Medical inflation in workers’ compensation is back. This article in Managed Care Matters documents the trends that we have seen in our own data.  Studies in IN, VA and NJ show significant increases.  Facility and hospital costs are driving a lot of this increase.

For those of you who do not know the trends in the industry, hospital groups are consolidating and buying physician practices and Ambulatory Surgery Centers (ASCs). They can charge more for government services than independent groups (Medicare, Medicaid, etc.) so the value of the purchased entity jumps as soon as they purchase it. In addition, with regional monopolistic power, they have more leverage negotiating PPO rates, which drives up costs to the general market.  This trend will continue with the national healthcare law changes.

This is why Rising has been focused on developing new techniques to attack this problem.  Effective predictive modeling and medical management and focusing on less expensive alternatives has been at the forefront of our product development innovations for the last few years.  Having medical management programs that can impact this trend will become more and more critical as time goes on.