NCCI Releases Research on Indemnity Benefit Duration and Obesity

Posted Date: June 19, 2012

Industry InformationResearch

View complete report: Indemnity Benefit Duration and Obesity (PDF)
By Frank Schmid, Chris Laws, and Matthew Montero

Executive Summary

There is mounting evidence of obesity contributing to the cost of workers compensation. Longitudinal studies by Duke University of its own employees—and by Johns Hopkins University of employees of a multi-site U.S. aluminum manufacturing company—point to substantially higher odds of injury for workers in the highest obesity category. Further, a 2011 Gallup survey found that obese employees account for a disproportionately high number of missed workdays, thus causing a significant loss in economic output. Finally, earlier NCCI research of workers compensation claims found that claimants with a comorbidity code indicating obesity experience medical costs that are a multiple of what is observed for comparable non-obese claimants.

The study finds that obesity contributes in significant ways to the length of time during which claimants receive indemnity benefits. Indemnity duration was measured based on Temporary Total and Permanent Total indemnity benefit payments; in a sensitivity analysis, Permanent Partial benefits were counted toward indemnity benefit duration as well. Two concepts of aggregating observed indemnity benefit transactions into duration were employed, with little difference in the results. Further, the statistical analysis accounted for the presence of interval-censoring and right-censoring, both in the nonparametric framework of Kaplan-Meier plots and in the Bayesian semiparametric proportional hazard model.

The statistical analysis shows that claimants with a comorbidity indicator pointing to obesity have an indemnity benefit duration that is more than five times the value of claimants who do not have this comorbidity indicator but are otherwise comparable. Inclusive of Permanent Partial indemnity payments, this multiple climbs to more than six.

Clearly, the limiting factor in this study is the lack of information on the body mass index of the claimant. On one hand, it can be argued that the analysis overestimates the effect of obesity if the assignment of the comorbidity indicator, the ICD-9 code 278, is related to the arrival of obesity-related medical complications, as opposed to the condition of obesity. From this perspective, claimants who acquire this comorbidity indicator may disproportionately belong to the highest obesity category—the morbidly obese; this conjecture is supported by the fact that only 0.15 percent of the claims in the data set acquire the ICD-9 code 278 (within 12 months of the date of injury). On the other hand, a case can be made that the effect of obesity is underestimated. This is because many of the claimants who are categorized as non-obese in this study may, in fact, be overweight or obese, thereby diminishing the measured contribution of obesity to duration.

Despite the limitations of the data set employed in this study, the results obtained for the effect of obesity on indemnity duration are close to what has been established by Duke University for the morbidly obese. Based on the reported means in the Duke University study, for the morbidly obese, the number of lost workdays per claim amounts to 6.4 times the value observed for claimants of recommended weight. By comparison, for duration concept I [II], the multiples established here equal 5.4 [5.3] (Temporary Total and Permanent Total) and 6.6 [6.7] (Temporary Total, Permanent Total, and Permanent Partial).