Every so often a statistic wanders through our industry that sounds too good to be true. Usually, it is. Someone shows a slide promising a 70 percent reduction in something, the room nods, and six months later we learn that the study involved eleven claims at a single bakery in 2009.
So I approached this one with my customary skepticism. According to claims data, communication grounded in empathy is associated with a reduction in claim costs of 20 to 50 percent. That is a wide range. It is the kind of range a weatherman gives when he has no idea whether it will rain. But here is the thing that keeps me from dismissing it: almost every serious piece of research in this space points in the same direction, and none of it points the other way.
Consider what Lockton found when it went digging through adjuster notes. The researchers examined notes covering $16 billion in workers’ compensation claims, representing 65 million transactions. They were looking for one thing: fear. Lost-time claims cost an average of 3.5 times more when words like “fear” and “afraid” appeared in adjuster conversations, and 84 percent of litigated lost-time claims costing more than $100,000 had those fear words in the notes.
Read that again. The most expensive claims in the system are not necessarily the ones with the worst injuries. They are the ones with the most frightened people.
The Hartford came to a similar conclusion through its own text mining. Its analysis found that the presence of “fear” in claim notes was more predictive of poor outcomes than a lumbar fusion surgery. Let that sink in for a moment. We have built entire cost containment strategies around avoiding spinal fusions, with utilization review, peer reviews, second opinions, and enough paperwork to deforest a small nation. Meanwhile, a scared worker on the other end of the phone was quietly the bigger predictor of disaster, and nobody had a form for that.
So what does a 20 to 50 percent reduction actually look like on the ground? It does not look like a software platform, although the vendors would love for you to believe otherwise. It looks like a phone call made on day one instead of day nine. It looks like an adjuster who explains what happens next before the injured worker has to ask. It looks like someone telling a frightened employee that yes, their job will still be there, and actually meaning it.
None of this is new. Research presented years ago from the Institute for Work & Health recommended listening to claimants with empathy, explaining the comp process in detail to reduce uncertainty, and making check-in calls to see how the injured worker is doing. That is not a revolutionary treatment protocol. That is what your grandmother would have told you to do.
And yet our system has spent decades doing the opposite. We send injured workers a letter full of statutory citations they cannot understand. We assign them to someone whose job title implies they are there to adjust something, presumably downward. We let weeks pass in silence, and then express surprise when the worker calls a lawyer whose television ad promises, above all else, that someone will finally listen. The attorney did not create that fear. We did. The attorney just answered the phone.
The good news is that the industry has noticed. Rising Medical Solutions’ benchmarking research found that advocacy-based claim styles were more prevalent in higher performing claims organizations, and that more training for adjusters in communication and soft skills like empathy was associated with higher performance. In other words, the organizations getting the best results are the ones treating injured workers like people. Imagine that.
I want to be careful here, because “empathy” has a way of being misunderstood by people who control budgets. Empathy is not giving away the store. It is not approving every treatment request or paying every demand. An empathetic adjuster can still deny a claim that should be denied. The difference is that the worker understands why, knows what comes next, and does not feel like they have been dropped down a well. Empathy is not softness. It is clarity delivered by a human being.
It is also, as it turns out, cheaper. That is the part that should get the attention of every CFO who has ever viewed claim advocacy as a nice idea for organizations with more money than sense. The research suggests the opposite is true. The money is being spent either way. You can spend it on early communication and trust, or you can spend it on litigation, extended disability, and the slow, expensive unraveling of a worker who no longer believes anyone is on their side.
This is, of course, the whole reason I have been arguing for more than a decade that we should stop calling this system workers’ compensation and start calling it Workers’ Recovery. Compensation is a transaction. Recovery is an outcome. When the stated goal of the system is to pay people, we design processes around payment. When the goal is to help people recover, we design processes around people. The cost savings follow the people, not the other way around.
Several hundred professionals have now gone through our Workers’ Recovery Professional certification at WorkCompCollege.com, and the thing I hear most often from them is not that they learned some radical new technique. It is that they finally got permission to do what they always suspected was right.
So when someone tells you empathy can lower claim costs by 20 to 50 percent, you are welcome to be skeptical about the exact number. I am. But do not be skeptical about the direction. The data on fear, litigation, and outcomes is too consistent to ignore. A frightened worker is an expensive worker. A worker who feels heard is usually not.
It turns out the most effective cost containment strategy in workers’ compensation is treating people like people. Who knew?
Just thought you should know. It’s what I do. No need to thank me.
Sources referenced in this article:
Compassion as a KPI: Measuring Empathy in Claims Management – WorkersCompensation.com
Fearful claimants generate higher workers comp costs – Business Insurance
Psychosocial Issues Main Barrier to Successful Workers’ Comp Claims Outcomes
Empathy, measured approach can aid claims communication – Business Insurance