As we step into a post-COVID era, the skilled nursing and healthcare insurance industry is facing a unique set of challenges. The combination of below-average occupancy rates, rising nursing wages, inflationary pressures, and increased insurance costs has resulted in negative industry-wide operating margins. In particular, workers’ compensation costs have become a significant area of concern, as they are directly tied to safety management and enforcement measures.
Additionally, the aging workforce, with a surge in retiring baby boomers and the prevalence of chronic diseases, presents further hurdles for employers in the healthcare sector. Addressing these challenges is crucial for maintaining control over costs and ensuring the long-term sustainability of businesses in this evolving landscape.
This blog explores the key factors impacting the skilled nursing and healthcare insurance industry, with a specific focus on workers’ compensation, the aging workforce, and effective cost-controlling strategies. By understanding the implications of these challenges and adopting proactive measures, businesses can navigate the changing landscape successfully.
I. Workers’ Compensation:
- The Vital Importance of Safety Management: Workers’ compensation costs are directly linked to safety programs and their enforcement. Neglecting safety measures may result in skyrocketing expenses in the future. This blog emphasizes the significance of prioritizing safety to gain control over workforce claims.
- Addressing Hiring Practices: Effective communication, safety training, and comprehensive job descriptions are essential for protecting both employees and companies. A job analysis performed by a doctor ensures prospective employees’ abilities align with job requirements, reducing the likelihood of workplace injuries.
- Transitional Return to Work: Implementing a transitional return-to-work program helps injured employees ease back into the workplace while minimizing workers’ compensation costs. Monitoring employees’ progress is crucial to ensure the program’s success.
II. The Aging Workforce:
- The Shift in Demographics: With 10,000 individuals turning 65 every day, the aging workforce is growing rapidly. By 2030, one in every five residents will be of retirement age, outnumbering children for the first time in history. This demographic shift poses unique challenges for employers, particularly in the senior living sector.
- Addressing Chronic Diseases: Many chronic diseases become more prevalent with age but can be effectively managed through care programs. Identifying high-risk individuals and providing hands-on care can significantly reduce medical costs and improve financial outcomes for future claims.
III. Claims Handling:
- Mitigating Risks: Claims handling procedures must be modified to address the impact of age-related risks on workers’ compensation costs. Older workers tend to have longer disability durations, and the increased likelihood of co-morbidities can escalate costs by up to 200%.
- The Role of Data Analysis: Monthly discussions with doctors and claim adjusters, along with predictive modeling of claims costs, can guide businesses in making informed decisions about settling claims effectively.
IV. Employer Sponsored Benefits:
- Impact on Healthcare and Workers’ Compensation: Every decision related to healthcare plans, safety management, and hiring practices affects a business’s financial bottom line. Adjusting plan benefits can help control rising healthcare costs, but businesses should be aware that reducing these benefits may increase workers’ compensation expenses.
The skilled nursing and healthcare insurance industry is facing multifaceted challenges in a post-COVID world. Addressing these challenges head-on, from prioritizing safety management and hiring practices to managing the aging workforce and claims handling, is vital for controlling costs and maintaining financial stability. By implementing proactive strategies, businesses can thrive and adapt in this evolving landscape, ensuring a sustainable and successful future.
For more information on Liberty’s National Complex Workers’ Compensation Practice Group, please reach out to Kirk Aguilera, Managing Partner (National Complex Workers’ Compensation Practice Leader), The Liberty Company Insurance Brokers.
For more information on Liberty’s National Healthcare Services Practice, please reach out to Tim Mooney, Senior Vice President (National Healthcare Services Practice Leader), The Liberty Company Insurance Brokers.
