Illinois: Researchers say severity of injury drives comp costs, not legal fees

The severity of injury and level of impairment are the major driving factors behind workers' compensation costs in Illinois, not injured employees' legal fees, according to a study.

For the report, which was published in the Journal of Occupational and Environmental Medicine, researchers from the University of Illinois at Chicago School of Public Health used workers' comp data to quantify the actual amount of money spent on claims. The researchers identified specific factors associated with cost, such as age at the time of accident, weekly wage, fatality, attorney representation, number of body parts injured, and the severity of injury.

The study evaluated 19,734 construction injury claims filed with the Illinois Workers' Compensation Commission between 2000 and 2005. The cumulative cost of the claims was more than $580 million. However, researchers said the true direct costs were likely much higher because the commission's data do not include external settlements made directly to workers from an employer or insurer.

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The researchers found that the number of injury claims declined between 2000 and 2005, but the median compensation for an injured worker increased. The overall rate of construction claims per 100 Illinois construction workers was 1.21 while the median cost of a claim was $16,705.

The study found that construction workers filing a claim with attorney representation received $1,210 more in compensation than those representing themselves after controlling for all other variables in the analysis.

"Before throwing in measures of severity -- which in this study was percent of disability -- attorney costs were about $10,000 per worker," said Lee Friedman, lead author of the study. "Once we controlled for severity of injury, it dropped to $1,200."

Friedman said this finding is contrary to previous study models, which concluded that attorney's fees significantly increase the cost of workers' comp.

"The discussion that workers retaining attorneys are driving up costs always surprises me," Friedman said. "There has never been a discussion about employers retaining attorneys, which they almost always do. The discourse has always been one-sided."

The study also found that injuries to the extremities (58 percent) and back or spine (20.5 percent) were the most common. In addition, workers who suffered back and spine injuries received higher compensation than workers who injured other body parts.

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January 11, 2010

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