Workers' Compensation and the US Healthcare Debate

I’ve been traveling in the US for the past few weeks. I had a speaking engagement in Washington DC and then attended the AASCIF conference in Portland, Maine. Wherever I went, the main topic of conversation was the US Healthcare reform and inevitably, I would be asked about how the system works in Canada and how Workers’ Compensation fits in with the Canadian model.

First, the concern over healthcare costs in the US workers’ compensation community is high. At the AASCIF conference, several speakers noted that healthcare now represents 60% of the benefit spending of workers’ compensation systems in the US. In Canada, indemnity benefits still far exceed health care costs (Healthcare accounts for about 26% of benefit expenditures [excluding claim administration] at WorkSafeBC).

In the US, I am told there is some suspicion that some workers without healthcare coverage feign a work-related injury to obtain healthcare and indemnity benefits for non-work injuries. With about a third of Americans lacking medical insurance, the impetus for such supposition is obvious. Yet, in Canada where there is universal healthcare coverage, the same reasoning would support a conclusion that such misapplication of workers’ compensation benefits to cover healthcare is unlikely.

For work-related injuries, workers’ compensation insurers in Canada are first payers just as they are in the US. While Canadian workers’ compensation insurers benefit from the lower costs that prevail in a single payer system, the healthcare costs of work-related injuries must still be reflected in the cost of workers’ compensation insurance to the employer.

It is important to note that any work-related injury or disease healthcare costs not paid by workers’ compensation will usually be paid by the provincial medical insurance plan. Since healthcare is actually funded by more than the nominal healthcare premiums paid by individuals and families, work-related injuries that are not covered by workers’ compensation are a burden on taxpayers and a subsidy to business or work that gave rise to the injury or disease.

As the debate over healthcare reform continues, it is possible that workers’ compensation will be included in at least some of the proposals. The status quo with workers’ compensation as the first payer for work-related injury and disease is conceptually the easiest and most direct method for workers protection. Failure to capture the full healthcare cost of work-related injuries and disease would remove an important incentive to invest in worker safety and health.

Workers' Compensation: Recovery and Return to Work (RTW)

In my view, Prevention and Rehabilitation/Return-to-Work are the two main pillars of workers’ compensation; the ‘compensation’ part is just what we do after prevention fails and before the worker returns to work.

I view the early, safe and durable return-to-work (RTW) of an injured worker as the hallmark of a successful health outcome for an injured worker. Many workers and employers are under the mistaken impression that RTW should only occur after the worker is ‘back to normal’ or ‘100% recovered’.

To help correct this impression, I often use this recovery curve diagram to depict how the workers’ compensation system works. It shows the level of health functioning (H0)the worker has prior to the work-related injury and depicts the sudden, drastic drop in health function caused by the injury. During the initial post-injury period, the worker is Totally Temporarily Disabled(TTD). As the worker recovers, there will be a point where the worker is no longer TTD but is Temporarily Partially Disabled, (TPD). During this phase of the recovery curve, many workers actually return to work. As any practitioner of Disability Management will tell you, returning to work can be an effective therapy. For many workers, the demands of their regular jobs may be met at a level of health functioning lower than (H0). This makes sense since few jobs require a worker to be at the peak of their functional health capacity to adequately and safely perform their duties.

Recovery continues until the worker reaches a medical ‘plateau’ or what some call ‘maximal medical improvement’. Most compensation systems require that temporary disability payments cease once the worker’s condition plateaus but in practice about 90% of workers return to work prior to that point.

If the worker has permanently lost some functioning, (an amputation of the hand, for example) the worker will never return to the pre-injury level (H0). A new maximal level of health functioning will be established (H1). Conceptually, the difference between H0 and H1 is a permanent functional impairment. Depending on the workers’ compensation system, this impairment may result in a permanent partial impairment based on function or translated into a Permanent Partial Disability (PPD). As long as the level of health functioning is above the requirements for the worker’s particular job, the worker can RTW; if there are parts of the job that demand more than the current level, job modifications or other strategies (like providing lifting devices, restricted duties, or shorter shifts) may allow the worker to RTW during TTD).
RTW to the accident employer is usually the best alternative. Some systems (Ontario and Victoria Australia are two examples) require employers to take injured workers back into employment while others (British Columbia and Washington State for example) do not have such ‘mandatory reinstatement’ provisions in their legislation.

Promoting early, safe, and durable return-to-work is a priority for most workers’ compensation systems. WorkSafeVictoria recently posted videos for workers, employers and agents that continue that jurisdiction’s long-standing tradition of encouraging RTW. These videos are worth a view.

Workers’ compensation and Social Insurance Disabilty

In much of the world, workers’ compensation is part of larger social insurance schemes. In Canada amd the US, social security systems are separate from workers’ compensation but there can be overlaps in coverage and varying treatments on the benefits payable.

On the contribution side, workers and employers are generally required to contribute to a social security system. In Canada, that system is called the Canada Pension Plan (CPP) in most of Canada and the Quebec Pension Plan (QPP) in that province. In the US, the Social Security system fulfils this role. Each of these plans has its own provisions for cases involving disability. In the case of the Canada Pension Plan, an individual with a condition that is ‘Severe and Prolonged’ may be eligible for a benefit from CPP Disability.

A worker who develops a debilitating condition not related to work may collect from the appropriate social insurance plan. Where the condition or injury that gave rise to the disability is work related, the worker may or may not have eligibility under both the social insurance disability plan and the appropriate workers’ compensation legislation.
Where workers’ compensation and social insurance are both potential payers, there are three main public policy alternatives:

• Fully stackable- the worker may collect from both plans
• Fully integrated- the worker collects full entitlement from one plan (the ‘first payer’) and an amount equivalent to the full entitlement from the other plan less anything payable from first payer
• Partially integrated- The worker’s entitlement to one plan is reduced or ‘offset’ by some portion of the entitlement of the other insurance.

Currently, workers in British Columbia experience a partially integrated system whereby WorkSafeBC deducts 50% of the applicable CPP disability benefits from a worker’s permanent disability award where the injury occurred on or after June 30, 2002. Of course, this only applies if the worker is eligible for CPP Disability. Workers with a job-related injury in Quebec, however, go to the CSST (Quebec’s workers’ compensation system) and cannot apply to the Quebec Pension Plan.

In the US, the offset usually works the other way around. According to the National Academy of Social Insurance’s fact sheet of the topic:

An offset for concurrent receipt of workers’ compensation was contained in the original 1956 Social Security disability program, eliminated in 1958, and reinstituted in 1965. The 1965 Social Security Amendments required that Disability Insurance benefits be reduced when the worker is also eligible for periodic or lump-sum workers’ compensation payments, so that the combined amount of workers’ compensation and Social Security disability benefits does not exceed 80 percent of the worker’s average current earnings. The combined payments after the reduction, however, will never be less than the amount of total Social Security disability benefits before the reduction …Under the 1965 law, the Social Security disability benefit will not be reduced if the state workers’ compensation law or plan provided for a reverse offset (a reduction of the workers’ compensation benefit of a worker also receiving Disability Insurance).

Each of the public policy alternatives has its pros and cons. There is no one right way to provide workers compensation and social security benefits. It is important, however, to be mindful of the interplay between the two systems when considering either a change in public policy or comparing benefits across jurisdictions.

What's Climate Change got to do with Workers’ Compensation?

As Al Gore’s “An Inconvenient Truth” aptly displayed, climate change has consequences for all of us. Most of us are workers so it follows that climate change will have consequences for workers’ compensation and prevention organizations.

Last week, the U.S. government released a new global warming report entitled "Global Climate Change Impacts in the United States.” It lists some of the likely consequences of climate change. As you read each of these, it is easy to imagine occupations that will feel the brunt of the change in a way that will influence safety and health. I’ve selected a few consequences and added a few but you may have others:

Heavy downpours - Occupational risks associated with flooding, washed out roadways, impaired visibility for drivers and others on highways, undermining of rail and bridge supports, silt debris buildups, contamination of water runoff.

Heat Extremes- Occupational risks associated with deformation of rail tracks, overheating of vehicles, delays and dangers in road building and repair, softening of asphalt, changes in lift properties of aircraft

Drought areas expand- increased wildfires, decreased visibility (blowing smoke, dust).

More intense hurricanes- storm surge danger, increased risks to safety and rescue workers, disruption in supply systems, dangers due to weakened manmade and natural structures (trees).

Health impacts- increase in occupational heat stress, exposure to waterborne diseases, poor air quality leading to exacerbation of underlying asthma, diseases transmitted by contact with insects and rodents new to the area.

The impacts on human health will also impact workers who are caregivers. These workers not only face the direct effects of the climate change but the indirect effects of caring for others impacted by heat, cold, flood, ozone/air quality, waterborne and zoonotic diseases.

The report provides detailed analysis for each geographic region. For the Northwest, the area just south of British Columbia, the report suggests increases in winter precipitation and decreases in summer precipitation, changes in snowpack, stream flows, sea level, and forests. The report cites the BC pine beetle experience:

The mountain pine beetle outbreak in British Columbia has destroyed 33 million acres of trees so far, about 40 percent of the marketable pine trees in the province. By 2018, it is projected that the infestation will have run its course and over 78 percent of the mature pines will have been killed; this will affect more than one-third of the total area of British Columbia’s forest.

The consequences for industries and workers dependent on the forests are obvious.

Most of the trends listed are already well underway. Creating greater awareness of the risks that come along with the consequences of climate change—and what to do to mitigate them—needs to be a priority.

Wellness and Workers' Comp

A recent column in the Insurance Journal, entitled "Workers' Compensation Industry Worried About Obesity Claims", raised the issue of one chronic condition and triggered thoughts about others. Many workers with underlying conditions are in the workforce. They carry on their tasks and duties competently. Many observers do not even know they have an underlying health condition. Diabetes, hypertension, asthma and many other conditions do not interfere with their other work duties but can have an impact on recovery if the workers is injured.



Obesity is one condition in this category. Many of us are over our ideal weights and we are told this may impact our health but what about our safety and recovery after injury. A recent Duke University study found:

...obese workers filed twice the number of workers' compensation
claims, had seven times higher medical costs from those claims and lost 13 times more days of work from work injury or work illness than did non-obese workers. ...and obese workers in high-risk jobs incurred the highest costs, both economically and medically.

The full study (Ostbye, Dement, and Krause "Obesity and Workers' Compensation: Results From the Duke Health and Safety Surveillance System" Arch Intern Med. 2007;167(8):766-773) is available on line.

The Duke study raises an important general question for workers' compensation and prevention organizations: What role, if any, should workers' comp and OH&S organizations play in promoting workplace wellness?

Findings like those from the Duke study suggest workers' compensation and prevention organizations have a vested interest in the overall wellness of workers. By inference, assisting workers to address non-work-related health issues like obesity, lack of exercise, and work-life banance could reduce the number of workplace injuries serious enough to result in claims as well as the duration and associated medical costs of those claims.

The link between wellness and controlling workers' compensation costs is what's behind WorkSafe Victoria, Australia's $218 million investment in WorkHealth. The program includes workplace-based 'health checks', access to advice, and education programs to help workers reduce their risk of chronic disease.

The idea behind this strategy appears sound. It is an investment in societal change with local benefits to the workers and employers in the long run. It is thinking outside the traditional workers' comp box and will be fascinating to watch.

Metals, arsenic, dusts and fibres: Workers’ Compensation and Prevention concerns

I’ve written about the International Agency for Research on Cancer (IARC) in an earlier blog post. IARC recently released a reassessment of the previously classified Group 1 carcinogens to identify additional tumour sites. The assessment will be published in apart C of Volume 100 of the IARC Monographs.

A news story in The Lancet (Vol 10 May 2009) carried a table that lists Group 1 agents, Tumour sites for which there is sufficient evidence in humans and other sites with limited evidence in humans as well as the established mechanic events that lead to cancers in humans. Among the Group 1 agents are metals and their compounds (Arsenic, Beryllium, Cadmium, Nickel), Asbestos, Erionite, Silica Dust, Leather dust and Wood dust.

While the more or less usual associations between Asbestos and Lung Cancers, Silica and Lung Cancers, and Wood dust and nasal cavity are displayed in the table, the column on “other sites with limited evidence bears note. The connections between Prostate cancers and both Arsenic and Cadmium, for example, may be significant.

What occupations are likely to be exposed to these substances? In some cases, the industry and occupation will be obvious. It may be, however, that too little is known about where these exposures are occurring. It raises questions about the responsibility workers’ compensation and prevention agencies have in alerting industries and occupations of the potential risk to workers. Medical surveillance mechanisms may be needed and perhaps active information initiatives to ensure both prevention and compensation priorities are met.

For more information, I recommend a close review of the links noted above.

What about Pain and Workers' Compensation? (Part 2)

I know when I injured my foot (acute pain) and when I suffered from recurrent migraines (chronic pain), work was very often out of the question. Even with medications (and sometimes because of them), the mental resources taken up dealing with the pain meant I had little capacity for other activities including work, school and even family.


The reality of pain related to work injuries means that many workers for some time post injury are unable to do anything except deal with their injury. While many workers' compensation insurers will insist they do not compensate for pain, one look at their medical bills they pay will prove otherwise. At WorkSafeBC, I looked at the medications we paid for in 2006 and found seven of the top 20 claims were narcotic analgesics and accounted for 50% of the dispensed drugs paid for on accepted claims.

When pain becomes a chronic part of a permanent disability, workers' compensation legislation, policy and practice have taken varying approaches to 'objectify' pain so it can be compensated.

In British Columbia, the Rehabilitation Services and Claims Manual Volume II
section 39.02 describes two types of 'Chronic Pain':

• Specific chronic pain - pain with clear medical causation or reason, such as pain that is associated with a permanent partial or total physical or psychological disability.
  
• Non-specific chronic pain - pain that exists without clear medical causation or reason. Non-specific pain is pain that continues following the recovery of a work injury.
  

Where a WorkSafeBC determines that a worker is entitled to compensation for chronic pain, an amount equal to 2.5% of total disability may be granted.

California takes a different approach. In case of permanent disability, the worker may be awarded from 0 to 3% of whole person impairment for pain.


In the American Medical Association's Guides to Evaluation of Permanent Impairment, 6th Edition, [AMA Guides, 6th] 'Pain-related Impairment' uses a 15 question questionnaire that generates a point rating based on ten points per question. Those with 70 or fewer points are considered to to have no or mild pain and receive nothing. Those with 71 to 100 points are considered to have moderate pain and receive 1%; Severe (101 to 130 points) get 2% and Extreme 131 to 150) receive 3%.


Deciding on some percentage for impairment due to pain is one thing but how that translates into the real world of work is another. There appears to be no one best way to assess let alone obviate the effects of pain. Many workers' compensation authorities will authorize pain management programs for the most severe cases.


Advances in science, medicine and statistics are likely to improve our measurement of pain and provide more insights into its causes. New techniques and medications will be developed to manage pain. Each advance has the potential to help injured workers but there are likely no simple pathways to a perfect system for assessing and compensating for pain.