The number of on-the-job injuries continues to decline; yet
the total cost of workplace injuries continues to escalate. The
paradox of fewer injuries and greater costs continues to
baffle employers and professionals in the insurance industry.
Insurance professionals, employers, and business leaders are aware of
the following conditions that drive up Workers' Compensation injury costs:
• About 20% of employee injuries account for 80% of the claims dollars
spent in the system.
• Injuries that should have a short duration according to the
medical condition often drag on for months or years and are
concluded with large settlements.
• Two employees with the exact same injury and the same
exact biology may have very different cost outcomes to their
injury.
• Psychosocial factors significantly influence claims costs, but
adjusters or employers do not change or enhance their
process to accommodate these factors.
• There are very few catastrophic injuries, so it's the "typical
injury" that is driving the cost problems.
Medical researchers and professionals have studied these issues under
what they call "Delayed Recovery." Delayed Recovery occurs when
the duration and financial outcome of a disability are out of proportion
with the severity of the injury or illness.
For example, back sprains and strains, joint injuries, and
cumulative trauma are the most troublesome and costly
types of injuries. However, studies have shown that only
three or four out of 20 such injuries will become chronic and
exhibit Delayed Recovery.
Early intervention is the key to ensuring an injured employee
makes a rapid return to full productivity. Yet, it is too costly
and nonsensical to deploy the same level of resources for
every back or joint injury when only three or four out of 20
will present a problem.
So how can we know, with reasonable certainty, which three
or four injured employees out of the 20 will experience
Delayed Recovery? For many years, medical researchers
have been utilizing Predictive Modeling to determine what
precipitates Delayed Recovery. The answers are available,
but up to now they have been buried in medical literature.
Predictive Modeling is relatively new to the field of work- related
injury management, but it has a long-standing and proven record in other
industries. For instance, readers of this article are probably aware of
their credit scores. The banking and credit industries developed credit
scoring over 50 years ago as a way to predict which borrowers are more
likely to default on their loans – that's Predictive Modeling.
Through the use of Predictive Modeling and the development
of credit scores, the credit industry has dramatically reduced
the number of loan and credit card defaults. Credit scores are
now used by a whole host of industries including
telecommunications, insurance, and executive staffing, just to
name a few. If a company has a credit risk, it is likely to
utilize a risk reduction tool such as a credit score that was
developed though Predictive Modeling. The same method
used to accurately predict loan and credit defaults has now
been applied to predict which injured employees are likely to
experience Delayed Recovery.
Injuries do not occur in a vacuum. There are many factors beyond just
the physical medical issues that influence an injured employee's recovery
and return to full productivity. These include, but are not limited to:
• Job dissatisfaction
• History of prior injuries
• Education level
• Length of employment
• Secondary medical issues
(diabetes, cardio-
pulmonary,
etc.)
• Lack of available modified or transition duty jobs
A key component to predicting Delayed Recovery is the
ability to identify the non-medical issues affecting the injured
employee. Doctors have been trained to apply medical
treatment protocols to injured workers; however, often it is
not the medical condition that is preventing the injured
employee from returning to full productivity. Providing
additional medical treatment will not bring a positive
outcome if the medical condition is not the underlying cause
of the Delayed Recovery.
Put simply, injured employees are more likely to experience
Delayed Recovery because of issues not related to the
injuries or their physical conditions. Through the use of
Predictive Modeling, these employees can be identified
quickly.
The Institute of Work Comp Professionals is the first
organization to offer a Web-enabled product directly to
employers that predicts which employee injuries are most
likely to result in Delayed Recovery. Like so many advances
in the past, this application leverages technology to give us a
practical use of scientific studies.
The purpose of this tool is to detect early in the claims process which
injured employees are most likely to be more costly than the norm. By
identifying exceptions early, you can take immediate action to improve
outcomes and reduce unnecessary costs. This Predictive Modeling program
has been tested by the California State Workers' Compensation Fund with
positive results.
Here is how it works. At the time of injury, the employer or manager
answers questions about the employee on a secure Web site. Then, based
on a weighted algorithm developed through exhaustive testing, the program
provides a score of a "Low, Medium, or High Predictive Indicator
of Delayed Recovery." An intervention plan is available for each
indication level.
Let's assume the Predictive Modeling process produces a "High Predictive
Indicator for Delayed Recovery" for a particular injured employee.
A detailed intervention plan prepared prior to the injury that is specific
to this level of indication is executed. Greater resources are then mobilized
and expended than would have been had there been no advance warning.
In addition, front-line supervisors can be brought into the loop quickly.
They can be made aware that they need to be more actively involved with
their employees' recoveries. Front-line supervisors become critical to
the intervention process by supporting workplace accommodations and maintaining
positive communication. Supervisors should also be made aware of the anticipated
duration of employee disabilities so they can monitor their employees'
progress.
Injury management practices seem to bump along year after year without
much change or evolution; Predictive Modeling is changing the landscape.
Some will adopt this newfound leverage of knowledge and technology, and
some won't. At a time when injury costs continue to escalate, Predictive
Modeling of Delayed Recovery and the interventions that follow may be
the difference that separates those whose costs continue to escalate and
those whose costs decline.