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Insights
Medical Cost Trends—What's in the Mix?
Medical Cost Trends—What's in the Mix?
NCCI Page Content Two
InsightsAIS 2024 Highlights ReportMedical Cost Trends—What's in the Mix?

By NCCI InsightsMay 14, 2024
 
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Page Content

Medical Cost Trends—What's in the Mix?

Raji H. Chadarevian
Executive Director—Actuarial Research, NCCI
Jon Sinclair, FCAS, MAAA
Director and Actuary, NCCI

Medical cost trends continue to be a top concern for the industry. Less dependence on opioids, more pain management injections, or fewer surgeries may all be pieces to the bigger puzzle. In this session, NCCI experts revealed the components that drive utilization of hospital stays and ever-changing prescribing trends.

Quote 
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Key Insights

  • Net of high-cost stays, hospital inpatient paid cost per claim has been growing at a moderate rate of 1.6% per year since 2012.
  • To understand inpatient trends, we have created a WC inpatient utilization measure based on
    • the medical condition,
    • the type of stay, and
    • the number and type of days in a stay.
  • Drivers of annual inpatient trends include:
    • Fewer but longer stays per claim, resulting in a decrease of 2% in inpatient utilization,
    • A shift of some major surgeries from inpatient to outpatient settings, and
    • An increase of 4% in the price per stay.
  • Pharmacy costs are down 2.5% a year, driven by changing prescribing patterns, affecting future medical estimates and ultimate claim costs.

Related Materials

  • Medical Cost Trends—What's in the Mix? (PDF)

Medical Cost Trends—What's in the Mix? Video

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Raji H. Chadarevian
Executive Director—Actuarial Research

With over 30 years of experience in insurance, Raji Chadarevian currently leads a team of research actuaries and experts to provide Thought Leadership in workers compensation. Prior to this, he led the Medical Regulations and Informatics team at NCCI, making him NCCI’s primary actuarial expert on matters relating to medical data and workers compensation health informatics. Prior to 2012, he was responsible for several state rate filings in the western region.

Chadarevian is the principal author of “How Is Medical Inflation Measured? And Why Should I Care?” and “Killer Pain Relief: Opioids in Workers Compensation.” He is the principal author of “Gen Rx-The Next Generation of Medicine,” which he presented at NCCI’s virtual Annual Issues Symposium in 2020. Most recently, he authored articles on COVID-19’s impact on medical treatment and medical inflation in workers compensation.

Chadarevian received a bachelor of science in mathematics from the University of Southern California in Los Angeles. He is the recipient of the 2020 IAIABC Award of Merit.

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Jon Sinclair, FCAS, MAAA
Director & Actuary

Director & Actuary Jon Sinclair joined NCCI in 2018. He currently leads the Medical Data and Analysis focus area.

Prior to joining NCCI, he worked in reinsurance pricing at Aon plc for five years. Sinclair earned his BS degree in mathematics from the University of Central Florida. He is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries.

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