How do we make Workers’ Compensation organizations better?

 

The pandemic disrupted the operations and planning of many workers’ compensation organizations (WCO).  Researching and planning had to shift from strategic initiatives to tactical priorities of protecting staff and serving the workers and employers reliant on workers’ compensation.  As we transition to the post-pandemic era, planning for the longer term must gain in priority. 

The international consulting firm, Deloitte, published a study on the future of workers’ compensation organizations in 2020, just as the COVID-19 crisis was impacting services across the sector.  The timing of its release meant that many policy makers, boards of directors, and planners may have missed the analysis.  A link to the study at the end of this post.

The study is based on surveys of 18 workers compensation organizations in the US, Canada, and Australia.  It identifies five “levers” that workers’ compensation organization can use to shape the future of service delivery and outcomes.  The five levers are:

• Risk-based segmentation
• Standardized plans
• Case management team structures
• Focus on prevention
• Leveraging behavioural economics

The study focuses the work and structure of WCOs on return to work (RTW) and recovery.   For many WCOs, this means a functional shift from internal processes focus of claims inventory management to better outcomes for workers in terms of health, safety, recover, and RTW. 

Risk-based Segmentation:

The majority of workplace injuries result in little or no time away from work.  Workers are often back on the job before a claim is fully established.  Identifying these cases as low risk in terms of difficulty in recovery, rehabilitation and return-to-work can streamline operations, improve customer service and focus resources where they are most needed. 

Many organizations are adopting “auto-adjudication” methods for more routine cases.  What is often missing from the system is segmentation based on the risk of failing to return to work or the difficulty of returning to work.  The study suggests that up to 80% of cases may be handled fully or mostly by automated systems.  This meets service expectations of injured workers wanting timely decision-making and payment of claims.  It also frees resources to focus on more complex cases including, shoulder, back, traumatic stress, occupational cancers, and fatalities. This is not just Pareto principle, example, but a practical imperative.

Organizations that stream or triage cases into specialty areas from the start of the claim are already well on their way towards fully risk-based segmentation.  I have seen specialty units set up for hand injuries where treatments are arranged and commenced before the claim is fully adjudicated and accepted.  Some agencies have experimented with sensitive and mental injury claims groups to adjudicate and case manage injuries related to harassment, assault and stress—claims with a high risk of lengthy recovery, recurrent disability, and difficulty in sustained, safe return to work.  Risk-based segmentation has the potential to make workers’ compensation organizations more efficient and better at optimizing worker outcomes.

Standardized plans:

The Deloitte study emphasizes the use of standardized plans.  This strategy follows from segmentation and takes different forms in different workers’ compensation organizations.  Case managers, treating physicians, and therapists can use standardized treatment, rehabilitation and recovery protocols as the basis for planning, setting expectation, and more quickly identifying cases issues that may jeopardize outcomes. 

Standardized treatment plans are not cookie cutters but starting points for taking those medium and higher complexity cases toward the objective of RTW and recovery.  These are not the old medical yardstick tools of the past.  Treatment and rehabilitation guidelines (See as an example, WorkSafeBC, Ankle Ligament Reconstruction Post-op Rehabilitation Guidelines,  available at https://www.worksafebc.com/en/resources/health-care-providers/guides/ankle-ligament-reconstruction ) provide the worker, case manager, and treating professionals with common understanding, expectations,  and roadmaps to RTW and recovery.  This standardization does not obviate the need for customization and active case management but does lead to consistent treatment, fewer delays and ultimately better outcomes.   Besides the transparency and predictability standardized plans offer, they also allow greater time for providing support to workers and their families.

Case management team structures

Having effectively and accurately segmented cases and standardized plans, WCO structures and systems need to be aligned to manage cases.  Injured workers with medium to high complexity injuries complain about case manager lack of understanding of their injury, constant hand-offs, and “churn” in personnel.  Injured workers often ask me, “Should it be up to me to training my case manager?” and “Why do I get someone new every time I call?.  They hear about a “team” approach but are never told what that means.  Rarely is the team members identified by name and responsibility.   

It is not just about structure.  It is about training and specialization that can implement the best practices of RTW consistently.  Mental health teams, for example, can be very effective if the teams have the deep understanding that comes with training and experience, often within a specific sector (particularly law enforcement, paramedical services, and healthcare).

Structures need foundations.  The infrastructure to support case management in the future WCO will not be the same as it was in the past.  Analytics and artificial intelligence will facilitate timely actions and flag cases where interventions are necessary.  This is not just about following schedules but integrating information to overcome barriers to RTW or impediments to recovery so they can be acted upon in a timely way.  Ontario’s WSIB, for example, offers the following “Specialty Programs” to:

…provide timely access to expert specialists for people with work-related injuries or illnesses. These programs specialize in recovery and achieving a healthy and safe return to work by conducting an assessment and providing interdisciplinary treatment for more complex injuries and illnesses.

(see WSIB, Specialty Programs, available at https://www.wsib.ca/en/specialtyprograms)

 

Focus on prevention!

Some seek to limit the concept of “prevention” of injury but a more inclusive definition that embraces the prevention of disability is needed.  This is not as clear in the Deloitte study as it should be.  While there is a nod to changes in terminology away from “injury management”  to language and practices consistent with recovery and return to work.

As the Deloitte study points out, the prevention mandate varies widely across WCOs.  About half the Canadian jurisdictions and a few jurisdictions in the US and Australia, the legislative mandate for  occupational health and safety including prevention is embodied in the workers’ compensation legislation or authority.   

Regardless of mandate, the study asserts,  “prevention efforts can support all WCOs in realizing sustained reductions in claims volumes and costs, higher safety literacy rates, and communal ownership of prevention.”  [p.15] 

WCOs can act directly within their mandates.  According to the survey, WCOs are now leveraging a focus on prevention to reduce injuries and prevent through”

• Periodic workplace safety audits are conducted (50%)
• Employer rating/pricing is tied into their implementation of health and safety programs (56%)
• Work with employers to create customized safety programs for them (61%)
• Employers are offered a menu of safety programs that they may implement and adopt as needed (61%)

The Deloitte study flags strategies that focus on cultural change within the workforce, third party collaborations to enable safety and prevention in the workplace and data analytics to support workers and employers in preventing injuries before they occur.  A prime strategy is to focus on industry and partner with employers, industry groups and labour organizations.  Dedicated departments focused on prevention initiatives with the personnel and budgets to initiate, sustain and expand preventions efforts are essential.

Examples such as the collaborative cultural change efforts include

• The Community Against Preventable Injuries in BC  https://www.preventable.ca/join-the-community/,
• WorkWell initiatives in Victoria, Australia,  https://www.worksafe.vic.gov.au/workwell and
• Premium Pricing features in Alberta https://www.wcb.ab.ca/assets/pdfs/employers/pricing_2023.pdfb .

Collaborative initiatives targeting segments of high risk, high complexity at their route are essential to effectiveness of this lever.  WCOs through collaborations and initiatives can bring predictive analytics, the latest research, retrospective data analysis and resources to bear on issues to prevent injury and disability as with  BC First Responders’ Mental Health (see http://conference.bcfirstrespondersmentalhealth.com/).

 

Leveraging behavioural economics

WCOs are learning to reach beyond the traditional disciplines of insurance and enforcement in finding ways to achieve a future state.  The Deloitte study highlights the power and potential of behaviour economics to better understand and influence the way people behave.  

WCOs have employer performance data on injuries, fatalities, inspections, and penalties that are too often hidden from the public, workers, and other employers. Overcoming the organizational inertia or limits of the WCO mandate is essential to bringing about this future state.

One of the  “future” behavioural economic approaches highlighted include publishing employer injury rates online.  A great example of this already exists in Alberta.  With the entry of an employer name, results covering up to five years of data are instantly available.  The data are rich and include person year estimates, disabling injuries, lost-time claims, workplace incident fatalities, occupational disease fatalities and much more.  Injury rates for the firm and the overall industry add to the context.  The database includes summaries of occupational health and safety orders, administrative penalties, and even convictions.  [See https://extern.labour.alberta.ca/ohs-employer-search/occupational-health-safety/employer-records-search.asp] .

The study also highlights research out of New South Wales that used behavioural economics:   

…to personalize support for workers and encourage them to actively participate in the recovery process. Practices included reducing the volume and detail of communications, reframing messaging to focus on recovery and RTW rather than on injuries, and having case managers provide more personalized support that was targeted to workers as individuals. [p 18]

 

 Closing comments

For corporate planners in WCOs, the Deloitte study is a must read.  It is not about the distant future but an emerging one where the ideas presented are actual, real world actions underway that have the potential to further prevent injuries and achieve better outcomes for workers and their families. 

The study “The future of workers’ compensation - How workers’ compensation organizations are improving return-to-work outcomes” is available at:  https://www2.deloitte.com/ca/en/pages/financial-services/articles/the-future-of-workers-compensation.html