The not-so-exclusive remedy

A recent Ohio Supreme Court decision prompted some thoughts about workers’ compensation as the ‘exclusive remedy’ for work-related injury, illness, disease and death.

In Canada and most of the US, we think of workers’ compensation as being the exclusive remedy, that is, compensation for work-related injury or disease is limited to the wage loss, permanent disability and medical compensation defined by the workers’ compensation law and policy in force in a particular jurisdiction. Injured workers (or their survivors in fatality cases) are not permitted to seek other remedies for the work-related losses; for example, a worker is prohibited by law (statute barred) from suing the accident employer or another worker. (Of course, if a third party is at fault, there may be a right of action that may be taken as an alternative to compensation or pursued by the workers’ compensation authority as a subrogated right). The Ohio case reminded me that some states allow for exceptions to the exclusive remedy rule.

In the Ohio case, legal precedent in that state and a change in the Ohio tort law five years ago defined an exception to the exclusivity of workers’ compensation. It allowed a worker to both collect workers’ compensation and pursue an action against an employer if, and only if, the worker could prove the employer acted with “deliberate intent” to harm. The statute reads (in part) as follows:

R.C. 2745.01, effective April 7, 2005,
(A) In an action brought against an employer by an employee, or by the dependent survivors of a deceased employee, for damages resulting from an intentional tort committed by the employer during the course of employment, the employer shall not be liable unless the plaintiff proves that the employer committed the tortious act with the intent to injure another or with the belief that the injury was substantially certain to occur.

(B) As used in this section, ‘substantially certain’ means that an employer acts with deliberate intent to cause an employee to suffer an injury, a disease, a condition, or death.

(C) Deliberate removal by an employer of an equipment safety guard or deliberate misrepresentation of a toxic or hazardous substance creates a rebuttable resumption that the removal or misrepresentation was committed with intent to injure another if an injury or an occupational disease or condition occurs as a direct result.

The section clearly puts a high test on what would be an intentional act intended to or substantially certain to injure a worker. The examples in paragraph C anchor the intent of the provision to very plausible but likely very rare situations. And the Ohio Supreme Court certainly confirms a very narrow access to the exception.

Similar exceptions to the exclusive remedy exist in some other states for cases of reckless or wanton disregard for the safety of the worker. According to Larson’s, Ohio, Louisiana, North Carolina, Connecticut, Oklahoma, New Jersey, South Dakota, and Texas—now employ a “substantially certain” standard.

In Australia, access to common law remedies still exists in most states (but not in SA or NT and limited access in Victoria and ComCare). In Queensland there is an unrestricted worker right to seek common law damages against an employer for breach of duty or negligence. One report says common law claims represent just four percent of all claims, but 40 percent of claim costs. That state has a discussion paper proposing a narrowing of access to common law by adopting a 10%-15% threshold in whole body impairment.

Social justice reasons are sometimes given for allowing exceptions to the exclusive remedy rule. Some see access to common law remedies for serious harm resulting from intentionally or substantially certain harm as a mechanism to deter such behaviors and improve worker safety. On the other hand, many view exceptions to the exclusive remedy as an erosion of the Historic Compromise.

In isolation, each of these arguments may have merit, however, I am of the view that you cannot look at any single feature of a system—including exceptions to the exclusive remedy rule-- in isolation. This is less a form of cultural relativism and more a position that accepts more than one arrangement of public policy features can achieve similar if not exactly equivalent outcomes.

I am certain others will have strong views for or against exceptions to the exclusive remedy rule so feel free to post them.

Is Asbestos-related Disease a Pandemic?

Last week I attended a conference on Asbestos Surveillance and Compensation. On presentation by Dr. Leslie Stayner (Professor and Director of the Division of Epidemiology and Biostatistics at the School of Public Health, University of Illinois at Chicago) asked the provocative question, “Is there really a pandemic of Asbestos diseases?”

I suppose one way to answer this questions is to ask if Asbestos is causing the same sort of damage as other pandemics. Pandemic H1N1 influenza is a current and convenient comparator. The World Health Organization recently stated, “As of 28 February 2010, worldwide more than 213 countries and overseas territories or communities have reported laboratory confirmed cases of pandemic influenza H1N1 2009, including at least 16,455 deaths.” By comparison, Stayner pointed out that WHO estimates from 2006 placed the occupationally-related deaths from asbestos disease at approximately 90,000 per year:

• 43,000 Mesothelioma
• 39,000 Lung Cancer
• 7,000 Asbestosis
  

He points out that this estimate does not include other cancers such as Laryngeal and ovarian cancers that may be asbestos related.

The next way to evaluate his claim that asbestos disease is a pandemic is to see if it really is represented worldwide. Quoting from various research sources, professor Stayner showed the distribution of mesothelioma alone was covered much of the planet with the highest rates of disease in countries with the highest consumption of asbestos. While Australia had the greatest number of cases mesothelioma deaths per million per year, other countries such as Canada, the US and Great Britain were in similar territory. Countries from Asia, South America and Europe were also widely represented. Africa does not register highly in this analysis (but that may be changing).

So, on the face comparison with pandemic H1N1, asbestos-related disease has almost the same spread and actually a greater number of deaths.

Stayner’s point is that we need to think about asbestos-related disease as being an active disease of the present and not of the past. He notes that asbestos disease is on the rise in most of the world and that production and consumption of asbestos has remained relatively flat (although down in developed countries, increasing in the developing nations). He adds that we can expect the epidemic in the developed world to start to gradually decrease in 10 to 20 years; based on consumption, he expects to see increases in developing nations.

It is important to note that asbestos persists in our environment. The installed base of products with asbestos are going to be with us for a very long time.

As we saw with pandemic H1N1 influenza, once you attach the pandemic label, funds and resources as well as public attention may be brought to bear on prevention, treatment and control. Elimination of disease is the ultimate objective.

Stayner concluded his presentation with the following quote from the WHO 2006 Report on the Elimination of Asbestos-related diseases:

“The most efficient way to eliminate asbestos-related disease is to stop the use
of all types of asbestos.”

Perhaps he is right. Perhaps we should start thinking about asbestos-disease as a pandemic and bringing resources, education, and prevention efforts to eliminate asbestos-related disease.

How serious is a 'Serious Injury'?

All work-related injuries, illnesses and diseases are serious. Period. I will go further and say that many ‘near misses’, exposures, and traumatic events that do not involve any physical harm to the worker are also very serious. If you believe this as I do, you are part of the way to understanding why it is important that such events be reported. You will also agree that the impact of certain work-related harms can be life changing or even life ending while others result in only minor interruption in work or life’s day to day activities. So how do workers’ compensation and prevention agencies decide which harms deserve the most attention?

In measuring the unacceptable, the most common way to differentiate this spectrum of harms is to focus only on those that result in time away from work. Lost-time injuries are the basis for most Injury Rate calculations. There are three major ‘threshold’ measures Injury Rate measures:

• IR or IR0 includes all cases that result in any time lost from work beyond the day of injury
• IR3 includes only cases that involve more than 3 days away from work
• IR5 or IR7 based on cases that involve greater than one work week away from work
  

While WorkSafeBC reports the provincial injury rate as IR0, much of the world uses IR3 as the threshold. The US Bureau of Labor Statistics and OSHA have reporting systems and analysis based on this measure. The Workers’ Compensation Research Institute uses IR7 in most of its analysis.

It is important to note the source of any reports you might look at. While WorkSafeBC is both the workers’ compensation insurer and the primary prevention agency for the province, these roles are often split and the data collected can be very different. Australia reports Compensation Claims Frequency based on absences of greater than a week. This is not exactly the same as an IR7 but it is similar enough for most purposes.

Chile’s ACHS, the largest mutual workers’ compensation insurer, reports the distribution of injuries by number of days lost. Using the translated equivalents of “minor” (1-3 days), “serious” (4-10) days) and “very serious” (the balance usually displayed as separate lines 15 days to 24 days, those in the range of 25 to 50 days and those greater than 50 days).

Categorical measures are common in specific industries. The airline industry, for example, has a Serious Injury Rate (using ‘per 1,000 departures’ as the denominator) and defines Serious Injuries as follows:

Every injury that
(1) requires hospitalization for more than 48 hours, commencing within 7 days from the date the injury was received;
(2) results in a fracture of any bone (except simple fractures of fingers, toes, or nose)
(3) causes severe hemorrhages, nerve, muscle, or tendon damage;
(4) involves any internal organ; or
(5) involves second- or third-degree burns, or any burns affecting more than 5 percent of the body surface

The advantage of categorical definitions is that they can quickly focus attention for prevention.
A similar approach is used by WorkSafeBC in its Serious Injury Rate. I would classify this as a composite measure because the measure includes fatalities, long duration claims, high medical costs and other time-loss claims involving certain ICD-9 injury codes. This approach has the advantage of being clearly focused on those work-injury events that have had or could potentially have life altering or ending consequences.

Whatever the method, every system needs a basis to prioritize harms for the purpose of preventing them. Even though there is no universal standard, allocating resources in such a way as to reduce and eliminate harms is an essential element to any prevention strategy.

Is competition the answer for WC in Ohio?

The workers’ compensation scene in Canada is dominated by provincial boards or commissions with exclusive authority to provide workers’ compensation insurance coverage to employers and benefits to workers. In the US, only four states have similar models: Ohio, Washington, Wyoming and North Dakota. Ohio is the largest and appears to be the latest to be looking at opening the market to competition. Back in November, the Ohio State Senate approved Resolution 118

“To create the Competitive Workers' Compensation Task Force to review the feasibility of allowing employers the option to obtain private insurance to insure their obligations under the workers' compensation system of Ohio.”

Is competition for the provision of workers’ compensation the answer? Comparative research suggests that competitive or open markets for workers’ compensation provision do not result in lower costs or better outcomes than exclusive state or provincial provision.

Comparisons between workers’ compensation systems is hard and much caution must be used in evaluating such comparisons. That said, I was interested in seeing the Institute for Work and Health’s (IWH) Issues Briefing document comparing the Canadian style workers’ compensation system with a jurisdiction dominated by competing workers’ compensation providers—California.

The IWH analysis summarizes its key messages this way:

• The administrative costs of the workers’ compensation system in California, where benefits are provided mainly through private insurers, are much higher than in Canada, where workers’ compensation is provided mainly through a single public agency in each province.
  
• Both workers and employers realize benefits from the public administration of the Canadian system compared with the competitive private insurance market for workers’ compen­sation in the state of California.
  

The IWH paper cites an earlier, comprehensive study that found a similar cost advantage in favour of monopoly provision of workers’ compensation insurance in BC and Ontario over states with competitive state funds and private markets. [Thomason T, Burton JF. The cost of worker’s compensation in Ontario and British Columbia. In: Gunderson M, Hyatt D (eds), Workers’ Compensation: foundations for reform. University of Toronto Press, Toronto. 2000]

Comparisons and benchmarking performance are hard to do and no comparison—or system—is perfect. Within the population of monopolistic systems, there are likely very good performers and very poor ones. The same can be said of private insurers and competitive state funds. Each underlying insurance model has its advantages and disadvantages. Competition or monopoly alone does not guarantee success.

Workers’ compensation is an important social insurance program that must always be guided by public policy objectives. How best to meet those public policy objectives should trump purely dogmatic considerations over structure.

The Ohio taskforce is due to report out by June 30. It will be interesting to see if the taskforce considers the issues and the evidence.

What is a ‘reportable’ injury?

I was asked last week to compare injury rates from two jurisdictions. I had to explain that this is not easily done. Economic mix, demographics of the workforce, differences in benefit terms (waiting periods, employer deductibles) and other factors can impact such a comparison. One factor, in particular, came up that is often overlooked: injury reporting requirements.

Before a workers’ compensation or prevention organization can act on an injury, illness or incident, there must be a report to the organization. What is reportable will have a large impact on key statistical measures including time-loss injury rate (injury frequency). There are two aspects to reporting requirements:

• What is required to be reported as a work-related injury or disease

  The degree of compliance with reporting requirements
  

So, what is reportable? That varies by jurisdiction. For WorkSafeBC with its dual role as the workers’ compensation and prevention agency for the province, a reportable injury is (or is claimed to be) an injury arising out of and in the course of employment with any of the following immediate or subsequent characteristics:

1. The worker loses consciousness following the injury.
2. The worker is transported or directed to a hospital or other place of medical treatment, or is recommended by such persons to go to such place.
3. The injury is one that obviously requires medical treatment.
4. The worker has received medical treatment for the injury.
5. The worker is unable or claims to be unable by reason of the injury to return to his or her usual job function on any working day subsequent to the day of injury.
6. The injury or accident resulted or is claimed to have resulted in the breakage of an artificial member, eyeglasses, dentures or a hearing aid.
7. The worker or WorkSafeBC has requested that an employer's report be sent.
   
   

Some incidents require immediate reporting whether or not an injury occurs:

• Any incident that kills, causes risk of death, or seriously injures a worker
• Any blasting accident that results in injury, or unusual event involving explosives
• A diving incident that causes death, injury, or decompression sickness requiring treatment
• A major leak or release of a dangerous substance
• A major structural failure or collapse of a structure, equipment, construction support system, or excavation
• Any serious mishap

Ontario’s WSIB (with its primary role on the workers’ compensation side) has the following reporting requirements written into policy:
Employers must report a work-related accident to the WSIB if they learn that a worker requires health care and/or

• is absent from regular work
• earns less than regular pay for regular work (e.g., part-time hours)
• requires modified work at less than regular pay
• requires modified work at regular pay for more than seven calendar days following the date of accident.

In Alberta, reporting requirement of injuries for occupational health and safety purposes is different than for workers’ compensation purposes. According to the Alberta OHS Act, injuries and incidents have to be reported to the Government of Alberta if they:

• result in a death
• cause a worker to be admitted to hospital for more than two days
• involve an unplanned or uncontrolled explosion, fire or flood that causes or has the potential to cause a serious injury
• involve the collapse or upset of a crane, derrick or hoist
• involve the collapse or failure of any component of a building or structure necessary for the structural integrity of the building or structure.
  

My point is simply this: injury rate comparisons are complex. The injury rate in any jurisdiction is the result of many factors. Reporting requirement and the level of compliance with those requirements can have a significant impact on the apparent injury rates. When comparing injury rate data between jurisdictions, understanding what is reportable and how well reporting requirements are met are essential to understanding reported injury rates.

What factors encourage OH&S compliance?

Recently, I’ve been thinking about compliance with safety and health requirements of law and regulation. What factors encourage compliance among workplace players (employers, supervisors, workers)? I think there are three main categories of organizations to consider:

• those with strong safety cultures,
• those who are uninformed, and
• everyone else.

The easiest category to consider is the first one. Many workplaces are safe and secure form injury, illness and disease because of a pervasive safety culture. By this I mean that those present in the workplace put safety and health top-of-mind all the time. Supervisors continually incorporate safety-oriented content in 75% or more of their interactions with those they work with; workers are constantly alert to hazards and empowered to act to correct and control them; managers view violations of health and safety requirements as defects in their processes, training or supervision; firms act to eliminate safety and health risks to the vital human resources and the reputation of the firm. This shared culture is the predominant motivator and compliance is a natural byproduct of that culture.

The second category is characterized by a lack of safety culture without any malice or intention to violate health and safety requirements. In a sense, this group has the most to learn and gain from an intervention such as an inspection by an occupational safety and health officer. Often, these are newer firms struggling to gain markets, to expand or just to keep the business going. For this group, it is a lack of knowledge or skill rather than an active or willful disregard for health and safety that characterizes the lack of compliance. I include in this group those who may be well intentioned and even striving to develop a strong safety culture but ill equipped with the necessary knowledge, skills and abilities to make this happen.

The final category includes everyone else. Members of this category have knowledge of the health and safety requirements, the skills and abilities to comply with the health ans safety standards, but lack the internal motivation to act on what they know. For this group, compliance is more of a risk calculation:

Is the Cost of compliance less than [the probability of being caught in non-compliance times the cost of sanction(s)]? If so, comply... If not, continue in non-compliance.


A roofing firm might know that fall protection is required and even have the equipment and training to use it; however, if the risk of an inspection is negligible or, if an inspection does occur, the value of any penalty is low or non-existent, compliance may be seen as an added cost. (I shall assume that the value of non-compliance results in little or no increase in production).

For this category, there are few routes to compliance. Compliance may come as an unintended consequence or benefit of a change in process (a new machine comes with an automatic power off feature built in, for example) or if the cost equation makes non-compliance very costly.

Simple consequences of the equation follow:

• If there are no penalties, there would be no motivation for this group to comply.
• If the penalties are substantial but the probability of detection is very low (there are no inspectors in the region or the workplace is not easily observed), then there is little or no incentive for compliance.
  

There are much more complex equations in the literature but this simplified version leads to a couple obvious conclusions. Workplaces in this last category will move toward compliance as their perceptions of the cost of non-compliance increases. The perceived cost of non-compliance will increase if either or both the perceived probability of detection of non-compliance and cost of sanctions rise.

One way to increase the perceived probability of detection is announce an inspection blitz of a region or industry. Another is to increase the publicity around detected violations and penalty assessments. This does not increase either the number of inspections or the value of individual penalties for detected violations but it does increase the perception or expectation about the cost of non-compliance.

Another strategy is to increase the cost of non-compliance by a broader interpretation of penalties and sanctions. Loss of reputation through higher-profile sanctions may achieve this. OSHA in the US posts inspection reports on line. You enter a firm name and a state; you get a list of inspection reports and can determine if there are any penalties for serious violations of health and safety standards. To the extent that potential customers of a firm use this information to decide on whom they will do business with, the perceived cost of non-compliance will rise.

Ideally, we can move all workplaces into the first group—those with great safety cultures. Hopefully, a using these concepts to design compliance strategies will more workplaces toward that goal.

Why Compare Performance?

This past week I was in Victoria speaking at a conference on Performance Measurement. I have been asked to present at this conference about a half dozen times and it is a real credit to the strong performance measurement culture of WorkSafeBC that this organization continues to ask for our participation.


One of the BC Reporting Principles, adopted by the BC legislature, states the following:

Public performance reporting should provide comparative information about past and expected future performance and about the performance of similar organizations when it would significantly enhance a reader’s ability to use the information being reported.

Comparative data provides stakeholders with a context to understand if what we achieved is good, bad or indifferent.


Some of our key performance indicators do have direct comparators. Thanks to the AWCBC, we can plot our administrative costs, injury rate, duration and premium against other workers’ compensation systems in Canada. Not all the comparisons are perfect. One has to take into account that jurisdictions such as Manitoba, Ontario, and Saskatchewan cover a much lower percentage (~70%) of the employed labour force than we cover in BC (~93%).


Some of our key performance indicators have no direct comparison. Our ‘voice of the customer’ program has no direct comparator in Canada regarding overall satisfaction levels for workers and employers. Some jurisdictions report on return to work at the aggregate level but none in Canada publish a statistic comparable to our indicator that measures the success of RTW for cases referred to vocational rehabilitation for that purpose. While our key performance indicator for assessing our funding status is unique, there is an industry standard that can provide another context for comparison. This AWCBC measure is reported on their website and in the Appendix to our Annual Report and Service Plan. True the the principle, this additional context is included so stakeholders have another way to judge how WorkSafeBC is performing even though there is no direct comparator to our 'Percent of Target Capital Adequacy Reserve' indicator.


WorkSafeBC also reports on a public contribution index. This measure reflects the percentage of 800 surveyed British Columbians expressing an opinion who rate WorkSafeBC as making a somewhat or very positive contribution to BC. Scores in the mid 80% range in the last four quarters are a reflection of the commitment of staff to making a difference for each and every human being they encounter. No other workers’ compensation system I know of measures performance in this fashion (or, if they do, they are not telling anyone about their results). From some historical data from firms who used to ask this question and report, we have a scale that suggests our current level is near the top of the observed range for some other BC corporations. Still, having some current external comparator in the workers’ compensation business would help our stakeholders properly evaluate our performance.


All of this is not to say we have performance measurement ‘solved’. Measurement is essential to improvement. If you can’t (or chose not to) measure something, it is debatable that you can understand it or improve it. That said, not every jurisdiction can or should measure the same things nor should they necessarily measure similar things in the same way. Performance Measurement should be strategic as well as meaningful and useful to stakeholders and those accountable for the system. More importantly, every person working within the system should be able to see how what he or she does contributes to organizational goals and influence the key indicators of the system.

Whenever possible, I encourage comparison. Sometimes that means WorkSafeBC has to generate measures for others to use; at other times, we are asking jurisdictions in Canada, the US, Australia, or New Zealand to restate their data in a way that helps us understand our own performance better.

Why compare performance? Comparison leads to understanding and that leads to questions that can make all our systems better for those we serve.