No Pain, No Gain?

Why worker's comp is out of control

Charles Oliver from the January 1993 issue

(Page 2 of 6)

Nationwide, back strain is the most common type of worker’s comp claim–31 percent of all cases. It is also one of the most expensive to diagnose and treat; the average claim costs $23,916. In fact, various sprains and strains make up exactly half of all workers" comp cases. The trouble with this type of injury is that there usually is no clear-cut way to tell malingerers from those who are genuinely incapacitated. Indeed, the difference may not have anything to do with the injury itself.

Each year, almost half the American work force reports losing at least one workday because of back pain. But only 2 percent to 5 percent of those people file a worker’s comp claim. For the last 13 years, Dr. Stanley Bigos, a professor of orthopedics at the University of Washington’s medical school, has been studying back pain among Boeing workers to see what distinguishes those who file claims from those who don’t.

"There was no relationship between physical activity and worker’s comp claims. Workers whose jobs involved lots of heavy lifting didn’t file at a greater rate than those who didn’t," says Bigos.

Rather, a person’s mental state seems to determine whether he or she makes a claim of back injury. "Those who say they are dissatisfied with their jobs or with life in general are much more likely to file than those who are happy with their jobs or lives," says Bigos.

Indeed, he notes that one job category he has been studying has had no back-pain claims since 1978, despite the fact that it involves more heavy lifting than most of the jobs at Boeing. "It’s a high-status job," he says. "The people who do it have special uniforms. No one wants to lose that job and be sent down to hand out small parts from a bin."

Nationwide, the insurance industry estimates that around 20 percent of worker’s comp claims involve cheating. But when the insurance industry talks about fraud, it means the real thing–faking injuries, filing claims for injuries that occurred outside the workplace, or pretending to be disabled after an injury has healed. But as Bigos’s research suggests, there is another category of cheating that I call, for lack of a better term, "soft fraud."

There are two types of soft fraud. The first occurs when a worker genuinely feels that his general fatigue amounts to a disability, and the system allows him to collect on that fatigue. The second occurs when a worker tries to collect for a real disability that has a tenuous connection to his job. Since worker’s comp has not adopted the cost-containment measures and eligibility restrictions that other forms of insurance have, people have an incentive to try to get all of their ailments covered by worker’s comp.

Problems such as back pain, stress, cancer, hearing loss, and joint diseases can all be influenced by a person’s genetics, personal habits, or emotional condition. These problems are rarely the result of a single incident; they arise gradually and may be due more to aging than to workplace conditions.

"If someone develops, say, cancer and his workplace might have contributed to it, he’s probably going to convince himself that it did," says Orrin Kramer, an economist and consultant who studies the insurance industry. "It’s just a question of getting covered by the most generous system available."

Many of these ailments can also be exaggerated or faked more easily than old-fashioned industrial injuries. And many people no longer feel any guilt about defrauding insurance companies. While no one has actually surveyed Americans to see how they feel about cheating on worker’s comp, a 1991 study by the Roper Organization on auto insurance may provide some indication of what Americans think about the general topic of insurance fraud. In face-to-face interviews in 1,987 households, 23 percent said that it was acceptable to pad auto insurance claims.

If someone isn’t already prone to file a fraudulent claim, there are other people who will prompt him. Doctors and chiropractors, in particular, have a financial incentive to urge workers to file false claims. Take, for example, Dennis L. Campbell, an Oregon chiropractor caught two years ago in a large state investigation of worker’s comp fraud. Campbell told an undercover investigator complaining of an injury that there would be compensation if the injury occurred on the job. The secretly taped conversation went:

Campbell: "If this was a workman’s comp, they’d pick up the tab."

Investigator: "I know."

Campbell: "Did you hurt yourself at work?"

Investigator: "No. "

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