Workers Compensation Industry

Challenges Facing the Workers’ Compensation Industry

Workplace injury remains an uncertain cause of financial concerns, especially when you need some time off to fully recover. In sceneries like this, some challenges usually arise, some of which include: Workers’ Compensation Industry-

  1. The Changing Workforce/Population Demographics

The age of workers is one major demographic shift for the Workers’ Compensation industry. For workers who are 55 years and above, the average annual growth rate is projected to rise by 1.8%, which is about three times the rate of growth of the overall labor force. Sadly, the costs of Workers’ Compensation claims increase with age as health diminishes with age too.

  1. Mental Health Exposures and PTSD Coverage

According to studies, a work-related injury resulting in chronic pain has caused many individuals to suffer from depression. In most cases, these individuals have been prescribed opioids at higher doses, making diagnosis and treatment of the injury’s psychological effects as important as treating the physical pain. People with severe anxiety problems or post-traumatic stress disorder (PTSD) are more likely to struggle with chronic pain after a surgical procedure, leading to a greater risk of developing an opioid use disorder.

Depression, when combined with physical injury and after-pains, majorly slows down the recovery process and delays the return to work.

  1. Increasing Complexity of Claims

In the beginning, most workers’ compensation claims usually start as simple cases but later become complex. This complexity develops from several factors, including attorney involvement. According to a recent article, the average total claim paid among claims without attorney involvement stood at $15,936, while claims involving an attorney stood at $77,807. In addition to this, the non-attorney involved claim’s duration was 305 days, with the attorney involved cases duration was at 901 days.

  1. New and Expensive Medical Claims

Catastrophic injury or mega claims can go as high as $10 to $15 million, with industry data showing that the $5 million toppings on claims incurred could continue to rise. This trend began in 2016 and has ever since experienced a steady uptick in these types of claims. Increasing emphasis on loss control measures would go a long way to prevent the occ.

  1. Opioid and Substance Abuse

The opioid epidemic undoubtedly affects employers in every industry, with deaths rising to 400,000 from 1999 through 2017 due to opioid overdose. Many injuries suffered in the workplace result in chronic pains, leading to the use of opioids to mask the pain. The opioid epidemic now ravages businesses (both small and large); therefore, appropriate measures need to curb the menace. 

  1. Drug Prices

Even though the use of drugs seems to be experiencing a decrease, it is interesting to note that drug prices continue to rise.

According to reports released by the  National Council on Compensation Insurance (NCCI), on average, states prescription drugs account for about 14% of a Workers’ Compensation claim. Doctors are opting in for other expensive treatment methods, which has affected the number of opioid prescriptions. These particular medications are responsible for a large portion of costs.

  1. Medical Marijuana

The issue and debate surrounding the support for legalizing marijuana is a hot one, and it’s at an all-time high among consumers and the medical community. 

More states are now gradually embracing the legalization of medical marijuana; however, employee rights concerning its use are still a subject of discussion. It is essential to maintain a drug-free workplace for the safety of all employees.

  1. Comorbidities and Poor Worker Health

Another factor that leads to increased compensation claims is health conditions like mental health issues, diabetes, obesity, tobacco use, and abuse of substances. These factors increase litigation rates, prolonged duration, higher costs, and more temporary disability days. 

If you’re ever in need and wish to make any form of inquiry, lawyer Burwood would be glad to help.


Workers’ compensation as beneficial as it is for the workers can be a pain in the ass for the industry. The numerous processes, including the involvement of attorneys, can sometimes slow down activities.