Friday, November 29, 2013

Can a toxic workplace harm workers?

Most of us have heard of “toxic” workplaces.  The hallmarks of a toxic workplace typically include discrimination, back-biting, rumor-mongering, obsessive favoritism, repeated harassment, bullying and more.  As a result, workers may experience anxiety, become depressed, take sick leave or leave the company altogether.  Notice, the characteristics of a toxic workplace are all about behavior not intent. Regardless of the intent,  there is now compelling evidence that such behaviors by superiors and co-workers can harm and are harming workers.

Increasingly, workers’ compensation systems are accepting mental or psychological injuries arising from the work environment.  The trend is a natural consequence of research that has shown how stressors in the workplace can increase the risk to the psychological health of workers even in the absence of any physical trauma.  

Workers’ compensation systems have a long history of accepting psychological injury as a consequence of physical trauma.  Post-traumatic Stress Disorder (PTSD) is perhaps the highest profile diagnosis but clinical depression and anxiety are common and can become chronic sequellae to traumatic injury.  A single traumatic event without personal physical injury has also been recognized as creating a risk of psychological injury to workers.  First responders, disaster relief workers, and worker-witnesses to traumatic events are certainly at risk of mental disorders. 

What we now know from the research is that serious psychological harm in the form of mental disorders can occur from a single traumatic event or a cumulative series of significant stressors in multiple work-related events.  While the standard (and onus) of proof required for the acceptance of mental disorder claims varies across jurisdictions (from “causative significance” to “predominant cause”), the recognition of the risk puts an onus on employers and workers to take action to protect workers and stop behaviors like workplace bullying and harassment .  Failure to do so may well constitute a breach of the employer’s general duty to take all reasonable steps in the circumstances to ensure the health and safety of workers.

In BC, changes to the Workers Compensation Act recognized the evidence on mental injuries and the connection to toxic workplace behaviors such as bullying and harassment.  Prior to the changes contained in Bill 14, compensation was payable only where the mental stress was an acute reaction to a sudden and unexpected traumatic event arising out of and in the course of employment.  Under the changes that came into effect on July 1, 2012 “mental disorder” is recognized as a reaction to one or more traumatic events arising out of and in the course of the worker’s employment.    The amendment recognized that a diagnosed mental disorder may arise from a significant work-related stressor or a cumulative series of significant work-related stressors.

It’s more than a year down the road since the effective date in BC.  From published data and presentations we know that 3000 claims have been registered since July 1, 2012.  So far, nearly 500 claims have been allowed while 1400 have been disallowed or rejected and others have been suspended until a worker agrees to be diagnosed by a psychiatrist or psychologist. 

Not every work-related stressor causes a work-related injury.  The pressure of workloads and deadlines, the realities of labour force adjustments and the inevitable changes in job duties are intrinsic to many industries and work environment.  While the Bill 14 amendments prescribes some exclusions (such as discipline, termination and changes in the work to be performed or in working conditions), mental disorders that are a consequence of bullying and harassment are clearly within the scope   of coverage. 

The main objection to inclusion of mental disorders in the scope of coverage and instituting new policies that target bullying and harassment involves intentions.  I’ve heard a few employers say, “It’s not my intention to harass anyone…”, “I like to keep my employees off balance—it makes it easier to manage them” ,  “Sure I am hard on my staff but it is for the benefit of the team—we all win if we meet the deadline”, “I’m not harassing any one person… It’s not harassment if you treat everyone the same.”   Even if you think there might be some merit to any of the intentions, what really matters to workers are the behaviors they observe and experience. 

Behaviors  such as calling an employee in for a meeting without ever telling them in advance why , micromanaging, withholding critical information necessary to do one’s job, and playing one employee off another may be seen as ways to retain power, meet deadlines or exceed production quotas  but are really passive-aggressive behaviors that can increase the toxicity of a workplace.  

Physically beating subordinates is never justifiable to meet deadlines or production quotas; should behaviors that can inflict mental harm be treated any differently?  Clearly, the ends in either case do not justify the means. Behaviors, not intentions, are what workers observe and experience.  Not all the behaviors mentioned here are captured by the formal definition of bullying and harassment, but they are behaviors that can undermine confidence, heighten anxiety, foster depression and contribute to a toxic workplace. 

Not every worker who is bullied or harassed will develop a mental disorder;  that does not mean that the harassment and bullying can go on with impunity.  WorkSafeBC’s policies pursuant to the Occupational Health & Safety Regulation came into effect on November 1, 2013.  The policies define bullying and harassment; more importantly, they explain the duties of workers, employers, and supervisors to prevent and address workplace bullying and harassment.

No regulatory prohibition can eliminate all the characteristics of a toxic workplace.  Eliminating bullying and harassment is a good place to start.   

Thursday, November 14, 2013

Is age 70 or 75 becoming the new 65?

I was in Washington, DC last week speaking on the impact demographic change is having and will continue to have on workplaces.  After the “Global Economic Crisis” and severe recessions in many countries, there is evidence that workers delaying retirement and even re-entering the labour force.  Demographic changes is also having an impact on the supply of qualified younger workers to take the place of older workers poised to exit the labour force. 

Social Security’s retirement age is 70.  The simple fact is that monthly benefits are highest at age 70 and are reduced actuarially for each year they are claimed before age 70.  This is a relatively new development, which may explain why Social Security’s retirement age is the best-kept secret in town.  But I think it’s time we told folks.   And then we need to clarify what all this talk about raising the so-called full retirement age really means.

US Social Security and the Canada Pension Plan (CPP) are similar in many ways.  CPP also provides the greatest benefit to those who postpone receipt to age 70. Yes, 65 is still the reference year for retirement but waiting has its rewards and these are increasing.   From 2011 to 2013, the Government of Canada has gradually increased the incentive to delay collecting CPP.  As of this year, 2013, if you start receiving your CPP pension at the age of 70, your pension amount will be 42% more than it would have been if you had taken it at 65. 

Put another way, if you assume the point of view of age 70 as the reference year at 100%, then retirement at age 65 has an initial monthly CPP payment of only 70.4% of the monthly amount at age 70.  Because CPP is also increasing the “penalties” for retiring early, in 2013, a 60 year old retiree would get only 47.6% of the retiree delaying receipt of CPP to age 70. 

Now, for many people the incentive or penalty is irrelevant.  Health and income may simply make delaying receipt of CPP out of the question.  For others, particularly those that are in relatively good health and who may have invested heavily in education before starting work, work beyond age 65 may be a necessity.  The employment rate of for males 65 and over with a university degree was 25.3% in 2012.  For those 65 and older with educational attainment above a bachelor’s degree, the employment rate was nearly 30% in that year.  Both the employment rate and actual numbers of these older workers is increasing.  [CNSIM Table 282-0004 Canada, Employment rate by Educational Attainment for selected age groups 2012].

Canada and the US are well above the OECD average for life expectancy.  The life expectancy and labour force participation rate for those over the age of 65 are also above average-- and rising-- but still below  life expectancy and participation rates in some countries such as Sweden.  Sweden’s centre-right  Prime Minister,  Fredrik Reinfeldt , recently put it bluntly:  Swedes should be prepared to work until they are 75 and to change careers in the middle of their work life if they are to keep the welfare standards they expect.  He also note that half of today's children in Sweden can expect to become 100 years old and there has to be a change in the way the Swedes view their work life.

The point is simply this:  we are seeing and will continue to see more workers aged 60, 70 and older in our workplaces.  We need them.  Work is good for their health and well-being.  They want to work –some for the money but many for social and mental stimulation reasons.   It is time to rethink policies and attitudes that fail to appreciate this changing reality.  

Friday, November 1, 2013

Why did you attend the ACHRF event in Australia?

I spent much of October in Australia.  My main purpose was to attend the third Australasian Compensation Health Research Forum (ACHRF) in Sydney.  The forum had two full days of presentations and discussions along two themes:  Day 1-  Return to work and social participation and Day 2- Health and disability services delivery.  While there is no substitute for personal participation in the conference, the organizers have made most presentations available on line.

My keynote presentation was an introduction to the first day and to the theme of return to work and social participation.  I used an “environmental scanning” approach to highlight “Six Trends, Three Predictions and One Sure Thing: International Perspectives on Return to Work and Social Participation.” This presentation provided evidence for six trends in North America, Europe and the Australasian region and some predictions for what is coming next. 

I touched on the following trends:

1.       Rise of social enterprise 
2.       Mainstreaming Social Responsibility
3.       Enabling through Technology
4.       Improving through Comparison
5.       Dawning of BIG DATA
6.       Resetting Expectations

My three predictions that will influence RTW in the future flowed from these trends and from other developments that are hard to ignore:

1.       Demographic Change:  Unexpected Consequences
2.       Concepts of “Disability” will change….Dramatically
3.       Technology, for good and ill, will change everything

The “One Sure Thing” is that the number of disabled persons is going to increase dramatically.  Already, US Social Security Disability is nearing the point of insolvency; the number of recipients of Canada Pension Plan Disability is rising and is projected to continue to rise for at least the next two decades.  This does not even address the rising prevalence of disability in the overall population.  One New Zealand study projects the disabled population is estimated to grow over the next 50 years to 1.2 million people, or 21 per cent of the total population.

The goal of the presentation was not to solve the world’s problems or to pass judgment on the trends identified.  The goal was to invite the gathered researchers, administrators, policy makers and practitioners to lift their point of view from the narrow focus on jurisdiction and caseloads; to view the wider world of RTW and social participation in other jurisdictions; and to begin a process of discussion, research and action to improve outcomes for those that need it most.

A major advantage of participating in this event was the opportunity it afforded me to meet with reprentatives from agencies that share the mandate of WorkSafeBC.  These included WorkSafe Victoria, the Transport Accident Commission (TAC),  ACCComcare, WorkCover NSW and many researchers associated with the Institute for Safety and Compensation Recovery Research (ISCRR)— host of the event and sponsor of my participation.  Those informal discussions provide the context essential to understanding the trends and results evident in other jurisdictions. 

Even if you can’t personally attend events like this one, the program and presentations provide a portal through which you may glimpse the direction of new research and the approaches of others to issues common to all.   The world of workers’ compensation, prevention, and RTW is small and many of the challenges we face are common.  There is much to learn from each other.  Exploring the presentations from this event may open new avenues of dialogue with our Australasian cousins.   

Wednesday, October 23, 2013

Why did you attend the AWCBC Learning Symposium?

I was asked to participate in the AWCBC Learning Symposium in St. John, NB a few weeks ago.  I accepted the offer in part because I believe strongly in the purpose of the event.  Every board has employee training programs for staff and orientation programs for directors.  These are essential to good governance and effective administration.  What the Learning Symposium does is provide cross-jurisdictional consistency and exposure to concepts, issues and challenges that go beyond the basics.

This year’s event was a celebration of the legacy Canadian workers’ compensation boards received from Sir William Meredith.  A hundred years ago, Meredith submitted a report to the Ontario government that set the course for workers’ compensation in Canada.  You can get a lot of background from , a website created by AWCBC. 

My first presentation was on the evolution of workers’ compensation in Canada.  My approach to the topic started as you might expect, with the situation Meredith faced.  I departed from the predictable decade by decade recount of developments that got us to where we are today.  Instead, I built on a theme developed by Professor Terence Ison, the preeminent legal minds in workers’ compensation law. (He literally wrote the book, Workers’ Compensation in Canada).   I was fortunate to hear his lecture at a similar AWCBC event nearly 20 years ago in Edmonton.  His approach was to take some of the key issues of the day and explore them from the perspective of Meredith some eighty years earlier.   

My approach was similar. What would Meredith say about scope of coverage, causation, level of benefits, mandatory reinstatement, funding and opening the system to competition?  Ison expressed his view based on his extensive knowledge and experience as a legal expert, chair of a workers’ compensation board, and author of dozens of reports, books and articles.  I was able to add my perspective based on developments in recent years since his presentation. 

My second presentation was with H. Allan Hunt and addressed the issue of Performance Measurement.  I first met Allan in the early 1990s as he and Peter Barth conducted an Administrative Inventory of workers’ compensation in British Columbia.  Over the years, he revisited WorkSafeBC and critically examined its progress, identified attention points, and made emphatic statements about action was needed.  His expertise was called upon in reviews in Australia and Ontario.  It was an honour to share the podium with him and present the case for effective performance measurement in workers’ compensation.  It was gratifying to hear his assessment of WorkSafeBC’s performance as being worthy of being counted among the best.

My final presentation was at the request of the organizers of the event.  They asked that I speak about the future.  They gave me the title “Rethinking the workers’ compensation model and the future”.  Again, Terence Ison provided a fabulous starting point.  His article,  “Reflections on Workers' Compensation and Occupational Health & Safety" [(2013) 26 C.J.A.L.P. 1-22 ]describes… “The decline of Workers’ Compensation…and reasons for that decline…”

I described the current business model and the key role experience rating plays.  Ison is not the only critic of the current system but he is among the very few knowledgeable, informed critics we ought to listen to.  I offered the audience my response to Ison’s criticisms and described ways forward that address his concerns while maintaining the essential features of the current model.  

I get requests to participate in many events; so, why did I choose to participate in this one?  I attended because learning matters.  Research shows that the lack of knowledge of case managers is a significant concern of injured workers and advocates.   I have had the benefit of years of mentorship, WorkSafeBC’s support in taking courses, and external practice in system evaluations.  I have been permitted to attend AWCBC and similar events and bring what I learned back to my colleagues.  The AWCBC Learning Symposium was an opportunity to give something back, to support the fabulous roster of presenters, and to present ideas that I truly believe can help shape the future and sustain Sir William Meredith’s legacy.   More importantly, I wanted to support a tradition of learning and sharing that sustains an effective system of prevention and compensation –a system consistent with the principles put forward by Sir William—for employers, workers, survivors and dependents. 

Monday, September 16, 2013

Have there been any Criminal Code convictions for health and safety violations?

Two events separated by 17 years came to mind when I was asked the above question recently.  The two events may seem unrelated: 26 miners killed in a 1992 Westray mine explosion in Nova Scotia and four construction workers falling to their death on Christmas Eve 2009 in Toronto.  Connecting them is Bill C-45 amendments to the Criminal Code of Canada passed in 2004.

The investigation into WestRay revealed the limits of sanctions the law would allow.  The commission of inquiry found that the explosion and resulting deaths were predictable.  The operation put economic considerations ahead of worker safety.  Commissioner K. Peter Richard concluded the story leading up to the explosion was

“…of incompetence, of mismanagement, of bureaucratic bungling, of deceit, of ruthlessness, of cover-up, of apathy, of expediency, and of cynical indifference.”
Despite the strength of this finding, no one was found criminally responsible.

In response to the significant public outrage, Bill C-45 was introduced and eventually passed into law amending Canada’s Criminal Code.  The main amendment makes a clear statement.  Section 217 now reads

Duty of persons undertaking acts217. Every one who undertakes to do an act is under a legal duty to do it if an omission to do the act is or may be dangerous to life.

Duty of persons directing work217.1 Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.

Since these sections became law, I am aware of only two applications of this new section.  The first was in Quebec and is known as Transpave where the employer plead guilty and a fine $100.000 was imposed.  The case involved a young worker being killed by a malfunctioning machine.  The employer knew the machine malfunctioned but did not take it out of service or properly train the worker in appropriate procedures. The employer was remorseful and invested heavily in safety measures to ensure a similar event would never happen. 

Then, in 2009, six construction workers were on a swing stage at the 14th floor.  The usual number of workers on the swing stage was just 2.  There were only two lifelines and only one was properly engaged.  Two workers survived but one was severely and permanently injured; four were killed. The employer, Metron Construction Corporation, plead guilty and was fined $200,000.  The Crown appealed and the Ontario Court of Appeal raised that fine to $ 750,000.  The OCA ruling is available on line.  As of this writing, the ruling has not been appealed further. 

We now have two cases testing the Criminal Code amendments flowing from Westray.  Has a company official been sentenced to prison for criminal negligence?  No, not yet.  Will we see more cases?  Unfortunately, yes.  I say unfortunately because the cases so far involve completely avoidable deaths and, sadly, the potential for more deaths exist elsewhere.  On the other hand, perhaps the successful convictions will be a wake up call to manages, supervisors, directors, and owners to review their own practices or lack of safety practices.  At a minimum,  financial risk analysts will now have new data to consider when weighing the risks of failing to train, keep equipment in good repair and put the safety of workers first.  

Thursday, August 15, 2013

Is it time to introduce cone-zone cameras?

It happened again.  Another flag person was hit and badly hurt in another roadway incident.   Another community shocked by the tragedy; another call from police looking for witnesses. Add another tragic case to approximately 400 or so that occurred in this province alone in the last decade.  This particular incident occurred in Northern BC on July 21st, but a quick scan of any news feed will show you just how common this sort of incident really is in North America. 

In the US, the Bureau of Labor Statistics reports in their Fatal occupational injuries by selected characteristics, 2003-2011 publication 373 entirely preventable worker deaths while directing or flagging traffic.  Despite our best efforts at education, on-site warnings, large signs proclaiming “My Mommy works here”,  even labeling cones with the words “Mom” and “Dad”,  it just keeps happening. 

A few days ago I was out for a walk.  At one intersection, a crew of electricians was working on the overhead traffic signals.  A flagger was controlling some of the traffic lanes and also directing pedestrians to cross when safe to do so.  She was about five and a half feet tall but with the hi-viz fluorescent green/yellow coveralls and jacket, hard hat and safety boots she had a six foot presence.

I watched as she used her body language, voice, stop/slow sign, and eye contact to effectively manage the flow of most drivers and pedestrians.  However, in the space of two minutes, she was nearly hit twice.  Both drivers were down the road in an instant; and one actually slowed down, turned and sheepishly mouthed “Sorry”… the other just accelerated through the intersection in a literal cloud of dust. Through all of this, the flagger stayed calm and focused on her immediate task: the safety of crew, drivers and pedestrians like me.
In an extended break in the action as the equipment and crews were out of the intersection, I asked her about her job and, in particular, what she thought was behind the two close calls I witnessed.  She said, “It happens all the time” and added, “If you could see the [stuff] I see…”. 

She described people on their cell phones or texting, others with dogs on their laps, and even a cab driver—supposedly a professional driver—eating noodle soup from a bowl.   “If you could see the [stuff] I see…”
Her comment got me thinking.  Red light cameras are widely accepted.  I note some jurisdictions are putting photo radar in construction zones (Saskatchewan).  Others are banning cell phone use in construction zones (in Illinois, any phone use at all, hands-free or hand-held, is illegal statewide in school and construction zones) but I don’t know of any jurisdiction that installs “cone zone cameras” –not to detect speeding in construction zones but to actually record what the flagger actually sees.  Why don’t we have “cone zone cameras” ? 

Police cruisers are fitted with dashboard cameras, cabs have cameras that record passengers, some police forces and security personnel have wearable video recorders.  Why not flaggers?  Video evidence is curtailing property crime and has been invaluable to investigators when serious incidents occurs on transit systems, in airports and at public events. 

Most of us respect flag personnel.  Most of us understand the inherent risk their jobs entail.  Most of us will not speed by them, cut corners, or disobey their directions.  For the few that do, my guess is that the behavior is not isolated to a particular cone zone and one particular time.  Identification and intervention may make a difference but most of our ad campaigns and public education are preaching to the converted.  Perhaps a database of outrageous violations will help us identify those that really need to hear the message.   

Flagging should not mean putting your life on the line or under the wheel of a distracted driver’s car or a bloody image in the rear view mirror of someone who really couldn't care less.  Cone zone cameras focused on the “stuff” flaggers actually see might be an added deterrent and could help make a difference.  

Tuesday, July 23, 2013

How much does Canada spend on medical care for work-related injury?

A policy analyst from the US contacted me a few weeks ago and asked a disarmingly simple question.  “How much does Canada spend on medical care for work-related injury?”  The question came from an assumption that Canadian healthcare system would have this data readily available.  In fact, the question is quite complex (and is the reason for this longer than usual post).  

The first complexity is a definitional one:  what is covered by the term “medical care”.  Our discussion on this point lead to agreement that the term was meant to cover the various aspects of necessary medical care including doctor visits, hospitalization, medical diagnostics such as MRIs and x-rays, prescriptions, physical rehabilitation, and medical appliances such as wheel chairs.  Coming from a workers’ compensation background, both of us had a pretty good idea of what would be typically covered by a work-related injury under workers’ compensation in our respective jurisdictions.  We agreed that the scope and nature of WC medical coverage was pretty much the same in both countries.  For the purposes of the question, “Medical care” is meant to include the health care expenses typically covered by WC systems from hospitalization to bandages and medications to MRIs. 

The second issue we discussed was the term “cost”.  In workers’ compensation accounting, there are “actual costs”, real payments to real doctors, hospitals and therapists made in a particular year and there are “incurred” costs, which crystalize an estimate of the medical costs that are likely over the lifetime of claims occurring in a given year.  The incurred cost may include discounted future costs related to an injury-year claim.  My friend was interested in the former, the real dollars paid out in the calendar year. 

What surprised my colleague was the fact that workers’ compensation medical coverage was separate from the universal medical plans and that each province had its own medical plan.  I explained the constitutional reasons for this and the basic principles of the Canada Health Act.  Like WC insurers in the US and most other countries, WC is the first payer of work-related medical costs in Canada. 
I also clarified that payment of insured health services by an employer or a worker would offend the principles of the Canada Health Act (public administration, comprehensiveness,  universality, portability, accessibility).   WCBs pay for the cases they cover but no direct payment by the employer or worker for insured necessary health services is permitted. 

To answer the question, I went to WCB’s annual report and looked through the notes in the financial statements.   From a workers’ compensation perspective, medical care costs for work-related injury, illness and disease was nearly $1.75 billion dollars in 2011.  But that was not quite the answer to the question asked! 

Clearly, workers’ compensation covers a lot of the work-related injury medical costs—and well it should.  Work-related injuries have both a human and financial cost.  The financial cost is reflected in industry-specific premiums and firm-specific experience rating that determine the amount a firm pays for workers’ compensation coverage in a year.  Workers’ compensation costs are counted for in the firm as an employment expense and add to the labour cost of production.  It is only when the cost of work-related injury is fully reflected in the cost of production that firms may be motivated to invest in safety.  Firms with the lowest injury costs have a competitive advantage over those with higher costs.  Just as importantly, the cost of work-related injuries is borne by the industry that gave rise to that cost and not by the worker or the general community.    Why should the community –taxpayers—be on the hook for work-related injury medical costs?  That would amount to a subsidy to business.  

This all makes sense from a worker’s compensation perspective.  Industry should pay the medical cost associated with work-related injury and disease.  This logical, simple principle is also consistent with what Tommy Douglas and Emmett Hall—the founders of universal health care in Canada—envisioned.  Both saw fit to exclude payments made by workers’ compensation authorities from the definition of insured health services.  

To really answer the original question,  I had to estimate the medical costs from those enterprises and workers excluded from workers’ compensation.   The list of exclusions varies from province to province.  Some jurisdictions have virtually no exclusions or exemptions from coverage.  For these provinces, the amount spent by the WCBs for medical care for work-related injury is the cost of work-related medical care for the whole jurisdiction.  

Assuming the exclusions from WC coverage have a similar injury rate, severity and cost pattern to the WC covered population in each province, one way of estimating the medical care costs of work-related injury and disease in any given province would be to take the actual costs paid by the WCB for a year and divide that by the percentage of the employed labour force in that province.  Subtracting the actual cost of WC-covered costs from the grossed-up estimate would yield an estimate of medical costs for the non-WC covered segment of the employed labour force. 
The result of this approach yields more than $337 million.  That’s a third of a billion dollars being borne by workers and taxpayer-supported healthcare insurance programs.  More than half that amount is in Ontario.  So, based on this estimate method, the cost of work-related medical care (for both workers' compensation covered and excluded work-related injuries) in Canada is about $2 billion. 

To be more accurate the injury rate and population of each exempted category would have to be gathered and matched with similar populations from populations with WC coverage.  That data is simply not available to an independent researcher.  It may also be argued that at least some of the work-related medical care costs would not be borne by the taxpayer but may be borne by extended medical plans.  This may be true but few plans are fully employer paid or fully self-insured leaving open the likelihood of some externalization of costs from the employer.  Finally, there are costs that would be borne by certain workers covered directly by the Federal Government but I could not find a good source for that. 
There may be valid arguments for exclusions from worker’s compensation coverage but those arguments need to be sufficient to justify this substantial public subsidy to the cost of production.  Why should taxpayer-supported medical plans subsidized the cost of work-related injuries for banks in Ontario or teachers in Saskatchewan but not in BC?  So far, the only response I have received from policy analysts in those provinces relies on the universality principle of the Canada Health Act.    

Regardless of who pays, the financial cost of medical care for work-related injury in Canada is likely more than $2 billion—an unacceptable and preventable cost. 

If you have a better estimate methodology or can provide estimates methodologies that are more precise, let me know.  

Monday, June 24, 2013

Are some cases of Parkinson's Disease work related?

Last week, I participated in a research project sponsored by the Pacific Alzheimer’s Research Foundation and Canadian Institute of Health Research.  It was conducted by the Pacific Parkinson’s Research Centre at the Health Sciences Centre Hospital – UBC.  I don’t have Parkinson’s or Alzheimer’s or other neurodegenerative disease (at least not yet) but believe research is essential if we are to improve the diagnosis and treatment of Parkinson’s, Alzheimer’s and related  neurodegenerative disorders.  As a subject in the study, I will not receive any direct benefit but the knowledge gained from me and other participants may benefit others. 

The study employed a technique known as PET (Positron Emission Tomography) scanning to determine the activity of brain nerve cells.  This involved the injection of a substance labeled with a tiny amount of radioactive isotope with a very short half-life.  As the isotope decays, it emits positrons. When a positron bumps into an electron, both are annihilated releasing two gamma photons in opposite directions which are detected in the scanner.  Three dimensional images of the brain can be constructed from the data sets collected from the scanner.

I had two scans during the course of the six hours I was at the hospital. Each scan involved my head being placed in the scanner.  Keeping my head still for the hour or so for each scan was made easier by a a very stylish custom-fitted mask. 

Such studies are not cheap to run.  The isotopes, technicians, medical staff involved to get one set of readings from one test subject like me, not to mention my occupying the very expensive PET scan for literally hours are clearly cost intensive.   The actual research on the scans of all subjects involved, the analysis, peer review and publication also carry significant costs. What could possibly justify the cost?  Well, to paraphrase a poster I once saw, “If you think research is expensive—Try disability and disease!”  Clearly, the human and financial costs of neurodegenerative disorders are staggering and, by that measure, financial and personal commitment to research is the far better and cheaper choice. 

Linking that personal experience and position to the world of workers’ compensation is not a huge leap.  We may not talk a lot about neurodegenerative disorders but just about everyone knows someone with one such neurodegenerative disorder:  Parkinson’s disease.  High profile sufferers of this chronic disorder include actor Michael J. Fox and fighter Mohamed Ali.  They have helped put a face on the characteristic and progressive tremors, stiffness, and slow movements that are often the most visible signs of this disease. 

Is Parkinson’s disease or Parkinsonism work-related? There is a lot of evidence that certain work exposures are associated with an increased risk for the development of Parkinsonism.  There is evidence that chemicals in the work environment may play a role in the development of the disease.   Certain pesticides and organic solvents are clearly implicated in the development of Parkinson’s and head trauma – as a result of a work-related injury, for example—increases the risk of Parkinson’s disease.  Manganese exposure and heavy metal exposure are also associated with the development of Parkinsonism. 

As far as occupational risks are concerned, work on farms and in gas stations or work as a welders and miners have been shown to have statistically higher risks for the development of this disease. 
In the US, the ASSE reports 10,000 lawsuits by welders who have developed manganese-induced Parkinson’s disease .   I know of only a handful of workers’ compensation claims ever being submitted  for Parkinson’s disease or Parkinsonism.  Aside from a few cases reported in the US press [like the 1996 win by a welder in the California Workers’ Compensation Appeal Board], few applications for workers’ compensation have been accepted.  

Why don’t we see more workers’ compensation claims for Parkinson’s disease, Parkinsonism, and other potentially work-related neurodegenerative disorders?  The onset of the disease is often diagnosed after work careers end.  Knowledge of the association between work and the disease may not be widely known in the occupations at elevated risk.  Temporary foreign workers in agriculture, for example, may not fully understand the risks they may be exposed to in applying pesticides; even if they are aware of the risks, it is unlikely that a temporary foreign worker who may have suffered exposure here will file a claim from their home country. 

Will we see more workers’ compensation claims for neurodegenerative diseases like Parkinson’s in the future?  I predict we will.  As more workers extend their work careers into their late sixties and beyond and as the association between work, certain work-related traumas and increased risks of occupational disease including Parkinson’s increase, we are going to see more cases presented as work-related, exacerbated by work,  recognized by diagnosticians as being work-related, and ultimately presented for consideration of workers’ compensation benefits.    

Thursday, May 30, 2013

What is an equitable maximum insured earnings level?

My last post on maximum insurable earnings for workers’ compensation coverage generated a lot of email and questions.  Several people had responses like this one:

“…it does not appear that you addressed the root question of whether or not WCB adequately compensates high earners.  Rather, you imply that, as we are operating in a similar manner as everyone else, we must then be providing adequate compensation.  Just because everyone operates in a certain manner does not mean that said practice is a good practice.”

This is a fair point.  The blog post focused on practice and did not really address what would be “adequate” or qualify as “good practice”.  There are, however, some serious difficulties in coming to a judgment about what an equitable maximum insured ought to be.

Although WorkSafeBC's maximum insured earnings is similar to many other workers' compensation systems, it is higher than most US jurisdictions but lower than the insured earnings in Ontario, Alberta, Manitoba and at least some Australian schemes.  Without an agreement on what the maximum ought to be, it is hard to judge the adequacy of any particular jurisdiction.

I note that section 37 of Saskatchewan’s new Workers’ Compensation Act provides for the long-standing maximum of $55,000 per year to be raised to $59,000 per year with provisions for increases until the maximum is “equal to 165% of the product of the average weekly wage and 52.”  Why 165%?  The Committee of Review in 2006 had recommended the maximum be “not less than 165% of the “average annual wage” rounded to the nearest $100.”  Ontario’s workers’ compensation legislation in section 38(1)(c)sets the maximum at 175 per cent of the average industrial wage for Ontario.  Why 175%?  I’m not clear on why this particular percentage was chosen but it appears to be an effort to ensure a higher proportion of upper-level earners are fully covered.

British Columbia’s Workers Compensation Act uses a formula in Section 33.  A Board Minute sets the maximum for 2013 at $75,700 using the formula.  That is about 169% of the 2012 average industrial aggregate wage as reported by Statistics Canada. Is this equitable?  The last Royal Commission on Workers’ Compensation in British Columbia examined the current formula and made the following recommendation:

“[Recommendation]  … 139. the maximum wage rate under Section 33(1) and (6) of the Workers Compensation Act be adjusted annually to an amount equal to two hundred percent of the average industrial wage in British Columbia for the twelve month period immediately preceding the adjustment.”

Why 200%? In its discussion, the Royal Commissioners cite “fairness” and included a quote from a background paper prepared for the United States National Commission on State Workmen’s Compensation Laws, [John F. Burton Jr.,  1972]:

“To be equitable, the program must treat all workers fairly. According to one concept of fairness, most workers should have the same proportion of their wages replaced. However, a worker with a low wage may need a higher proportion of his lost wage in order to sustain himself and his family. … A high income worker who can afford to purchase private individual protection may have his weekly benefit limited to some reasonable maximum.”

Sir William Meredith’s 1913 final report to the Ontario government, which is the foundational document for workers’ compensation in Canada, made only one oblique comment in his narrative regarding the maximum.  He writes:

"...there is no reason why highly paid managers and superintendents of establishments should be entitled to compensation out of the accident fund to an amount greater than the highest paid wage earner would be entitled to receive.”  

The "highest wage earner"  is likely to have a unique earnings level in each province.  The intent, however, appears similar to the National Commission’s intent:  cover all earnings for all workers except for the very highest earners.

In the absence of any authoritative absolute statement on where to draw the line, an appropriate test of adequacy of earnings coverage in any jurisdiction might be to identify the proportion of the employed labour force with earnings below, say, the 90th percentile of earnings from employment.  The 90th percentile could be calculated from a number of potential sources from standardized surveys to actual tax returns. It has the advantage of being applicable regardless of the how skewed or splayed the distribution of earners might be without actually determining specific occupational roles.

Perhaps you have a better way or think the idea of a maximum insurable is outmoded.  Feel free to add your own comments and ideas.  

Tuesday, April 23, 2013

Does workers’ compensation adequately cover workers with relatively high earnings?

A reader of this blog recently pointed out that workers with relatively high earnings may not be adequately covered by workers’ compensation.  One’s expenses tend to parallel one’s net earnings; a temporary loss of earnings because of an occupational injury or disease puts all earners at risk of having insufficient income to meet their expenses.  While one might expect all workers to have less income on workers’ compensation, high wage earners lose disproportionally more than lower wage earners. 

I had to agree with the logic of this observation, however, the truth of the statement depends greatly on how you define “workers with relatively high earnings” and on the jurisdiction you are considering.

The compensation a worker receives under most workers’ compensation programs is the product of some measure of insurable earnings and a compensable percentage rate.   Neither the rate of compensation nor the level of insurable earnings is standard; both the rate of compensation and the maximum insurable earnings are matters of workers’ compensation policy.  How much compensation a worker with relatively high earnings will receive depends on these two policy factors and whether or not the benefits are taxable. 

Virtually all workers’ compensation systems in Canada, the US and Australia impose a maximum insurable or compensable earnings limit; income above that level is not compensated. Manitoba is an exception to the rule with no maximum on insurable earnings and a $111,000 per worker limit on assessable earnings.  BC has a maximum of $75,500 while Alberta’s max for 2013 is $92,600 (the highest in Canada).  Ontario’s maximum is $83,200.  Saskatchewan’s current maximum is the lowest in western Canada at $55,000.  The Maritime Provinces are in the same range as Saskatchewan while Quebec has a $67,500 maximum.  WorkSafeBC uses 90% of net while WSIB in Ontario has an 85%  of net rate.  Nova Scotia has a 75% of net rate with a step up at 26 weeks to 85% (presumably to compensate more adequately for injuries of greater severity).  Prince Edward Island provides 80% of net with a step up to 85% of net at 38 weeks.  The Yukon retains a 75% of gross calculation. 

In the United States, most states have a 66.67% compensation rate for individual time-loss claims as opposed to predominant model in Canada of compensating some percentage of net earnings.  I could not find a concise listing of maximum workers’ compensation insurable earnings but in 2012, the National Academy of Social Insurance noted that the maximum weekly temporary total disability (TTD) benefit ranged from $437 in Mississippi to $1,457 in Iowa. Both of these states provide a two-thirds of gross average earnings benefit level so the maximum earnings covered would range from a low of about $34k to $113k annual gross income.  Connecticut pays disability benefits at a rate of 75% of the spendable average weekly earnings to a 2010 maximum of $1168 per week or about $90K gross per year. If we define workers with high earnings as those earning at or above the maximum insurable, these workers will generally do better in Alaska, California, Connecticut, District of Columbia, Illinois, Iowa, Massachusetts, New Hampshire, Oregon, Vermont, and Washington where the maximum weekly benefit is greater than $1000 as opposed to Arkansas, Georgia, Idaho, Kansas, Louisiana and Mississippi where the weekly maximum temporary disability rate is $600.

Australian WorkCover schemes also vary in terms of the maximum earnings covered.  A worker with relatively high earnings needs to check with the jurisdiction in question to be certain if a maximum earnings level will limit their coverage.  ComCare has no explicit maximum.  Western Australia and the Northern Territories have maximum weekly earning restrictions that equate to well over $100k per year.  In New South Wales, weekly compensation is based on the “current weekly wage”, a rate that may be as much as 100 per cent of the rate of remuneration for one week of work (excluding overtime, shiftwork, payments for special expenses and penalty rates) or as little as 80 per cent of average weekly earnings (including regular overtime and allowances), depending on the presence or absence of an enterprise or industrial agreement (collective agreement).  In New Zealand, the ACC has a maximum weekly benefit of 80% of average weekly earnings which equates to a benefit maximum of around $96000 per year; earners with incomes above about $120k per year are expected to have supplemental insurance coverage.  Most compensation payments in Australia and New Zealand are taxable. 

This problem of the maximum vexes workers’ compensation systems.  On one hand, the historic compromise and exclusive remedy that are at the foundation of workers’ compensation are meant to provide timely, adequate income compensation without reference to the Courts.  On the other hand, the adequacy of income declines for earners above the maximum to the point where the adequacy of benefits may be questioned.  For earners earning, say, double the maximum, effective compensation may be less than 50% of typical net earnings. 

Should there be a maximum?  Since premiums are often based on a definition of “insurable” payroll, arguments for the sustainability of the system will tend to support a maximum.  How high should the maximum be?  That may depend on the spread of earnings for the population being insured… and that will vary greatly by jurisdiction.

Friday, March 29, 2013

Is now a good time to invest in greater occupational illness and injury prevention?

The global economic crisis brought terms like Gross Domestic Product (GDP) from the financial section of your weekend paper to the lead headlines on the evening news.    Even the non-economists among us are more in touch with the standard definition of a recession (a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP) because of what it means in real, everyday terms to our communities and our families.
In the current environment where economic growth is being measured in parts of single percentage points of GDP, many are searching for ways to stimulate growth.   Some argue for cutting red tape and reducing “impediments” to business.  A few even suggest cutting safety and health rules, inspections or enforcement.  It begs the question, is now the time to reduce our focus on OH&S?

A few years ago, the Australian National Occupational Health and Safety Commission (NOHSC) estimated the total direct and indirect cost of workplace injury and illness to the Australian economy at 2000–01 reference year to be $34.3 billion.  That is the equivalent of 5 per cent of Australian GDP.  I was taken aback by the size of this estimate. It made me wonder what the estimate might be for other jurisdictions. 

Last month, László ANDOR, European Commissioner responsible for Employment, Social Affairs and Inclusion, spoke at the Institute of Occupational Safety and Health 2013 conference in London.  His talk separated the myths from the facts about OH&S.  He noted a recent study by the European Agency for Safety and Health and Work that puts the occupational injury and disease loss to the European economy at between 2.6 and 3.8% of GDP.

The International Labour Organization (ILO) in its 2003 Safety Culture at Work study pegged the cost of work-related injury and illness at 4% of the global GDP.  Estimates put the figure at about 3% for the largest economy on earth, the United States. 

These estimates converge on about 3% of GDP average.  Economic growth at that level would be considered healthy in most developed economies.  Recent estimates of current annual growth rates for Canada, Australia and the US are all under that level.  If we could eliminate the direct and indirect costs of workplace injury and illness, the benefits are obvious. 

If more evidence is needed, another study (the Socio-economic costs of accidents at work and work-related ill health [European Commission 2011]) study found, the median value of the profitability index for investments in occupational safety and health (the ratio of pay-off to investment in a particular project ) ranges from 1.29 to 2.89.  Fabulous results for any investment!

Working toward greater health and safety particularly in the low growth, post recessionary period, is not just good for workers, it is good for the economy.  

Thursday, March 7, 2013

Who does workers’ compensation really protect?

This question gets asked a lot at public meetings, hearings and classes I attend or facilitate.  I can summarize one perspective with the following: 

 “Workers’ compensation is more about protecting employers than workers… It should be called the ‘Employer Protection Act’… It protects employers from being sued.  It protects them from the real costs of injuries.  It protects employers from having to look the families of the workers they have injured or killed in their eyes and be accountable for what happened.” 

This rather harsh assessment is not without its justifications.  The exclusive remedy workers’ compensation provides does protect employers from being sued by their workers for work-related injuries and diseases; however, it also protects workers from being sued by other workers.  There are some exceptions in some jurisdictions but this protection is an essential element of almost every workers’ compensation system.  More importantly, the no-fault, mostly universal coverage offered by workers’ compensation systems provide timely financial compensation and medical coverage in a way that fault-based systems reliant on the Courts simply cannot.  

Yes, the insurance does protect employers from the real costs of injuries but only to the extent that the cost of injuries exceed the cost of the insurance.  That’s the nature and purpose of insurance:  to protect against rare and costly adverse events.  It is also true that most of employers insured under a workers’ compensation policy in any given year will actually pay more for the insurance than the costs of their actual losses.  Some people are surprised by this statement, but only until they think about other lines of insurance.  The cost of my house insurance protects me from the real cost of a house fire but only if I have one.  Thankfully, my house is still standing and the cost of my house insurance far exceeds the losses I have had or will likely every have in a given year. 

Just because workers’ compensation in a no-fault system and protects an employer from suit does not mean the employer is not held accountable.  Firms with poor claim cost records relative to their industry counterparts will likely face financial consequences through experience rating (also called experience modification, demerits, and surcharges in other jurisdictions).  Put another way, firms who invest in safety and develop a strong safety culture are likely to have fewer injuries with less severity giving them a competitive advantage.    In addition to financial accountability through higher premiums that may hurt competitiveness of poor performing firms, more severe penalties add another layer of accountability in many jurisdictions. 

WorkSafeBC recently issued its annual listing of “administrative penalties” against employers for violations of the Occupational Health and Safety Regulation that put workers at risk whether or not such violations actually resulted in real injury.  This form of accountability goes beyond the financial accountability equal to the dollar value of the penalty, it can also holds the employer accountable in the court of public opinion.  One has only to look at the media coverage related to penalties assessed by WorkSafeBC. 

Who does workers’ compensation really protect? The obvious answer is the worker.  As an insurance nominally paid for by the employer where the beneficiary of compensation is the injured worker, workers’ compensation protects workers and their families from the full financial loss that might otherwise occur as a result of work-related injury.  That protection amounts to billions of dollars every year paid out to injured workers and their families in Canada, the US, Australia and other countries with workers’ compensation systems. 

Often overlooked are the protections extended by workers’ compensation legislation to non-workers.  Spouses and dependents are often beneficiaries of workers’ compensation in the event of a work-related fatality.  Beyond that, the healthcare paid on behalf of the injured worker protect society (taxpayers like you and me) from medical and other healthcare costs that might otherwise be externalized to government programs.

Workers’ compensation systems also impose a duty on the insured employer to prevent injuries.  That duty, when embraced fully, becomes cultural but the duty to protect workers extends protection to every other person in the workplace. 

The prevention imperative of workers’ compensation to directly protect workers also protects kids in schools, customers in malls, and non-worker participants at or near the worksite.  In a sense, workers’ compensation protects all of us in one way or another making it an important element of social policy.

Thursday, February 21, 2013

What is the purpose of a waiting period in Workers’ Compensation?

Waiting periods are a very common feature in US workers’ compensation systems but are relatively rare in the Canadian context and absent from Australian systems.   A waiting period in workers’ compensation is a form of worker deductible.  Most commonly, waiting periods start on the first day for which wages are lost and last anywhere from one day to one week with three and seven day waiting periods being very common.

Many systems allow for medical-only claims during the waiting period and most have no prohibition against the employer paying some benefits during this time.  In fact, collective agreements may contain provisions that require wage continuation during a workers’ compensation waiting period.  In such cases, there is no administrative or indemnity saving by introducing a waiting period.  All that changes is the pocket from which the benefit is paid.

Most systems with a waiting period have a retroactive point.  If the worker is off work beyond this point (ranging from one to four weeks but most commonly two weeks), the waiting period is waived and the worker receives wage-loss indemnity payments for the waiting period as part of the workers’ compensation claim.  Eliminating a waiting period impacts only the cases with durations less than the waiting period.

When workers’ compensation systems started, the waiting period was seen as a way to constrain insurance costs.  As may be deduced from the structure of the waiting-period deductible and the retroactive provision, the waiting period is targeted at less severe (in terms of duration) claims. Let me be clear, waiting periods limit cost to the insurer (and, through insurance rate-setting and experience-rating provisions, to the employer).  The human and financial cost of the injury for the waiting period is borne by the worker and his family unless this burden is offset by collective agreement provisions or employer practice of wage continuation (or access to sick leave or other paid leave provisions) provided by the employer. 

When workers’ compensation got started in BC in 1917, the waiting period was three days.   In 1972, the waiting period was eliminated.   This was part of a trend in Canada, however, there has been a recent trend to consider and implement waiting periods.  Prince Edward Island and Nova Scotia each have a “2/5ths” of a week waiting period [which works well for 4 day weeks and other non-five days a week schedules] and New Brunswick has a 3 day waiting period. 

From a pure insurance point of view, the best injury claim is the one never filed.  Introducing waiting periods conceptually reduce administrative costs [assuming healthcare costs are paid by someone else] and indemnity costs but they may well discourage many claims of longer duration from ever being filed.  If sick leave or other leave provisions are in place, a worker may well elect to forgo a possible workers’ compensation claim with all the burden of filing and often with an implied or perceived onus of proving work-relatedness in favour of a simple sick leave application within the firm.  Firms may well tacitly approve this practice as it may (or may be perceived to) positively impact workers’ compensation premium rates through experience rating. 

For workplaces with no alternatives, a waiting period externalizes a cost of production [work-related injuries and illnesses] to workers.  If this forces the worker or a family to access other aspects of the social safety net [social welfare services] or community food banks, then the mere existence of a waiting period externalized costs beyond the workplace.  Put another way, those externalized costs amount to a subsidy (paid by workers’ families, taxpayers or the community) to businesses where injuries occur. 

Yes, the firm will have to hire a replacement worker for a few days or bear the costs of lost productivity, but that is the case regardless of the legislative existence of a waiting period.  Contrast a firm in a jurisdiction with a waiting period to one where work-related claims are payable from the day following the day of injury and the collective value of waiting periods is obvious. 

Some may argue that the financial subsidy or externalization of costs at the aggregate level is not large.  If this is the case, then reverse is also true: the cost of eliminating waiting periods where they exist will not be large either. If, however, the value of a waiting period is argued to be significant, then its cost or subsidy value should be part of the policy discussion. 

Every jurisdiction has to make its own decision regarding waiting periods in workers’ compensation.  That’s a matter for legislators and their electorates.  There may be good and valid reasons for waiting periods that outweigh the costs or justify the subsidy in a particular jurisdiction.  I am not saying the public policy choice to have or introduce a waiting period is always a bad one.  I am suggesting that the policy debate include a full discussion of the externalized costs and subsidy values involved.