Two mostly-ignored things will have way more impact on workers’ comp than any other 10 factors.
And as usual, workers’ comp is out to lunch. Let’s quickly review the work comp industry’s failure to understand reality.
When COVID hit, the workers’ comp industry’s caterwauling and catastrophizing hit epic levels, mostly driven by:
That led to far too much angst and far too little reality-based planning by the workers’ comp industry.
Fast forward to today, when the opposite is happening.
The industry is blithely ignoring the impact that heat will have on claims, loss ratios, combined ratios and claim duration, and the impact that infrastructure investment will have on premiums and claims.
The massive and seemingly endless heatwave in multiple states is affecting restaurant workers, agricultural workers, folks in logistics and manufacturing.
Sure, there’s heat exhaustion and heat stroke and heat prostration (which costs about $38,000 per claim). But that’s the (forgive the analogy) tip of the iceberg.
Excessive heat also creates more injuries of all types; injuries to cherry harvesters in Washington state increase by 1.5% for every 1 degree Celsius above 25 (77 degrees Fahrenheit), mostly from falling off ladders.
Oh, and California data shows that compared to days with temperatures in the 60s, on days when the temperature was between 85-90 degrees Fahrenheit, the overall risk of ALL types of workplace injuries was 5% to 7% percent higher. When temps topped 100 degrees, the overall risk of injuries was 10% to 15% greater.
This means more claims in an industry that is generally unprepared to “manage” heat-related claims.
Hundreds of billions of dollars are flowing into infrastructure, an investment that has already created 90,000 jobs in construction; transportation improvements; highway, bridge and road maintenance and replacement; and heavy industry.
And many more jobs are on the way (check out where this is happening here).
These are very well-paying, high-frequency and high-severity jobs.
This means premiums will increase, as will claims and claims costs. And this will continue for years.
What does this mean for you?
At the risk of belaboring the obvious, a more dangerous environment for many more workers in already high-risk jobs.
Heat jobs = more premium dollars, higher costs for self-insureds, more claims and higher severity claims.
Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.