In an article at PropertyCasualty360.com, Kimberly George, a senior VP at Memphis-based Sedgwick Claims Management Services and Mark Walls, VP with St. Louis-based alternative risk funder Safety National, discussed some of the trends that the worker’s compensation industry should be aware of in the coming year. Among the highlights:
1. State-level elections: During the past few weeks, most of the political focus has been on the presidential election and the somewhat surprising victory of President-elect Donald Trump. But the many state-level elections could have a bigger impact on the workers’ compensation industry. State insurance commissioners are elected in 11 states and appointed in the remaining 39. The elections of both those state insurance commissioners and the governors who appoint them can have a significant impact on policies, procedures and enforcement regarding workers’ compensation.
2. Federal involvement: There’s some concern that the workers’ compensation industry could see increased federal involvement in the state systems. To a certain extent, that’s already the case: The Occupational Health and Safety Administration (OSHA) has an impact on workers’ compensation, and laws involving Medicare Secondary Payer Compliance also affect the system. But recent criticisms of workers’ compensation have focused on the sometimes large differences in benefits between the various states, and there’s a chance – even in a Republican-controlled White House and Congress – that the federal government will advise minimum benefit recommendations to the states at some point.
3. Drug pricing: The rising price of prescription drugs gained a lot of media attention in 2016, from pharmaceutical executive Martin Shkreli’s plan to dramatically raise the price of the drug Daraprim by a factor of 56 to the company Mylan announcing plans to increase the price of a pair of EpiPens from about $100 to more than $500. Even in less newsworthy cases, prescription drug prices increased by 10 percent in the past year, and that trend is expected to continue, having an effect on the cost of worker’s compensation claims.
The workers’ compensation industry is influenced by myriad factors, from the rising cost of medical treatment to ever-changing legislation. Companies involved in this field must keep aware of trends if they intend to succeed. What’s more, they must investigate the benefits of outsourcing their workers’ compensation processing in order to remain compliant, stay competitive and allow their own employees to focus on the company’s core competencies.