From The Ergoweb® Learning Center

Study: Workers’ Comp Pushing Costs to Private Insurers and Injured Workers

The incidence and overall number of work-related back injuries sustained by an employee had a substantial cost impact on subsequent back claims made to private insurance companies by that worker, according to a recent state of Washington study involving 18,768 carpenters over a 15-year time period (1989-2003).

Compared to subjects with no history of work-related back injury, the private insurance payment rate for subjects with:

  • one work related back injury was 40 percent higher
  • four or more work related back injuries was 300 percent higher

Research findings revealed that the State of Washington workers’ compensation injury rates for overexertion back disorders diminished during the study time period while private insurance cost rates diminished until 1995.  Since that date, the private insurance cost rate has increased.  Also, since 1983, the mean patient deductible payment has nearly doubled.

The Bottom Line – How This Applies To Ergonomists

This study confirms what many ergonomists sense.  Residual conditions from work-related back injuries lead to increased financial costs to workers and private health insurers when subsequent back claims are made by the previously injured employee. Also, work injury statistics should be viewed with this awareness in order to have an accurate perception of the true costs of work-related back injuries.

Other Key Study Points

Treatment for a back disorder (either work related or non-work related) was not sought by 60 percent of the cohort group (11,217 of the 18,768 carpenters). Ten percent of the cohort group (1,819 of the 18,768 carpenters) was treated for a back disorder from both workers’ compensation and private insurance.

In this cohort group, private outpatient health insurance payments for back disorders in 2006 dollars cost $6,439,909 for 1,117,250 months of insurance eligibility: a payment rate of $6,917 per 100 person-years of insurance eligibility or approximately $69 per person year.

The amount paid by the private insurer for treatment of back disorders comprised 8.2 percent of all outpatient payments for all conditions during the study time period.  Payment rates for outpatient back disorders were 16 percent lower in 2003 than in 1989, while payment rates for all conditions increased 9.7 percent during this time period.

Older subjects (those over 30 years of age) and female participants had higher back disorder private insurance payment rates than other cohort members.

Carpenters who were associated with local affiliates that primarily performed tasks of residential/light construction, drywall installation, and millwrighting had lower private insurer payment rates than those who performed heavy commercial work.

Study Methods

A cohort of 18,768 union carpenters was identified who worked in the state of Washington between 1989 and 2003 and were covered by the Carpenters Trusts of Western Washington (CTWW) – a private health insurance carrier.

Records of all claims for medical care covered though the Trust were acquired.  Payments for care associated with provider assigned ICD-9 diagnosis codes indicative of back injury were recorded.

A cost rate was determined were by:

  • the numerator was dollars paid for outpatient care for musculoskeletal back disorders during months of insurance eligibility
  • the denominator was months in which each carpenter was eligible for private insurance coverage

The Washington State Department of Labor and Industries provided the workers’ compensation claims for the cohort.

Cost across different years were made constant to 2006 year values.

Research Limitations

Findings of this study may not apply to workers/professions who are not covered by private health care policies.

This position paper can be acquired at:

Article Title: Who is Paying the Bills?  Health Care Costs for Musculoskeletal Back Disorders, Washington State Union Carpenters, 1982003

Publication: Journal of Occupational and Environmental Medicine, 51(10): 1185-1192, 2009

Authors: H J Lipscomb, J M Dement, B Silverstein, W Cameron, and J E Glazner

This article originally appeared in The Ergonomics Report™ on 2009-11-18.