- Kelly Johnson
- Staff Writer and Social-Media Strategist – Sacramento Business Journal
The recession has touched everything, including the cost of workers’ compensation claims.
The faster growth of workers’ comp costs per claim in California after 2007 may be partly due to the recession, according to a new study.
The Workers Compensation Research Institute Workers Compensation Research Institute Latest from The Business Journals Workers’ comp claim costs increased in Florida, study showsWorkers comp claims in Texas riseWorkers comp claims in Texas rise Follow this company , a nonprofit in Cambridge, Mass., reported this week that the economic woes contributed to indemnity costs per claim growing faster from 2007 to 2009 than in prior years.
Indemnity claims are payments for lost wages, loss of earning capacity and permanent impairment or disability.
Between 2002 and 2005, California’s indemnity costs per claim dropped nearly 30 percent as a result of systemwide reforms. But costs per claim rose at an annual rate of 7 percent between 2007 and 2009, the organization noted.
“This growth in indemnity costs per claim was faster than the average growth rate from 2005 to 2007, and indicated some impact of the recession in California,” a news release said.
The average weekly wage of California workers injured on the job didn’t change much between 2007 and 2009 as wage growth declined, the study found. In prior years, the growth rate was 4 percent.
Meanwhile, “the average duration of temporary disability benefits increased by nearly one week per year, likely indicating the slower return to work because there were fewer jobs available,” the news release said.
California also experienced a swift rise in medical payments per claim to injured workers after 2005, after previous large decreases. The amount after 2005 was 8 percent a year for claims in which workers lost more than seven days of work, the study found.
“Recent growth in medical payments per claim stemmed from multiple factors, including an increase in prices paid for office visits due to a fee schedule increase; growth in payments per service for facilities associated with surgical procedures; more complex office visits with higher prices billed more frequently; and moderate increases in services per visit for physical medicine,” the release said.
“Medical-related expenses per claim,” the release said, “also grew continuously over the study period, including the average medical cost containment expense per claim and the average medical-legal expense per claim.”
Kelly Johnson covers retail, sports, insurance, education, nonprofits, manufacturing, social media, international trade, distributors/wholesalers and disability access for the Sacramento Business Journal.