By JOSHUA CLIFTON, a Chicago-based writer who covers workers' comp and disability issues
In a new report to mark the 25th anniversary of the Cambridge, Mass.-based Workers Compensation Research Institute, heavyweights from the academic, insurance and public-policy realms took a look back at how the workers' compensation industry has changed since the early 1980s and examined how current challenges and coming crises may play a role in shaping its future.
The report is titled " Workers' Compensation: Where Have We Come From? Where Are We Going?"
Peter Barth, professor of economics emeritus at the University of Connecticut, for instance, noted a number of historical trends that have occurred, ranging from the widespread adoption of competitive pricing in the insurance market to the growth in scientific research-based literature that has expanded the knowledge of various workplace hazards.
More interesting, however, is Barth's breakdown of the most significant areas without change in workers' comp, most notably the stagnation of effective return-to-work strategies.
"We are not much more advanced than we were in 1983 in finding a best-practices approach to re-employing those who are re-entering the labor force after sustaining an occupational injury or disease," he said. "A few states have experimented with programs, but the results are not encouraging."
This issue should be of great concern going forward into the 21st century, Barth believes. As the baby boomer generation grows older and many extend their working years due to the collapse in retirement savings, the aging workforce will likely result in "longer periods of disability, more difficulty in becoming re-employed following work-caused disability and costlier medical expenses."
Robert Steggert, vice president of casualty claims at Marriott International Inc., agreed. In discussing cost trends and drivers from an employer's perspective, Steggert said that future leaders must figure out how to deal with the aging workforce and "seamlessly move injured workers to secure retirements without being litigation being the predominant path."
Aging workers aren't Steggert's only concern. He said that it is imperative that workers' comp leaders address how to best integrate a growing global workforce presence in the United States.
"And how will fundamental healthcare delivery and workers' compensation systems alike deal with this imported labor, legal or not?" he asked.
THE NEXT 25 YEARS
While a majority of the experts remained cautiously optimistic about the next 25 years, many say changes in healthcare and increased regulation represent the greatest potential drivers of change.
"The mess in capital markets has been accompanied by very loud calls for policymakers to increase and improve the degree of regulation there," Barth said.
The economic collapse wasn't limited to banks and investment companies, Barth noted, adding that AIG played a major role in the implosion of the capital markets.
"It seems reasonable to me that some call for increased regulation will directly impact the insurance industry," he said.
Federal regulators might even supplant the existing state authorities, warned Barth.
"Imagine federal rules applying to reserving and underwriting practices, and to investments?" he wrote.
The reform of the healthcare system makes it hard to predict what the future holds for workers' comp. Although the current effort by the Obama administration has proposed folding workers' comp healthcare into the overall healthcare system, as was once proposed in 1993, that doesn't mean it won't come up for debate down the road, said Barth.
If and when universal healthcare coverage comes to America, Steggert questioned, will the workers' comp system become threatened or extinct?
"How will workers' compensation systems deal with indemnity benefit delivery and be win-win while minimizing litigation if and when healthcare becomes 'free choice' in the universal healthcare era?" he asked.
December 21, 2010
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