One of the problems we face in claims administration is that many of our decisions are made in the context of uncertainty. For example, we may know that the plaintiff is credible, but that the mechanism of injury is questionable and the defense has a strong IME report. The claims and legal professionals must determine (among other things) the plaintiff’s likelihood of succeeding on the question of whether an injury occurred based upon the available information. The problem is that this judgment is a guess (though hopefully an educated one) based on experience and the available information. There is no definite or fixed answer. In order to make such decisions effectively, we need to know what is fact, what is inference, what is loose conjecture, and what information is likely to be discoverable or otherwise available that will make the guess more educated. Once we have this information, we can determine what aspects of the claim are uncertain or ambiguous and develop a strategy to deal with them.
This brings us back to Brewer’s strategies for combating cognitive biases and making effective decisions. His second strategy asks us to:
“Be clearly and explicitly aware of gaps in available information.”
We normally live with and tolerate an enormous amount of ambiguity and uncertainty in our lives without paying much attention to it. In fact, imperfect knowledge is the general and pervasive condition of human life. However, when we assess claims, we become acutely aware of ambiguity and uncertainty and recoil from it. Why? We recoil because ambiguity and uncertainty foil our attempts to predict the outcome of claims and hence drive us crazy. Nonetheless, it is critical that we be able to make effective claims decisions against a background of ambiguity and uncertainty. And the key to making effective decisions in the context of ambiguity and uncertainty is to specifically and accurately identify what is known (and hence certain) and what is not known (and hence uncertain). Doing so will help us accurately evaluate the strength of our current position, reveal what we can do to obtain more information, and allow us to make rational decisions without ignoring or being paralyzed by ambiguity and uncertainty.
Once we have asked the “how do we know…” questions, we are in a position to organize what we know. What we know in any claim falls into several categories.
To accurately judge the claim, it is important to understand the gaps in available information and to understand when our conclusions are not supported by factual knowledge. Take the dictum that a delay in reporting an injury increases the likelihood that the injury is fraudulent. To believe this, one must make assumptions that may or may not be supported by actual evidence. It is important when evaluating a new claim that we understand what these assumptions are before we make a judgment regarding the validity of the claim.
First, accepting the dictum as true assumes that there is statistical support for it. If there is not, the dictum is the equivalent of an old wives tale. This is not to say that it may not be true, but without statistical support for it then it is equally plausible that the dictum is false. Thus, the dictum should not be taken to demonstrate the strength or weakness of a claim without the existence of additional supporting evidence such as the softball tournament example above. Despite the lack of statistical support for the dictum that delayed reporting increases the likelihood that a claim is fraudulent, numerous insurance professionals, companies, and even state agencies continue to hold the dictum out as if it had some sort of predictive significance.
Second, accepting the dictum can actually create a selection bias in which late reported claims receive a higher level of scrutiny and more intense investigation than claims with contemporaneous reporting. If one believes based on experience that late reported claims are more frequently bogus than timely reported claims, one must actually investigate her claim handling history and measure the level of scrutiny given to the separate claims to determine if there is any truth to the dictum. In order to determine if there is a probable statistically significant effect in a retrospective investigation, at a minimum you would have to include only those timely reported claims that receive the same or similar level of scrutiny and investigation to late-reported claims for comparison to at least attempt to eliminate selection bias. Without making this investigation, the dictum that late-reported claims are more likely to be fraudulent has no basis in fact and is likely to skew results in a way that confirms the dictum.
When managing claims, it is important to consider why a decision is being made and whether the decision is based on factual knowledge, an inference, or an assumption that has been “taken on faith.” Any claim will have ambiguity and uncertainty. This is normal. When the ambiguity and uncertainty are identified, they can be factored into the assessment of the claim and will help generate the strategy for developing the claim (which will be the topic of the next post in this series). When deciding to give a claim heightened scrutiny or making any other tactical decision, the decision will be more effective and will likely yield better results if it is based on factual knowledge than if it is based on an unsupported assumption. The only way to ensure that the decision is based on factual knowledge is organize what you know. Once the knowledge in a claim has been organized, it is easy to identify if something is being taken on faith rather than fact.
Medical News Today reported on a piece in Neurology (subscription required) in which researchers conducted memory studies on retired French workers who had been exposed to solvents during their working years. The specific solvents included benzene, chlorinated solvents, and petroleum solvents. The retirees had been out of work for an average of 10 years and the average age of study participants was 66. The results demonstrated that only 18% of the persons tested had no memory impairment. This statistic is more troubling in context: only 16% of the persons tested had no exposure to solvents. Another troubling aspect of the study is that it found that persons with high but distant solvent exposure (31-50 years prior to testing) still demonstrated measurable cognitive deficits.
While it would be too early to draw definitive conclusions from the report, it seems likely that the findings will prompt further investigation. If subsequent studies confirm the researchers’ conclusions, it certainly could prompt claims by those exposed to the offending solvents through their employment. This is significant because chlorinated solvents and petroleum solvents are found in such common items as cleaners, degreasers, and paint. Exposure to these products is regulated, but if new information becomes available that demonstrates the level of exposure that causes harm is lower than previously thought then employees in such occupations as commercial housekeeping and painting who suffer cognitive decline that would have been attributed to other factors may now connect the cognitive decline to solvent exposure on the job. Obviously the effect on worker’s compensation claims would be significant as would the likely third party claims against the manufacturers of the solvents.
In the last post, we discussed a paper Jeffrey Brewer wrote regarding strategies for overcoming cognitive biases and emotions. Brewer identified 10 specific strategies to overcome biases and emotion. His first strategy advocates consciously raising the questions:
But how does this help us? Don’t we already essentially do this when we analyze claims?
Not exactly. First, asking the questions immediately changes one’s state of mind from its natural, emotionally reactive state, to one in which reason is brought to the forefront. Consciously asking the questions forces us to slow down, search for, and contemplate the possible answers. Second, answering the questions quickly demonstrates whether something is an objectively verifiable fact, an inference, hearsay, opinion, or pure conjecture. Once the questions are answered and the information is categorized, the process will have naturally organized the claim in a rational way. Third, knowing what category the information falls into can provide a roadmap for developing the claim. Fourth, asking and answering the questions is likely to result in a more accurate assessment of liability, damages, exposure, and further investigation needed.
How can this strategy be applied to claims? The place to start is at the beginning of the process. When a claim comes in, we are given information asked to apply the information to a metric for assessing exposure. The formality of the metrics will vary, but the best companies and firms mechanize this process to the greatest extent possible to streamline the process and to make it as consistent as possible. This is of course why all case assessment reports, forms, and letters look roughly the same for each entity that generates them regardless of who actually wrote them. This predictability and uniformity is a virtue, not a vice. Nevertheless, individual claims professionals must judge where each piece of information goes and its significance.
The two most important parts of a case assessment report, form, or letter will generally be the statement of facts or narrative summary. It is from this that the conclusions regarding liability, damages, and exposure will be drawn. In preparing the statement of facts, it can be a useful exercise to distinguish between facts, opinion, hearsay, and assumptions to better understand the support for the claim or its defense. For example, take a claim where an employee X injures his hand on a piece of equipment. In conducting the investigation, the employer obtains a statement from employee Y who has observed X using the equipment for personal use in the past.
In this example, the only thing that is a fact is that Y observed X using the equipment for personal use in the past. If the statement is used to support the defense that the employee was not performing work for the benefit of the employer at the time of injury, then an inference is being made that X’s behavior at the time of injury was consistent with X’s past behavior. With no additional information or support, the inference is weak at best. In order to strengthen it, one could find out if X used the equipment for personal purposes at certain times of his shift or after certain jobs and whether the injury occurred at a similar time of day or after the same kind of job. In addition, the inference would be stronger if Y observed X using the equipment for personal use regularly or on many occasions, especially if the most recent uses were near in time to the accident. The bottom line is that the fact of the observation only affects the injury at issue if it can be inferred from the observation that the behavior leading to the injury likely conformed to the observed past behavior.
In another example, worker’s compensation investigations often discover a coworker who overheard the injured employee complaining about his job or the company or both. Specifically, assume employee X alleges he hurt his low back lifting a heavy object at work. The investigation discovers that employee Y heard employee X say that he was fed up with his manager and couldn’t take much more. What is fact? The only fact is that on one date X complained about his manager and said he couldn’t take much more. That is it. X’s statement does not mean that X feigned injury or exaggerated its severity. To move from X’s statement to that conclusion is an inference that requires additional information for it to be believable. The inference is that X reached some sort of breaking point and is using the work injury (or feigning injury altogether) as a means of avoiding his manager.
When judging the significance of the statement, several factors must be considered. Obviously if the injury is relatively near in time to the statement, it would appear more likely that they are related. Other factors could make the inference stronger as well, such as similar, repeated comments, a discernible change in performance, a discernible change in attendance, or any overt conflicts with his manager. On the other hand, if X was a generally good employee who was having a bad day and significant time elapsed between the remark and the injury with no further overt evidence of conflict with the manager, then the inference is weak. Likewise, in judging the likelihood that X is avoiding work based on the prior statement, one must consider the benefit to X of being absent (avoiding the manager, not having the responsibilities of the job) with the costs of being absent (wage loss, benefits loss, loss of social contact with coworkers, etc.). In this case, if X only made one statement and the injury involves an extended absence with significant financial consequences, the inference will be weaker.
In order to effectively determine the strengths and weaknesses of any claim, we must be able to ask and answer the right questions. Simply recording a narrative of events without asking whether each component is a fact, an inference, hearsay, or opinion will skew the analysis badly. For every piece of the narrative, we should ask how we know it, why do we believe it, and what evidence supports the belief. Once we take this step, we will understand the extent of our knowledge, whether our knowledge is based in fact, the inferences that can be drawn from our knowledge of the facts, how strong those inferences are, and what additional evidence or information should be obtained to strengthen inferences or eliminate ambiguity and uncertainty. When we know this, we can effectively assess liability, damages, and further claims investigation necessary.
We recently published a couple of posts about the impact of cognitive biases and emotion on decision making. In the posts, we offered some suggestions on how to limit biases and emotions in order to make better decisions. Recently, we came across a paper by Jeffrey W. Brewer, a member of the Risk and Reliability Department at Sandia National Laboratories, that discusses strategies for overcoming cognitive biases and irrational risk perception. Brewer’s specific discussion deals with overcoming biases in the context of explaining the benefits of nuclear power; however, his general discussion offers a number of strategies that can be applied in any business setting.
Brewer reduces the strategies to a simple statement that focuses on thinking carefully, question assumptions, and using the best available evidence:
Techniques to counter the undesirable tendencies [of cognitive biases] include a strong commitment to reflect on one’s biases in a specific decision making situation, to make decisions using the most valuable quantitative data available, and to carefully map out what one considers important in the decision making setting.
He then offers ten specific strategies that can be used to overcome our biases when we make critical decisions:
While not every decision in the medico-legal-claims environment requires such careful attention, we do make high stakes decision involving significant monetary sums that can have profound impacts on employers, employees, and health care providers. When we are tasked with making such important decisions, we should make an effort to ensure that we are making the best decision possible based on reason and the best available evidence. Following Brewer’s strategies can help us do just that.
Although some of Brewer’s strategies are self-explanatory, some of them are not and all would benefit from a more extended individual treatment. Over the course of the next few posts, we will address Brewer’s strategies in more detail, explaining exactly what each strategy means, why each strategy is important, and how each strategy can be implemented, using practical examples.
Medical News Today reports on a recent finding from Johns Hopkins that most spine surgeons do not follow recommendations for presurgical screening for depression and anxiety. This is significant because depression and anxiety are known to increase recovery times and reduce the likelihood of a successful outcome. According to one researcher quoted in the Medical News Today article,
"Our survey results show that surgeons and patients still have a long way to go in recognizing and appreciating how much psychological factors and mental health can impact the success of their back surgeries," says health services researcher and senior study investigator Richard Skolasky, Sc.D. "It may be necessary to delay surgery in order to first treat a patient's depression or anxiety to minimize the likelihood of prolonged recuperation after their operation.
Interestingly, the study found that surgeons in private practice and at community hospitals were more likely to provide presurgical screening than were surgeons affiliated with university hospitals. In addition, surgeons with more than 15 years of practice and those performing 200+ spinal surgeries per year were more likely to provide screening.
Considering the enormous expense of spine surgery, it would seem wise for claims handlers to exert whatever influence or control available to ensure that claimants receive proper presurgical psychological screening before undergoing recommended spine surgery. This also seems to be an area in which the insurance industry (including group health carriers) could and should exert its influence to make presurgical psychological screening mandatory in spine surgery cases.
Many of us are in the business, directly or indirectly, of employee health and well-being. From a purely economic standpoint, employee health and well-being is a significant cost driver in any business. In the medico-legal world we are often at the intersection of disease status/health and employment. Historically, businesses have analyzed health and injury claims made to assess employee health, which was then used as a predictor of worker productivity.
Claims made is an easy but de facto method of measuring employee health. In addition, claims made do not capture other stressors that may impact productivity such as financial problems, family strife, etc. Claims made also fail to capture disease status/health that could result in claims made but are, for myriad reasons, not. For example, an employee with a chronic health condition may be on her spouses insurance and hence have claims that would otherwise be made but instead go unreported. Also, an employer with poor or no insurance is likely to have a claims history that does not accurately reflect the health status of its employees and how this impacts productivity.
Recent research suggests that employee well-being is a more accurate and dynamic metric for predicting employee productivity. In a compelling article, “Comparing the Contributions of Well-Being and Disease Status to Employee Productivity,” Gandy et al. found that “physical health is not sufficient to represent the vicissitudes of productivity in the modern workplace, but that the more global measure of individual well-being has a more important role in explaining productivity variance among workers.” The report specifically concluded that individual well-being status was “more predictive [of on-the-job productivity] compared to other factors, including disease status.” The study reported that well-being status was more predictive than disease status even among those with a positive disease status (diabetes, in this case). In other words, a worker with diabetes but with a positive well-being score was likely to be more productive than a healthy worker with a lower well-being score.
Gandy et al.’s findings dovetail with the general attitude shifts that have swept across the business world which has caused businesses to view employees as dynamic parts of and integral to corporate success. As Gandy et al. note, “In the new globally competitive marketplace, human capital has become the competitive advantage that employers can no longer afford to take for granted.” This paradigm shift has been borne out in the marketplace. For example, “A large international survey by the World Economic Forum found that organizations viewed as actively promoting health and well-being were at least 2.5 times more likely to be rated a best performer and to encourage creativity and 4 times less likely to lose talent.” One reason for the survey’s salience is “because well-being is many times a cause of other valued outcomes, such as worker productivity and rewarding relationships.”
This disconnect between health and well-being frequently plagues worker’s compensation claims. Surely we have all been dogged by the employee whose behavior seems considerably more impaired than the objective physical findings suggest. Frequently we look to issues like symptom magnification, malingering, or secondary gain to explain this perplexing behavior. Perhaps, we should instead be asking targeted questions to get at the person’s overall well-being. If the root cause of the disconnect between behavior and objective physical findings can be identified, at a minimum the behavior will be less perplexing and it may offer the opportunity to solve an otherwise vexing claim.
Patients often confuse positive findings on diagnostic imaging studies and what the findings mean for their personal health. For example, many studies demonstrate that asymptomatic persons who undergo MRI scans of their shoulder, knee, neck, or back frequently demonstrate positive findings, especially in persons over 40. In the case of a shoulder this may be in the form of shoulder impingement or rotator cuff pathology. A knee scan may demonstrate a torn meniscus. A neck or back scan may show a herniated disk. The question for the healthcare market generally is whether positive findings in asymptomatic individuals lead to increased healthcare costs.
Unfortunately but not surprisingly, much research finds that positive findings on diagnostic imaging scans of asymptomatic persons lead to increased medical interventions and costs. This is particularly problematic in the context of back and neck pain. According to the Journal of the American Board of Family Medicine, spine surgery rates are highest where spine imaging rates are highest. www.jabfm.org/content/22/1/62.full.pdf. As the authors note
One problem with inappropriate imaging is that it may result in findings that are irrelevant but alarming. Positive findings, such as herniated disks, are common in asymptomatic people. In a randomized trial there was a trend toward more surgery and higher costs among patients receiving early spinal MRI than those receiving plain films, but no better clinical outcomes.
Another study (subscription required) compared early MRI use versus no MRI use in low back pain patients and found significantly higher costs among those receiving early MRIs. “The early-MRI groups had similar outcomes regardless of radiculopathy status: much lower rates of going off disability and, on average, $12,948 to $13,816 higher medical costs than the no-MRI groups.” As a result of studies such as these that demonstrate increased interventions and costs following positive findings on diagnostic imaging, the American College of Physicians and the American Pain Society “recommend against routine imaging in patients with nonspecific back pain …”
In addition to the costs associated with a positive finding on MRI in an asymptomatic person, the actual cost of the MRI may itself be unnecessary. A study published in the American Journal of Sports Medicine (subscription required) compared the effectiveness of standard clinical examinations versus MRI scans for various conditions. Remarkably, the clinical examination outperformed the MRI in diagnosing ACL pathology, meniscal pathology, and articular cartilage pathology (osteoarthritis). With respect to diagnosing articular cartilage pathology, clinical assessment was 100% sensitive while MRI was only 33% sensitive. This study seems to suggest that MRI would not even be necessary for knee pain without a correspondingly positive clinical finding.
A large part of the problem may be due to a misunderstanding of pain and an overconfidence in the abilities of medicine to manage it. Most people who suffer from chronic or recurrent pain assume that if a specific cause of the pain can be identified and once identified the specific cause can be ‘fixed,’ which will remove the pain. Unfortunately, chronic or recurrent conditions often do not work this way. For example, degenerative arthritis is not susceptible to easy fixes and requires a strategy of management and tolerance rather than futile and expensive searches for cures. As the JABFM article points out, “there are no ‘magic bullets’ for chronic back pain, and expecting a cure from a drug, injection, or operation is generally wishful thinking.”
The fact of life is that there are often no panaceas for age-, genetic-, or disease-related degenerative conditions. “Patients need realistic expectations despite product marketing, media reports, and medical rhetoric that promise a pain-free life.” It is hard to keep expectations realistic when being besieged by marketing, media reports, and medical rhetoric. Our desire for efficiency, to find the fastest, easiest solution to any problem, further complicates the ability to maintain realistic expectations. Not only are we inundated with messages that tell us the answer to our problem is easy, we are also biologically programmed to seek the easiest solution. This is most unfortunate because with chronic conditions like joint pain or back pain, the most effective treatment is usually one that requires lifestyle changes, which indubitably is not the easiest solution. Hence, losing weight, increasing activity, pursuing a targeted home exercise program, and psychologically conditioning oneself to deal with persistent pain will bring the most relief but is probably the last option most persons will want to pursue.
The medicolegal world often confronts the difficulty of imaging studies creating problems where none previously existed. This can be devastating in the context of chronic pain because, as noted above, increased imaging tends to lead to increased surgical intervention. And if the imaging study finds an asymptomatic lesion, operating on an asymptomatic lesion or condition will not fix the chronic pain. It is important that we in the medicolegal world ask healthcare professionals to follow evidence-based standards for performing imaging studies in the context of musculoskeletal complaints. If imaging studies are not indicated, they should not be performed for the simple reason that the likelihood of an asymptomatic lesion or pathology being discovered is substantial, which is likely to merely induce the patient to fixate on the lesion or pathology as causative of his or her problem. This fixation often results in increased medical expenses, unnecessary interventions, and increased disability. To the extent that medicolegal professionals can require treating physicians follow evidence-based treatment guidelines, they should. One mechanism for doing this is through the IME. To be most effective in this regard, it may be advisable to ask the IME physician a specific question related to what evidence-based treatment guidelines apply and should be followed.
Stratified or targeted care of back pain implemented by family doctors leads to 'significant' improvements for patients and a 50% reduction in work absence - without an increase in healthcare costs...
To accomplish the targeted care, general practitioners participating in the study gave patients a 9 part questionnaire to evaluate the severity of their back problems. Patients were then placed low risk, medium risk, and high risk categories, with treatment individualized based on the level of risk. Importantly, the low risk patients were not given intensive treatment but were simply reassured about their back pain and given strategies for managing it. Medium and high risk patients received "more intensive treatments led by [physical therapists]."
Prior research found that targeted treatment of back pain was effective, but this is the first evidence that targeted care is effective at the family practice level of care. Medical News Today quotes Professor Alan Silman, medical director of Arthritis Research UK:
This exciting research shows that stratified or targeted approach to managing back pain in primary care is effective, and challenges the 'one-size fits all' strategy that is currently recommended by national guidelines in which everyone with nonspecific back is offered the same treatment, irrespective of their risk of persistent problems.
Critically, the research found that the targeted approach to back pain does not increase costs. Whether the results can be duplicated remains to be seen, but the study offers a promising method for early, cost-effective intervention in persons suffering from back pain. The fact that the protocol resulted in a 50% reduction in workplace absence is remarkable and reason enough to attempt to replicate the findings so they can be implemented as standard care in general medical practices. Professor Silman put it to Medical News Today best:
Back pain is one of the leading causes of work place absence, and to be able to reduce this burden on society by getting more people back to work, as well as giving benefit to individuals is a fantastic outcome.
Successful management of a claim or case, whether plaintiff or defense, requires logical analysis. The essence of the tort and worker’s compensation systems is monetizing injury and allocating responsibility for payment. Essentially, claims and cases are just a fight over money, over who should bear the cost of a particular illness, injury, or condition. In a perfect world, we would analyze cases carefully and assign value dispassionately and with the rational precision of Mr. Spock. Unfortunately, ours is not a perfect world. We are not perfectly rational and emotion often infuses how we analyze and manage claims.
Human beings, though possessing remarkable cognitive capacities, are creatures of emotion. And no matter how hard we try, we cannot divorce emotion from reasoning. This presents particular problems for those of us in the medico-legal world because we are asked to administer, defend, and prosecute claims using pure, objective reason while being almost biologically incapable of doing so. For example, in our system of risk perception, instinctive reaction moves faster than conscious thought, “The system is set up to be fast rather than smart. Our brains are hardwired to feel first and think second.” Not only that, but “in those cases where the outputs from the two processing systems disagree, the affective, association-based system usually prevails.” (full paper can be downloaded from linked site).
So what do we do given that, “no matter how hard we try to reason carefully and objectively, our brains are hardwired to rely on feelings as well as facts to figure out how to keep us alive?” For starters, it helps to acknowledge that our decision making is less rational and objective than we think. We want to analyze claims with as little emotional response as possible. In making decisions, we should strive to push reason forward so that the quick-response, emotional system does not dominate and overpower more deliberate, rational thought. We can implement strategies to give the conscious, rational part of our brain more influence over our decisions:
When analyzing and managing claims, taking a few simple steps to slow down and let reason come to the fore can help minimize the role emotion and bias plays. And the clearer we think, the better we are at analyzing liability, causation, and the nature and extent of injury.
A University of Minnesota Carlson School of Management professor recently published a study on PLOS ONE that concluded that working while on a treadmill boosts productivity. Yes, you read that right, working while on a treadmill. The lead author, Professor Avner Ben-Ner anticipated that the findings would be objected to because of the cost of retrofitting or building a workspace with a treadmill:
It's a health-improving option that costs very little. I think there will be an increasing number of employers who will invest $1,000 or $2,000 in outfitting a persons' workstation… The employer benefits from the employee being active and healthy and more smart [sic] because more blood is flowing to the brain.
While it is hard not to look at this study without tongue firmly planted in cheek, the study noted that the participants were walking rather slowly while working and that there was an adjustment period during which productivity declined. The obvious side benefit of working on a treadmill is that it reduces the deleterious effects of being sedentary while on the job which certainly could result in substantial cost-savings to employers. Regardless, I personally look forward to my office space resembling this: