The Epidemiology of Severe Injuries in Structured Settlement Applicants

This study describes the epidemiologic characteristics of 6,461 severely injured individuals. These attributes include age, sex, race/ethnic group, injury settings, and mechanisms, types and severity of injury. The injuries were 28.4 % work-related, 23.3 % iatrogenic, and 48.1% from personal injuries. The overall male:female ratio of persons injured was 2.2:1. Craniocerebral injuries accounted for 39.1% of the total, and spinal cord injuries 21.2%. These two injury types are described in considerable detail. It is concluded that the group described, which consisted entirely of individuals applying for structured settlements in satisfaction of claims for recovery of injury, probably do not differ significantly from population-based groups of injured persons of similar severity. Introduction Unintentional physical injuries are a major public health problem worldwide. In the United States, injuries from any cause are the fourth leading cause of death, following heart disease, cancer and stroke, and the treatment of nonfatal injuries is a major contributor to the cost of health care (Nahum and Melvin, 1985). There are a number of ways to measure the impact of various health problems. The one most often reported is comparison of number of deaths or death rates attributable to a particular disease or health problem. In 1980 injuries caused 71 deaths per 100,000 of U.S. population, compared to 336 for diseases of the heart, 184 for cancer, and 75 for stroke. The total of 160,551 deaths from injury in the U.S. were about equally represented by deaths from motor vehicle crashes (53,172), deaths from all other unintentional injuries (52,246), and deaths from intentional acts (26,869) suicides and 24,728 homicides). Another 3,686 were unclassified (Nahum and Melvin, 1985). Mortality comparisons, ubiquitous though they are, tend to minimize the real impact of injuries. Unlike the other leading causes of death, injuries tend to predominate among the young. For ages I through 44 injuries are the leading cause of death, and for most ages in that group injuries kill more people than all other.causes combined. A method for better illustrating the significance of injuries is to compare the various causes of death after weighting the effect of each death by the factor of the number of years of potential remaining life that are lost as a result of that death. For example, if one assumed a probable life span of 70 years as an average, then death from heart attack at age 55 would cost 15 Potential Years of Life Lost prior to age 70 (P.Y.L.L.-70), while a motor vehicle crash death at age 25 would cost 45 P.Y.L.L.-70, a "significance" three-fold that of the heart attack. Expressed in terms of P.Y.L.L.-70, death from injury has the leading impact among causes of premature death in the United States. (Romeder and McWhinnie, 1977; Budnick and Chaiken, 1985). Fatal and non-fatal injuries have an economic impact on society through direct costs of medical resources and indirect costs of lost productivity. Measured in this fashion, injuries from motor vehicle crashes are found to be second only to the costs of cancer, with direct costs from motor vehicle injuries totalling twice that from coronary heart disease (Nahum and Melvin, 1985). Munoz (1984) estimates that 1977 costs of nonfatal injuries in the U.S. induded $18.9 billion of direct treatment-related costs and $9.7 billion of foregone earnings. Some injuries are spectacularly expensive, such as paralytic spinal injuries. Expressed in 1982 dollars, Munoz (1984) indicates that the direct costs of an incomplete paraplegia are $161,867, complete paraplegia $211,543, incomplete quadriplegia $355,438 and complete quadriplegia $439,995. Sources for the recovery of the costs incurred as a result of traumatic injury include individual medical and disability income insurance plans, group employer-sponsored insurance coverages, workers’ compensation programs, and others, including tort liability actions. In this latter setting a successful personal injury claimant has traditionally received a lump sum of money from the responsible defendant in exchange for a release from liability. The lump sum settlement is then the injured claimant’s to use for attendant expenses, to invest for future needs, or to squander. In recent years the concept of periodic payments in lieu of single lump sums has been developed for settlements, and in a growing number of states there is legislation authorizing courts to enter judgments which require periodic payments in appropriate circumstances (Hindert et al., 1986). Periodic payments received as recovery of the costs of injury are most commonly presented as part of a structured settlement whereby the injured daimant receives an immediate cash payment for past and current expenses, along with an annuity contract promising payments at regular intervals, usually monthly, over the claimant’s lifetime, intended to cover any future costs attributable to the injury. These structured settlement annuity contracts are purchased from a life insurance company by the responsible defendant or sponsor. They are structured or tailored to meet the anticipated needs of the injured claimant and commonly include some or all of: payments which inflate annually at a modest rate, usually 3-5 % throughout the lifetime; additional lump sums at specified future dates, e.g. when a dependent child reaches college age; payment schedules with "step" increases or decreases at various times; a lump sum for beneficiaries upon death of the annuitant; payments at regular intervals for a fixed period of years regardless of the annuitant’s survival ("period certain"); and, variations of these and others (Hindert et al., 1986). 1982 to May 1986. The purpose was assessment of the probable impact upon life expectancy of severe injuries leading to a settlement in recovery of attendant costs. The author applied generally accepted actuariomedical considerations to these cases, translating the anticipated increase in mortality rate or reduction in life expectancy into the assignment of an "adjusted age," i.e., the age at which the corresponding population mortality rate and overall average life expectancy most closely approximated the reduced life expectancy of the injured claimant. (See Appendix for detail concerning this underwriting process.) Subtracting the chronological age from the assigned adjusted age gives an estimated P.Y.L.L. The medical records upon which this underwriting judgment was based varied in extent and timeliness, but usually included hospital records from the initial care for injury, subsequent medical and/or rehabilitation records reflecting the results of follow-up care, and sometimes extensive exp6rt examinations or depositions intended to describe the injury in great detail. (The largest of these was delivered in a box and was five inches thick!) Each of the 6,461 cases was entered into a Database II file on an IBM PC. Each record included name, age, sex, type of injury, the adjusted age, and business data. The use of structured settlements for recovery of the costs of injury is increasing rapidly. This mechanism was first applied significantly in the U.S. in 1976, and has grown since to about 200,000 cases of placed annuities, by our best estimate. This alternative to the traditional settlement is generally accepted as being in the best interest of all parties concerned, especially the injured annuitant. This dramatic growth has been encouraged by the current tax advantage of postponing "constructive receipt" of the award coming from a recovery action. Purpose The purpose of this study is to describe the epidemiologic characteristics of unintentional injuries to individuals seeking recovery of costs of severe injury by structured settlement techniques. The description includes physical characteristics of sex, age, race/ethnic group, and the settings, mechanisms, types and severity of injuries. The results will add to the knowledge of the epidemiology of injury, especially for craniocerebral and spinal cord injury which will be considered in additional detail. The study also will describe similarities and differences between this study group and other reported injury groups who are not engaged in this new, unique claim activity. Method This study reviews data concerning a group of 6,461 injured applicants whose medical reports were consecutively submitted to the Medical Department of Safeco Life Insurance Company, Seattle, Washington, from October For the 2,908 cases entered after July, 1985, an added notation of the injury setting was also made, recording whether the injury arose out of a work-related (workers’ compensation) injury, an iatrogenic (medical liability) injury, or a personal setting. Work related injuries included all of those arising out of gainful employment and included claims for medical conditions which were attributed to adverse effects of the working environment (such as myocardial infarction on the job which was judged to be due to the stress of the workplace). Iatrogenic injuries included all actions against physicians, dentists, nurses, hospitals, pharmaceutical suppliers, nursing homes, am.bulance attendants (only one), etc. Personal injuries included all home, recreational, and motor vehicle injuries arising out of activities of individuals not in a setting of gainful employment or under medical management at the time. This subset will be identified as the N = 2908 group. An additional subset from those cases was specifically searched for mechanisms of injury and for race/ethnic group of the daimant. For 1,188 cases submitted during November and December 1985, January, March and April 1986, mechanism of injury appeared in 1,140 of the medical records, but could not be determined in 48 instances. A clear statement of race/ethnic group was present in 921 (77.5%) of the medical records, permitting assignment of those individuals to one of the following groups: white, black, Asian/Pacific Islander, Native American, Hispanic, or other. This subset of the N = 2908 group will be identified as the N = 1188 group. Findings: Age and Sex The distribution of the study group injuries by age decade and sex is shown in Table 1. As shown, the male:female ratio was 2.2:1 overall, with a maximum difference of 3:1 occurring in the sixth decade. The excess of these severe injuries among men was significant at each age group through the seventh decade (p K .01).