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Most states in the northeastern region reported deteriorating workers’ compensation underwriting results last year, according to latest data from A.M. Best.

Pennsylvania, New Jersey, Delaware, Maine and Rhode Island were especially hard-hit.

Pennsylvania’s direct premiums written fell 8.6 percent last year. New Jersey’s fell 8.3 percent. Delaware’s was down by 8.1 percent. Maine fell 5.5 percent while Rhode Island was down 5.2 percent. The total U.S. direct premiums written fell by 5.4 percent last year.

New York, on the other hand, bucked the downward trend. The Empire State saw its direct premiums written volume increase last year. It went up by 5.8 percent to $3.62 billion.

Higher Loss Ratios

Eight states in this region (New York, New Jersey, Massachusetts, Connecticut, Maryland, Rhode Island, Vermont and Delaware) had higher direct incurred loss ratios last year compared to the previous year. New York(95.8 loss ratio in 2010), Maryland(91.3), Vermont(71.5) and Delaware(89.0) all reported loss ratio hikes of around 10 points or more.

Three northeastern states — Pennsylvania(69.7), Maine(61.5) and New Hampshire(68.4) — as well as the District of Columbia(52.4) had lower direct incurred loss ratios last year compared to the previous year. Both New Hampshire and D.C. saw their loss ratios fall by around 10 points.

The total U.S. workers’ comp loss ratio rose to 74.7 in 2010, up from 68.1 in 2009.

Loss ratios show how much of the premiums collected are going out to pay for actual losses. The higher the percentage, the less likely an insurer will be able to post a profit after other expenses are factored in.

A.M. Best said workers’ comp results deteriorated sharply in 2010. The U.S. calendar-year combined ratio rose nearly seven points to 118.1, up from 111.2 in 2009, and the highest level since 2000.

The ratings agency predicted the workers’ comp line’s underwriting performance will continue to weaken before it improves. That’s because several adverse conditions that led to the deterioration in recent years are expected to continue over the medium term.

These adverse factors include competitive pricing, rate decreases, high unemployment, decreased payrolls, rising medical costs and claims severity steadily trending upward.

HOMER, N.Y. (AP) – A high school football player in central New York died Friday night after he suffered a head injury during a game.

The fatal injury comes at a time when the safety risks of youth sports are under intense scrutiny, due to questions about whether enough is being done to protect players’ heads. It occurred during the third quarter of a varsity game in Homer, south of Syracuse. A lineman on the visiting team from Phoenix High School was hit hard and lay face down after the play.

“The coaches and trainers went over. He was talking. He rolled on his back by himself,” said Phoenix School District Superintendent Judy Belfield. The boy was able to sit up after the play, but he complained of a very bad headache and collapsed when he tried to stand, she said.

An ambulance took him to a hospital, and he was being transferred to a larger medical center in Syracuse when his condition deteriorated, Belfield said. The ambulance turned around, but doctors were unable to save the student’s life.

The teen’s name wasn’t immediately released out of concern that not all of his relatives had been notified of the death.

Team coaches didn’t learn until after the game that the player’s injuries were severe, Belfield said. She said the school community was distraught, and that officials would open the high school Saturday to students or staff who wanted to talk about what had happened.

“It just one of those freak things,” she said. “The Homer players have to be feeling just as much sadness.”

The Homer Central School District posted a message on its website Saturday morning saying the community had been “deeply saddened and shares in the grief of the Phoenix School Community.”

Head injuries in football have been a concern across the country in recent years, with some medical evidence emerging to suggest that the equipment players use may not be enough to protect them from serious, long-term injuries.

A handful of high school students suffer fatal on-field injuries every fall, according to the University of North Carolina’s National Center for Catastrophic Sport Injury Research. A player at Frostburg State University, in Maryland, died after suffering a head injury in a practice in August.

Belfield said the Phoenix school district sends its football helmets out to be reconditioned every year, and that each has to pass a safety inspection before the season begins.

“Over the course of the past few years, they have really tried to improve the protection of the head. But there is always a risk of injury or of death,” she said. She added that an investigation would be conducted to try to determine what went wrong.

In New York, a law signed this summer will require school coaches to bench student athletes who have symptoms of a concussion, a mild traumatic brain injury with symptoms such as dizziness or headaches. Students can play again only after they are symptom-free for 24 hours and cleared in writing by a doctor.

NASHVILLE — With pain in her right ear, Sue Cassidy went to a clinic. The doctor, wearing a white lab coat with a stethoscope in one pocket, introduced herself.

“Hi. I’m Dr. Patti McCarver, and I’m your nurse,” she said. And with that, Dr. McCarver stuck a scope in Ms. Cassidy’s ear, noticed a buildup of fluid and prescribed an allergy medicine.

It was something that will become increasingly routine for patients: a someone who is not a physician using the title of doctor.

Dr. McCarver calls herself a doctor because she returned to school to earn a doctorate last year, one of thousands of nurses doing the same recently. Doctorates are popping up all over the health professions, and the result is a quiet battle over not only the title “doctor,” but also the money, power and prestige that often comes with it.

As more nurses, pharmacists and physical therapists claim this honorific, physicians are fighting back. For nurses, getting doctorates can help them land a top administrative job at a hospital, improve their standing at a university and win them more respect from colleagues and patients. But so far, the new degrees have not brought higher fees from insurers for seeing patients or greater authority from states to prescribe medicines.

Nursing leaders say that their push to have more nurses earn doctorates has nothing to do with their fight of several decades in state legislatures to give nurses more autonomy, money and prescriptive power.

But many physicians are suspicious and say that once tens of thousands of nurses have doctorates, they will invariably seek more prescribing authority and more money. Otherwise, they ask, what is the point?

Dr. Roland Goertz, the board chairman of the American Academy of Family Physicians, says that physicians are worried that losing control over “doctor,” a word that has defined their profession for centuries, will be followed by the loss of control over the profession itself. He said that patients could be confused about the roles of various health professionals who all call themselves doctors.

“There is real concern that the use of the word ‘doctor’ will not be clear to patients,” he said.

So physicians and their allies are pushing legislative efforts to restrict who gets to use the title of doctor. A bill proposed in the New York State Senate would bar nurses from advertising themselves as doctors, no matter their degree. A law proposed in Congress would bar people from misrepresenting their education or license to practice. And laws already in effect in Arizona, Delaware and other states forbid nurses, pharmacists and others to use the title “doctor” unless they immediately identify their profession.

The deeper battle is over who gets to treat patients first. Pharmacists, physical therapists and nurses largely play secondary roles to physicians, since patients tend to go to them only after a prescription, a referral or instructions from a physician. By requiring doctorates of new entrants, leaders of the pharmacy and physical therapy professions hope their members will be able to treat patients directly and thereby get a larger share of money spent on patient care.

As demand for health care services has grown, physicians have stopped serving as the sole gatekeepers for their patients’ entry into the system. So physicians must increasingly share their patients — not only with one another but also with other professions. Teamwork is the new mantra of medicine, and nurse practitioners and physician assistants (sometimes known as midlevels or physician extenders) have become increasingly important care providers, particularly in rural areas.

But while all physician organizations support the idea of teamwork, not all physicians are willing to surrender the traditional understanding that they should be the ones to lead the team. Their training is so extensive, physicians argue, that they alone should diagnose illnesses. Nurses respond that they are perfectly capable of recognizing a vast majority of patient problems, and they have the studies to prove it. The battle over the title “doctor” is in many ways a proxy for this larger struggle.

For patients, the struggle has brought an increasing array of professionals trained to deal with their day-to-day health woes, but also at times confusion over who is responsible for their care and what sort of training they have.

Six to eight years of collegiate and graduate education generally earn pharmacists, physical therapists and nurses the right to call themselves “doctors,” compared with nearly twice that many years of training for most physicians. For decades, a bachelor’s degree was all that was required to become a pharmacist. That changed in 2004 when a doctorate replaced the bachelor’s degree as the minimum needed to practice. Physical therapists once needed only bachelor’s degrees, too, but the profession will require doctorates of all students by 2015 — the same year that nursing leaders intend to require doctorates of all those becoming nurse practitioners.

Dr. Kathleen Potempa, dean of the University of Michigan School of Nursing and the president of the American Association of Colleges of Nursing, said that the profession’s new doctoral degree, called the doctor of nursing practice, was simply about remaining current. “Knowledge is exploding, and the doctor of nursing practice degree evolved out of a grass-roots recognition that we need to continuously improve our curriculum,” she said.

Last year, 153 nursing schools gave doctor of nursing practice degrees to 7,037 nurses, compared with four schools that gave the degrees to 170 nurses in 2004, when the association of nursing schools voted to embrace the new degree. In 2008, there were 375,794 nurses with master’s degrees and 28,369 with doctorates, according to a recent government survey.

Dr. Potempa said that nurses with master’s degrees were every bit as capable of treating patients as those with doctorates.

Nursing is filled with multiple specialties requiring varying levels of education, from a high school equivalency degree for nursing assistants to a master’s degree for nurse practitioners. Those wishing to become nurse anesthetists will soon be required to earn doctorates, but otherwise there are presently no practical or clinical differences between nurses who earn master’s degrees and those who get doctorates.

Nurse practitioners must generally graduate from college and take an additional 12 to 16 months of classes, which include months of treating patients for both mild and serious illnesses in clinics and hospitals under the watchful eyes of instructors. Those earning doctorates must generally take a further four semesters or 12 to 16 months of additional classes.

While instruction at each school varies, Dr. McCarver took classes in statistics, epidemiology and health care economics to earn her doctor of nursing practice degree. These additional classes, at Vanderbilt University, did not delve into how to treat specific illnesses, but taught Dr. McCarver the scientific and economic underpinnings of the care she was already providing and how they fit into the nation’s health care system. Studies have shown that nurses with master’s level training offer care in many primary care settings that is as good as and sometimes better than care given by physicians, who generally have far more extensive training. And patients often express higher satisfaction with care delivered by nurses, studies show. Physicians say they are better at recognizing rare problems, something studies have trouble measuring.

The benefits to patients of nurses receiving doctorates is unclear, since there is no evidence that nurses with doctoral degrees provide better care than those with master’s degrees do.

Given the proven effectiveness of nurses with master’s degrees, even some nursing leaders have asked why nurses should be required to get doctorates.

“If it ain’t broke, why fix it?” asked Dr. Afaf I. Meleis, dean of the University of Pennsylvania School of Nursing.

Some health care economists say the push for clinical doctorates across health professions could be misguided. They argue that anything requiring students to spend more time and money getting trained will invariably result in longer waits and increased costs for patients, because fewer students will meet the increased requirements and those who do will eventually demand higher compensation.

“Everyone’s talking about improving patients’ access to care, bending the cost curve and creating team-based care,” said Erin Fraher, an assistant professor of surgery and family medicine at the University of North Carolina School of Medicine. “Where’s the evidence that moving to doctorates in pharmacy, physical therapy and nursing achieves any of these?”

Depending on their area of specialty, nurse practitioners earn a median salary of $86,000 to $90,000 annually, according to the Medical Group Management Association — a bit less than half of what primary care physicians earn. Nurses with doctorates generally earn the same salaries as those with master’s degrees since insurers pay the same rates to both. Physician groups fear that the real reason behind the creation of the doctor of nursing practice degree is to persuade more state legislatures to grant nurses the right to treat patients without supervision from doctors.

Twenty-three states allow nurses to practice without a physician’s supervision or collaboration, and most are in the mountain West and northern New England, areas that have trouble attracting enough physicians. Nursing groups have lobbied for years to increase that number. “This degree is just another step toward independent practice,” said Louis J. Goodman, chief executive of the Texas Medical Association.

Not true, Dr. Potempa said — the new degree simply ensures that nurses stay competent. “It’s not like a group of us woke up one day to create a degree as a way to compete with another profession,” she said. “Nurses are very proud of the fact that they’re nurses, and if nurses had wanted to be doctors, they would have gone to medical school.”

The U.S. workers’ compensation insurance segment continued to face competitive pricing, further rate decreases, weak macroeconomic factors, growing medical costs and an uptick in claim frequency during 2010.

As a result, premium volume declined and underwriting results deteriorated yet again, reported A.M. Best.

While the line is still dealing with the same issues in 2011, A.M. Best said there is some reason to be hopeful as premium growth is on track to be positive for the first time since 2005.

However, as the workers’ comp system celebrates its centennial in 2011, conditions appear grim over the near term, and A.M. Best said it expects underwriting results to weaken further before they get better.

A.M. Best released a report on the state of workers’ compensation. Other key findings in this report:

• Results for the workers’ comp line of business deteriorated sharply in 2010, with the calendar-year combined ratio increasing nearly seven points to 118.1, the highest level since 2000.
• Net premiums written (NPW) for the line fell for the fifth consecutive year in 2010. Premium volume has declined more than 30 percent since NPW reached its high in 2005. While NPW declined for most insurers, a number of companies saw an increase in 2010.
• The top five workers’ comp insurers ranked by NPW in 2010 remained unchanged, with Liberty Mutual Insurance Cos., American International Group (AIG), Travelers Group, Hartford Insurance Group and the State Insurance Fund of New York still leading.
• Through Sept. 15, 2011, negative rating actions outpaced positive rating actions in the workers’ comp segment by more than a 2-to-1 margin. In addition, there were eight rating units affirmed with negative outlooks during this time, and A.M. expects this trend to continue for the remainder of 2011.

Insurers seek price increases after tough years

October 16, 2011 – 6:00am

More states are approving workers compensation rate increases this year as insurer results deteriorate amid rising injury expenses and the Great Recession’s hammering of employer payrolls.

In states where regulators have approved workers comp rate increases, insurers are passing costs on to employers of all sizes, although smaller buyers are feeling the greatest impact, brokers say.

After years of rate and premium decreases, rising costs and diminished payrolls, insurers’ combined ratios have reached untenable levels, making rate increases necessary in more states but not all, industry sources say.

“When we look at the past several years that industry premiums have been coming down significantly, you were seeing rate decreases in a variety of states and also diminishing payroll,” said Frank Freund, chief financial officer in Lansing, Mich., for Accident Fund Holdings Inc.

“Everybody’s combined ratio has been climbing because of the lower premium levels, and you can only do so much with expenses,” Mr. Freund said. “The expense portion of the combined ratio continues to grow. So you are going to see those increasing combineds until rate adequacy comes about.”

Workers comp premiums generally are a function of an employer’s payroll multiplied by state-approved rates. But other factors, such as market competition, employer size and policy structure influence the actual premium amount paid by an individual insurance buyer.

Shrunken payrolls also mean insurers need larger rates to cover losses, sources said.

Already this year, NCCI Holdings Inc. has filed for rate increases in 19 of the 38 states it provides with rating services, and it is only partially through its annual rate filing cycle, which runs from July 1 to June 30.

During all of last year’s filing cycle, Boca Raton, Fla.-based NCCI asked regulators for increases in only 15 states, said Peter Burton, NCCI’s senior division executive for state relations in Wayne, Pa.

Conditions and laws affecting rates differ by state, so NCCI also has applied for rate decreases in seven jurisdictions this year. In Alabama, for example, it is seeking its steepest rate decrease of 9.3%.

Additionally, some NCCI rate increase requests this year have been “very modest, single-digit adjustments” in contrast with Virginia, where NCCI is seeking its largest increase of 10.5%, Mr. Burton said.

But there are more states that will see NCCI filing for increases, and the number of increases this year reveals a trend, Mr. Burton said.

“It’s the general pattern that is happening with workers comp around the country,” Mr. Burton said.

The New Jersey Compensation Rating & Inspection Bureau, for instance, recently applied to the state’s Department of Banking and Insurance for a 6.9% rate increase for 2012.

In May, the New York Insurance Compensation Rating Board proposed a 10.4% loss-cost hike, but Insurance Superintendent James J. Wrynn approved an average 9.1% increase effective Oct. 1.

During a Florida hearing last week, attention focused on physician dispensing of repackaged drugs accounting for 2.5% of an 8.9% rate increase NCCI is seeking there.

But in general, costs such as those for medical expenses, are rising nationwide. Meanwhile, employer payrolls remain below pre-recession levels, although premium growth is on track to be positive this year for the first time since 2005, according to A.M. Best Co. Inc.

Insurer results also have suffered under flattening or increasing claims frequency in many states, several sources said. That represents a recent shift from a long-term decline in claims frequency that offset increasing costs over many years.

Under those conditions, deteriorating underwriting results are more the norm than the exception.

Last week, Best reported that workers compensation insurers’ underwriting results likely will weaken further before improving, as “conditions appear grim over the near term.”

Best said in its “Market Review” that the workers comp line—which is among the largest in the U.S. property/casualty insurance industry, representing 16% of all commercial lines premium—experienced the greatest deterioration among the property/casualty industry’s overall underwriting performance.

The combined ratio for workers comp insurers is projected to reach 121.5% for 2011, up from 118.1% in 2010 when “business deteriorated sharply” and the industry’s combined ratio rose to the highest level since 2000, Best reported.

“Industry combineds of 120% or 121% indicate rates are not where they need to be,” Accident Fund Holding’s Mr. Freund said.

And lost costs are likely to continue growing, said Bruce Hockman, executive vp and workers comp practice leader in Philadelphia for Towers Watson & Co.

“The market really has to sort out where (insurers are) going to get pricing because they can’t even have a constant underwriting result of 115% and hope to stay in this line of business,” Mr. Hockman said. “Not with today’s investment marketplace. It’s impossible.”

The rate increases that are occurring are getting passed on to employers, although insurer competition remains a factor in pricing, brokers said.

“For workers compensation as of (Oct. 1), we are seeing most of our accounts, maybe as high as 70%, see at least some rate increase on their renewals,” said Pamela F. Ferrandino, casualty practice leader, placement for Willis North America in New York.

Small accounts that do not take retentions are experiencing the greatest amount of rate hikes pushed through to them, Ms. Ferrandino said. Similarly, a larger percentage of middle-market accounts are experiencing insurers passing rate increases through to them than large national accounts.

Large national accounts and larger middle-market employers are seeing an average of 1% to 2% rate increases passed on to them by insurers, added Jesse Olsen, vp in the risk finance practice for Lockton Cos. L.L.C. in Kansas City, Mo.

Those buyers also are seeing premium increases of up to 4%, partly because of some growth in payrolls, although any increases are “heavily jurisdiction-dependent,” Mr. Olsen said.