Monday, August 23, 2010

What's behind the headlines about 'Fewer Worker Fatalities'?

There have been a lot of headlines lately about the lower number of injuries. One headline read “ U.S. Worker Fatalities fall 17% to record low” [Bloomberg August 19, 2010 ]. The improvement over past years is certainly welcomed but in the U.S. that still means 4340 work-related fatalities. The headline also misses the fact that construction spending in the US fell by 15% over the same period.

As an aside, it is important to remember that the U.S. counts work-related fatalities is very differently from the way WorkSafeBC and many other reporting agencies report similar statistics. The U.S. Bureau of Labor Statistics (BLS) has a system called the Census of Fatal Occupational Injuries (CFOI). Certain work-related fatalities are excluded from CFOI. For example, occupational diseases are excluded. Deaths due to work-related heart attack or stroke are considered occupational diseases and are excluded. Fatal work injuries to workers under 16 are also not included in this database. In contrast, all these categories of work-related fatalities are included in the WorkSafeBC index.

Another difference between the U.S. data and what we typically see in Canada is the number of homicides and suicides that occur at work. These are included in CFOI. Last year, homicides in the CFOI numbered 521 [80% due to shootings] while suicides accounted for 237 of the fatalities in this dataset.

Returning to the impact of the recession on workers’ compensation, it is true that injuries have declined both in absolute numbers and in rate. The decline in numbers is to be expected: if no one works, there can be no work-related injuries. The decline in injury rate is more complex and is part of a trend that has been going on for some time in most countries, states and provinces. NCCI in the U.S. notes that claim frequency continued to decrease in 2009: down 4 percent (cf. reductions of 3.4 percent in 2008 and 3 percent in 2007). According to NCCI’s research, recession was predicted to put additional downward pressure on frequency, because the work force still working during the recession gains in experience and is less prone to injury.

Many articles have noted the increase in ‘severity’ during the recession. Unlike WorkSafeBC that has a special definition for ‘Severe Injuries’ most jurisdictions simply use duration of disability as a measure of severity. The idea that a recession would extend recovery makes intuitive sense. In a robust economy, most workers return to their accident employment well before reaching maximal medical recovery. In a recession, there may be fewer employers clamoring for injured workers to return and workers are more likely to remain on claim until they are nearer to or reach a full recovery (or a point of maximal medical improvement), which is their entitlement under most workers’ compensation systems.

As we come out of this recession, most analysts are predicting a modest recovery rather than a rapid expansion. Given that scenario, one can expect that severity/duration will decline slowly and the number of injuries will increase. We can anticipate upward pressure on the provincial injury rate partly due to recoveries in higher risk sectors and partly due to the ‘churn’ as businesses deal with modest expansion (new hires) and an acceleration in the retirement rate due to the underlying demographic impact as older workers grow in numbers and are replaced as they retire.

Friday, August 6, 2010

Why is Ontario's WSIB phasing out its LMR program?

A few weeks ago, Ontario’s WSIB announced a major change in direction for its Labour Market Re-entry (LMR) program [roughly equivalent to WorkSafeBC's Vocational Rehabilitation Services].  The change will phase out the use of external providers and create a new Work Reintegration Program inside the WSIB. 

First a little background.  Back in 1997,  Ontario moved to a ‘self-reliance’ model; most employers were mandatorily required to accommodate an injured worker in a return to work with the accident employer.  The legislation also imposed a duty on the worker to cooperate toward this end.  For workers who could not return to their accident employer, the LMR program became the option.  The LMR program was to be delivered in the community by external professionals so in 1998, the internal disability case management and vocational rehabilitation functions of the WSIB for cases that could not return to their accident employer were outsourced.

In 2009, WSIB contracted an outside consulting agency to conduct an audit of the LMR and other Return-to-Work (RTW) services.  The report recommended changes to the program to make it more consistent with the leading practices of other jurisdictions (including WorkSafeBC).  This report, stakeholder consultations and a value for money audit showed that the re-training programs were not having the desired effect.  The lack of a link between re-training programs [employability] and effective labour market re-entry [employment] was identified as one root cause.  The absence of direct WSIB involvement in LMR actually hindered return to work and the effectiveness of LMR programs. 

The solution?  WSIB will phase out its use of external providers and will establish an internal role for ‘Work Reintegration Professionals’ who will actively “provide injured workers with a sound assessment and, if needed, high-quality, credible training that will -- to the best of the WSIB’s ability -- equip them for return to work.”  Clearly, the move is toward achieving better RTW outcomes and higher wage replacements for injured workers.

The new Work Reintegration Program is expected to be fully in place by the end of 2010.  According to the WSIB,
The new Work Reintegration approach will support:

  • Increased simplicity of communication and co-ordination of services between WSIB and workers,

  • Increased clarity of accountability,

  • Greater assurance of workers getting the service they need, when they need it,

  • Increased consistency of services provided in similar circumstances, and

  • Improved management of expectations and a reasonable level of investment within clear cost parameters.

You can read background on all this on the WSIB website .

Tuesday, August 3, 2010

My inbox after vacation

I’m back from a break and have been catching up on developments in the world of workers’ compensation. Here are a few highlights from the my inbox over the last few weeks:
 Washington State’s Secretary of State has certified Initiative 1082 that would open the workers’ compensation insurance market in that state to private insurance. The Initiative would also eliminate the portion of the premium paid by workers (a feature that may have attracted some workers to sign on to the petition). While 18% of a sample of the signatures in support of the initiative being placed on the ballot were ruled inadmissible, the required minimum of valid signatures was achieved so the provision will be on the ballot in November.

Arizona’s governor signed into law a provision that will take the Arizona State Compensation Fund from a public competitive state fund to a private entity. It currently has about a third of the market in that state. The move will allow the new entity to expand operations into other states.

Alberta’s Employment Minister, Thomas Lukaszuk, announced his department will post safety records of all companies in Alberta. What exactly will be posted has not been revealed but speculation in the media suggests workers’ compensation lost-time claim data (presumably counts and dollars) will be part of what is published. The move is intended to improve safety for workers in that province. Press reports attribute the following statement to the Minister:
"Today is a new day for occupational health and safety in the province of Alberta. This is the day when status quo is no longer acceptable. The hammer is coming down on those who persistently fail to comply with safety laws.”

Tennessee proposed a law that would require all construction service providers to be included in the scope of coverage unless specifically exempted—a procedure that is open to certain sole proprietors and others but with a catch: the firm must be registered and the exemption must be applied for (subject to fees) before an exemption card good for two years is issued.

President Obama has taken aim at the safety and return to work performance of federal agencies and executive departments. Under the acronym POWER (Protecting Our Workers and Ensuring Reemployment) departments are expected by

• Reducing total injury and illness case rates
• Reducing lost-time injuries
• Analyzing lost-time injury and illness data
• Increasing the timely filing of workers’ comp claims
• Increasing the timely filing of wage-loss claims
• Reducing lost production day rates
• Speeding return-to-work in cases of serious injury or illness

Vermont has increased the penalties for firms who are required to register and carry workers’ compensation coverage but fail to do so. Such firms will now be required to close immediately and a fine of $250 per day issued until they are in compliance.

I'm always interested in unique developments in workers' compensation and prevention.  Feel free to send any you come across to me.  As always, if you have any comments or insights, leave a post and add to the blog.