What happens when the medical bills keep arriving long after the case is closed?
That’s the question at the core of every legitimate car accident injury claim. A broken wrist takes six weeks to heal. A spinal cord injury takes forever. Literally. And when your injury is with you for life, so are the bills.
It’s easy to see how big of an issue this is. Car crashes cost American society $340 billion in just one year, and medical bills are one of the largest contributors.
Here’s the problem:
Final. When a claim is signed-off no one returns two years, five years or eight years down the road when the next surgery is scheduled. That is why future medicals have to be calculated accurately from the start and why so much of the battle in a long term injury case revolves around one number.
Exactly how do you price tag the next 4 decades of healthcare?
Let’s break it down…
What you’ll pick up:
- Why Future Medical Costs Carry So Much Weight
- Who Actually Calculates The Number
- The Building Blocks Of A Cost Projection
- Medical Inflation And Present Value
- Mistakes That Shrink The Final Figure
Why Future Medical Costs Carry So Much Weight
Most people think an injury claim involves the bills already piled on the kitchen table. Ambulance. Emergency room. Physiotherapy. Easy. There are receipts.
Future medical costs are different. They haven’t happened yet.
Getting them valued correctly is essentially the entire focus of any legitimate car accident injury claim. That projected amount is what will cover treatment that is yet to occur. It’s also what allows an injured victim to focus on recovery instead of the bills.
They tend to dwarf all other damages in long-term injury cases too. Consider what a permanent injury actually requires for decades:
- Repeat surgeries and hardware replacement
- Prescription medication, refilled every month
- Physical and occupational therapy
- Wheelchairs, prosthetics and mobility equipment
- Home and vehicle modifications
- In-home nursing or attendant care
Taken individually they seem minor. Factor it over 30 or 40 years and you change lives.
Traumatic brain injuries illustrate the concept nicely. The CDC tracks approximately 214,110 TBI-related hospitalizations per year. Many of those patients will require assistance after discharge. The hospitalization is over. The caregiving isn’t.
Who Actually Calculates The Number?
This isn’t speculation. And it’s not an attorney pulling some number that sounds big. Future medical is assembled by a team of specialists, and each has a distinct role.
The Treating Doctors
All begins here. Treating physicians write up the diagnosis, prognosis and what treatment is “reasonably certain” to require. If there is no medical basis, then there is no claim for future care.
The Life Care Planner
A life care planner translates those opinions into an item-by-item plan. The procedure. How often it occurs. The cost. Two knee replacements; one at year 12, one at year 30? They’re both included with costs assigned.
The Forensic Economist
An economist crunches the numbers. They add growth rates, do some discounting, etc., to produce a single number that an insurer or jury can look at.
Medical opinion + life care plan + economic analysis = dollars that will stand up in court.
The Building Blocks Of A Cost Projection
Every projection gets built from the same core ingredients…
Life expectancy. Really – how many years of care will this claim pay for? Start with actuarial tables, but adjust for the injury.
Frequency. Is that MRI happening once a year, or once every three?
Unit cost. How much does it cost right now where the injured person lives? Care isn’t equal priced in major cities vs. rural counties.
Length. Some expenses last a lifetime. Others expire – a wheelchair van isn’t replaced every year, more like every seven years.
Growth rate. Medical prices climb. More on that in a moment.
Alter one of those variables and you change the total by six figures. That’s why they get scrutinized so heavily in a car wreck injury case.
Medical Inflation: The Part Everyone Forgets
Here’s something most people never think about…
Today’s price is not tomorrow’s price.
CMS actuaries project health prices will increase at roughly 2.5% through 2026, and health spending per person is estimated to reach $24,200 by 2033. Today’s $60,000 operation will not be a “$60,000 operation” in 2046.
That’s why sensible projection uses a medical growth rate rather than straight consumer inflation. Health care grows on a separate curve, and typically outpaces the weekly grocery bill.
Insurance companies know this very well. Which is also why a first offer works off of todays prices and conveniently leaves out growth rate.
Reduced To Present Value
Now for the bit that confuses almost everybody.
Say someone requires $2 million of care over the course of 40 years. They are not given $2 million dollars in a lump sum. Money awarded today can be invested, meaning it has time to grow. Judges will discount the award to present value.
The plain English version:
How much money would need to be invested now to pay a bill in 2050?
The discount rate is huge. A high rate reduces the award. A low rate preserves it. Both sides will argue about this issue.
Mistakes That Shrink The Final Figure
Many long-term claims resolve for much less than actual cost of care. Virtually all for the same few reasons:
- Signing before knowing what the future holds. Agreeing when the doctor says, “let’s wait and see”.
- Excluding non-medical care. Home modifications, transportation and attendant care are real costs and should be included in the plan.
- Ignoring inflation. Putting today’s price tag on tomorrow’s treatment.
- Eliminating expert support. Numbers unsupported by a life care plan are just someone’s opinion. Adjusters know that.
- Forgetting replacement cycles. No piece of equipment lasts forever.
It’s quite glaring once you see it. Everything omitted from the projection is pure waste. Pure cost that the victim will be paying out of pocket forever.
One additional item of interest: Indirect losses are calculated separately. Lost wages are listed at $95,309 per year on average after suffering a spinal cord injury nationally, and that is added to the medical estimate, it is not included in the estimate.
Bringing It All Together
Estimates of future medical expenses aren’t sloppy calculations made on the back of an envelope. They’re built, brick by brick.
Physicians establish the medical picture. The life care planner translates it into a priced plan. The economist factors in growth rates and present value. The result is a figure that stands up to intense scrutiny.
To quickly recap:
- Future care usually costs far more than the bills already paid
- Expert support is what makes the number stick
- Medical inflation has to be applied, not ignored
- Present value brings that total back to today’s money
- Anything missed is never recovered later
In a long-term injury case, you only get one shot at getting it right.
