Mr. Furlong said insurers do a fairly good job monitoring claims during the first 18 months, but then claims stay open for years and continue to be a drain on carriers. He said only around 50 percent of open claims are current-year claims.

He recommended that insurers involve themselves early in the claims process, and that they stay involved and work constructively with all stakeholders, including adjusters, physicians and nurses.

Early surgical intervention, for example, could control costs, according to Mr. Furlong. He said problems can develop when too much time lapses between an injury and surgery, because during that interval the injured worker is getting continuous treatments and could possibly end up getting addicted to drugs meant to dull the pain. All of this, Mr. Furlong said, drives costs.

Mr. Furlong put forth the acronym TIME, or Timely Intervention with Medical Expertise. He said that insurers should:

o Develop a good plan of action with all stakeholders.

o Maximize the skill sets of all stakeholders, including nurses and adjusters.

o Partner with physicians and establish a treatment plan that emphasizes the right treatments early.

o Emphasize return to work as a treatment model.

Insurers will see no relief from rising medical costs until they proactively work to correct the situation, Mr. Furlong said.

Ned Wilson, director of planning and treasury, FCCI Insurance Group, speaking on the same panel as Mr. Furlong, discussed the Florida workers' comp system, and how a drop off in construction is affecting the economy and insurers alike.

The state, he said, has seen a “very abrupt” drop in construction employment. Before the drop-off, in 2006, around 680,000 workers were employed in the construction industry in the state, he said. Currently, the number has dropped to around 520,000-530,000. And, he added, the rate of decline is faster than the rate of ascent prior to 2006.

In 2001, 7.5 percent of the state's workforce was employed in construction. That rate ascended to 9.6 percent in 2006 and has dropped to 7.7 percent since.

On the positive side, the lower level of activity yields less traffic, less travel and therefore lower claim frequency.

But overtime pay has decreased, and payroll in general is lower, which adversely affects premium rates for insurers.

Additionally, Mr. Wilson said the composition of the workforce has changed. Companies have retained older workers, who are safer and more experienced. But when injuries do occur, they tend to cost more to treat.

Other implications include bad debt as companies go out of business, and a greater chance of fraud as people get “more creative” to find ways to save money in a challenging market.

With respect to loss ratios, the drop in construction work has caused a very attractive Florida market to recede somewhat, to the point where it is comparable to other states. But Mr. Wilson said the state still has a good market.