What is Lost in the Debate Over Workers’ Compensation Reform?

02.02.2017


By: Robert Wilson

While perusing the news early this morning I came across several articles related to reforms pending or proposed in two key states. One such article was discussing potential reforms in a state dominated by a Republican governor and legislature; another was discussing a state with a Republican Governor but a legislature permanently controlled by Democrats. The former article was largely focused on the efforts of the state Chamber of Commerce to protect their members. The latter article was written by a Democrat Representative of the State House. Despite these seemingly opposite political positions, the two articles sounded very much the same. Neither represented any imaginative approach to fixing the issues related to their specific systems. Quite honestly, they both could have been written about any state at any point over the last 30 years.

Here are some specific quotes from the two articles:

“The case creates uncertainty in costs for businesses – a climate their advocates and legislative allies say is a drag on employment.” 

“Members of the House Democratic Caucus, meantime, have been working to advance specific reforms that will lower workers' compensation costs for [the states] employers.”

“But while the 2011 reforms are helping reduce claims and costs, they do not contain a mechanism requiring workers' compensation insurance companies to pass these savings along to employers in the form of lower insurance rates.”

““One, it drives the costs up for all the necessities in life and it drives up the cost of labor — employing people”

The focus, as has seemingly been the case for the last couple decades, is mostly aimed at lowering costs for business. What is missing is the fact that, over the long haul, recovery for injured workers is far more important to achieve than compensation. If you really want to lower costs for employers over the long haul, reform your system to provide exceptional medical care and the tools to return the worker quickly to the job. Unfortunately, that type of innovative program is not represented by the discussions being held today in these states.

To be fair, the article relaying the (conservative) Chambers position did include quotes related to “making the injured worker whole” and the importance of providing quality medical care. Ironically, the one penned by the Democratic rep barely mentioned workers’ and instead directed its energy at skewering insurance companies for daring to make a profit. Overall, the reform arguments being made today seem to resemble those of yesteryear – save money for employers and remain competitive with neighboring states.

As a conservative businessman, I am all for saving money. The problem is, the continual cycle of reform should tell us we are not accomplishing that task – and we are screwing a host of injured workers in the process. 

I am suggesting that what is missing in the entire process of “reform”, is the focus on outcome. Ideally, the best accident is the one that never happens, but when one does, what is the ideal ending for the story? Perhaps our legislatures should answer that question and then build backwards from there.

Instead, we focus on cost and process. We establish complex systems, cap certain payments, monitor activities, increase reporting requirements and hope for the best. The result has generally been, in many cases, failing benefit levels, delayed care, increased litigation and poor recovery results.

And then we wring our hands, demand change, and start the process all over again. 

Albert Einstein said that the definition of insanity is doing the same things over and over again and expecting different results. We should know by now that “improving workers’ compensation” by cutting benefits and increasing complexities only achieves the opposite of the intended results. Our legislatures need to embrace bold thinking that is focused on the best possible health outcome for injured workers. “Recover and return” needs to become the mantra that will guide truly effective reforms. 

After all, if we honestly believe that the answer is simply repeating failed reforms of the past, thinking that “this time it will work”, then we truly must be crazy.

The foregoing was originally published on Bob's Cluttered Desk Blog and is reproduced here with permission of the author. No further republication is permitted without the author’s consent.

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