In the last post, we discussed a paper Jeffrey Brewer wrote regarding strategies for overcoming cognitive biases and emotions. Brewer identified 10 specific strategies to overcome biases and emotion. His first strategy advocates consciously raising the questions:
But how does this help us? Don’t we already essentially do this when we analyze claims?
Not exactly. First, asking the questions immediately changes one’s state of mind from its natural, emotionally reactive state, to one in which reason is brought to the forefront. Consciously asking the questions forces us to slow down, search for, and contemplate the possible answers. Second, answering the questions quickly demonstrates whether something is an objectively verifiable fact, an inference, hearsay, opinion, or pure conjecture. Once the questions are answered and the information is categorized, the process will have naturally organized the claim in a rational way. Third, knowing what category the information falls into can provide a roadmap for developing the claim. Fourth, asking and answering the questions is likely to result in a more accurate assessment of liability, damages, exposure, and further investigation needed.
How can this strategy be applied to claims? The place to start is at the beginning of the process. When a claim comes in, we are given information asked to apply the information to a metric for assessing exposure. The formality of the metrics will vary, but the best companies and firms mechanize this process to the greatest extent possible to streamline the process and to make it as consistent as possible. This is of course why all case assessment reports, forms, and letters look roughly the same for each entity that generates them regardless of who actually wrote them. This predictability and uniformity is a virtue, not a vice. Nevertheless, individual claims professionals must judge where each piece of information goes and its significance.
The two most important parts of a case assessment report, form, or letter will generally be the statement of facts or narrative summary. It is from this that the conclusions regarding liability, damages, and exposure will be drawn. In preparing the statement of facts, it can be a useful exercise to distinguish between facts, opinion, hearsay, and assumptions to better understand the support for the claim or its defense. For example, take a claim where an employee X injures his hand on a piece of equipment. In conducting the investigation, the employer obtains a statement from employee Y who has observed X using the equipment for personal use in the past.
In this example, the only thing that is a fact is that Y observed X using the equipment for personal use in the past. If the statement is used to support the defense that the employee was not performing work for the benefit of the employer at the time of injury, then an inference is being made that X’s behavior at the time of injury was consistent with X’s past behavior. With no additional information or support, the inference is weak at best. In order to strengthen it, one could find out if X used the equipment for personal purposes at certain times of his shift or after certain jobs and whether the injury occurred at a similar time of day or after the same kind of job. In addition, the inference would be stronger if Y observed X using the equipment for personal use regularly or on many occasions, especially if the most recent uses were near in time to the accident. The bottom line is that the fact of the observation only affects the injury at issue if it can be inferred from the observation that the behavior leading to the injury likely conformed to the observed past behavior.
In another example, worker’s compensation investigations often discover a coworker who overheard the injured employee complaining about his job or the company or both. Specifically, assume employee X alleges he hurt his low back lifting a heavy object at work. The investigation discovers that employee Y heard employee X say that he was fed up with his manager and couldn’t take much more. What is fact? The only fact is that on one date X complained about his manager and said he couldn’t take much more. That is it. X’s statement does not mean that X feigned injury or exaggerated its severity. To move from X’s statement to that conclusion is an inference that requires additional information for it to be believable. The inference is that X reached some sort of breaking point and is using the work injury (or feigning injury altogether) as a means of avoiding his manager.
When judging the significance of the statement, several factors must be considered. Obviously if the injury is relatively near in time to the statement, it would appear more likely that they are related. Other factors could make the inference stronger as well, such as similar, repeated comments, a discernible change in performance, a discernible change in attendance, or any overt conflicts with his manager. On the other hand, if X was a generally good employee who was having a bad day and significant time elapsed between the remark and the injury with no further overt evidence of conflict with the manager, then the inference is weak. Likewise, in judging the likelihood that X is avoiding work based on the prior statement, one must consider the benefit to X of being absent (avoiding the manager, not having the responsibilities of the job) with the costs of being absent (wage loss, benefits loss, loss of social contact with coworkers, etc.). In this case, if X only made one statement and the injury involves an extended absence with significant financial consequences, the inference will be weaker.
In order to effectively determine the strengths and weaknesses of any claim, we must be able to ask and answer the right questions. Simply recording a narrative of events without asking whether each component is a fact, an inference, hearsay, or opinion will skew the analysis badly. For every piece of the narrative, we should ask how we know it, why do we believe it, and what evidence supports the belief. Once we take this step, we will understand the extent of our knowledge, whether our knowledge is based in fact, the inferences that can be drawn from our knowledge of the facts, how strong those inferences are, and what additional evidence or information should be obtained to strengthen inferences or eliminate ambiguity and uncertainty. When we know this, we can effectively assess liability, damages, and further claims investigation necessary.
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