As the leading edge of the
baby boomer generation approaches age 60, it is not surprising that the aging
of the workforce has become a topic of interest in workers compensation. On average,
younger workers have higher incidence rates of workplace injuries and illnesses
than older workers; older workers have higher costs per claim.
The key findings:
* While age is an important factor in overall claim costs,
the significance of age on frequency has diminished, suggesting that age may
not play an important role in future frequency trends.
* The relationship between age and claim severities has remained essentially
unchanged.
* A significant portion of the differences in claim severities between younger
and older workers were accounted for by other factors correlated with age—average
wages, claim durations, lump-sum payments, injury diagnoses, and number of medical
treatments.
* Differences in wages and claim durations accounted for a majority of the difference
in indemnity severities between younger and older workers. The former explains
about a third and the latter explains almost half of the difference in indemnity
severities. Differences in lump-sum payments explain a small portion.
* With respect to medical severities, older workers experience relatively more
higher-cost injuries, where the most notable differences in diagnoses involve
injuries to the joints—rotator cuff and knees—which were more commonly
experienced by workers aged 45–64, and sprains of the ankle, which were
more commonly experienced by workers aged 20–34. Carpal tunnel syndrome
and injuries to the lower back are among the top 10 diagnoses for workers of
all ages.
* Differences in the types of injuries accounted for a modest portion (about
a quarter) of the difference in medical severities between younger and older
workers.
* The key driver explaining about 70% of the difference in medical severities
between younger and older workers is the markedly higher number and different
mix of treatments within a diagnosis.
* The remaining portion (less than 10%) seems to be due to a somewhat more costly
mix of treatments for older workers as reflected in small differences in the
average prices of categories of medical services.
* The greater number and different mix of treatments also contribute to the
longer duration of indemnity payments for older workers.
* In terms of trends in loss costs, baby boomers made an impact historically,
but the major impact of an aging workforce has likely already occurred.
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