What's worrying workers' comp insurers: Part II

As part of my international scan of top issues worrying occupational safety/health and workers' compensation authorities, I've been listing the top issues clusters. In this post, I am continuing that list to round off the top dozen areas of concern.

• 6. Hearing, Noise and Ototoxins: This cluster is about the impact of work-related factors on hearing. Several sources noted increases in hearing-related claims and in the emerging science of substances and other agents in the workplace that may contribute to hearing loss. This area has implications for both prevention and compensation policy.




• 7. Pandemic, New Pests and Diseases, Zonotic vectors, Infections and Parasites: Changes in climate and travel as well as antibiotic-resistance are captured in this cluster. There is growing concern over the impact these factors could have in the workplace. Prevention strategies are stressed but contingency planning is advised. Several insurers also raised the issue of how they and their prevention counterparts would operate in conditions of an outbreak (would staff even come to work) so business continuity planning is also advised.




• 8. Respiratory and dermatological issues: Asthma is a growing concern and endotoxins [causing fever, acute toxic effects, allergies, organic dust toxic syndrome (ODTS), chronic bronchitis, and asthma-like syndromes, or lead to lethal effects such as septic shock, organ failure and death] are noted and forecasted to increase by several authorities particularly in Europe. With the growing population of asthmatics among youth, the potential for exacerbation of pre-existing conditions are increasingly likely as young workers enter and become the future workforce. Work environments that were not a problem for most workers a decade ago may pose a serious health threat a decade hence.




• 9. Foreign workers: Legal or not, short or long term, skilled or not--the numbers of foreign workers are increasing in Europe, Canada, the US and Australia. Language and culture are only two of the many barriers that may inhibit prevention and may account for a lower than expected access to workers' compensation. Reaching this audience, providing education and access will vary by vulnerability of the population but will almost always take greater effort than for similar citizen and legal permanent resident populations.
  


• 10. Musculo-skeletal injuries (MSI): This cluster was raised by several sources. Linked to the obesity issue, demographics, and changing work systems (involving greater repetitive actions) these injuries are and will continue to lead the list of work-related injuries. Ergonomic regulation may be part of the answer but new approaches to MSI are needed.




• 11. Terrorism: Chemical, biological, radiological, nuclear threats may be directed at more than workers but workers are likely to be injured in any terrorist attack and its aftermath. Workers were injured and killed while in the course of their employment in several terrorist attacks. Whether domestic or foreign perpetrated, workers and their families will suffer. What worries insurers is just how wide and deep the impact might be.




• 12. Cancer (emerging work-related causes and under-reporting of): As you saw in my previous posts, cancer is likely work-related to an extent far greater than recognized. That IARC study I cited [in my post from January], shift work was implicated as a probable human carcinogen. A few weeks ago, Denmark accepted 40 claims for breast cancer from flight attendants and nurses with long histories of shifts that interfered with circadian rhythms. [See this BBC story for a good lay overview].

There were other issues: human performance enhancement, synthetic biology, work relationships, fatigue/human factors to name a few. This list of issues may signal areas workers' compensation and prevention authorities ought to be looking at more closely--not simply because of the dollar costs implications--but because prevention can actually make a difference in protecting workers. It is the right thing to do.

What's worrying workers' comp insurers? Part I

Recently, I was asked to present a 'global scan' on what is worrying workers' compensation insurers and occupational health regulators. Working in a small department in a medium sized statutory agency, I rely on a lot of published reports from a lot of sources. The following is a Top Issue Clusters list based on this reading:

1. Psycho-social factors/Mental illness/ Stress/ Bullying/ Returning vets: The mind is often injured in the course of employment or in recovery but the harm is no less 'real' than a broken arm. This cluster highlights the growing awareness of pscyo-social issues as workplace factors. European and Australian sources were more likely to highlight these but North American jurisdictions are increasingly recognizing the role workplace stresses play in direct injury and indirect harm. Veterans returning from Afgahnistan, for example, may be suffering from unrecognized post traumatic stress that, when combined with yet another stresser in the worplace, may develop a servere reaction. Whether recognized by workers' compensation authorities or not, insurers and regulators are cleardly worried about this issue.


2. Nanotechnology/Nanoparticles: Seven of the reports I surveyed for this presentation cited this cluster in their top issues. More and more nano-scale products and agents are being used in the workplace and surprisingly little is known about the potential health impacts. Several sources drew parallels to asbestos and how it was used for many years even after it was known there were going to be health impacts. Some ask, "Are nanoparticles the new asbestos"?


3. Obesity: How is this work-related? Several references pointed out that the workforce is now populated with many individuals who are clinically obese and research shows that these individuals are more likely to be injured and, once injured, are likely to have longer recoveries, more complications and greater degrees of residual disability. Some jurisdictions are going so far as to add programs and initiatives more focussed on wellness as part of thier prevention strategies.


4. Chemicals/Substance in processing/solvents/Asbestos: As with the special case of nanoparticles, concern over the use of other substances in production or processes (other than the actual production of such substances) was raised by at least five workers' compensation insurance-oriented reports. Who is tracking the agents and their health effects? And even if we are not sure of the effects, who is tracing the exposures now? We know with asbestos that we may see health effects fify years from now. Will employers with records of exposure be around in a half century?


5. Aging/Demographics: The one presentation I have been asked to give more often than any other is on this topic and it was clearly 'top of mind' for many workers' compensation and prevention agencies. Even in the recession, the impact of structural demographic forces in the labour force are relentless. Young workers will enter the workforce, older ones will retire and some will die while in the labour force. These are facts and while some can modulate certain life events (when to start a family or retire) the demographic clock will continue to be a major factor in prevention strategy and workers' compensation cost control.

There are more issues worrying workers' compensation insurers and prevention agencies... and those are a topic for anther post.

Workers' Compensation Fraud

In every recession, workers' comp agencies increase diligence on compliance issues.

• Firms are required to register for and obtain workers' compensation, declare the type of work they do, report accurately their payroll, and submit premiums accordingly.
• Workers are expected to participate in their own recovery, be honest about the extent of their injuries and disability, declare earnings from employment and return to suitable and available work when it is safe to do so either as part of their rehabilitation or recovery.

Most workers and employers play by the rules but some don't. The evidence of alleged worker violations of these rules are sometimes much heralded in videocasts; employer non-compliance and outright fraud doesn't lend itself to video journalism but it is often larger than the collective value of alleged worker fraud and abuse. Provider fraud, supplier fraud and even internal fraud within insurers are not unheard of. What's important is to acknowledge the potential for such frauds and put in place the controls necessary to mitigate against that potential. The process must be dynamic. New fraud's are perpetrated and new means of detection and control are always required.

How much fraud is out there? In the words of one Australian parliamentary 2003 report:

The Committee could not quantify the significance or otherwise of fraud within any sector without sound data, which is presently not available. While fraud may not be common, when it does happen in workers’ compensation schemes it does have costs and it is very expensive. [Australian] House of Representatives Standing Committee on Employment and Workplace Relations, "Back on the Job: Report into aspects of Australian workers’ compensation schemes", 2003 page xx

In the big scheme of things, the actual amount of fraud is probably a very low percentage of premium or benefit costs. One workers' compensation chair is quoted as calling fraud 'insignificant' [Peter Criscione, "Instances of workplace fraud in Ontario insignificant: WSIB chair", Brampton Guardian, Thursday March 5 2009] . Having said that, any amount of fraud means that those playing by the rules are disadvantaged by those intentionally breaking them. That disadvantage means closer scruitiny, audits, delays while facts are checked, and even surveillence and investigation.

For there to be fraud, there must be intent. Intentionally under-reporting payroll, suppressing claims or misrepresenting classification for the purpose of paying the appropriate premium are obvious and well documented fraud cases from the employer side. Worker fraud cases usually involve collecting full workers' compensation benefits for temporary total disability while still working. Supplier and provider fraud cases can involve billing for services not rendered.

Workers' compensation fraud is not a victimless crime. The victims of such frauds are not really the workers' compensation insurers. Instead, the victims are those who play by the rules--the workers, employers and providers/suppliers of services. Workers receive more scrutiny of their claims, employers are subject to more audits and must bear the costs not being covered by those fraudulently under-reporting payroll. Everyone pays for the oversight and increased administration and controls. Programs like WorkSafeBC's Report Fraud line and Washington State's Labor and Industries fraud initiative are just two programs that seek to level the playing field and protect the system for those who need it and play by the rules

Workers' Compensation fraud is a sad but real aspect of every workers' compensation system. Compared to the billions collected and paid, the amount lost to fraud may be low but in tight economic times, even small amounts have significant costs --not just to the bottom line.

Injury Statistics: Sources and Issues

Finding solid statistics on work-related injuries is not that easy. Finding sources that provide enough context and detail for understanding is even more difficult.

In my own jurisdiction, we have a great companion document to our Annual Report and Service Plan along with some very useful special reports (http://worksafebc.com/publications/reports/statistics_reports/default.asp). Since WorkSafeBC covers about 93% of the employed labour force, the stats are pretty representative for the jurisdiction.

On the national scale, the AWCBC hosts a useful instrument called the National Work Injury Statistics Program (http://awcbc.org/en/nationalworkinjuriesstatisticsprogramnwisp.asp#Stats). While the stats are very accurate, one has to be cautious about what the data are telling us. A listing of accepted claims is not the same as an estimate of the total number of persons injured. Why not? Aside from the problem of under-reporting which may exist to some degree in all jurisdictions, a bigger difference may well be in the scope of who is covered. In Saskatchewan or Ontario, accepted claims can only come from about 70% of the labour force whereas in Quebec or BC, accepted claims arose from a covered labour force of more than 90%. Not only are there differences in the labour force covered, the mix of industries can be substantially different.

An interesting and very accessible statistics document comes from the Chilean insurer, AHCS. This is the largest of the mutual insurers in Chile and their report contains English subtitles. I particularly liked the use of colour and charts to communicate important concepts. As with most reports, there are drawbacks. The injury rates and other information are particular to the jurisdiction and may or may not be appropriate comparators to other jurisdictions.

Using any other jurisdiction's workers' compensation data as comparators to one's own carries with it many issues. For example, in most US jurisdictions, there are waiting periods. Typically, the worker must absorb the loss of wages for three days before reaching the first day of compensation. For more serious claims, most jurisdictions have a retroactive period; if the time off work goes longer than a couple of weeks, the worker will be compensated for the waiting period. Another example comes from Australia where insurance carries with it the concept of an employer excess-- a deductible period where the employer pays the benefits for a week before the WC insurance kicks in. In both the US and Australia, the nature of the workers' compensation system may have a direct bearing on the reporting pattern and the statistics presented.

The point is simply this: the basis of injury and compensable claim counts can be quite different from jurisdiction to jurisdiction. I've learned over the years that I have to look very closely at the context before making any sort of comparison or drawing any conclusions.

As far as good jurisdictional reports on injury statistics, I recommend taking a look at three listed below (or click on the sample pages pasted in this post).

• WorkSafeBC Statistics 2007 http://worksafebc.com/publications/reports/statistics_reports/assets/pdf/stats2007.pdf
• CDC Worker Health Chartbook 2004 http://www.cdc.gov/niosh/docs/2004-146/
• Chile's AHCS 2006 (bilingual Spanish and English) http://ww3.achs.cl/cm2/aptrix/resources/file/ebe08308072f9cd/Completo%20E.pdf