Claim denials

The statistics here pertain to the larger claims denial regression sample. However, the smaller duration sample has mean statistics (for the independent variables) very close to those reported in Table 3.1. 

Evidence from Claim Types and Claim Denials... 

If, for example, more financial involvement in the firm reduces claim frequency by a reduction in moral hazard, then we would e q)ect that more employee financial involvement would also reduce the number of claim denials on the part of firms. Similarly, since claim-reporting moral hazard is most likely to occur in difficult-to-monitor claims such as back sprains and strains, we would expect that firms offering more financial rewards linked to workers productivity would experience relatively fewer back strain claims as the moral hazard-induced reporting of those claims falls. We examine the empirical evidence associated with these predictions in the next two sections. 

Our hypothesis is that claims seen by the insurer, or firm, as potential claims-reporting moral hazard behavior are more likely to be denied. We expect that the implementation of safety strategies and worker involvement will ameliorate concerns over claims-reporting moral hazard. Hence, in this section we estimate the following logistic claim denial regression ... 

The descriptive statistics for the claim denial analysis are given in Table 4.1 and are the same as those given in Table 3.3 in the last chapter. The logistic regressions in Table 4.2 compute the likelihood that a... 

Table 4.2 Logit Estimates of Claim Denials in the Workers ...

Dependent variable incidence of claim denial in the Minnesota workers compensation system ... 

The analysis of this chapter provides little evidence that HRM practices operate solely, or mostly, through a reduction in claims-reporting moral hazard. The only HRM practice that appears to significantly reduce the likelihood of a claim denial is Employee Participation in Financial Returns, which, although consistently exhibiting the expected... 

This doesn t mean that moral hazard isn t important, only that the claims denial and multinomial logit results indicate that HRM practices do not reduce workers compensation solely, or even mainly, through reductions in claims-reporting moral hazard response. 

Logistic regressions for claim denials with Downsizing interaction variables were also estimated, analogously to the duration estimates in Table 3.3 of the last chapter. However, none of the interactions were statistically significant at the 0.05 level (and none at all in the full model with the control variables). These... 

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