Drastic reforms were needed in the 1910s. At that time, scientific knowledge about work and health was, from today's perspective, rudimentary. Other benefit systems, public and private, were yet to be born.
In the 1970s, a federal commission spurred a wave of needed reforms to moribund state workers' compensation laws, in effect saving the system from itself. At the time, public and private practices in safety, work productivity, personal health and benefits began a sustained period of expansion and refinement.
Since then, tackling work injury risks melded into the overall card stack of workplace and societal preoccupations. But the workers' compensation system persists largely unchanged from its stand-alone model of the 1910s.
Frank Neuhauser, an agile, perceptive researcher at The University of California, Berkeley, poses the question, "Is workers' compensation a myth?" I rephrase it, "Is work injury risk still worth a world of its own?" I believe the answer may be, "For the most part, no."
The workers' compensation system assigns accountability for two related risks. Work injury risk is the risk that injuries and illnesses occur at work. Injury recovery risk is the risk that the worker will not successfully recover from injury.
Take safety innovations. When OSHA was introduced in 1970s, many employers complained that it would lower productivity. Ironically, productivity and quality improvement projects likely prevented many work injuries over the last 30 years. Work safety is in large part a by-product of productivity investment.
Now consider work injury recovery risk. Recovery from work injury can stumble over the behavioral and health problems of the injured worker. Traumatic injuries are treatable less and less in isolation from these problems. Our increased focus on workplace wellness, more nuanced understanding of health risk and other factors make it clearer that holistic aid to the injured worker works best. Over half of work injuries with high-cost claims involve needed treatment of complicating non-occupational conditions.
Both worker and employer might benefit if most work injuries were removed from the workers' comp silo and addressed within the mesh of other workplace practices ? health insurance, sick leave, short and long disability, and mainstreaming of people with disabilities, as the Americans with Disabilities Act calls for. For many low-risk employers this might mean removing all work injuries from workers' comp.
The Affordable Care Act will assure health insurance coverage for more workers. The act strengthens the case for holistic treatment of work injuries.
There may remain a continuing value for some work injury risk to be kept in workers' compensation. Very large claims might continue to paid by workers' compensation insurance, say over a threshold of $250,000. Some sectors where the risks of very high injury costs are elevated, such as in construction and mining, could be entirely retained by the workers' compensation system.
Serious occupational disease risks deserve more dedicated attention. Making employers financially accountable is a thorny challenge for benefit designers. But employers could be assessed to fund research to more closely identify these risks. Think of workers' compensation as struggling to be reborn as a leaner, more focused system.
PETER ROUSMANIERE is an expert on the workers' compensation industry. He can be reached at firstname.lastname@example.org.
May 1, 2013
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