Are workers less likely to recover from an illness or injury if they're compensated? It might be hard to believe, but studies are suggesting just that.

Dr Ian Harris from the University of Sydney has undertaken extensive research into compensation outcomes in which he looked at any written documentation of studies comparing compensated with non-compensated patients. The studies dated back to the 1950s and spanned the world – all languages were looked at. Even abstracts and proceedings were included.

He looked at the association between compensation status and outcome after surgery, observing any patients who received or expected to receive payments from a third party. All patients compensated by whichever means were included and compared to those not compensated.

Speaking at the 2008 People at Work conference in Adelaide Dr Harris said his research had proven something that had been sensed by doctors for a long time: workers who are compensated are less likely to recover and return to work than those who are not. Further, the results of surgery in terms of getting patients better and back to their normal selves appear to be worse in compensated patients.

Dr Harris' research team evaluated the results by looking at the medical condition and the country or region where the injury occurred. Over 20,000 patient outcomes were evaluated across all the studies, of which about 13,000 were compensated cases and 7000 were non-compensated.

Sophisticated statistical techniques were used to combine the results of all of the studies. They found that the likelihood of an unsatisfactory outcome was significantly greater in those who had a compensated case. The 'odds ratio' was about 3.8. An odds ratio is a measure of the likelihood of a particular outcome. If the odds ratio is one, the likelihood of a poor result from surgery would be the same in compensated and non-compensated patients. A ratio of over two is considered to be an important finding.

Analysis of the studies by country, surgery time, length of follow-up after the operation, completeness of follow-up, study type, and type of compensation found the increased likelihood of a poor outcome in compensated patients was consistent for all subgroups. The results showed that for every third work compensation patient who had a bad outcome, that bad outcome was due to the fact that they were compensated.

What are some of the possible reasons for these bad outcomes? Compensation should provide a worker with financial assistance to cover medical treatment required for recovery, and to cover lost wages while that recovery takes place. Dr Harris has demonstrated that – though it might seem paradoxical – the reality of the situation is not as it should be, that patients who aren't compensated return to work faster. Perhaps because financially they can't afford to stay away from work for too long and so have to strike an agreement whereby they can return to their job undertaking roles that are achievable. Or perhaps because, not stuck in the slow mechanisms of a compensation process, patients have more time, energy and mental strength to dedicate to simply getting better.

This research provides evidence that compensation introduces a patient to a system that can actually impede recovery, rather than encourage it. Receiving and maintaining compensation accompanies a lengthy medical journey of appointments, referrals to specialists, long waits between appointments and waits for results.

There is an argument that people away from work receiving compensation have to justify their (for example) sore back to so many people – employers, colleagues, WorkCover officers, medical practitioners – that the psychology of “being ill” becomes embedded in their way of thinking. So much of recovery depends on the right combination of physical treatment, psychological strength and the desire to get better. When having to defend an illness repeatedly, this psychological strength is hard to conjure.

Out of all the regions looked at in Dr Harris' research – Australia, Canada, US, UK and Europe – the effect that compensation had on a bad outcome was lowest in Australia, which Dr Harris admitted surprised him; he thought Australia would be the worst example. This is not to say that the data doesn't raise serious concerns in Australia. It's an issue that doesn't discriminate by location; but it does present a stronger problem in lower socio-economic groups, which form the greater part of the compensated demographic.

Dr Harris said he's amazed at how few people are aware of compensation affecting a patient's case and its association with a poor outcome. The research he's really interested in relates to why and how this is the case – and he's still working on it. In the meantime, we know that the likelihood of return to work taking place decreases with the passing of time.

To help patients from falling into long-term worker's compensation, it's useful to remember the following: successful treatment depends on early recognition  the timely and effective communication of all those involved with injured worker's care is essential the likelihood of long-term pain, disability and being out of work is reduced if there is collaboration between patient, return to work coordinator, employer, claims manager and health professionals.