Lack of Quality Drug Rehab and Pain Management Programs

Another issue is the lack of good rehabilitation and drug detoxification facilities around the country. There is also a lack of comprehensive pain management programs that provide an alternative to opioids. It's not realistic to cut off the opioids for people with chronic pain and not provide a detox program as well as some alternative form of pain management.

Although a lack of quality facilities is a concern, I am equally as concerned about the mindset of our industry. Time and time again, I see payers resisting rehab and pain management programs because of the cost—but we need to keep the big picture in mind. If you can eliminate a lifetime of opioid overuse for the cost of two to three years of those prescriptions, why wouldn't you do that? In the long term, the employer saves money. More importantly, these alternative pain management and detox programs give injured workers their lives back, breaking the cycle of addiction that harms them and their families.

Medical Treatment Guidelines

Another issue to watch on the medical side is the continued development of medical treatment guidelines and drug formularies in states around the country. This is a positive trend and one that our industry should be pushing for. There is no reason that the same diagnosis under workers' comp should result in more treatment and longer disability than the same condition under group health plans. One troubling issue that I see here is the politics that come into play. I don't accept that human anatomy is different in California or Florida than other states. I feel the focus should be on adopting universally accepted treatment guidelines, such as the Official Disability Guidelines (ODG), rather than trying to develop state-specific guides. The ODG have been developed by leading experts and they're updated frequently. State-based guidelines often are influenced by politics instead of evidence-based medicine, and they usually are not updated in a timely manner.

Along the same line, when it comes to utilization review, why does it matter where the physician is based? I hear people trying to make this a huge issue in any state-mandated utilization review program. I view such arguments as nothing more than an attempt to distract from what should be the goal of all treatment guidelines: to ensure that every injured worker receives the appropriate medical care at the appropriate time.

Medical Advances Increase Costs

There is one area in which advances in medicine are having an adverse impact on workers' compensation costs: catastrophic injury claims, such as brain injuries, spinal cord injuries, and severe burns. In 1995, Christopher Reeve—best known for his movie role as Superman—suffered a spinal cord injury that left him a quadriplegic. He received the best care money could buy from experts around the world, and he died less than 10 years after his injury. But as medicine advances, quadriplegics can live close to a normal life expectancy if they avoid complications. That's great news, but surviving these injuries is very expensive. The cost of catastrophic medical claims used to top off around $5 million, with a $10 million claim being a rarity. Now, that $10 million price tag is becoming more the norm.

Think about the way prosthetics have advanced. These used to be clumsy and provide limited function. Now people can have multiple prosthetics for a variety of activities including exercise, daily activities, or a specific work function, but they also cost significantly more than they did 10 years ago. Medical advances prolong lives and increase function, but they also increase costs—a reality that directly impacts the workers' compensation industry.

Also consider rated ages provided by life insurance companies. If you deal with structured settlements—such as funding a Medicare set-aside, for example—you undoubtedly have noticed that the life expectancy projections on serious injury claims have increased over the years. Medical advances mean that people live longer, even when they're dealing with serious health conditions. In turn, the claims tail for lifetime medical or permanent total disability claims is slowly increasing over time.

If you haven't reviewed your WC policy recently, talk to your agent, broker or carrier, and work out a strategy to deal with these issues before they impact your bottom line.

These are just a few of the workers' compensation issues to be aware of for 2015. We'll bring you more from Mark Walls in future articles.