“The best ‘medicine’ for injured workers is to return them to work as soon as safely possible,” according to a new position statement from the American College of Occupational and Environmental Medicine (ACOEM)1.

While returning to work sooner promotes better health, it has been shown that a large percentage of disability-related lost workdays are not actually medically necessary–despite that it is the physician’s role to help their patients minimize life and work disruptions by advising them to stay at work or return to work as soon as it is medically viable1. Click here download the research paper: Medical Costs Along the Disability Continuum.

The cost of disability

Prolonged disability interferes with employee health, but it also costs employers billions of dollars a year. In fact, for employers, faster recoveries significantly reduce the cost burden of unplanned illness and injury, which is estimated at $440 billion for US companies each year in wage replacement payments and lost productivity, according to the Integrated Benefits Institute2. At ReedGroup, we wanted to know whether this approach also reduces the medical costs incurred during a disability absence, after considering case-level factors affecting both medical cost and disability duration, such as disease severity and treatment type.

To tackle this question, we began a multi-year research initiative in 2016 to explore the relationship between medical costs and disability. Here’s how our team of data scientists, epidemiologists, and data engineers went about addressing this question:

We connected the short-term disability claims for millions of people to their medical claims using the Truven MarketScan databases, which provide de-identified, patient-level data. We traced for each anonymous individual the specific medical events, including the treatments, medications, secondary diagnoses, and the cost of each service by day of disability. One case, for example, was a 50-year old man who visited the emergency room for a knee injury and initiated a short-term disability claim shortly thereafter. He underwent several imaging studies and ultimately had an arthroscopic meniscectomy, which was followed by physical therapy and his return to work 64 days, and $9,000 in medical costs, later.


With information on the day-to-day experience of disability for millions of individuals, we noticed several patterns in disability durations and costs. For example, many cases with treatment delays had longer durations and higher medical costs. This may be easily illustrated from my own experience with a disabling back injury: I delayed my surgery, despite being a good surgical candidate according to evidence-based guidelines, because I couldn’t accommodate the post-operative activity restrictions. This delay in treatment increased the length of disability, as well as the medical costs spent on physical
therapy and epidural steroid injections before finally having surgery. Like mine, each case going to be unique in some fashion, but the conclusion is the same: treatment delays prolong disability and increase medical costs.

Taking a deeper dive

Our large sample size allows us to dive deeper into specific diagnoses and treatments. Among more than 10,000 short-term disability claims for a torn meniscus, we observed that:

  • The first day of disability is the most expensive, followed by a downward trend in the average cost per day, but the accumulation of costs varied by treatment.
  • Treatments must be considered to accurately estimate medical costs. For example, a case with a meniscus repair surgery cost over $11,000, whereas a case without surgical treatment costs less than $4,000, on average.
  • Twenty percent of medical costs were incurred after half of the employees with a meniscus tear returned to work. (Our next blog post will describe our analysis of these long disability cases with lingering costs.)


At ReedGroup, we know that health outcomes are improved when employers, employees, and clinicians view returning to work as a vital step in the recovery process. This approach can reduce and prevent unnecessary disability, and based on our current research, help lower medical costs, as well. Click here to download the research paper: Medical Costs Along the Disability Continuum.

Don’t miss the final blog in the three-part series.
Check your in-box in late-July to read, “Calculating Avoidable Medical Costs by Reducing Disability Duration.”

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  1. Jurisic M, Bean M, Harbaugh J, et al. The Personal Physician ’ s Role in Helping Patients With Medical Conditions Stay at Work or Return to Work. 2017;59(6):125-131. doi:10.1097/JOM.0000000000001055.
  2. IBI. Illness Cost Estimator.; 2017. https://www.ibiweb.org/tools/full-cost-estimator.