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Workers' Compensation

Depression: The Hidden Cost of Compensable Work Injuries

Collateral damage from a compensable incident often extends well beyond physical harm that stems from the initial injury. The psychological effects of even short-term disabilities, pursuing workers’ compensation benefits, and anxiety regarding an ability to return to work can be severe.

Both the injured worker and employer bear the costs. According to the medicolegal treatise Occupational Injuries and Illnesses (LexisNexis), many injured workers struggle with depression or emotional detachment related to the significant change occupational injury or illness brings to their lives. And as reported in Larson’s Workers’ Compensation Law (LexisNexis), the depression can tragically lead to suicide in some instances. For employers, providing mental health services for injured workers is a costly hidden expense of occupational injuries and illnesses.

Injured Workers Are Prone to Distress

A recent study by Abay Asfaw, Ph.D., and Kerry Souza, Ph.D., of the Centers for Disease Control and Prevention focused more narrowly on what should be compensable psychological harm in the form of depression. The Journal of Occupational and Environmental Medicine published Asfaw’s and Souza’s (collectively, researchers) findings in an article titled “Incidence of Depression After Occupational Injury.”

Distinguishing post-injury depression from the variety that is “original” compensable harm, such as the type that can result from a hostile work environment, is important. This distinction must be made because of the different factors, and different treatments, related to depressions that stem from circumstances related to someone’s work and distress related to compensable physical harm.

One spoiler regarding the researchers’ findings is that “injured workers were more likely than noninjured workers to suffer from depression during the study period. Consequently, additional costs are incurred for treating injured workers’ depression; these costs were not covered by the workers’ compensation system.” Another spoiler is that “the occupational health community, employers, and others may reasonably anticipate that injured workers may need mental health services.”

Hidden Costs of Compensable Harm

The researchers concluded that the estimated $67 billion price tag for treating occupational injuries and illnesses excludes “costs that are indirect or more difficult to quantify, such as the effects on a worker’s (daily) activities or family life.” The study determined as well that “these costs are usually borne by private medical insurance or by the workers themselves, as workers’ compensation … frequently does not cover such treatment. This underestimates the true costs of occupational injuries or illnesses.”

Findings specifically related to depression included that most workers’ compensation systems do not acknowledge that condition as being work related “although depression has been linked to a preceding occupational injury and has been found to be a factor influencing workers’ success in returning to work.”

The study further quotes the determination of the Bureau of Labor Statistics that “after-injury depression costs workers, group health insurance plans and/or taxpayers at least an extra $8.2 million … within a 3-month study period in 2005 dollars. Such costs of treating depression as a sequel to injury are typically not included in estimates of the economic burden of occupational injury.” These numbers do not include related costs, such as inpatient care and prescription drugs.

Study Overview

The presented conclusions reflected data from the 2005 Thomson Reuters’ MarketScan Health and Productivity Management and Commercial Claims and Encounter data sets. Sixteen large employers provided the underlying data, which related to more than 440,000 employees.

The researchers limited their exams of the incidence and costs of injured workers’ depression to the three months after a work-related injury. Their reasoning was that it “is expected to be long enough to capture the effect of injury and short enough not to capture the effect of other shocks, such as change in the health status of family members” and other non-work stressors.

A corresponding three-month period was used for non-injured workers in the control group. For example, the medical records for both an injured worker and members of the control group for the period between September 1, 2005 and December 1, 2005, would be examined if the injured worker sustained the work-related physical injury on September 1.

Considering an injured worker to be diagnosed as being depressed required that that person be primarily diagnosed with a condition that included those listed below within three months of sustaining the relevant injury:

  • Episodic mood disorders
  • Affective personality disorder
  • Prolonged depressive reaction
  • Adjustment disorder with depressed mood

The method for excluding workers with preexisting depression was excluding study candidates who were treated for depression within the three months before sustaining the work-related harm.

Study Results

The researchers looked at the medical records for 6,513 workers who received workers’ compensation benefits during the study period and for an additional 361,368 workers who did not receive those benefits during that period. The primary finding was that 1.04 percent of non-injured workers had an outpatient visit for a depression-related condition during the relevant period. That contrasted with 1.49 percent of injured workers who received that care.

These results prompted concluding that “this implies that the likelihood of injured workers suffering from depression within the study period was 43% higher than that of noninjured workers.”

The bottom-line gender-related result was that “the likelihood of [injured and non-injured] female workers being treated for outpatient depression was more than 50% higher than that of male workers.”

Age-related results revealed that “depression problems increased up to age 31 to 40 years and declined after that for all workers. Nevertheless, at most age categories the incidence of outpatient depression was higher for injured workers than for noninjured workers.” The researchers observed as well that “age increased the incidence of outpatient depression but at a decreasing rate.”

The bottom-line overall result was that “the odds of injured workers being treated for outpatient depression within 3 months after injury were 44% … higher than those of non-injured workers.”

Costs of Treating Depression

The statistics revealed that “the mean outpatient cost of depression during the study period was $295 … for injured [workers] and $250 … for noninjured workers.” The researchers concluded based on all of the cost-related statistics that “the unconditional average outpatient depression cost for an injured worker was 63% higher than the average outpatient depression cost for a noninjured worker after adjusting for covariates.”


Statistics and common sense show that claimants are prone to depression and that the odds that proof of a nexus between a compensable incident and that psychological harm will ultimately shift the high costs of treating that condition to the workers’ compensation system.

The better news is that a great deal of that depression is preventable; reassuring a newly injured claimant who is statistically likely to experience depression that the employer will not penalize that person for pursuing workers’ compensation benefits and will take specific action to return him or her to work as quickly as possible should help alleviate the depression and the related expenses.

Case Examples Reported by LexisNexis

The following cases reported in Occupational Injuries and Illnesses (hereinafter “OII”) (LexisNexis) and Larson’s Workers’ Compensation Law (hereinafter “Larson’s”) (LexisNexis) illustrate how courts have addressed requests for workers’ compensation benefits related to post-injury depression.

  • Huddy v. Workers’ Comp. App. Bd. (U.S. Air), 905 A.2d 589 (Pa. Commw. Ct. 2006). One physician indicated a strong causal relationship between the employee's mental problems and his original work-related injury, while another opined that the employee certainly had depression and anxiety issues but that any effects attributable to the original injury would have abated within a few years. The depression was found work-related. See Larson’s, § 10.02.
  • In the Matter of the Claim of Smith v. Cornell University, 77 A.D.3d 1007, 908 N.Y.S.2d 472 (3rd Dept. 2010). Decedent's treating psychiatrist confirmed that his disability and accompanying chronic pain led to his depression and eventual suicide. See Larson’s, § 38.03.
  • Dotolo v. FMC Corp., 375 N.W.2d 25 (Minn. 1985). Claimant developed tinnitus, ringing in the ears, after a truck backfired on him at work. The court held that the tinnitus caused or substantially contributed to claimant's depression, and therefore, the disability caused by the depression was compensable. See Larson’s, § 52.05D.
  • Allen v. Protel, Inc., 852 So. 2d 916 (Fla.Ct.App. 2003). An appeals court awarded the claimant permanent disability benefits for depression that stemmed from a compensable back injury. For a complete summary, see OII § 14.206.
  • Chavis v. Northrop Grumman Corporation, 798 So. 2d 1217 (La. Ct. App. 2001). The issues in this dispute included post-injury depression exacerbating compensable pain and that pain simultaneously causing depression. The ultimate benefits award was only for physical harm from the compensable incident. For a complete summary, see OII § 16.203.
  • Paxton & Vierling Steel Co. v. Hope, 2007 Iowa App. LEXIS 1346 (Dec. 28, 2007). One dispute in this case was whether a compensable incident caused a claimant’s depression. The decision that that depression was compensable was based on evidence that included the claimant’s report that persistent back pain after his work-related accident made him feel “terrible.” For a complete summary, see OII § 18.206.
  • Simpson v. Franklin Ins. Agency, Inc., 2007 Ky. App. LEXIS 345 (Sept. 21, 2007). The decision in this case included ordering additional proceedings regarding the adequacy of the proof regarding the claimant’s assertion that compensable harm caused psychological-based sexual dysfunction. For a complete summary, see OII § 18.207.

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