Pervasive Rate of Misdiagnoses a ‘Silent Cost Driver in the Insurance Industry’

By Gerald

This is a major problem in most or all workers compensation systems.

Pervasive Rate of Misdiagnoses a ‘Silent Cost Driver in the Insurance Industry’

Sarasota, FL ( – Getting the right treatment for an injured worker at the right time improves outcomes and reduces costs. However, an incorrect diagnosis sends the claim in the wrong direction from the get-go. Inappropriate treatments and/or medications and long term disability often result when the injured worker’s condition is misdiagnosed.

The problem of misdiagnosis is pervasive. But that can be changed. Combining the talents of physicians with the analytic power of artificial intelligence can lead to better and faster recoveries for the worker and lower costs for the employer/payer.


“Getting the right diagnosis is crucial because it’s the starting point for every healthcare decision made with that patient,” said Michael Best, M.D., an orthopedic surgeon and Owner/CEO of The Assessment Centers and Founder and Chief Medical Officer of Clinical Solution Decisions. “The rate of misdiagnoses is exceedingly high.”

Best joined Christopher Brigham, M.D., consultant to Clinical Decision Solutions and Senior Contributing Editor for the AMA Guides to the Evaluation of Permanent Impairment, Sixth Edition, for a recent webinar on Assuring Accurate Diagnoses.

When asked, ‘What is your assessment of the diagnoses that are incorrect?’ a majority of the webinar attendees — over two-thirds — said they believe diagnoses are incorrect at least 20 percent of the time.

“If we don’t have a correct diagnosis how to do we do appropriate management, appropriate treatment or if we’re using resources such as ODG for disability duration guidelines?” Brigham asked. “We have to have an accurate diagnosis to start.”

The rate of misdiagnosis has been identified in several studies over the years:

  • The University of Pennsylvania. A study conducted in 1998 was given to both medical and surgical residents who had graduated from 37 U.S. medical schools. “The shocking statistics show that even though the passing grade only took 73 percent, 87 percent of the medical residents failed and 82 percent of the surgical residents failed,” Best said. “If 85 percent of physicians got either a D or an F on this test and the American Medical Association says there are 1.1 million physicians in the U.S., does this really mean that almost 900,000 physicians in the U.S. are incompetent in making musculoskeletal diagnoses?”
  • Mayo Clinic. A 2017 study showed 21 percent of patients were misdiagnosed by primary care physicians; a 2012 review of autopsy findings noted a 26 percent rate of misdiagnoses; and a study of ICU or ER cases showed misdiagnoses rates ranging from 20 percent to 40 percent.
  • Institute of Medicine. A 2015 study called Improving Diagnosis in Healthcare showed that misdiagnoses led to between 80,000 and 120,000 deaths annually in the U.S.

A plethora of studies over the last 15 years have shown little reduction in the rate of misdiagnosis.

“If the Bureau of Labor Statistics indicates that 2.8 million non-fatal work injuries occur per year, and there’s a misdiagnosis rate of 25 percent, than that means that 700,000 misdiagnoses occur in work comp each year,” Best said. “That’s pretty bad.”

Misdiagnosis has become “a real silent cost driver in the insurance industry,” Best said. “Misdiagnosis creates a waste of claims dollars, creates serious internal inefficiencies in the adjustment process, and harm to the individual patient. Consequently, there are not only problems just to the patient, the cost factor continues to go up because of the waste that misdiagnosis causes to the insurance industry.”


Part of the reason for misdiagnoses relates to the inability of physicians to constantly stay abreast of the latest medical knowledge. An estimated 2,500 articles are published weekly on factors that should be addressed by primary care physicians. “No physician can read 2,500 articles per week,” Best said. The vast majority of physicians spend less than five hours per month reading medical journals, even though medical information doubles every five years.

Another problem, he said, is that physicians have an inaccurate perception of their own abilities to make accurate diagnoses. One study, for example, found that physicians believe there is a 5 percent misdiagnosis rate but only 1 percent admit to having made a misdiagnosis themselves within the last year.

“So it’s everybody else’s problem, unfortunately,” Best said. “We’re going to have to change the mindset of physicians in this area.”


In addition to addressing issues of misdiagnosis, ensuring the use of evidence based treatment is also key to better outcomes and lower costs. A study by ODG, for instance, found both claim duration and medical costs were lower when evidence based medicine was used. But only about 20 percent of the knowledge that providers use is evidence-based, according to a researcher at the University of Pittsburgh.

Artificial intelligence and other technologies can make a significant impact on the diagnosis and treatment of injured workers. Best said the idea of using AI is not to replace the physician, but to allow her to do her job better, including spending more time with patients.

“I think one of the things we as a society and all the stakeholders have to say is that what we’re doing in terms of paying for healthcare right now is wrong,” Brigham said. “We’re overpaying for procedures, we’re not paying for the time that physicians really need to spend with the patient, — listening, asking the right questions, understanding what the story is, and teaching. So one of the things I’d say is we want to use these to make us more efficient but we have to stand firm that we need to be providing physicians and other healthcare providers with the adequate time to really do what they should be doing — caring for that patient.”

Best said an example of an AI program he’s developed allows physicians to spend 56 percent more time with patients than the norm. Called Clinical Decision Software, it uses an interactive touch screen that poses questions specific to the complaints of the patient as the provider inputs the information.

“You move through the process like a physician in training,” Best said. “It improves diagnostic accuracy and recommends the appropriate state-of-the art evidence-based treatments.”

Each ‘answer’ has an evidence-based numerical ‘weight’ — appended to offer the end user the five most likely diagnoses, he explained. The touch screen pinpoints where the pain is, so the weighted response further delineates the diagnosis. Finally, standard physical examination procedures are mandated, relative to the patient complaint.

“Our results with a 13 hospital chain were remarkable,” Best said. “We worked with them for a year and had a 75 percent reduction in their cost of workers’ comp.”

The intake is performed by a medical assistant. “We strongly believe that the physician no longer needs to be the record keeper,” he said “that’s just useless time spent by him.”

Leave a Reply