The ProPublica/NPR
investigative reports have highlighted what is wrong with workers’
compensation. Make no mistake; there is
much to criticize among the US and Canadian workers’ compensation systems. Does that mean we should throw out the
current systems and start again?
Marjorie Baldwin, (Professor, Arizona State University, and
Chair of the Study Panel on Workers’ Compensation Data of the National Academy
of Social Insurance (NASI.org)) recently
responded to the main issues highlighted by this investigation. Her post, “Workers’
Compensation: Critical Questions,
Elusive Answers” addresses some of the obvious issues. The journalistic approach of focusing on individuals
to illustrate the issues effectively shines a light on vivid examples of poor
benefits, bad adjudication and abusive processes that re-victimize the victims
of work-related injuries, illness, and disease.
The scholarly examination of underlying policies at the root of these
failures may not grab headlines but it is critical to public policy development. Headlines don’t tell the whole story. Professor Baldwin’s point that stakeholders
need “a more informative accounting of how the system performs” succinctly
summarizes both what is needed and what has been missing from much of the
discussion.
It is not that there isn’t good information out there. The NASI report on Workers’ Compensation: Benefits, Coverage and Costs 2012 provides a starting point. The AWCBC Key Statistical Measures
provides similar data for the Canadian workers’ compensation
jurisdictions. The work by IAIABC and
WCRI to provide objective data on the Workers’ Compensation Laws that
ultimately determine the benefits, costs and coverage on both sides of the
boarder is another important information resource.
And it’s not as if there is no objective yardstick on what a
workers’ compensation system ought to do.
The 1972 Report of the National Commission on State Workmen’s Compensation Laws made
recommendations that provide clear guidance.
ProPublica/NPR journalists the National
Commission’s recommendations to design workers’ compensation laws; public
policy analysts in Canada, the US and other countries often take the measure of
workers’ compensation systems using the National
Commission’s recommendations.
Objective assessment of systems’ performance against those
recommendations reveals two things. The
first is the point of the ProPublica/NPR reports: Worker’s compensation is failing in some
states. The second point is really the corollary. Despite the poor performance of some
jurisdictions, there are workers’ compensation systems that are providing benefits that meet or
exceed most of the recommendations of the National
Commission.
Workers’ compensation is not one “system”. There are more than sixty North American
jurisdictional attempts at fulfilling a common social policy objective that is
the foundation of the Grand Bargain, the Historic Compromise. It is plainly wrong to extrapolate grievous
failings from a few jurisdictions to every workers’ compensation system.
Yes, there are failures.
Workers’ were promised compensation for work-related injuries but there
are jurisdictions where between a third and a half of all workers with
lost-time work-place injuries are entitled to no compensation for lost wages—and
that does not take into account the issue of claims suppression and
under-reporting. Large proportions of
the labour force—particularly agricultural workers and domestics—are excluded
from coverage in some jurisdictions.
Middle-to-high wage earners may have less than half their earnings
unprotected by workers’ compensation insurance in states/provinces with low
maximum benefits and very low indemnity rates.
These inequities are not only unjust, they undermine the social contract
and threaten the social policy (and possibly legal) basis of the “exclusive
remedy”.
The ProPublica/NPR reports force policy makers to acknowledge
these failures and hopefully seek out those jurisdictions that live up to the bargain. Those jurisdictions that come closest to
meeting the National Commission
recommendations cover nearly everyone who works for someone else and even offer
coverage to those who are self-employed; they cover high wage earners and
provide compensation that restores 80-90% of spendable (after tax) income. They provide timely decisions and are
accountable for their errors in the application of law and interpretation of policy. They seek and earn a measure of social
licence for what they do and do it at a cost that is affordable and
sustainable.
H. James Harrington (author of Business Process Improvement among
others) said:
Measurement is the first step that leads to control and eventually to improvement.
If you can't measure something, you can't understand it.
If you can't understand it, you can't control it.
If you can't control it, you can't improve it.
NASI, WCRI, IAIABC, AWCBC and others provide objective measurement
of jurisdictional and national performance.
The National Commission recommendations
provide a standard against which the measures from each jurisdiction may be
assessed and understood. Measuring the
performance of each system against those recommendations can be the first step
in addressing the failures, controlling the excesses and improving outcomes for
injured workers and their families without a wholesale scrapping of all
systems.
No system is perfect.
Among the sixty-plus systems in North America, however, there are a few
that have come close to meeting the recommendations of the National Commission. They
are proof that the Grand Bargain, the Historic Compromise can achieve the
social policy objective: to protect workers from work-related injury,
disability, illness and death in a compassionate and sustainable way that still
allows the economic activity and innovation necessary for societies to operate
and thrive.
Improvement is not only possible, it is essential—not only
because it is the morally correct thing to do but also because every failure
erodes the public confidence in all workers’ compensation systems everywhere.
Rather than taking a defensive posture, insurers and policy
makers can thank the ProPublica/NPR journalists for raising the level of
discourse, highlighting the disparities that exist and illustrating the need
for genuine improvement in under-performing systems.
