in health system consolidation and its impact were completely ignored.

Joe Paduda

I hasten to add I am not finding fault with the researchers, who were focusing on topics of interest to their funders.

An hour of hearing really smart and articulate actuaries discussing methodology, body part, cause of injury, industry, premium size— pretty much every other factor except the phase of the moon — which I might have missed because I was tearing my hair out.

None of which provide any meaningful insights on how to mitigate, plan for, manage or otherwise better control huge dollar claims.

There was no discussion of:

• Rising facility costs.
• The hugely disproportionate consumption of pharmaceuticals for claims older than five years.
• Any changes in the impact of opioids on mega claims, as the industry has greatly limited the inappropriate use of those drugs.
• The impact of fee schedules.
• Increasingly ineffective provider networks.
• Employer direction.
• Use of specialty medical facilities.
• Durable medical equipment.
• The role of risk transfer/value-based care approaches.
• Anything medical-related.

Oh, there was one (very brief) statement by a researcher to the effect that medical is the most important driver of severity (total cost).

So, the team knew medical was the key driver but completely ignored it.

I did submit a question asking about medical as a factor, which was not addressed by any of the researchers. After the event, I asked why medical was absent. I was told medical was “out of scope.”

How can the most important driver of these claims — the one most readily affected by employers and insurers — be out of scope, and a bunch of tangential-at-best things be in scope?

Because the National Council on Compensation Insurance's constituents don’t get that medical drives everything.

I am not squawking about the researchers or presenters, but rather about the folks who decided this was a great way to spend time and brain power. While the findings may be of some interest somewhere to someone, I’m not going out on a limb to argue that a study focused on medical drivers of cat claims would be a heckuva lot more useful to injured workers, employers and taxpayers — and NCCI’s customers.

So let’s recap.

• Mega claims are getting more prevalent and more expensive.
• Researchers know medical is the key driver.
• The industry is paying zero attention to the primary driver of increasing frequency and cost of cat claims.

What does this mean for you?

Mega claims are more prevalent and more expensive because the industry doesn’t understand what drives cost.

Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.