Burnout in Workers’ Compensation: The Hidden Cost of Data Overload And How the Industry Can Fix It

The Growing Workforce Strain in Workers’ Compensation

Workers’ compensation professionals, including claims adjusters, case managers, and risk teams, are facing increasing strain.

Caseloads continue to rise, documentation requirements are expanding, and workforce shortages make it harder for insurers and TPAs to keep up.

While industry reports show that overall claim frequency has declined over the years, the complexity of cases and administrative demands have increased, adding to adjuster workloads (NCCI).

At the same time, the industry is struggling to attract and retain claims adjusters, raising concerns about the long-term sustainability of the workforce (CutCompCosts). Adjusters report spending excessive time on manual data entry and verification rather than focusing on case strategy and resolution.

Administrative burden has been identified as a key factor in job dissatisfaction and turnover (Duncan Group).

These challenges impact more than just the workforce. Delayed claim resolutions, increased disputes, and rising operational costs create inefficiencies across the system.

As insurers and TPAs struggle to maintain staffing levels, addressing administrative inefficiencies must be considered a strategic priority, not just an operational concern.

While automation has provided incremental improvements, many claims professionals still face inefficiencies caused by unstructured data, disconnected information systems, and outdated workflows.

Addressing these issues requires a shift toward structured data strategies and workflow automation that support, not replace, claims professionals.

The Administrative Bottleneck: Where the System is Breaking Down

A claims adjuster’s day involves reviewing hundreds of pages of medical records, pharmacy reports, and employer documentation to determine claim eligibility and benefits. However, much of this time is spent on repetitive, manual tasks such as:

• Extracting and re-entering medical details into claims systems

• Verifying duplicate or conflicting documents across multiple platforms

• Cross-checking data across unstructured PDFs, faxes, and handwritten records

The burden of administrative tasks on claims professionals is well-documented. The 2019 Workers’ Compensation Benchmarking Study by Rising Medical Solutions found that 58 percent of frontline claims professionals spend more than 20 percent of their time on internal or external compliance activities, with 14 percent spending over 40 percent of their time on these tasks (Risk & Insurance).

Errors in medical bill review further compound administrative inefficiencies. A recent analysis by Enlyte found that 35 percent of audited workers’ compensation medical bills contained errors, ranging from incorrect coding to duplicate charges. Broader healthcare billing research suggests that this issue extends beyond workers’ compensation.

A University of Minnesota study estimates that between 30 and 40 percent of all medical bills contain errors. Similarly, the Medical Billing Advocates of America reports that up to 80 percent of medical bills include incorrect information (University of Minnesota Study).

The workers’ compensation industry’s data quality challenges can be effectively understood through the lens of the 1-10-100 rule, developed by George Labovitz and Yu Sang Chang in 1992 but still highly relevant in insurance and claims management today.

This principle establishes a progressive cost structure where data verification at entry costs approximately $1 per record (prevention), cleansing and correction later costs roughly $10 per record (correction), and working with uncleansed data ultimately costs organizations approximately $100 per record (failure).

As insurers and TPAs face growing documentation backlogs, it is clear that traditional claims processing models are no longer sustainable. Addressing these inefficiencies requires a shift toward structured data strategies, workflow automation, and AI-driven document intelligence to support claims professionals.

How AI and Data Structuring Are Changing the Industry

Many workers’ compensation organizations are shifting from manual document processing to structured, machine-readable data to ease administrative strain.

This transformation is not about replacing professionals with automation but enabling them to work more efficiently. AI-driven document intelligence that organizes unstructured data, removing the need for manual entry.

Key innovations driving this shift include:

• AI-driven document intelligence that extracts, categorizes, and organizes unstructured claims data, reducing reliance on manual entry

• Pattern recognition and predictive modeling to help adjusters identify claim trends and inconsistencies more effectively

• Human-in-the-loop verification, ensuring automation enhances rather than replaces claims expertise

By implementing these technologies, insurers, and TPAs are seeing meaningful improvements:

• Faster review of complex claims, reducing turnaround times by days or weeks

• Less time spent on manual data entry, allowing adjusters to focus on decision-making

• Reduced documentation errors, leading to fewer disputes and improved compliance

• Lower burnout rates as claims professionals spend more time on meaningful work

The adoption of data structuring is not about efficiency alone. It is about making claims management sustainable by allowing professionals to focus on high-value tasks rather than getting lost in administrative backlogs.

The Industry-Wide Shift: What Comes Next?

Workers’ compensation is at a turning point. To create a system that is more sustainable for both employees and insurers, the industry must focus on three key areas:

• Collaboration between insurers, TPAs, and technology partners to improve data-sharing and reduce redundant processing

• Regulatory and compliance changes that encourage structured claims data for better oversight and faster decision-making

• Scalable AI-driven data intelligence that enables claims teams to handle growing caseloads without excessive administrative overhead

The workers’ compensation system is high-stakes, requiring both accuracy and speed. Organizations that embrace structured data, workflow automation, and AI-driven document intelligence will achieve faster claims resolution, improve workforce retention, and set new standards for efficiency.

Conclusion: A Call to Action for the Industry

The growing administrative burden on Workers’ Compensation is not just a technology issue. It is a workforce sustainability challenge.

If insurers and TPAs want to maintain efficiency while keeping experienced professionals in their roles, they must:

• Invest in automation that enhances human expertise rather than replacing it

• Reduce administrative burdens to prevent workforce shortages

• Use structured data strategies to improve accuracy, compliance, and decision-making

The future of workers’ compensation claims is not just about faster processing. It is about supporting the professionals who keep the system running.