Orlando, FL (WorkersCompenstion.com) – What will the workers’ compensation system look like by 2030? Will it survive a variety of potentially devastating external forces? Could a paradigm shift result that would cause a fundamental change to the grand bargain?
The heady questions are raised in a soon to be published book by Richard Victor, founder and former CEO of the Workers Compensation Research Institute and now a fellow at the Sedgwick Institute. Four of the industry’s major thought leaders discussed the scenarios presented in the book and offered their own glimpses into the 2030 world of workers’ compensation.
The current workers’ compensation system could be significantly impacted by:
- Emerging widespread labor shortages
- Restrictive immigration policies and rhetoric
- Growing disparity between cost sharing in non-occupational health insurance and in WC
- More workers with no health insurance
Labor shortages, due to retiring baby boomers and other factors could result in increased workers’ compensation costs, Victor postulates. The shortage of healthcare staff could result in delays in medical care and longer return-to-work times. An increase in workers’ compensation-related positions would led to less experienced staff to fill them. Also, employers in many fields would be forced to hire inexperienced workers, potentially leading to an increase in injury frequency rates.
Governments, consumers and employers will all need to significantly lower their expenditures to cover debt and unfunded liabilities, Victor speculates. That could lead to higher taxes and cause governments to increase premium taxes and raid state fund reserves.
A question for the panelists is will the incremental changes that have kept the 110 year old workers’ compensation system operational be enough to deal with the external pressures.
“What he’s saying is, these are external forces he’s worried about, not part of the workers’ compensation system, but affecting it,” said John Ruser, president of WCRI. “So it’s a lot harder to address these challenges than other things within the system.”
“When you consider workers’ compensation is a social benefit and look at other social services it’s debatable whether any has ever been in balance. They tend to teeter within a certain boundary. The arc of that shift really depends on who the stakeholders are and what are the priorities of the different stakeholders,” said Alex Swedlow, president of the California Workers Compensation Institute. “The idea that we’ll ever reach a perfect balance is unlikely. More likely is continued experimentation and reform until we reach something closer to a perfect balance.”
Swedlow explained that California’s typical approach to problems in the workers’ compensation system is to react and reform. The danger is that “if we’re not capable of recognizing and reforming the issue at hand then someone else is going to do it for us. And that person won’t have the background and experience. “
Overall, the panelists viewed the book as thought provoking. Something to think about going forward.
“I’m more of an optomist than Rick in his book,” Ruser said. “I think we’re going to be able to process some of these changes. We’re not going wait until 2030 to deal with them. I think solutions can be reached to deal with cost pressures we’re going to see. We’re largely a pay for service system, a reason for cost shifting. We need to adopt same systems outside of workers’ compensation, to cut down on cost shifting. If high deductible policies are pushing cost shifting, maybe some form of deductibles in workers’ compensation.”