Ergonomics and Demographics

Last week I completed a graduate course on Ergonomics (OCCH 505b offered through the School of Environmental Health at the University of British Columbia). The class consisted of about a dozen students, mostly working towards a Master of Science degree in Occupational and Environmental Hygiene. The instructor was a professional ergonomist with a great background in academic, regulatory and private practice areas. The content and discussions were a great way to spend three hours every Monday evening over the last three months.

The course content covered the range of topics you might expect and a few that might not immediately jump to mind. One area we discussed was how the changing demographics of society and the labour force will require ergonomic considerations for older workers.

Demographic changes are clearly having an impact in the labour force. The average age of workers in the labour force is rising. More people are deciding to participate in the labour force well beyond the age of 65. In the US, most of this population is opting for full time work—a clear shift from the trends we saw only a decade ago. Despite these trends, there was surprisingly little research-validated data on specific ergonomic recommendations for the older workforce.

There is no standard definition of what we mean by older workers. In some research, particularly in manufacturing and construction, age 40 or 45 is used to differentiate the older worker population. In other literature, workers over the age of 55, 64, or 67 may be used to define the older population.

The research lists changes that occur to our body and mind as we age. Not everyone ages at the same rate but many common changes are important to consider when designing or fitting the job to the worker:

• 
  · stiffness Increases
  · range of motion and flexibility decrease
  · Hearing declines particularly at upper frequencies
  · metabolism slows and weight gain often occurs
  · tire more easily and take longer to recover
  · eye movements may become impaired
  · colour perception may change
  · more light may be required for fine work tasks
  · floaters and veils can appear and persist in the field of vision

Not everything about aging is bad. Some things improve with age. These include verbal and general knowledge. Age is associated with increased happiness. A recent study found a positive association between age and safety perception. Older workers have the best perceptions on safety, highest job satisfaction levels, greatest compliance with safety procedures and recorded the lowest work-related accident/injury rates.

Some researchers and insurers are beginning to provide important information for the protection older workers. I’ll provide some resources in my next post

Workers' Compensation and Social Security Disability Insurance

I spent part of last week in Washington, DC at a seminar sponsored by the National Academy of Social Insurance and the U.S. Social Security Agency. The seminar focused on the fact that many of the clients served by both workers’ compensation (WC) and social security (SS).

My role in the conference was to provide a Canadian perspective and some insights into how Canadian public policy makers are dealing with the overlap between workers’ compensation and social security. More importantly, my hosts were interested in the innovations Canadians are bringing to the return-to-work priority both systems share for the clients who may be able to overcome the barriers to gainful re-employment in the labour force.

The research is pretty clear: early intervention improves return to work outcomes. Typically, access to services to assist in an early return to work (RTW) is more associated with workers’ compensation than Social Security Disability Insurance (SSDI) or Canada Pension Plan-Disability (CPP-D). Consequently, public policy that increases the scope of coverage for WC tends to increase access to programs and services of this population that would not otherwise have such access. Since many of those who are outside the scope of WC coverage (for example, some jurisdictions exclude, domestic workers, out-workers, farm labourers and self-employed from coverage) are workers who may have limited access to alternative employment, any expansion of WC coverage that includes these populations has the potential to help some of the most vulnerable workers return to work.

In my presentation, I noted that some jurisdictions have mandatory reinstatement provisions in their WC legislation. These provisions require an employer to take an injured worker back to employment. Some jurisdictions go further and require the employer to accommodate the worker to the point of “undue hardship”—a significantly higher test than mere ‘reasonable accommodation’. The big stick of legislation is not unique to some Canadian jurisdictions. Many Australian jurisdictions, for example, require employers to return injured workers to employment.

Since WorkSafeBC’s legislation contains no direct mandatory reinstatement provision, other approaches are emphasized. For example, WorkSafeBC offers a rebate of premiums to employers who qualify for a Certificate of Recognition. After substantiating through an audit that a firm has a prevention program in place that exceeds the regulatory minimum and has an injury management/Return to Work program in place, the firm may qualify for a 15% rebate. This can provide a substantial carrot to get and keep the attention focused on primary prevention and disability management that may help all workers—not just those who may suffer a work-related injury.

In the question and answer session, I was asked how WorkSafeBC is financed and how this compares with the typical US workers’ compensation insurer. I noted that WorkSafeBC is the exclusive insurer of work-related injury, the sole adjudicative authority, policy maker, workplace health and safety regulator and inspectorate for the province (like OSHA in the US). WorkSafeBC is funded by premiums that average about $1.56 per $100 of assessable payroll and that premium covers all WorkSafeBC’s functions (in the U.S., the quoted base or book rate may not reflect assessments or levies that finance research, oversight, appeals, and state-OSHA costs).

In follow-up questions, I was asked what I meant by assessable payroll. In many places, workers’ compensation rates apply to total payroll as opposed to the limit WorkSafeBC and most other Canadian WC boards place on payroll per person (currently $68,500). If we stated WorkSafeBC’s premium in terms of total payroll, we estimate the rate would come in at about $1.33 per $100 of payroll.

It was clear from the interest expressed in questions both during and following the session that many of the researchers in the audience were intrigued with the apparent low cost, relatively high benefits and strong return-to-work outcomes achieved in British Columbia for our workers and employers. If you are interested in seeing the presentations from this event, you will find them posted on the past events section of the NASI.org site...look for the November 18, 2009 seminar listing.

What does Workers’ Compensation owe Francois Bareme?

Every workers’ compensation system has some way of deciding what payment a worker should receive for permanent disability. Some systems are based on impairment or non-economic loss while others are based on disability with its implied economic loss calculated in some manner or other. Still others are based on a combination of the two concepts. Commonly in workers’ compensation, schedules of disability exist that relate impairment or disability to some standard. In Canada, we might refer to these as Disability Schedules. In several European sources, I noted that these schedules were called “Baremas” . I wondered about the origin of the word and was fascinated by what I found.

In medieval times, Germanic law related the loss of an arm or an eye to the ‘wergeld’ or ‘manngeld’, the compensation that was to be paid to the family for the killing of a free man. Even pirates had schedules in the articles that governed their enlistment. In Under the Black Flag: Exploits of the most notorious pirates, Don Carlos Seitz lists the articles from a 1723 voyage under Captin John Phillips; one article reads:

If any Man shall lose a Joint in time of Engagement, shall have 400 Pieces of
Eight; if a Limb, 800.

Enter the French mathematician, Francois Bareme [or Barreme] (1638?-1703). He created and published many mathematical tables for ease of use and consistency in commerce. The French word for a ready-reckoner, barême or barrême, is a reference to him. Bareme took the sums that were commonly used for the loss of body parts and restated them as a percentage of the compensation that would be granted for compensation for the death of a free man. Subsequently, such listings of body parts and percentages in many personal injury compensation schemes became known as Baremas. Today, the most complex Barema would be the AMA Guides. In Spain, the Baremo, as it is known, is a mechanism that allows users to consistently evaluate bodily injury and assess compensation for victims of motor vehicle incidents (for permanent disability systems, it uses a point system to calculate a rating from 0 to 100 that determines the compensation).

The scale and method of calculating compensation varies with the barema used and the jurisdiction. I recently wanted to know how various systems might rate the loss of an eye. Since some jurisdictions are not limited to just workers’ compensation, these may not be strictly comparable but I thought the variation was interesting. In WorkSafeBC’s Permanent Disability Evaluation Schedule, and industrially blind eye is evaluated as a 16% disability, enuculeation at 18%. In Belgium, total loss of vision in one eye is rated at 30% disability. The English Barema uses 40% while the French use 25% and in Iceland, the loss of vision in one eye is rated at 20%. There is even a wide variation in Scandinavia with the loss of vision of one eye rated at 20% in Denmark and Norway and 14% in Sweden while the actual loss of one eye is rated at 20% disability in Denmark but 25% and 17% in Norway and Sweden respectively.

Of course, the final result for the injured worker will be based on more than a percentage of disability. A low percentage of a high wage rate may provide a greater benefit than in a system where the maximum wage rate is pegged at a low level.

There is no one right percentage of disability to apply in this example. What is right for one jurisdiction is not necessarily right for another. The impact of the loss of an eye in one society (and its related economy) may be quite different than in another. That said, the equity is critical. Bareme’s intent in creating tables was to standardize and eliminate error—a goal that still applies today.

Workers' Compensation and a Uniform or Flat Assessment Rate?

I received a call last week about funding workers’ compensation systems. The caller asked why we don’t just charge one rate for all industries. For those of us in North America or Australia, this notion may seem odd since our systems all have different rates for different industries based on some sort of classification system. On the other hand, those covered by Canada Pension Plan-Disability or Social Security Disability Insurance in the US are familiar with the idea of a single contribution rate paid for an insurance. For workers without workers’ compensation coverage, CPP-D or SSDI may be the only insurance they have for work-related injury that precludes them from earning. Is there any good reason for having assessment rates that varies by industry? Are there any advantages to having a single rate system?

First, let’s talk about the rating systems we have. In BC, the average WorkSafeBC assessment rate (premium) is $1.56 per $100 of assessable payroll. Industries with higher costs pay more: Heavy construction, steep slope roofing, steel frame erection are at the high end, around $12 while financial institutions, computer software design and production pay between $0.08 and $0.13 per $100. Having a rate structure has implications. There are costs for creating and monitoring the classification system, assigning firms to various classification units and managing the inevitable conflicts that can occur as a business changes or argues that it should be classified in a (usually lower) classification.

A single rate system, on the other hand, requires none of these costs. Canada Pension Plan contributions are calculated as a simple tax on payroll (currently the employer and the worker each pay 4.95% of earnings for CPP). That’s it. Simple. But is it fair? In one sense, it is equal treatment for all and for non-work related causes of severe and prolonged disability, it likely is fair. Each of us bears a risk for serious disease that could debilitate us from work so it makes sense that all should share equally in the cost.

Doing the same for a workers’ compensation scheme has been proposed. Sir Owen Woodhouse proposed a flat rate for employers for their part of the New Zealand Accident Compensation scheme back in 1967. In defense of Woodhouse, his concept extended well beyond work-related injuries and in the context of a no-fault universal scheme of social insurance, the uniform rate idea is attractive.

I am unaware of any system in Canada, the US or Australia that have implemented a flat rate system. In Canada, the issue of a uniform assessment rate was considered by Sir William Meredith who writes:

It is the purpose of my draft bill to empower the Board in determining the roportions of the contributions to be made to the accident fund by employers to have regard to the hazard of each industry, and to fix the proportions of the assessments to be borne by the employer accordingly, and not to require that the proportions for each class or sub-class should be uniform…

So, in practice, workers’ compensation systems use classification systems that result in different rates being assessed for different industries according to ‘hazard’ which includes the human and financial costs associated with the wage structure, frequency and severity of injuries that occur within an industry. A uniform rate, it may be argued, would be tantamount to a subsidy. In the BC example noted above, a uniform assessment of $1.56 would be very attractive to steep slope roofers and would be a significant cost burden to financial institutions whose assessments would be used to offset the costs in sectors where injuries were more frequent and/or costly.

Similar arguments apply within sectors and are often used as a justification of experience rating or rate modification…but that is a discussion for another day.

Seasonal Agricultural Workers and Workers' Compensation

Last week I attended a symposium on health and safety issues for farm workers with a focus on those entering under the Canada as Seasonal Agricultural Workers Program (SAWP) from Mexico. I have been tracking the workers’ compensation issues raised by the entry of British Columbia into this program about five years ago.

What we know about this group of workers is that they are vulnerable on several levels. Language, culture, limits on the ability to meet with others in the community, long hours, fear of removal, limited knowledge of rights, isolation due to location are but a few of a long list of factors that make this population among the most vulnerable of workers. While these workers have the same rights under workers’ compensation laws and the Occupational Safety and Health Regulation, fully exercising those rights may be hindered by the these factors.

What we heard from the researchers confirmed what we already know: many temporary foreign workers are reluctant to report injuries and violations of the Regulation. Addressing the factors that contribute to this situation isn’t easy but is important.

Letting these workers know about their rights isn’t simply a matter of sending out a booklet or posting a page on the internet (although these actions help to some degree). Unlike other worker populations, workers under SAWP, other programs or even working without legal authority will, by definition, tend to be ‘new’ workers (new to Canada, new to the jobsite, new to tasks they will be performing). As we know from other research, newness itself increases risk (see IWH brief on this topic). Finding ways to better address the needs of this vulnerable group will be a growing challenge as the number of workers in this category increases.

In other forums, I have heard about innovative practices and approaches to serving agricultural workers, particularly temporary foreign workers from Mexico. In Washington state, Spanish radio vignettes have been designed and broadcast with plot lines and dialogue that mirror health, safety and compensation rights. In Ontario, all SAWP are covered by the provincial medical plan (OHIP) without the typical waiting period. In BC, WorkSafeBC and FARSHA have developed materials, delivered training and increased services designed to reach these workers on jobsites throughout the province.

One additional point came out of the symposium that is worth noting. The general category of ‘farm worker’ includes several vulnerable worker types. Canadian citizens and permanent residents may be subject to the same language and cultural barriers as workers under the SAWP groups (Mexico and the Caribbean); Refugee claimants with authority to work will have additional barriers as will other workers who may have no legal status at all in Canada. For the sake of all these vulnerable workers, new approaches may be necessary to educate these workers about the workplace risks they face, how to protect themselves and how to exercise their rights, protections and compensation.

What will drive the Future of Workers' Compensation?

Last week I was at the AWCBC Learning Symposium. The theme of the event was “Time Capsule” and I was asked to speak about the future of workers’ compensation.
My talk outlined three categories of forces that are driving change in workers’ compensation:

• Factors that are substantially beyond our direct control like economic cycle, demographic shifts, and broad societal trends.
  
• Public policy decisions that we do not necessarily control but which we may influence. This category includes the areas of who is covered, what is covered and the degree to which workers’ compensation and prevention are aligned and integrated.
  
• Decision we make and direction we take that are substantially within our control.
  

The details of these forces and the analysis behind them are beyond the scope of this blog but there are some clear themes that emerge that may be summarized by the following points:

1. Economic cycles, demographic shifts and societal changes will continue to impact workers’ compensation systems—outside our direct control but with predictable consequences. We need to take that step and have ready analysis of the effects of past recessions and expansions on investments, employment, injury volumes, injury rates, duration of disability, etc.
   
2. The scope of coverage will trend toward universal coverage and greater prevention responsibilities—something we may anticipate and be involved in. In jurisdictions with less than 80% of the employed labour force covered by workers’ compensation laws, the trend will be toward greater inclusion within scope and the evidence of work-relatedness will increase in what is covered. Here workers’ compensation systems can play a vital role in identifying where coverage should be extended for the mutual advantage of workers, employers and the broader society.
   
3. Occupational Diseases will drive our legislative, regulatory, policy and practice directions particularly in the area of
   • Stress, Psychological Injuries
   • Fatigue, human factors
   • New materials and processes
   • Old materials, new applications
   • New workplace relationships, participants
   • New zoonotic disease, new vectors
   

Based on this third point, Expansion of what and who is covered is likely.

I also extended my analysis to capture a other changes workers’ compensation systems could anticipate. The first was Harmonization. Workers’ Compensation and Prevention coverage, policies, and practices will trend toward greater similarity. Next was Integration, by which I mean workers’ compensation systems will trend toward an expanded mandate and the responsibility for prevention. I added an obvious prediction around Automation. Our work will be increasingly technology enabled… and dependent…even the parts of our work that require high levels of personal interaction. This is both a blessing and a curse since this dependence becomes one of our greatest vulnerabilities.

In some ways, my final prediction is an extension of the others. Cooperation will become a key driver in workers’ compensation. Strategic alliances, direct partnerships, shared resources such as systems and call centers will grow among workers’ compensation agencies and between individual agencies and their stakeholder partners.

In the future, the future that we must enable, we will see what Malcolm Sparrow calls the "Character of Harms" as a driver of what we do internally, externally and most importantly across traditional boundaries.

I can only add my biggest fear: that 20 years from now, workers’ compensation and prevention personnel will look back on what we are doing now and ask: What were you thinking? What did you know—or should have known—and why didn’t you act?

Workers' compensaiton state funds: Are they comparable to private insurers?

Workers' compensation insurance is ubiquitous in developed nations but how that insurance is delivered varies greatly. In most of the world, workers' compensation is part of social insurance structures. In Canada, the United States, and Australia workers' compensation is generally legislated by individual states or provinces. In Canada, every province and territory has a workers' compensation act as does the federal government. The same holds true in the U.S. and Australia in that each state and the federal government has legislation governing workers' compensation. Options for administration delivery of workers' compensation, covery a wide spectrum from [mostly] private workers' compensation insurance markets [with varying degrees of state oversight and regulation] to [mostly] state delivery models.

In Canada, there is only one model: provincial workers' compensation boards or commissions each the primary insurer in their respective jurisdictions. Some people refer to this model as the "exclusive state fund" model or "monopolistic state fund" model. The latter is less accurate in that many jurisdictions allow for private disability insurance over and above the workers' compensation coverage and to serve populations outside the scope of coverage offered by the state.

In the U.S. there are two main types of state funds (each with two main subtypes): Exclusive state funds (with or without a provision for self insurance), Competitive state funds (which compete with private insurers across a broad market or who serve a more limited market of specific sectors and often acting as the insurer of last resort). In the U.S. there are about 25 state funds, four of which would be considered exclusive state funds and closest to the Canadian boards and commissions.

Are state funds comparable in terms of efficiency with their private insurance counterparts? This question is frequently raised, usually with the supposition that exclusive state funds will somehow be inefficient and therefore have higher costs. Defenders of state funds note that some state funds were create precisely because of private insurance market failures. They note that several states created competitive state funds to create a more vibrant market and to ensure all those who need (or were required by the state to carry) workers' compensation insurance would have a place to go. In order for state funds to compete, like any other competitor in a market place, they must face similar costs and obstacles as their competitors. If they were inefficient, by definition, they would be less competitive and lose market share. For exclusive state funds, the economies of scale and scope, absence of costs associated with gaining or retaining market share, and the presence of almost perfect information on risks and costs in the market are often cited as offsets any inefficiencies inherent in exclusivity.

One of the premier consulting firms in the industry, Conning, recently completed a study on state funds in the U.S. A summary of their findings is available at this link. The summary notes:

Workers' compensation state funds currently write a quarter of insured workers'
compensation net written premiums. Although sometimes thought of as a "market of
last resort," despite their higher loss ratios, state funds' financial results are on par with the industry as a whole....As we show in this study, the primary mission of state funds is support of their local economies. This includes not only promoting fair access to insurance, but also the maintenance of a safe and productive workforce. Their ability to provide effective loss prevention and control services, and link the outcomes directly to insured costs, has helped state funds succeed in their mission.

This finding adds to the weight of evidence in favour of the competitiveness of workers' compensation state funds. And the advantages of the state fund model in meeting other public policy objectives --particularly in regards to workplace safety/prevention [see my earlier post]--continues to make the creation and maintenance of such funds a viable alternative to a purely private market for workers' compensation.

Each model has its advantages and disadvantages; clearly each jurisdiction has something to learn from the full range of models out there.