For lost-time claims, medical utilization grows as injured worker wages rise. This correlation persists across age groups, jurisdictions, industry groups, and even NCCI class codes within a particular industry group.
This is important because understanding the complex dynamic between medical utilization and demographic factors such as earnings, aging workforce, and temporal changes in mix of injuries can help stakeholders more accurately project medical utilization, claim outcomes, and the final cost of a claim.
This report builds on "Navigating Medical Severity and Claim Outcomes," a presentation from this year's Annual Insights Symposium, as well as recent research on The Relationship Between Benefits and Wages. We examine the positive correlation between injured worker wages and medical utilization, as well as potential drivers of the relationship.
Key Findings
- Medical utilization and medical severity increase as injured worker wages increase. The average medical utilization for higher-wage workers making more than 150% of the state’s average weekly wage (SAWW) is about 1.6 times that of lower-wage workers making less than 50% of the SAWW. Similarly, a higher-wage worker’s medical severity is about 1.5 times that of a lower-wage worker.
- The positive correlation observed in both medical utilization and medical severity indicates that the differences are largely driven by the intensity of services and not prices.
- The positive correlation between wages and medical utilization and medical severity persists across age groups, industry groups, and jurisdictions.
- Higher-wage workers are less likely than lower-wage workers to report less serious claims. As a result, they have a much lower share of less costly claims. These workers are about twice as likely to undergo major surgery as lower-wage workers, which puts upward pressure on medical costs for services such as professional, facility, prescription drugs, and medical equipment.
To explore the full findings and analysis, read the
complete report.
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