Heart Disease and Workmen's Compensation - …circ.ahajournals.org/content/circulationaha/24/2/274.full.pdfcial area of whether or not a cardiac accident ... cost less than $1,000,

Heart Disease and Workmen's CompensationWhat Are the Costs to the Insurance Carrier?

By ROBERT D. RUSSELL, ED. D., AND RODNEY R. BEARD, M.D.

E; VERY CARDIAC INJURY CLAIMgets an award, and every award is a

sizable one." This generalization concerningthe awards under the Workmen's Compensa-tion Act of the State of California stands asan increasingly obstinate barrier to the reha-bilitation of cardiac cases in this State. Therecognition of this fact was translated into atangible form of action in 1955 when a teamof research workers sponsored by the Cardiacin Industry Committee of the CaliforniaHeart Association undertook a study of"Heart Disease Claims under the CaliforniaWorkmen 's Compensation Act"1 - in order tosubstitute some facts for opinions in the cru-cial area of whether or not a cardiac accidentis work connected. The authors concluded thatheart disease claims filed in the study period(1948-1951) were not very great in compari-son to the size of the State's population andto the number of deaths caused by heart dis-ease; heart claims constituted 1.7 per cent ofall claims decided by the Industrial AccidentCommission during this period. They noticeddiscrepancies in judgment among physiciansand concluded that education of physiciansfor the part they play in these case proceed-ings is needed. Their final statement said,"It may also be pointed out that the allega-tion that 'every heart claim gets an award'has not been substantiated by this study."1

In 1959 the present authors organized afollow-up study, sponsored by the Committeeon Rehabilitation of the California HeartAssociation. This study was designed to at-

From the Department of Health Education, Schoolof Education, and the Department of PreventiveMedicine, School of Medicine, Stanford University,Stanford, California.

This study was sponsored by the RehabilitationCommittee of the California Heart Association;this report is presented through the Committee.

274

tack the area of costs-what the insurancecarriers (and, ultimately, the employers) paidto workers or survivors filing cardiac accidentclaims for the period 1948-1951. The Com-mittee would like to offer these data in acomparative way with figures from otherstates and with cost data associated with othertypes of injury. Yet it seems that the infor-mation for comparison is not available; thisinvestigation, then, must stand on its own orserve as a basis for later comparison.The authors also are fully aware that costs

for the period 1948-1951 cannot be acceptedas directly representative of costs a decadelater. The cases from this 4-year span wereselected because they were the cases used inthe original study and because during thisspan all cardiac cases went to a referee ofthe Industrial Accident Commission for dis-position. In subsequent years all cases havenot gone to referees, which introduces anothervariable into such a cost investigation. Thusit would seem that the figures for any timespan-no matter how recent-would have tobe qualified. The results of this investiga-tion are offered as a point of departure anda base for further study.A total of 523 case-record abstracts (filed

in the Northern and the Southern Californiaoffices of the IAC) were available for use inthe selection of a study sample. In the origi-nal study the cases for each district officewere numbered consecutively; using a tableof random numbers, the investigators selected100 cases and 14 alternates to be included inthe sample.Out of the total of 114 cases, two were

found to be noncardiac injuries and five (4per cent) offered no cost information of anykind, leaving a working sample of 107 cases.The procedure for gathering the data con-

sisted of tracking each selected case back to

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HEART DISEASE AND WORKMEN'S COMPENSATION

the insurance carrier and obtaining, eitherthrough a mailed form or the investigator'spersonal visit, all the cost data available.When the company was unable to provide in-formation (due to destruction of records) theinvestigator went back to the case summarydeveloped and utilized in the original Beardstudy, which provided the major cost itemsin most cases.The information sought was as follows:1. Amount paid on Temporary Disability

(amount per week, number of weeks,and total amount).

2. Amount paid for Permanent Disability(amount per week, number of weeks,and total amount-for both PermanentTotal Disability and Life Pension).

3. Amount paid for medical care.4. Amount paid for Subsequent Injury.5. Amount paid in Death Benefits, either

as direct benefits or as burial expense.6. Amount of Compromise and Release

settlement.7. Amount of other Direct Costs (inves-

tiaations, phone charges, medical ex-aminations, etc.).

8. Amount in reserve set aside if the in-jured is still living.

9. Amount held in reserve for futuremedical costs.

10. Amount of Indirect Costs.Sixty of the cases (56 per cent) provided

"full information," defined as those casesin which items 1 through 8 in the foregoinglist were included or apparently nonexistent.Forty-seven cases (44 per cent) were repre-sented by partially complete figures; in 38of these (35 per cent of the total) the infor-mation came from the abstracted case recordpreviously referred to.The following profile of the sample can be

sketched in from a review of the data*:

*A number of the case reports were much lessprecise as to the exact breakdown of the award thanthe categories set up for this study; as a consequence,the investigator had to make a number of judgments-with consistency as one of the major guideposts-as to how particular cases and amounts should beconsidered.


Out of 107 cases in the sample,1. Seventy-nine (74 per cent) received

awards of some magnitude, while 28(26 per cent) were denied any com-pensation.

2. Nine cases (8 per cent) were awardedTemporary Total Disability, six (6 percent) were awarded Permanent Disa-bility, four (4 per cent) received both,five (5 per cent) were awarded someunknown combination (including deathbenefits), making a total of 24 (22 percent) who received awards of disabilitypayments.

3. The most prevalent type of compensa-tion was the Compromise and ReleaseSettlement, which went to 46 of thecases (43 per cent) ; this form of settle-ment was at least part of 58 per centof all awards.

4. Twelve cases were awarded statutorydeath benefits (12 per cent).

5. Medical payments were awarded in 37of the cases (33 per cent) ; in addition,nine (8 per cent) were reimbursed formedical examinations in conjunctionwith hearing proceedings or death. Ofthe former group 17 (16 per cent) werecompensated for both disability andmedical care, 11 (10 per cent) receivedmedical reimbursement plus a compro-mise and release settlement, four (4 percent) were awarded a combination ofmedical care, temporary disability, andcompromise and release, three (3 percent) received medical plus death bene-fits, and two (2 per cent) medical ex-penses alone.

6. Six cases from the total sample (5 percent) are still open and being paid (8to 13 years after injury).

7. Out of the 114 cases initially selectedfor review, two were noncardiac; of theremaining 112 heart cases, 49 (44 percent) were dead at the time the In-dustrial Accident Commission decisionwas rendered (fig. 1).

Because of the division of the sample into

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RUSSELL, BEARD

Benefit of Nnb kind

Comprom ise & RelectsesetlPement (46 cases0)

Death 1benefits (12 cases)

Medical (37ccases)

Disabi~itq compensation (24 cases)

No benefit128 cases)

10 20 30 -40 so 60 70Percent of ceases

Figure 1Major varieties of lorkmen's Compensation beije-

fits awarded to a sample of' 107 heart diseasecla~inasts, Californ)1i(a, 1948-1.591. (Thl e percen togesin this figure total more than 100 per cent doe

to the fact that file (c(aess ('; per cent) receied(lboth temnporary (l isalility and a Compromise andlRelease settlement and th as were counted ttice,and the fact that all baut two (.5 per cent) o f thoserecciimy m edical treatment (costs were awna rded

some other form of benefit as well.)

those cases with reasonably complete infor-mation and those with partial or incompleteinformation the cost figures must show thesetwo categories. Table 1 presents the mean andmedian total costs for a cardiac injury(rounded off to the nearest whole dollar).

If one considers total costs from a slightlydifferent viewpoint, it can be shown thatamong the 60 cases for which data were com-

plete, 20 (33 per cent) cost less than $1,000,while 22 (37 per cent) amounted to $6,000or more. For 30 cases with incomplete fig-ures on the payments paid, seven (15o per

cent) averaged less than $1,000, and three(10 per cent) cost above $6,000 each. Puttingall the figures together, 27 (25 per cent) ofthe cases cost less than $1,000, while 25 (23per cent) received awards and incurred coststotaling $6,000 or more per case (fig. 2).There is a temptation to infer that the

costs of the cases with "incomplete informna-tion" would approach those with "completeinformation" if all the data concerning themwere available. This inference is probablyincorrect. The major items of compensationpayments and medical benefits were completein most instances; the information lackingwas mainly with respect to investigationalcosts, medical examinations, and similar rela-tively inexpensive items. Simply because theywere more important, more complete recordswere kept on the high-cost cases.

The range in costs of the 79 cases receiv-ing awards was from $76.89 to $30,541, withthe latter case still "open" and receivingcompensation. (Both of these were "com-plete" information cases.)

If one looks at the total cost picture in stillanother way, it can be shown that the sixcases (6 per cent) with the highest awards(averaging just over $15,000 each) cost theinsurance carriers a total of $90,610-or 26per cent of the total awarded in cardiaccases for the sample in the 4-year period. Toapproximate this figure from the low com-

pensation award cases would require 59 cases

(55 per cent), the total costs from whichtotal $89,974 (26 per cent).

Total awards and costs have thus been pre-

sented in a number of ways; it would now

seem appropriate to break these down andlook at them in terms of the "categories"

Table 1Mean and Median Total Costs for a Cardiac Injury, California, 1918-1951

Mean total cost per case (full iiiforination) .............................. $4,486MCean total cost per case (incomplete information) .......................... 1,584Mean total cost per case (both) ........................................ 3,211

Median total cost per case (full information) ............................ 3,291Median total cost per case (incomplete information) ........................ 713Median total cost per case (both) ....................................... 1,663


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spelled out in the earlier profile. Figuresused in the succeeding paragraphs refer,then, only to that portion of the total sum paidwhich was designated temporary disability,medical, Compromise and Release, etc.As was indicated earlier Compromise and

Release settlements were the most frequentresult of a cardiac injury claim. Of the 45eases so settled the mean cost was $2,427, themedian cost was $1,750, and the range was

from $9 to $7,500, with 24 per cent of thecases under $1,000 and only 15 per cent above$4,000.

Nine cases from the sample (8 per cent)were awarded Temporary Disability. Themean cost of these awards was $1,051, andthe median cost was $876.43. The range ofjudgments was from $90 to $2,790.The six cases (6 per cent) receiving Per-

manent Disability represented a range be-tween $2,179 and $9,496, with a mean costof $6,701, and a median of $7,333. In thesecases the awards tended to cluster in the$6,000 and $7,000 categories, so that disre-grarding the one low award would raise themean to $7,065. These figures can be con-

sidered indicative only of relative costs fora timespan, inasmuch as four of the six are

still "open" cases. Two cases are receiving$18.46 per week, one $6 per week, and thefourth $3.85 per week as a life pension.A total of 24 cases (22 per cent) received

disability awards of some type. The range ofawards was from $90 to $30,541; the mean

cost was $5,431, and the median was $4,649.As would be expected these disability cases

were somewhat more expensive than the aver-

age; whereas the number of cases (24) rep-

resents only 22 per cent of the total workingsample, the total cost of the cases represents38 per cent of the total cost.Twelve awards (11 per cent) were death

benefits; the mean of these was $5,471 andthe median $5,800. (Disregarding one very

low award brings the mean figure to $6,010,an even closer approximation to the median.)Mean medical costs for the 37 cases in which

this form of compensation was given were

$1,111, but this figure was greatly influ-


1 .....0:.:,.: .. .. . .: .:: ::::::::::::::::..-

Some::::::::cs, but::l:s:

Q~~~~FullorifornctooOnomlt.....e. .... 1; j Fig re

10.. 15.............4

Total costs per case of 90 cases of heart injury,California, 19 18-1951. The 90 cases inclulde the 79that received awards pulus 11 that received nzoaward bout cost the insurance carrier an idenltifiablesumg of m~onsey. The 17 cases that cost nlothing arenlot included. Inz these 11 cases, then, "received noaward" is not synzonymous with "cost nothing."

enceed by a fews large awards. Specifically,it canl be shown that the five eases receiv~ingawards of more than *q2,000 (averaging justover *4,000), wshile representing only 14 percenet of the total number, cost their carriersan amount equal to 52 per cenit of the totalcost of mnedical care. Without these five casesthe mneanl cost is slightly mloreA than half itsoriginal size (*$622 ) and mnore closely ap-proximates the median expense figure of*467. Four eases are still "openl," the carrierbeing responsible for all further mledical billsrelated to thle cardiac condition.The category "Other Direct Costs" con-

tainled a figure inl 50 of the cases (47 per('clt) ; the range of costs was $2.50 to $627.12,the mean cost $142 and the median $50. Againa rather large gap is noted between the mleanland median, which is partially explainled bythe revelation that 50 per cent of the costswsere under $50 and a total of 64 per centwere nuder $100, with 18 per cent between$d100 and $200, 10 per cent between $i250aimld $330, and the final 8 per cent eostiimgover $330.

Another interesting group of figures avail-aIble to the investigator involved time rather1 laul mloney-and may be helpful in answer-ing' questions such as ''how long does it taketo complete a case?" or "How long is it,typically, between a cardiac injury and set-

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RUSSELL, BEARD

tlement of the claim ?" It was found thata mean period of 6.1 months passed betweenthe day of injury and the day of filing thefirst claim with the Industrial Accident Com-mission (median-5 months). Nearly 50 percent filed within 5 months, but 5.5 per centtook more than 2 years to take this action.

It also was found that the total mean timespan from first Industrial Accident Com-mission entry until the last closing item was11.4 months. If the three cases with longsettlement periods (50 to 84 months) wereleft out, the mean dropped to 9.8 months,and if the mean were calculated without thetop 10 per cent of cases it amounted to 7.5months.

In answer to the question as to whetherthe two offices (Los Angeles and San Fran-cisco) processed cases alike it was found thatwhile the mean for San Francisco was 10.58months and that for Los Angeles 12.83, the"t" test for the significance of differencebetween means showed a "t" value of 1.22,indicating that this difference readily couldhave occurred by chance.

In 40 cases the insurance carriers pro-vided their closing dates, and for this groupthe mean time elapsing between injury andclaim settlement was 39 months (median-32.5 months). About one third of the caseswere settled in 20 months or less, and 121/2per cent took over 70 months; more than halffell into the category 10 to 50 months, or 1to 4 years. (This does not include the sixcases still open and being paid, where themean time elapse since Industrial AccidentCommission closure has been 9 years, 31/2months.)

In discussing the procedure utilized in thisinvestigation the authors have concluded thatwhereas in some cases rather complete in-formation finally was available from the in-surance carriers, the number of these casesand the extent of the completeness did notjustify such a time-consuming method. Theinvestigator soon learned that private insur-ance companies make it a policy to destroycase records 5 to 10 years after the closuredate. Undoubtedly the most efficient and

uniform procedure would be to use the totalIndustrial Accident Commission file as thesource, compiling figures on awards only.(One of the results of this study, whichshowed that "Other Direct Costs" are re-ported as representing only 2 to 3 per centof the total mean cost, would seem to justifythis slightly more gross but greatly more effi-cient procedure.) Use of a common source,such as the Industrial Accident Commissionfile, would eliminate the variable of greatlyvarying precision in data reporting whichmust be admitted in preface to the conclusionsof this study.

If one looks at the information presentedas a basis for comment, it is interesting tonote that most claims are settled rather quick-ly, with only 6 per cent still open (8 to 13years after injury). (Two of these cases arereceiving a life pension, two life pension andmedical expenses, and two medical expensesonly.) The majority of cases, then, are set-tled in less than 4 years.Though this study does show again that

every heart case does not get an award, italso discloses that slightly less than three-quarters of the claimants do get an award ofsome amount. In this regard, the fact thatthe insured died before settlement seems tobe pertinent to the decision; 27 per cent ofall cases in the sample received no award:17 per cent of the deceased received noaward, while 35 per cent of those survivingreceived nothing. (The treatment of thesefigures by the Chi square procedure showsthe difference significant at the .03 level.)This would indicate that the survivors ofdeceased claimants were more likely to re-ceive an award than would be the case ifdeath had not occurred, chance being a veryslight factor.The report indicated earlier that the Com-

promise and Release settlement was the mostcommon result of a case judgment. The rea-sons behind such an observed reality maybe inferred from observations that follow:1. Individual physicians may dispute one

another's judgment in case testimonies. TheIndustrial Accident Commission considers

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the judgment of any licensed physician to

lbe as competent as ally other. Where testi-inony is in conflict, the result is usually a

Compromise and Release settlement. Ill gen-

eral among the sampled cases, the indefinitestatement of a single physician that the al-leged injury "might have been work-connect-ed" would ehange a "no award" case to a

Compromise and Release settlement. How-ever, ill one instance a case in which all thefacts seemed to point to a generous awardwas finally settled by Compromise and Re-lease when one physician strongly averred

that "there was no unusual strain to whichthis attack can be attributed . . . " 2. Claim-ants may be so bothersome that a carriermay compromise just to be rid of them. Inone such case anl award was denied 5 monthsafter the claim was filed; 3 months laterthis denial was reaffirmed. One year latera case reopening plea was denied. Upon theiimjured's ldeath (1 year later) the case was

finally reopeimed, and a Compromise and Re-lease figure of $3,400 was agreed upon. Therecord states, "flowever, the defendantsare willing to pay said sum to end liti-gation and buy their hleace." 3. Some phy-sicians may word their statements with syni-

pathy for the patient as a guide. DouglassA. Campbell, J.D., the "dean" of the Cali-fornia Industrial Accident referees, stated.in an address to the California Heart As-sociation ". . that the accused event miqhthlave eaused the heart attack is not scien-tifically sufficient for an opinion of causa-

tion . . . for every 'sympathy decision' . . .

literally hundreds, if not thousands, of car-

diac cripples will be denied the chance towork. "22The Compromise and Release settle-ment, then, may symbolize both a lack ofaccurate, agreed-upon medical knowledge re-

grarding heart disease and a social and eco-

nomic value situation in which the desirethat people should not have to be in need as

a result of an injury is not yet matched bythe proper structures to provide such funds.

If one assumes that the vast majority ofcardiac accidents would require some amountof medical care, it is interesting to note that


only 35 per cent received such an award.Costs for this form of award seemed reason-able; the difference between mean and medianfigures is explained by the top four eases(11 per cent), whose awards averaged over$4,500-including one ease that accounted for24 per cent of the total medical care awards.Thus, while the chance of high medical billsis present, it seems to be just about 1 in 10.The total cost of a case can be expected to

fall within the range of $2,000 to $4,500. The$1,500 discrepancy between the mean andmedian figures emphasizes the importance ofthose who receive sizable awards (the 7 percent of the claimants with the highest awardsreceived monies equal to those received by 67per cent who rated small awards). The samegeneralization would hold for Compromiseand Release settlements, though the diserep-ancy difference here is less than $700.As expected, disability awards amounted to

more than Compromise and Release settle-ments; roughly two-and-a-half times more.

In summary and conclusion, this report hasprovided some definite cost figures taken froma randomly selected sample of cardiac caseswhose claims were heard by a referee of theCalifornia Industrial Accident Commissionduring the 1948-1951 period.

It shows that Workmen 's Compensationbenefits cost, on the average, about $3,000 percase. Disability and death benefit awardsaccounted for 34 per cent of the awards andaveraged just under $5,500 each. Medicalawards were made in 35 per cent of the casesand averaged $1,111, though this figure wasgreatly influenced by a few large payments.The Compromise and Release settlement wasthe form of compensation in 43 per cent of thecases-and was at least a part of 59 per centof the awards; mean cost of these cases was$2,427. Only 6 per cent of the total samplewere "open" eases (still being paid).

It further shows that about 6 months, on theaverage, elapsed before a worker filed a claim,and that the disposition required just lessthan 1 year. The mean time for completionof an award case with the insurance carrierwas just over 3 years.

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RUSSELL, BEARD

While reliable, comparable figures on thecosts of Workmen's Compensation benefits forother disease or injury categories or for otherStates have not been available, we have theimpression that the average in other cases inCalifornia is considerably lower, probably lessthan $1,000. Thus, the occurrence of a com-pensable heart injury in a small business couldlead to a perceptible increase in insurancepremiums. However, as was previously shown,the probability of such happening is not great,due, largely, to the general policy of basingrate changes upon a much broader categoryof business than the unfortunate experienceof a single small firm. Also, the majority ofsuch cases occur as a result of arterioscleroticheart disease, and most of them are in personswithout previous knowledge of heart disease.Arbitrary exclusion from employment on thebasis of having had " a heart attack " or " highblood pressure" or an abnormal electrocardio-gram will not elfectively conserve the em-

ployer's Workmen's Compensation insurancepremiums, while it does unnecessarily blightthe lives of many able people whose coronaryartery disease has become evident. The answerto the problem of Workmen's Compensationcosts lies in the appropriate work assignmentof workers with heart disease (and all otherworkers) and the development of other formsof sickness and disability insurance which willmake it less necessary to look to Workmen'sCompensation as a source of support for thedisabled, widowed, and orphaned.

References1. BEARD, R. R., BRESLOW, L., THOMAS, W. H.,

GARDIPEE, C. R, BUECHLEY, R. W., ANDMULLIN, V. W.: Heart disease claims underthe California Workmen 's Compensation Act.Circulation 13: 448, 1956.

2. CAMPBELL, D. A.: Heart Disease and Compen-sability under Workmen 's Compensation. Ad-dress before the California Heart Association,Long Beach, California, May 23, 1959, mimeo-graphed copy, p. 4.

Religio MediciCertainly that man were greedy of Life, who should desire to live when all the world

were at an end; and he must needs be very impatient, who would repine at death in thesociety of all things that suffer under it.-SIR THOMAS BROWNE. Religio Medici, 1642Edited by W. A. Greenhill, M.D., Oxon., London, MacMillian and Co., Limited, 1950, p. 3.


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ROBERT D. RUSSELL and RODNEY R. BEARDInsurance Carrier?

Heart Disease and Workmen's Compensation: What Are the Costs to the

Print ISSN: 0009-7322. Online ISSN: 1524-4539 Copyright © 1961 American Heart Association, Inc. All rights reserved.

75231is published by the American Heart Association, 7272 Greenville Avenue, Dallas, TXCirculation

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Heart Disease and Workmen's Compensation - …circ.ahajournals.org/content/circulationaha/24/2/274.full.pdfcial area of whether or not a cardiac accident ... cost less than $1,000,