Tag Archives: robert aurbach

Your Biggest Unmeasured Cost

Some claims resolve unremarkably. People heal, they go back to work, they resolve their claim around permanent impairment, if any, and adapt to their post-injury circumstances. We don’t focus on those claims. They simply pass through the system, without fuss and without remark. There are no water cooler conversations about the claimant who did what was expected of him or her. This group represents about 80% of our claims, but only about 20% of our resources in loss costs and processing headaches.

There’s another much smaller group that do attract our time, attention and concern. They are the claims, often with similar injuries to those that heal unremarkably, that fail to resolve, demand disproportionate amounts of time to administer, result in serial disputes and cost significantly more. They cause considerably more wear and tear on claims personnel and demand more time from our dispute resolution systems. They are the 20% who represent 80% of the claims costs, and most of the excess stomach acid for system administrators, claims managers and regulators.

The difference is often the development of a secondary condition that focuses claimants on what they have lost, on their symptoms and on their “new identity” as injured (and often disabled) persons.

Sometimes, this secondary condition is explicitly claimed as a compensable injury, but, in the U.S., psychological conditions are generally not compensable without a direct causal connection to a discernible traumatic incident. Harm that occurs as a reaction to the experience of the compensation system is often dismissed as malingering, secondary gain behavior or personal weakness, and you may thinking, “We don’t compensate that.” Think again.

To be sure, you may not be using the words, “exacerbation of primary claims due to secondary psychological overlay,” but you are still paying for it. The research evidence is now overwhelming. Psychological conditions, whether pre-existing or acquired after a claim arises, affect the physical healing as well as the probability that an injured person will return to his pre-injury life.

You are paying for secondary psychological overlay, whether or not your systems are set up to detect and measure this cost driver. It is very likely your largest unmeasured cost driver.

All of these conditions are attributable to secondary psychological overlay:

  • Unexplained failure to thrive and return to work;
  • Functional syndromes that have neither explained cause nor effective treatment;
  • Unexplained chronic pain (and all the expensive treatments and addiction problems that go with it); and
  • The appearance of secondary physical symptoms that complicate recovery

There are indirect repercussions, as well. Some people seem to develop the attitude that they are entitled to whatever treatment or benefits that they request, or that they deserve special treatment by the system. There is burnout, desensitization and turnover among staff, with the very significant attendant costs of recruitment and training of new personnel. These claims drive (and are driven by) lawyer behavior that enables “victimhood” and doctor behavior that “medicalizes” symptoms and sets inappropriate patient expectations.  The list of cost centers goes on and on.

We haven’t done a very good job of measuring this cost driver. Partly, that’s because our analytics are limited by the data we’ve collected. If we haven’t collected the right data (or haven’t even asked the right questions in the first place), then it’s hard to directly analyze the phenomenon. Partly, it’s a matter of the complexity of the calculation. Factoring personnel costs and systemic behavior changes by lawyers and doctors makes things a lot more complicated.

We avoid useful thinking about these claims. In fact, we habitually avoid thinking about anything psychological. Effective treatment is elusive, and we have too many examples of ineffective treatment stretching into lifelong periodic sessions with “the shrink.” We can’t see the injury associated with these claims, and tend to think that they aren’t “real” in the same way as physical injuries. This outmoded approach isn’t serving us well, as increasing claims severity in many jurisdictions clearly demonstrates. And there’s an element of fear of the unknown — if we acknowledge those claims, we just might have to learn different approaches to claims management and develop different substantive knowledge that we’ve needed in the past.

Unfortunately, this avoidance of all things psychological is a holdover from “person as a machine” thinking — the idea that we can fix the broken part, and the mechanism will go back into the production cycle. Alternatively, the thinking may presume that the difficulty with the worker is a disease, for which discovery of the right medication or treatment will restore equilibrium. Either way, it’s gotten much harder to maintain these simplistic views of injury and disability, given the overwhelming evidence that people are significantly affected by factors that have to do with their biopsychosocial environment and experience.

But that’s the trouble. How do we deal with this relatively small cohort of expensive claims without opening the proverbial Pandora’s box? On the one hand, acknowledging the biopsychosocial elements of the claims process may open the door to psychological claiming, which in the past has been a nightmare of unending expensive interventions with few or no positive outcomes. (Alternatively, focus on biopsychosocial factors exposes underlying matters about which the claim manager often has little or no control, such as the claimant’s prior history or the nature of the person’s off-work relationships.) On the other hand, failure to acknowledge the biopsychosocial elements flies in the face of an avalanche of research findings associating a bewildering and seemingly inconsistent array of factors correlated with good or poor outcomes. So what are you supposed to do?

First, quit pretending that the biopsychosocial flagging systems that have flooded the market are going to save you. There has never been a published properly controlled study that could show that the identification of people pursuant to a flagging system and subsequent intervention efforts had any more impact than just providing more personalized attention to claimants generally. Flagging systems have value for predicting outcomes for groups, rather than individuals. They are useful for managing reserves and initiating increased scrutiny of behavior. When misused, they also carry a potential for adverse impact through the mechanism of self-fulfilling prophesy. When you tell a well-intentioned claims manager that certain claimants have “flags,” it’s hard to predict the subtle ways in which the manager will treat the claimant differently, but it’s almost certain that the differences will be there. Identification of a person at risk, without more, has never made anyone recover faster or better.

Second, acknowledge that the presence of a secondary psychological overlay is very likely to affect the worker’s physical recovery. The research findings overwhelmingly demonstrate that psychological conditions such as depression and anxiety, a sense that personal control has been transferred to others and individual expectations for recovery have significant physical impact on physical welfare and healing of the claimant and the experience of things like chronic pain. The research shows that even the way that we talk to a patient about pain can have significant impact on the clinical outcome. It’s time to stop blaming the worker or assuming that the person is out to take advantage of the system. Just as the medical profession has acknowledged “iatrogenic” (system-created) injury, the workers’ compensation world would benefit from understanding that our compensation systems actually cause additional harm to the people we are supposed to be helping. Our system design should be more focused on preventing that harm than trying to suppress the costs associated with it.

Third, find a way of thinking about secondary psychological overlay to original injury that helps you understand how it all fits together. Such a conceptual model will help you to understand the relationship between findings that aren’t obviously related. For example, understanding the relationship between the positive impact of early intervention programs, the negative impact of lawyer representation and the negative impact of sleeplessness may be difficult without an overarching explanatory framework. There are several models out there, but I suggest that most everyone agrees that a very basic place to start is the understanding that the worker’s loss of an internalized sense of control over one’s own life is critical to explaining what’s happening to people in the claiming environment.

Finally, whatever your model of secondary psychological harm, find the places that you can control or improve the claims environment. Can you encourage early intervention or other activity that maintains the important sense of identity as a “worker” that is endangered by injury and absence from the workplace? Can you institute mechanisms that reduce the time and stress of dispute resolution and attend to the real personal needs of people in dispute? Can you arrange circumstances so that claimants get their calls returned more quickly to preserve their feeling of being valued, or minimize the repetition of their story, to prevent unnecessary entrenchment of a changed view of self? There are literally dozens of systemic changes that you can control that will have a positive impact on the worker and his recovery. It’s a different orientation than mere “cost cutting,” but it will have a greater long-term and sustainable impact.

The complication of claims because of undiagnosed and unmitigated secondary psychological overlays threatens the integrity of workers’ compensation generally. Whether you recognize it or not, it is a very significant underlying cost driver. In the absence of understanding this phenomenon, systemic attempts to control costs have led to the increasing perception of a failure of the underlying quid pro quo that is reflected in recent litigation in Florida and changes in the structure of the Oklahoma system.  Most of us have within our control some aspect of the system can lead to the reduced incidence of secondary psychological complication of a claim.  All of us can insist that our policy makers and regulators open their eyes to this hidden source of complexity and poor outcomes, and that they respond to it in a meaningful way.

The Second 100 Years of Workers’ Comp

The International Association of Industrial Accident Boards and Commissions (IAIABC) publishes an annual Peer Review Journal, and the editor, Robert Aurbach, asked me to participate in a series to be included in this year’s edition. This was no ordinary project, either, at least as far as I was concerned.

I was asked to pen an article presenting my view on changes the workers’ compensation industry should undertake to remain viable and effective for its “second 100 years.” That article would be published alongside an article from another author outlining his views. Then both of us would have the opportunity to review the other’s work and respond to his suggestions.

And the author with whom I would be sparring? Why that would be John Burton, professor emeritus at Rutgers and Cornell, and presidentially appointed chairman of the 1972 Federal Commission on Workmen’s Compensation.


Although the Journal will not be released until later this year, the four-article Point-Counterpoint series has been published in advance. Burton is an intellectual heavyweight in our industry, and I must admit the potential of this exchange left me feeling a bit like the industry’s Adm. Stockdale, Ross Perot’s hapless vice presidential running mate in 1992, who famously asked in a debate, “Who am I? Why am I here?”

Burton is an economist, and his primary article, titled “Should There Be a 21stCentury National Commission on Workers’ Compensation Laws?“, goes into detail regarding the changes he proposes. The article contains the plethora of supporting charts and graphs that one would expect from a professor emeritus at Rutgers and Cornell who was the presidentially appointed chairman of the 1972 Federal Commission on Workmen’s Compensation. My article by comparison, “The Case for Workers’ Recovery,” is a simpler, high-level view of a suggested philosophical change for our industry, to get away from our creeping “disability mindset.” My intellectually challenged contribution can best be summed up as “injury bad, recovery good.”

We engaged in this process several months ago, and while I had seen and responded to Burton’s original article, I had absolutely no idea what his response to my submission was. I have spent months dreading the possibility that he would title his review of my article, “Bob Wilson Is a Blithering Idiot.” Fortunately, that was not the case.

Ultimately, while we support the concept of workers’ compensation and its continuation, as well as agree on numerous points and identified problems, Burton and I do have distinct differences of opinion on what solutions would be best employed in the future. We have managed to present both a philosophically based and process-specific viewpoint in the writing of these articles.

I was honored to participate in this, and I hope that you will take the opportunity to read these articles. I think they provide an interesting contrast in philosophies and, I hope, will spark further discussion. I certainly thank Dr. Burton, Mr. Aurbach and the IAIABC for allowing me to be a part of the conversation.

MRIs: Part of the Solution, or Problem?

Another study sponsored by Liberty Mutual concludes that early magnetic resonance imaging for diagnosis of back pain leads to higher costs and poorer outcomes.

The study, published in the August issue of the medical journal Spine, showed that when back pain patients went through MRI scans within the first month after injury, they were between 18 to 55 times as likely as the reference group to receive more diagnostic and invasive procedures.

Glenn Pransky, a co-author of the study and director of the Liberty Mutual Center for Disability Research, said that MRIs can put patients in a mindset of trying to find a specific problem in their back and then seeking to fix it.

“People get hung up on thinking, ‘Oh, I’ve got this ruptured disc. That must be the problem. I won’t be well until somebody fixes that ruptured disc,’” Pransky said.

As many of us know, herniated discs and other spinal “abnormalities” are actually quite common.

Pain is complex, and the cause of pain is often illusive.

In an Aug. 20 webinar from managed care company Paradigm Outcomes, two physicians pointed out that pain can come from many places.

“When you look at somebody’s pain, they have the pain sensation — there could be nerve pain, there could be soft tissue-muscle-tendon pain,” said Steven Moskowitz, senior medical director of Paradigm’s pain program. “They could have pain because they’re deconditioned and out of shape and stiff, and so it hurts to be stiff and to move when you’re stiff. And then they can have. . .  emotional components.”

Bowzer’s pain started bending over for his cigar.


In his most recent book, Living Abled and Healthy, Christopher Brigham, MD, no stranger to workers’ compensation and lead editor to the AMA 6th Ed. Guide for Rating Permanent Disability, examines people who have had catastrophic injuries or who grew up “less than able” but overcame these difficulties, and compares them with folks who can’t seem to surmount such obstacles.

[Disclosure — Brigham is a friend, and I contributed a small part to the book.]

Brigham argues that our mind-body connections are surprisingly strong and that people in general discount the effect our emotions, psychology, feelings and perceptions have on our physical being.

“If we believe something is helping us we will likely feel better,” Brigham says. “If we believe something is hurting us, we will likely feel worse. Our attitudes define who we are, and the choices we make determine our destinies.”

Robert Aurbach, an attorney, researcher and international workers’ comp expert now consulting in Australia, has noted that neuroplasticity — the brain’s ability to reorganize itself by forming new neural connections — can play a big role in one’s perception of ability versus disability.

Essentially, continued “training” to be disabled, rather than abled, forms neural connections that reinforce negative associations with pain.

The extent to which early MRIs contribute to the perception and emotion of disability has yet to be fully quantified, but the Liberty Mutual study suggests the connection it is not insignificant.

According to a 2013 report from the Bureau of Labor Statistics, sprains, strains and tears made up 38% of work-related injuries in 2012, making those the most common source of claims. In that category, the back was the most-often injured body part, making up 36% of sprains, strains and tears.

Essentially that means that 1/6th of all work injury claims are related to back pain. How many of those end up worse because of diagnosis and treatment fostered by early MRI findings and might have otherwise been adequately (and perhaps more effectively and efficiently) treated conservatively isn’t known, but I suspect the number is considerable.

The authors of the Liberty Mutual study found that MRI use for patients with lower back pain wasn’t distributed evenly across the U.S., and they hope to continue the study to determine whether certain states are more prone to improper use of the scans.

I think it would also be interesting and beneficial to correlate that study with information about disability rates; my guess is that we (the grand collective “we”) make people more disabled than they otherwise would be in our zeal to use medical technology and attempt to find easy answers to complex problems, like pain and disability.

Is Controlling Workers' Comp Costs Really the Answer?

The agendas of all the big workers' compensation seminars agree. Controlling costs is the biggest and most pressing issue. Some might say it's the only issue. But I wonder if this emphasis isn't counterproductive….

The regulatory side

From a regulator's point of view, cost control is accomplished by imposing restrictions, by establishing fee and treatment schedules and, occasionally, by providing incentives that encourage the desired behavior. At bottom, the basis of regulation is distrust.

Controls are generally set to make everyone play by a single set of rules that allow the illusion of predictability and fairness.

I say “the illusion” because a clear understanding of the most common style of regulation shows a dysfunctional relationship. The regulator issues a regulation controlling, say, billing by physical therapists. The physical therapists will always collectively understand their business better than the regulator and will soon find a way to “work around” any portion of the regulations that they find objectionable. The regulator will eventually become aware of the “hole” in the regulations. The regulator will then move to reassert control by tightening the regulations, only to start the cycle all over again. 

In the meantime, the regulator comes to believe that the stakeholders (physical therapists in this example) cannot be trusted. The stakeholders have to be ever more closely controlled. When that fails, it “must be” because those pesky PTs are trying to make excess profits; the belief that they are self-serving becomes entrenched. Multiply this phenomenon by all of the various groups of stakeholders and service providers, and you see the atmosphere of “us against them” that is all too common in regulatory circles.

The trouble with this pattern for controlling costs is that it really is a cost driver. Every time the regulations change, two things happen. 

First, the change itself is costly. Computer programs have to be changed. People have to be retrained. Time that used to be spent doing the work of the industry is spent doing the work of the regulator. At the end of the day, the passive-aggressive resistance of the industry will win, and the cost of cost controls will outweigh the savings.

Second, the services to the injured get constrained by the cost controls, and the ability to provide individualized services suffers. One size does not fit all in injury management, and attempts to make it so usually end up fitting virtually no one.

The claims side

When the claims payer tries to impose control costs, the result is a different kind of cost driver. Once again, the whole system is based upon distrust. The claim must be investigated before it is accepted –even though only about one in 20 of the claims reported for suspected worker fraud justifies a finding of illegal behavior.[i1] Rehabilitative services that the research clearly shows are most effective if provided within the first days of the claim are delayed because this claim just might be the one in 20 (or worse, in a cynical attempt to save money by getting the injured worker with a legitimate claim to “just go away.”) Unfortunately, the delay of necessary services makes the claim more likely to become complex, more likely to attract the ungentle ministrations of the lawyers[ii], and less likely to resolve uneventfully.

Not only does the delay hurt, but the process of investigating the claim creates its own opportunities for adverse outcomes. Investigation is a statement of distrust. Tell the worker that you question whether she is really as hurt as she claims, and the natural reaction is to push back and try to prove that the injury really is severe. Sometimes, in that process, workers become attached to the belief in the seriousness of their injury, with unfortunate results.

Medicalization of the claim often occurs in the process of seeking a diagnosis. The diagnosis is not necessary for treatment of the injury in many cases – conservative care for, say, lower back pain is the same for the first few weeks whether it has a diagnosis or is just unspecified pain. Yet, because of the payer's distrust of the claim, we routinely get a diagnosis even though that risks losing control of the claim. 

Once the claim has been accepted, the scrutiny and distrust continue, again in the name of cost control. Adjusters and third-party payers have to justify their work, so claims are scrutinized. Frustration, delay and anger may be created in another self-perpetuating cycle of distrust.  

The outcomes of this dysfunction are often visited on the injured worker, in the form of reduced or curtailed injury management and lack of time for patient education that has proven value in durable recovery. 

We fail to realize that many cases of failure to recover as anticipated are caused by distrust, expressed in the system as cost-control measures. Moreover, the evidence is overwhelming that claims with unexplained failure to recover make up a large percentage of the 20% of claims that result in 80% of our loss costs. We might save a few dollars on some claims with our cost-control scrutiny, but at the risk of creating unnecessary complex, long-tail claims. We also risk pushing some of the cases into becoming one of those relatively rare cases of genuine misconduct, as people try to make the system work for them, in any way they can.

So, where are the savings?

A way forward

There are many other ways that cost controls actually become inadvertent cost drivers in the system. I'm not going to belabor the point further, because the important take-away is that an alternative exists. If 20% of claims create 80% of costs, then any efforts to prevent claims from falling into that 20% are heavily leveraged in their cost-savings impact.

If we want durable and sustainable cost control, the first step is to understand the dynamics that allow some people to recover and thrive while others with similar injuries spiral down to despair and dependency. While there isn't the space to discuss that topic here[iii], a better understanding about what helps injured people to avoid becoming “disabled” almost certainly leads to real and sustainable cost savings. And the distrust that currently permeates our systems isn't any part of it.

We created our situation, so we ought to be able to control it. Einstein said: “Any intelligent fool can make things bigger, more complex and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction.” Our current fixation on cost controls certainly makes the system more complex and full of new players eagerly selling us the latest magic bullet. The understanding to move us in the opposite direction also exists, if we can find the internal fortitude to use it.

[i1] The 5% average comes from presentations at the National Workers' Compensation College, International Association of Industrial Accident Boards and Commissions, 2004-2006, and from the author's own personal observation while supervising the New Mexico Workers' Compensation Administration fraud investigation unit over the course of five years.

[ii] See Aurbach, R.  “Suppose Hippocrates had been a Lawyer,” Psychological Injury and Law, Volume 6, pages 215-237, 2013.

[iii] See Aurbach, R. “Breaking the Web of Needless Disability” Work: A Journal of Prevention, Assessment and Rehabilitation, http://iospress.metapress.com/content/y50n1479vj054364/?p=7d6ab3539cd840bea6e14dbe8f2874dd&pi=0