What's the problem with impairment ratings?

Workerscompensation.com hosted a webinar with two articulate advocates for opposing sides regarding an issue which has bedeviled the workers’ compensation system for years. Alan Pierce is a claimant bar attorney. Christopher Brigham was the lead author of the most recently published impairment guides. The controversy involves a flaw which led courts, notably the Kansas Supreme Court, to rule that portions of the state’s law is unconstitutional.

Here is the flaw. Judge for yourself if it will be corrected.

There are a number of problems, but let’s stick with the most serious one. It’s that impairment ratings, as applied through the legal nuances of each state, can exert an excessively large influence over the size of a permanent disability award. 

Any disability award system needs to fairly assess the capacity of a candidate to work.  Impairment evaluations are designed to generate a numerical rating of a worker’s functional limitations, starting with a specific body part, then ending with the full body.   

But a disability award should primarily be made on the basis of a worker’s ability to make a living, not on the basis of a functional limitation per se. 

The award system might, to be sure, recognize what might be called non-economic fallout from injury. A construction worker whose shoulders are impaired by work might never be able to hold his grandchildren or install a motor on his fishing boat.  But the main concern should be, can he or she earn a living, comparable to pre-injury?

The Kansas Supreme Court took aim at the sixth edition of the American Medical Association’s Guides to the Evaluation of Permanent Impairment.  This edition was published in 2007. According to the AMA, only 19 states use this edition. As a sign of the labyrinthian legal culture of workers’ compensation, 21 states continue to use editions published as far back at 1988. (Other states use their own guides.)

The court found that an injured delivery worker received a 6% impairment rating under the mandated sixth edition while he would have received a 25% rating under the previously mandated edition. That cut his disability award by 75%.  It was persuaded that the sixth edition was wrong.

The real wrong is that Kansas over depends on the impairment rating as a measure of disability.

Here are four ways in which impairment ratings can be tangential to a person’s ability to make a living.

First, whole body impairment ratings are an artifice of formulaic thinking, not direct observation of the whole person. While they may be needed forensically to resolve disputes over the size of an award, they may not make street sense. Brigham provides the following example in his book, Living Abled and Healthy. If your ring finger is amputated, you get a 100% rating for your finger, a 10% rating for your hand, and a 5% impairment rating for a whole person. That whole person and her impairment are abstractions on paper.

Second, impairment raters are crude predictors of future job earnings. Ontario tracked a sample of disabled workers for 10 years. Let’s look at those with a whole person rating between 6% and 10%. (Brigham tells me that the average whole person impairment rating sixth edition is 5%, and 6% for the fifth edition). Researchers compared their wage earnings 10 years after injury with their peers, also 10 years out.  

After a decade had passed, 42% of the injured workers were earning between 75% and 125% of their peers; 42% less than 75%; and 13% more that 125%. This shows on balance some deterioration. The falloff is greater for higher ratings, less for lower ratings. These findings strongly suggest that an impairment rating is a blunt tool to predict one’s future experience in the labor market.

Third, using an impairment rating to predict job performance assumes stupendous guesswork. This is why vocational rehab professionals do detailed analyses of alternative jobs. The job profiling company Myabilities analyzes jobs using a subset of 26 specific physical demands, all of which have between 3 and 10 details such as height and weight.

Finally, jobs are transitioning towards more cognitive content. This will lead to physical impairment ratings becoming even worse in predicting job performance. Brookings has reported since as recently as 2000, the “digitization” of work at all levels of the workforce has advanced.

It says that “many low-digital occupations, including home health aides, welders, and heavy truck drivers. saw their [digital] scores triple or more” between 2000 and 2016. Does this mean that the physical demands of the jobs have shifted?  Perhaps.

Disability award systems are mired in politics and inertia. That’s why I personally do not see any serious prospect in the foreseeable future of reducing our flawed over-reliance on impairment ratings.

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