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Medical Services by Size of Claim (PDF)
It is well known that large workers compensation (WC) claims have a different makeup of medical services than small claims. To a large degree, this is common sense—without reviewing data, we know that complex surgery is not a significant cost component for small claims because the existence of complex surgery already pushes the claim size over some threshold. But, knowing the distribution of services by size of claim can help explain claim costs, and may have implications for future cost trends. With medical costs about 60 percent of WC claims costs and growing, it is useful to look into sources of this growth.
This research paper presents estimates of the shares of ultimate medical costs for a variety of service categories. We explore possible implications for differing trends by claim size.
- The mix of services differs between small and large claims
- Office Visits and Emergency Services dominate the smaller claims
- Surgery and Anesthesia are a larger share of the $5,000 to $100,000 claims than of other claim sizes
- Hospital Services and Prescription Drugs comprise more than 50 percent of the cost of claims that are greater than $100,000
- The varying mix of services by claim size has implications for the payout rates by type of service
- Office Visits, Physical Therapy, and Emergency Services have relatively fast payout patterns
- Hospital Services and Prescription Drugs have relatively slow payout pattern
- Large claims might currently be subject to greater inflation than smaller