To be sure, premiums have been notching upward. But the makings for classic, sustained across-the-board increases are not present.
Rather some classes of employers and those without a rose-smelling record will be selectively whacked with stiff premium hikes.
Troubles in California and New York dash one's hopes that workers' compensation can avoid severe setbacks. We would love the system, state by state and nationwide, to show gradual improvement year over year, measured in lower disability days and a temperance in costs. This is what most of us implicitly want. This is not usually what we get.
California's legislative reforms have failed to contain medical costs. When its premiums had reached three times those of most other states in 2004, it enacted sweeping reforms. Now the California Workers Compensation Institute reports that medical inflation is deeply entrenched.
New York's Workers Compensation Board oversaw the self-insurance group business in the state with such brutal indifference that it allowed a rogue administrator to run up a billion dollars in unfunded claims liabilities. With court approval, it is billing thousands of innocent employers to pay for these liabilities.
At times like these, it is useful to think through the basics. Management guru Peter Drucker asks: What is our business? Who is our customer? What does our customer value?
Workers' compensation is essentially an injury recovery service. The service applies medical care, with return to work. The large majority of employers prepay for the service through insurance premiums. In effect, insurers deliver the service and guarantee the results. The recipient of the service is the individual worker, all told about 4 million workers a year. We are servicing not a shoulder injury, but rather an individual who presents, with her shoulder injury, her habits and her often-confused expectations for the future.
When they discuss single cases, claims adjusters, nurses, attorneys and worksite personnels often show a subtle, even empathic sensitivity to an injured worker's predicament, including her expectations. However, this perceptiveness often evaporates, not because it is flawed but because it appears not really useful to the professional paid to work "the claim." The idea of the worker as a customer is easily lost, and with that a constructive focus on the worker's expectations is also lost.
David DePaolo recently offered this epigram: "Work mindset establishes the disability mindset and the disability mindset sets up the rules for disability status."
Literally speaking, the "rules" for disability status are found in things like laws, impairment guides and court precedent. I think the most decisive rules are the ones in the worker's head, nurtured by past and present circumstance.
The disability mindset, abetted by external enablers, is a huge reason for the rise in medical costs and insurer liabilities. For example, well over 100,000 injured workers are stuck in lifetime opioid-enabled disability mindsets. And each year another 100,000 of newly injured workers are candidates to join them. It's time to bring the customer back. Those among us who focus on the worker in chronic pain as a customer are having remarkable success in finding workers who value getting their life back. They tap into the worker's internal formula for recovery: hope, willingness, and readiness to act responsibly. What's the weather like in your job?
PETER ROUSMANIERE is an expert on the workers' compensation industry. He can be reached at firstname.lastname@example.org.
May 1, 2012
Copyright 2012© LRP Publications