As I write, the two branches of Congress are working out a single healthcare reform bill. This legislation puts center stage the principle of universal coverage and the urgent need for medical cost control. Of course, this is for personal healthcare, and no one has emitted a peep about workers' compensation.
But what if Democrats in Congress started to ask two questions: Are workers being universally covered for their injuries? If not, are the medical costs for work injuries being shifted over to other safety nets, such as Medicare?
And what if they came upon an imposing stack of studies which report that, indeed, many injured workers do not claim workers' compensation benefits and that cost shifting out of the workers' compensation system is substantial?
If you think this is a far-fetched scenario, think again because it is close to being put into play.
Some Democrats in Congress already worry that many work injuries are not being reported to the Occupational Safety and Health Administration (OSHA). In 2008 a House committee issued a report on the issue. The Government Accountability Office wrote a similar report in late 2009.
These Congressional investigations address OSHA reporting, which is different from workers' compensation reporting. However, a significant shortfall in OSHA reporting could infer a shortfall in workers' comp reporting; which studies have concluded.
These studies draw upon medical billing data, the comparisons of state and federal databases and worker interviews: Their quality varies. But a thinking person could conclude that the reporting systems for OSHA and workers' compensation are impaired.
I have discussed these studies with workers' compensation professionals. A defense attorney in Baltimore told me that a lot of light injuries and occupational diseases with long latencies may not be claimed. But he doesn't expect a claiming shortfall with serious acute injuries.
If these workers are not being treated within the workers' compensation system, they must be using other medical and disability safety nets as well as their own household income. One researcher has estimated that the annual medical spending on occupational diseases outside the workers' compensation system is between $7 billion and $23 billion. Compare that to the roughly $25 billion spent annually on medical care within the workers' compensation system.
That's a tsunami-sized cost-shift and if it's true, many costs are being shifted onto Medicare, because of long latent occupational diseases: And in case you haven't noticed, Medicare is going broke.
If these Congressional studies bear fruit it would be the second time in 40 years that the political establishment in the U.S. will have taken serious aim at workers' compensation.
When OSHA was born in 1970, politicians decided to review state workers' compensation systems. With a commission's report prodding them, many states took to reforming their laws.
Today, conditions are ripe for an escalation of activism by Democrats who might leverage two key facets of the 2010 healthcare legislation: universal coverage and costs.
For this to happen, the Democrats would need to retain control of the House in November. I'm under no professional obligation to forecast the results of that election, fortunately.
PETER ROUSMANIERE is an expert on the workers' compensation industry.
February 1, 2010
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