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Loss Reduction Through Worker Satisfaction: The Case of Workers’ Compensation

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  • Richard J. Butler
  • William G. Johnson

Abstract

A prospective study of occupational low back pain (LBP) indicates loss reduction efforts in workers’ compensation that improve workers satisfaction with the treatment of their claim significantly improves levels of recovery (reduces losses) and lowers workers’ compensation insurance costs. The improved outcomes associated with greater worker satisfaction with the firm's treatment of their injury claim, as well as with the treatment from their health care provider, are robust to five alternative measures of back problems, including leg pain and back pain scales, measures of functional limitation, and quality of life scales. Satisfaction with effectiveness of the health care is more important in recovery than satisfaction with the provider's bedside manner. While satisfaction with health care provider significantly improves back pain and functionality at 6 months, satisfaction with the employer's treatment of the claim is equally important at 6 months and grows in quantitative importance at 1 year. Overall, higher satisfaction with claim treatment reduces the likelihood that an injury becomes an indemnity claim and results in almost a 30 percent reduction in claim costs.

Suggested Citation

  • Richard J. Butler & William G. Johnson, 2011. "Loss Reduction Through Worker Satisfaction: The Case of Workers’ Compensation," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 14(1), pages 1-26, March.
    • Handle: RePEc:bla:rmgtin:v:14:y:2011:i:1:p:1-26
    DOI: j.1540-6296.2010.01188.x
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    File URL: https://doi.org/10.1111/j.1540-6296.2010.01188.x
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    References listed on IDEAS

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