Claim Severity in Workers Compensation Claims. Brendon Frost Daniel Smith

Transcription

1 Claim Severity in Workers Compensation Claims Brendon Frost Daniel Smith

2 Outline What do we mean by injury severity? Traumatic versus Chronic The modelling Clusters Model results Business insights

3 What do we mean by injury severity? The degree of injury at the time of injury? How badly injured the worker is? The consequence of an event?

4 What do we mean by injury severity? (cont.)

5 Traumatic versus Chronic Practitioners are well aware of the different patterns of medical treatment of claims Traumatic blood on the floor ; immediate medical treatment; treatment runs down as the injury heals Chronic often no initial medical treatment; as the injury deteriorates medical treatment builds up; can lead to surgery several months post accident

6 Traumatic versus Chronic (cont.) Allocating claims to t, c, or u based on accident type and affliction nature Medical costs tt ct uu cu cc ut tu tc uc Weeks after accident

7 Traumatic versus Chronic (cont.) Three distinct patterns Medical costs Traumatic Chronic Unknown Weeks after accident

8 The Modelling Clusters based on medical payments at 4 points in time differentiating between level and pattern Treenet to model clusters removing direct reliance on medical payments

9 Clusters The Modelling (cont.)

10 Treenet The Modelling (cont.)

11 Clusters The different clusters clearly have different levels of costs 31 and different patterns 32 Costs per period Costs per period Weeks after accident Weeks after accident Costs per period Weeks after accident

12 Clusters (cont.) The clusters provide interesting insights into the drivers of claim severity Nomenclature: Cluster AB: A=1 = low initial payments building up A=2 = initial even level of payments building up A=3 = immediate payments running-off B=1-7 where 1 is the lowest cost level and 7 is the highest cost level

13 Clusters (cont.) The clusters show good separation of individual claims group 1

14 Clusters (cont.) The clusters show good separation of individual claims group 2

15 Clusters (cont.) The clusters show good separation of individual claims group 3

16 Model Results Chronic claims dominate group 1 while traumatic claims dominate group 3 100% 80% 60% 40% 20% 0% Cluster Traumatic Unknown Chronic 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Cluster Chronic Unknown Traumatic All

17 Model Results (cont.) The proportion of claims requiring an ambulance increases with severity N Y

18 Model Results (cont.) Specialist visits increase with severity Group 1 claims have limited specialist visits

19 Model Results (cont.) Group 2 claims have a higher average number of specialist visits

20 Model Results (cont.) Group 3 have the highest average specialist visits

21 Model Results (cont.) There is a strong relationship between severity and delay to first inpatient treatment

22 Model Results (cont.) There is a strong relationship between severity and delay to first inpatient treatment

23 Model Results (cont.) Severe traumatic clams are caused by machinery and vehicles. Few chronic claims have these agencies Machinery Powered eq Vehicle Ladders Machinery Powered eq Vehicle Ladders

24 Model Results (cont.) Chronic claims are more likely to be caused by unpowered equipment Unpowered eq Steps Materials Environ Unpowered eq Steps Materials Environ

25 Model Results (cont.) Traumatic = falls and hit by object Chronic = body stress Body stress Hitting object Falls Hit by object Body stress Hitting object Falls Hit by object Body stress Hitting object Falls Hit by object

26 Model Results (cont.) The key injury types differ by type of claim Chronic = musculoskeletal & back Musc/skel Back Digestive Tendonitis

27 Model Results (cont.) The key injury types differ by type of claim Unknown = broader spread Musc/skel Back Digestive Tendonitis

28 Model Results (cont.) The key injury types differ by type of claim Traumatic = fractures, joint/ligament, open wounds Amputation Joint/ligament Crushing Traum. strain Fractures Stress Open wounds Other

29 Model Results (cont.) Body locations differ by injury type Chronic = Back, shoulder, knee Back Knee Shoulder Psych

30 Model Results (cont.) Body locations differ by injury type Traumatic = Knee, hands, leg Back Knee Shoulder Psych Abdominal Leg Hands Other

31 Model Results (cont.) Younger workers have a higher proportion of less severe injuries 30% < % 20% 15% 10% 5% 0% 11 12,13,22,21,14 31,32,33,34 23,24,25 35,36,37

32 Business Insights The unknown group are more challenging Medical costs Traumatic Chronic Unknown Weeks after accident

33 Business Insights (cont.) Disconnect between certified work capacity and pattern of treatment? Missing Alternative Modified Return to work Totally unfit

34 Business Insights (cont.) Same groups / clusters have poor resolution rates % reached 13 weeks compensation Traumatic Chronic Unknown 100% 80% 60% 40% 20% 0% Cluster

35 Business Insights (cont.) Same groups / clusters have poor resolution rates 120% 100% 80% 60% 40% 20% 0% 26 weeks / 13 weeks compensation What % are still on benefits at 26 weeks? Traumatic Chronic Unknown Cluster

36 Business Insights (cont.) Manufacturing (Food) - Injuries in 2006/07 Total Claims Time Loss Claims Number of Claims Good (?) Bad (?) 0 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 How did we perform last month? - using injury rates to track performance

37 Business Insights (cont.) Manufacturing (Food) - Injuries in 2006/07 Cost $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Average Estimate Average Payments Average Days Compensated Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun # Days

38 Business Insights (cont.) Manufacturing (Food) - Injuries in 2006/07 Cost $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 100% Average Estimate Average Payments Average Days Compensated Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun # Days Percentage 80% 60% 40% 20% 0% Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Chronic Unknown Acute

39 Business Insights (cont.) Manufacturing (Food) - Injuries in 2006/07 Cost $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Severity Index Average Estimate Average Payments Average Days Compensated Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun # Days Severity Index

40 Business Insights (cont.) Manufacturing (Food) - Injuries in 2006/07 Cost $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Severity Index Average Estimate Average Payments Average Days Compensated Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun # Days Severity Index Total Claims Time Loss Claims 30 Number of Claims