The AWCBC Congress was held last week in Halifax. This event is held every two years and brings together delegates from all the Canadian workers’ compensation boards and commissions. Are such gatherings worth the cost and effort? In this case, the program content certainly made this a good investment for those who could attend. There were many great sessions presented by many experts but the highlight for me was the first address.
The keynote speaker, Jeff Rubin, provided an unscripted, succinct, insightful, provocative examination of the trends that triggered the recent world recession and will undoubtedly impact us in the years to come. Since workers’ compensation systems in many jurisdictions manage large investment funds to pay benefits to workers injured in the past, his insight was extremely important. He correctly predicted the run up in oil prices in the last decade and convincingly links that price climb to the financial turmoil that followed.
Where are we heading? Rubin believes we are at or near peak oil so the world consumption of oil will shift. North America will use less; China and India will use more… much more. You and I will learn to love mass transit, cycling and living in or closer to home. The Hundred Mile Diet will become more fashionable out of simple, practical economics: the cost of fertilizer and transportation will make bringing food from farther away more expensive. As oil hits $150 a barrel, papayas from Mexico will be too expensive for much of the Canadian market. He notes that as the price of oil ford to $100 a barrel, the cost of making steel will make domestic production once again competitive with anything China can deliver to the North American market.
What does the recent BP gulf disaster mean? Rubin acknowledges the devastation on the people and the environment. Ultimately, BP will pay the price and that may mean the end of BP. Fundamentally, however, Rubin thinks the markets—not regulators—that will make deep-water oil an uneconomic risk. Will anyone who buys BP’s deep water assets be able to afford the insurance for another disaster. In a way, the BP fiasco has pushed a lot of ‘reserves’ effectively out of reach.
As oil increases in price, the Canadian dollar will rise. There will be ups and downs but the general direction for both appears to be upward.
If what Rubin has to say is true, the world we live in is indeed going to get a lot smaller... and the implications for investments, employment and labour are huge. Add to this the demographic changes and the future will be very different than our past.
Monday, July 5, 2010
Tuesday, June 29, 2010
Demographics and Maritime Safety
Last week I was in New Orleans and the National Maritime Safety Association (NMSA) conference. My role was as a speaker on demographic effects and this gave me an opportunity to look at some of the demographic changes that are impacting the industry in the US and beyond. Demographics is a term that just means population characteristics (gender, age, occupation…). The association is interested in that range of activities that are involved in and about the shipping, terminal services, stevedoring and related businesses.
The bottom line for this industry (and many others) is that there are going to be fewer young workers and many more older workers. Older workers may well stay beyond the ages of retirement in the past to fill the demand. It also means that many older workers will be in specific jobs they might not otherwise have performed in the past. As one attendee at the event noted, during the recession, many of the first workers to be laid off were the younger ones. This meant that many older workers had to do jobs that they had not done in years and jobs that had changed due to technology. As we know, new workers (even if they are older workers) in new jobs are generally at higher risk of work-related injury.
Two presentations at the event were of particular interest. The first was from a firm called Flight Level Solutions. The founder and leader of this group was a military fighter pilot and the team he works with includes an astronaut. They specialize in Crew Resource Management, a training approach that is origins in flight operations but is now being applied to diverse areas such as healthcare, public safety and manufacturing. The basic premise from a prevention perspective is that “Safety is a by-product of Standardized Execution”. The parallels to Six Sigma, Lean and TQM are obvious but the emphasis on cognitive and interpersonal skills is substantially higher in CRM. In the wake of the PB disaster, this approach may offer another avenue toward safety.
Finally, I was really impressed with the work being done by Louisiana Immersive Technologies Enterprises for the Louisiana Department of Transportation. The technology demonstrated was a 3d interactive environment in which learners had to correctly position flag persons around a curve using a typical gaming controller. I subsequently found a brief article on the net. The speaker identified a couple of differences among learner groups. Learners who were gamers (mostly younger but not exclusively) immediately ‘got it’ and could apply what they had learned in lectures to this virtual world simulation. Others took a while to get the hang of it. With the gaming industry now exceeding the revenues of the film industry, the population of those who know how to game and operate in these immersive environments is likely to grow. There may be many more applications for this sort of learning in the future.
So demographics and maritime safety are linked both in the impact that demographic changes are going to have on the industry and on the technologies and training that will be needed to reach/teach/enable workers in the next couple of decades.
- The population of dockworkers and drivers working from terminal operations in the US has some interesting characteristics. As a group, according to one California study, they have a heart disease death rate that is higher than the rest of the population—49% higher for drivers and 32% higher for dockworkers.
- In the UK, a recent study listed the fatality rates of ‘dockers and stevedores’ at 28 per 100,000. That would make this cluster of occupations the second most deadly in the UK.
- A report out of New Zealand noted that the current average age of ‘Able Seamen’ is 54 years. It also noted that 72% of this group has 30 years of work experience at sea, and 17% with more than 40 years’ experience at sea. The demographic issues are pretty clear: Who will replace these workers as they age and leave the industry?
- An Australian report noted that there is a skill shortage for occupations related to their ports. It warned of a drastic depletion of skills due to the ageing workforce; moreover, the population of young people who would be available to fill those jobs is being offered many other alternative career paths.
The bottom line for this industry (and many others) is that there are going to be fewer young workers and many more older workers. Older workers may well stay beyond the ages of retirement in the past to fill the demand. It also means that many older workers will be in specific jobs they might not otherwise have performed in the past. As one attendee at the event noted, during the recession, many of the first workers to be laid off were the younger ones. This meant that many older workers had to do jobs that they had not done in years and jobs that had changed due to technology. As we know, new workers (even if they are older workers) in new jobs are generally at higher risk of work-related injury.
Two presentations at the event were of particular interest. The first was from a firm called Flight Level Solutions. The founder and leader of this group was a military fighter pilot and the team he works with includes an astronaut. They specialize in Crew Resource Management, a training approach that is origins in flight operations but is now being applied to diverse areas such as healthcare, public safety and manufacturing. The basic premise from a prevention perspective is that “Safety is a by-product of Standardized Execution”. The parallels to Six Sigma, Lean and TQM are obvious but the emphasis on cognitive and interpersonal skills is substantially higher in CRM. In the wake of the PB disaster, this approach may offer another avenue toward safety.
Finally, I was really impressed with the work being done by Louisiana Immersive Technologies Enterprises for the Louisiana Department of Transportation. The technology demonstrated was a 3d interactive environment in which learners had to correctly position flag persons around a curve using a typical gaming controller. I subsequently found a brief article on the net. The speaker identified a couple of differences among learner groups. Learners who were gamers (mostly younger but not exclusively) immediately ‘got it’ and could apply what they had learned in lectures to this virtual world simulation. Others took a while to get the hang of it. With the gaming industry now exceeding the revenues of the film industry, the population of those who know how to game and operate in these immersive environments is likely to grow. There may be many more applications for this sort of learning in the future.
So demographics and maritime safety are linked both in the impact that demographic changes are going to have on the industry and on the technologies and training that will be needed to reach/teach/enable workers in the next couple of decades.
Friday, June 18, 2010
Will Washington state have the next Workers’ Comp system to allow competition?
In Washington State, the Department of Labor and Industries (LNI), is the publicly run workers’ compensation insurer and occupational safety and health authority for the state. It is one of only four remaining ‘exclusive’ state fund workers’ compensation insurers in the US. Exclusive state funds are the closest cousins of Canadian workers’ compensation boards and commissions. If the current campaign to get an initiative on the ballot, Washington’s LNI as it is called, will lose its exclusive insurer status and other insurers will be permitted to enter the market and compete for the sale of workers’ compensation insurance.
Citizen-based initiatives are relatively rare in Canada. In BC we have the example of a campaign to get a referendum in front of the electorate regarding the Harmonized Sales Tax. Initiatives are more common in the US. In Washington state, to take an initiative to the people ( that is, to get a proposal on the ballot for the next election), an initiative proposal must be filed with the state and then, within prescribed time frames and get endorsements from a specified number of registered voters. This year, the threshold is 241,153 signatures by July 2, 2010.
According to the information filed with the state, I-1082 has the following purpose:
The full text of the initiative is available at the following link:
http://www.sos.wa.gov/elections/initiatives/text/i1082.pdf
Proponents of the initiative have a website www.safeourjobswa.com and opposition groups to the initiative have posted their arguments on a variety of websites and blogs including several union sites such as http://ibew191.com/node/443 and http://www.wslc.org/reports/2010/May/18.htm#Tuesday .
If the intent of the initiative sounds familiar, it should; this initiative has a similar intent to the Bill debated in the Ontario legislature late last year. As you will recall, that Bill sought to allow private insurers to enter the Ontario market and compete with WSIB for the sale of workers’ compensation insurance to employers in that market. (See my earlier post). In Canada, the US and Australia, when dissatisfaction with an exclusive state fund rises, so do the calls for privatization and competition despite strong evidence that private or competitive models will be no less costly or efficient.
Direct comparisons between Canadian Boards and individual states are difficult but from a number of research studies and analysis we can say that over the long run, the Canadian model delivers higher benefits to workers and lower costs to employers than the typical US system. We also know directly from research carried out by the late Terry Thomason and John F. Burton, that exclusive state funds (which included the BC and Ontario boards) consistently provided lower costs to employers over a two decade time frame than either purely private markets or markets where there was competition permitted with a state fund.
It remains to be seen if the proponents of I-1082 will achieve the required number of signatures. If they do, the initiative will appear on the November 2010 ballot. Whatever happens in Washington State (or Ontario), the best defense any exclusive system can mount against such initiatives is to provide incredibly customer-focused, efficient service to all our stakeholders and to work with them to reduce the human and financial costs of work-related injury, illness and disease.
Citizen-based initiatives are relatively rare in Canada. In BC we have the example of a campaign to get a referendum in front of the electorate regarding the Harmonized Sales Tax. Initiatives are more common in the US. In Washington state, to take an initiative to the people ( that is, to get a proposal on the ballot for the next election), an initiative proposal must be filed with the state and then, within prescribed time frames and get endorsements from a specified number of registered voters. This year, the threshold is 241,153 signatures by July 2, 2010.
According to the information filed with the state, I-1082 has the following purpose:
This measure would permit certification of private insurers as industrial insurance insurers, and authorize employers to purchase state-mandated industrial insurance coverage through an “industrial insurance insurer” beginning July 1, 2012. It would establish a joint legislative task force to propose legislation conforming current statutes to this measure’s provisions, and would direct the legislature to enact such supplemental conforming legislation as necessary by March 1, 2012. It would also eliminate the worker-paid share of medical-benefit premiums.
The full text of the initiative is available at the following link:
http://www.sos.wa.gov/elections/initiatives/text/i1082.pdf
Proponents of the initiative have a website www.safeourjobswa.com and opposition groups to the initiative have posted their arguments on a variety of websites and blogs including several union sites such as http://ibew191.com/node/443 and http://www.wslc.org/reports/2010/May/18.htm#Tuesday .
If the intent of the initiative sounds familiar, it should; this initiative has a similar intent to the Bill debated in the Ontario legislature late last year. As you will recall, that Bill sought to allow private insurers to enter the Ontario market and compete with WSIB for the sale of workers’ compensation insurance to employers in that market. (See my earlier post). In Canada, the US and Australia, when dissatisfaction with an exclusive state fund rises, so do the calls for privatization and competition despite strong evidence that private or competitive models will be no less costly or efficient.
Direct comparisons between Canadian Boards and individual states are difficult but from a number of research studies and analysis we can say that over the long run, the Canadian model delivers higher benefits to workers and lower costs to employers than the typical US system. We also know directly from research carried out by the late Terry Thomason and John F. Burton, that exclusive state funds (which included the BC and Ontario boards) consistently provided lower costs to employers over a two decade time frame than either purely private markets or markets where there was competition permitted with a state fund.
It remains to be seen if the proponents of I-1082 will achieve the required number of signatures. If they do, the initiative will appear on the November 2010 ballot. Whatever happens in Washington State (or Ontario), the best defense any exclusive system can mount against such initiatives is to provide incredibly customer-focused, efficient service to all our stakeholders and to work with them to reduce the human and financial costs of work-related injury, illness and disease.
Tuesday, June 8, 2010
Does the basis of calculating WC benefits influence reporting of claims?
If you miss time from work due to a temporary total disability, the amount you receive from an insurer will determine if you can put bread on the table and pay the rent. The quantum of compensation varies with the type of insurance.
Although we do not think of ‘sick leave’ as a form of insurance, in many ways it is like an insurance plan. Sick leave credits or allocations are often earned and may or may not have any residual value upon termination or retirement. In most cases, sick leave provides 100% of wages and is taxable. Sick leave plans are generally free of ‘deductibles’.
For those without sick leave plans as described above, Employment Insurance generally offers some sick leave benefits. In Canada, these amount to 55% of gross up to an insured maximum and all benefits are taxable. There is generally a two week waiting period before benefits may be paid under an EI claim.
Workers’ compensation is a form of insurance. The benefit rate for short term disability varies by jurisdiction. WorkSafeBC provides 90% of net earnings (where net equals gross earnings minus appropriate [mostly mandatory] deductions for employment insurance premiums and Canada Pension Plan contributions as well as applicable federal and provincial income tax) and compensation is tax free. BC does not have any waiting periods so benefits are payable from the day following the day of injury.
Not all workers’ compensation systems compensate at the same level. Most US states set the basis for compensation at 66 2/3% of gross earnings. A sampling of other jurisdictions reveal a range of alternatives—generally higher than the 67%:
• Maine uses 80% of worker’s ‘spendable’ earnings (or net wage after tax)
• Connecticut and Rhode Island uses 75% of worker’s spendable earnings
• Texas uses 70% of the worker’s pre-injury weekly in most cases
• Washington State’s compensation varies by marital status and number of dependents so the range is from 60% for a single to 75% (spouse adds 5% and each dependent 2%).
Most states have a waiting period of 3 to 7 days although most systems offer a ‘retroactive period’ such that the worker will be reimbursed for the waiting period if the wage-loss extends beyond (typically) 14 to 28 days.
Canadian jurisdictions generally compensate temporary total benefits at a higher level than their US counterparts. WorkSafeBC’s 90% compares well with other Canadian jurisdictions:
• Ontario, Prince Edward Island and New Brunswick use 85% of net
• Nova Scotia uses 75% of net for the first 26 weeks and 85% after that
Waiting periods are not common in Canada but do exist in New Brunswick (3 days), Nova Scotia (2 days) and PEI (3/5ths of weekly wage loss benefits to the worker.
While workers have an incentive to claim workers’ compensation benefits over EI for work-related claims, the same may not be true for work-related injuries.
Beyond the fact that waiting periods and departures from 100% of net earnings shift some of the costs of injury to injured workers, the level of compensation may influence reported injury rates. Take the case of a worker who suffers an injury that will result in two weeks away from work and a loss of $1000 net earnings (2 weeks at $500 per week). If the worker has access to a sick leave plan, the worker will likely receive 100% of usual net earnings or $1000. If the worker claims workers’ compensation benefits in a jurisdiction with a 3 day waiting period and an 85% of net benefit rate, the benefit will be $595. In a jurisdiction with no waiting period and a 90% of net benefit rate, the benefit will be $900. If the worker has the option of claiming either sick leave or a workers’ compensation benefit, it is clear that the sick leave route will minimize the burden of the injury the worker must bear. The propensity to not claim under workers’ compensation will increase (at least for shorter duration claims) the greater the financial cost the worker must bear.
This is another example where reported injury rates must be interpreted in context. As a general rule, one would expect jurisdictions with waiting periods and lower replacement of net earnings levels to experience lower injury rates for at least shorter duration injuries.
Although we do not think of ‘sick leave’ as a form of insurance, in many ways it is like an insurance plan. Sick leave credits or allocations are often earned and may or may not have any residual value upon termination or retirement. In most cases, sick leave provides 100% of wages and is taxable. Sick leave plans are generally free of ‘deductibles’.
For those without sick leave plans as described above, Employment Insurance generally offers some sick leave benefits. In Canada, these amount to 55% of gross up to an insured maximum and all benefits are taxable. There is generally a two week waiting period before benefits may be paid under an EI claim.
Workers’ compensation is a form of insurance. The benefit rate for short term disability varies by jurisdiction. WorkSafeBC provides 90% of net earnings (where net equals gross earnings minus appropriate [mostly mandatory] deductions for employment insurance premiums and Canada Pension Plan contributions as well as applicable federal and provincial income tax) and compensation is tax free. BC does not have any waiting periods so benefits are payable from the day following the day of injury.
Not all workers’ compensation systems compensate at the same level. Most US states set the basis for compensation at 66 2/3% of gross earnings. A sampling of other jurisdictions reveal a range of alternatives—generally higher than the 67%:
• Maine uses 80% of worker’s ‘spendable’ earnings (or net wage after tax)
• Connecticut and Rhode Island uses 75% of worker’s spendable earnings
• Texas uses 70% of the worker’s pre-injury weekly in most cases
• Washington State’s compensation varies by marital status and number of dependents so the range is from 60% for a single to 75% (spouse adds 5% and each dependent 2%).
Most states have a waiting period of 3 to 7 days although most systems offer a ‘retroactive period’ such that the worker will be reimbursed for the waiting period if the wage-loss extends beyond (typically) 14 to 28 days.
Canadian jurisdictions generally compensate temporary total benefits at a higher level than their US counterparts. WorkSafeBC’s 90% compares well with other Canadian jurisdictions:
• Ontario, Prince Edward Island and New Brunswick use 85% of net
• Nova Scotia uses 75% of net for the first 26 weeks and 85% after that
Waiting periods are not common in Canada but do exist in New Brunswick (3 days), Nova Scotia (2 days) and PEI (3/5ths of weekly wage loss benefits to the worker.
While workers have an incentive to claim workers’ compensation benefits over EI for work-related claims, the same may not be true for work-related injuries.
Beyond the fact that waiting periods and departures from 100% of net earnings shift some of the costs of injury to injured workers, the level of compensation may influence reported injury rates. Take the case of a worker who suffers an injury that will result in two weeks away from work and a loss of $1000 net earnings (2 weeks at $500 per week). If the worker has access to a sick leave plan, the worker will likely receive 100% of usual net earnings or $1000. If the worker claims workers’ compensation benefits in a jurisdiction with a 3 day waiting period and an 85% of net benefit rate, the benefit will be $595. In a jurisdiction with no waiting period and a 90% of net benefit rate, the benefit will be $900. If the worker has the option of claiming either sick leave or a workers’ compensation benefit, it is clear that the sick leave route will minimize the burden of the injury the worker must bear. The propensity to not claim under workers’ compensation will increase (at least for shorter duration claims) the greater the financial cost the worker must bear.
This is another example where reported injury rates must be interpreted in context. As a general rule, one would expect jurisdictions with waiting periods and lower replacement of net earnings levels to experience lower injury rates for at least shorter duration injuries.
Tuesday, June 1, 2010
What's new in Canadian Research on Work and Health?
I spent part of last week at the Canadian Association for Research on Work and Health (CARWH) conference in Toronto. The conference theme was Worker Health in a Changing World and participants included about 300 researchers from across Canada with some from the US and even Australia.
So, what was preoccupying the researchers at this event? There were so many threads, it is hard to pull them all together but here is a short list of topics that might give you a hint of the range discussed in sessions or presented in poster sessions: asbestos, shiftwork/nightwork, vulnerable workers and those in precarious employment, stress, the heath of truck drivers, pesticides and cancer, effectiveness of OHS training and education, trends from Ontario's high risk firm intervention progam.
As with any multi-stream event, there is no way any one person can see or hear all presentations so it is a bit unfair to highlight some topics over others. That said, I was really impressed by a couple of presentations that I did attend and think you will find them of interest as well.
For those of you who work with larger employers, there was a great example from Fraser Health. Shannon Atkins demonstrated how an internal call centre approach reduced the time for filing employer reports. From the paper abstract, "Results to date are impressive. Form 7 submission timeline reduced from an average of 16.9 days to 1.72 days, with a mode of 0.04 days. Claim duration has been reduced from 49.2 days pre-call centre to 36.5 days."
Another fascinating presentation was "Long-duration claims – what is driving increases in duration and locked-in claims in Ontario?". Sheila Hogg-Johnson's analysis showed that both duration and locked-in claims increase coincidentally with January 1998's Bill 99 legislative and policy change. Now work is going in to examining exactly why.
Several speakers discussed qualitative research examining topics like Joan Eakin's "The stigmatization of injured workers: The construction of "unworthiness" in the compensation process". The care and concern for workers generally was reflected in every presentation.
Cameron Mustard's work on comparing BC and Ontario long-term care injury rates and durations was preliminary but demonstrated the great power in using large data sets from different jurisdictions to ‘tease out’ differences (and that may lead to new approaches for fewer injuries and shorter duration).
One of the most insightful comments from the two days was contained in a presentation by Genevieve Baril-Gingras from Laval. She and a dozen other colleagues reviewed the occupational safety and health law in Quebec by examining its provisions with those of other jurisdictions elsewhere in Canada and the world. Their findings resulted in a set of recommendations, each one backed by what they found from the science and experience elsewhere. And each recommendation was based on a proven provision in place in one or more of the other jurisdictions examined. Clearly, there will be lessons for other OHS and workers' compensation agencies in this paper.
Beyond the findings and the recommendations, her presentation contained one line that really impressed me. She said: "Academic freedom = Responsibility". Researchers need the freedom to gow where the research leads them, and if it leads them to conclusions that are uncomfortable or inconvenient, researchers still have a responsibility: to tell it like it is.
Just how research will be used by legislators and policy makers will depend on many factors. The likelihood of making the best public policy decisions, however, depends on accurate, well researched information. I'm glad there are people out there who take that responsibility in the study of work and health so seriously.
So, what was preoccupying the researchers at this event? There were so many threads, it is hard to pull them all together but here is a short list of topics that might give you a hint of the range discussed in sessions or presented in poster sessions: asbestos, shiftwork/nightwork, vulnerable workers and those in precarious employment, stress, the heath of truck drivers, pesticides and cancer, effectiveness of OHS training and education, trends from Ontario's high risk firm intervention progam.
As with any multi-stream event, there is no way any one person can see or hear all presentations so it is a bit unfair to highlight some topics over others. That said, I was really impressed by a couple of presentations that I did attend and think you will find them of interest as well.
For those of you who work with larger employers, there was a great example from Fraser Health. Shannon Atkins demonstrated how an internal call centre approach reduced the time for filing employer reports. From the paper abstract, "Results to date are impressive. Form 7 submission timeline reduced from an average of 16.9 days to 1.72 days, with a mode of 0.04 days. Claim duration has been reduced from 49.2 days pre-call centre to 36.5 days."
Another fascinating presentation was "Long-duration claims – what is driving increases in duration and locked-in claims in Ontario?". Sheila Hogg-Johnson's analysis showed that both duration and locked-in claims increase coincidentally with January 1998's Bill 99 legislative and policy change. Now work is going in to examining exactly why.
Several speakers discussed qualitative research examining topics like Joan Eakin's "The stigmatization of injured workers: The construction of "unworthiness" in the compensation process". The care and concern for workers generally was reflected in every presentation.
Cameron Mustard's work on comparing BC and Ontario long-term care injury rates and durations was preliminary but demonstrated the great power in using large data sets from different jurisdictions to ‘tease out’ differences (and that may lead to new approaches for fewer injuries and shorter duration).
One of the most insightful comments from the two days was contained in a presentation by Genevieve Baril-Gingras from Laval. She and a dozen other colleagues reviewed the occupational safety and health law in Quebec by examining its provisions with those of other jurisdictions elsewhere in Canada and the world. Their findings resulted in a set of recommendations, each one backed by what they found from the science and experience elsewhere. And each recommendation was based on a proven provision in place in one or more of the other jurisdictions examined. Clearly, there will be lessons for other OHS and workers' compensation agencies in this paper.
Beyond the findings and the recommendations, her presentation contained one line that really impressed me. She said: "Academic freedom = Responsibility". Researchers need the freedom to gow where the research leads them, and if it leads them to conclusions that are uncomfortable or inconvenient, researchers still have a responsibility: to tell it like it is.
Just how research will be used by legislators and policy makers will depend on many factors. The likelihood of making the best public policy decisions, however, depends on accurate, well researched information. I'm glad there are people out there who take that responsibility in the study of work and health so seriously.
Tuesday, May 25, 2010
To include or exclude Professional Sports Competitors from Workers' Compensation Coverage
Who should be covered by workers’ compensation? In the beginning, coverage was limited to primarily industrial workers but most systems have expanded who is included within the scope of coverage. In some cases, inclusions are accomplished by specifically identifying the industries (or occupations) to be covered in legislation. In others, as in British Columbia, the legislation simply defines a principle (inclusion) and the specifics of any exemptions (exclusions) are defined by policy decision.
Of jurisdictions with universal coverage, the rationale for inclusion is pretty straight forward. From a prevention perspective, inclusion of all occupations provides an opportunity to strengthen the barriers, safeguards and defenses against personal injury and disease related to earning a living. By engineering, substitution and administrative controls, the risks that would otherwise harm the worker can be minimized if not entirely eliminated... and the cost of workers' compensation premiums may provide an incentive to invest in these protections (or an added penalty for failing to).
Further, inclusion means all workers have equivalent protections. From a workers’ compensation perspective, insurance for (hopefully) rare events is provided and crystallizes the likely risk of a rare large financial claim or suit to the employer; the premium and experience rating for a particular employer with workers in and about an industry serves as an added and (more or less) constant pressure to invest in prevention. A further rationale is that mandatory inclusion prevents the costs of injury (and necessary healthcare) from being externalized to the public purse.
For jurisdictions with exclusions from universal coverage, the rationale may be more complex. One rationale may be that the risks are very small and the costs of any actual injury or disease arising from the work very low so the benefits of insurance are negligible. Other jurisdictions suggest that industries with ‘equivalent’ coverage may be exempted from the provision. Sometimes, exclusion from some aspects of the workers’ compensation plan can be achieved by ‘carve outs’ and to a certain extent, self insurance with self administration, although this avenue is usually allowed only if the firm is large enough, financially stable enough, and ‘safe’ enough in the eyes of the jurisdictional regulator. It may be necessary to include all firms under prevention standards but the workers’ compensation coverage by this logic would be optional. On one hand, this should increase the firms motivation to protect workers since they will bear the costs of a suite or suitable settlement. Unfortunately, this does not protect the taxpayer (in Canada at least) from the potential costs associated with health care and those who may not receive a speedy settlement (or never get the chance). Exempting an industry or occupation, therefore, should intentionally consider these consequences.
Professional sports competitors in hockey, football, winter sports like skiing are obviously poor candidates for inclusion. The inherent risks and latent defects in the safeguards, barriers and defenses that would otherwise protect them from harm are numerous. It is hard to think of regulating maximal exertion on razor-sharp blades while carrying long sticks and making body checks safe without taking these essential elements out of professional hockey. And on the insurance front, who would you pool the risk of mixed martial arts competitors with? In these sports, the economic model of what you can get ‘workers’ to do, is really an economic expected value one. The pay and contracted benefits are going to have to convince the sports competitor (and his agent) that the residual risks of competing are being properly anticipated and compensated while the ownership (and those setting the rules) are going to have to make assurances sound enough to likely fend off potential suits.
Is there a case for their inclusion of sports competitors? Aside from the inherent externalization of necessary health care costs to the public purse (or a violation of the Canada Health Act principles if the sports team ownership pays for those services) and the principle of universality on its own, I don’t think so. That said, I don’t see any rationale for excluding coverage for the team coach, trainers, managers and other staff. Their work and risks are not dissimilar from recreation facility staff, fitness instructors and equipment managers in many other sectors (schools, universities, private gyms, community recreation facilities).
I would be interested in your views.
Of jurisdictions with universal coverage, the rationale for inclusion is pretty straight forward. From a prevention perspective, inclusion of all occupations provides an opportunity to strengthen the barriers, safeguards and defenses against personal injury and disease related to earning a living. By engineering, substitution and administrative controls, the risks that would otherwise harm the worker can be minimized if not entirely eliminated... and the cost of workers' compensation premiums may provide an incentive to invest in these protections (or an added penalty for failing to).
Further, inclusion means all workers have equivalent protections. From a workers’ compensation perspective, insurance for (hopefully) rare events is provided and crystallizes the likely risk of a rare large financial claim or suit to the employer; the premium and experience rating for a particular employer with workers in and about an industry serves as an added and (more or less) constant pressure to invest in prevention. A further rationale is that mandatory inclusion prevents the costs of injury (and necessary healthcare) from being externalized to the public purse.
For jurisdictions with exclusions from universal coverage, the rationale may be more complex. One rationale may be that the risks are very small and the costs of any actual injury or disease arising from the work very low so the benefits of insurance are negligible. Other jurisdictions suggest that industries with ‘equivalent’ coverage may be exempted from the provision. Sometimes, exclusion from some aspects of the workers’ compensation plan can be achieved by ‘carve outs’ and to a certain extent, self insurance with self administration, although this avenue is usually allowed only if the firm is large enough, financially stable enough, and ‘safe’ enough in the eyes of the jurisdictional regulator. It may be necessary to include all firms under prevention standards but the workers’ compensation coverage by this logic would be optional. On one hand, this should increase the firms motivation to protect workers since they will bear the costs of a suite or suitable settlement. Unfortunately, this does not protect the taxpayer (in Canada at least) from the potential costs associated with health care and those who may not receive a speedy settlement (or never get the chance). Exempting an industry or occupation, therefore, should intentionally consider these consequences.
Professional sports competitors in hockey, football, winter sports like skiing are obviously poor candidates for inclusion. The inherent risks and latent defects in the safeguards, barriers and defenses that would otherwise protect them from harm are numerous. It is hard to think of regulating maximal exertion on razor-sharp blades while carrying long sticks and making body checks safe without taking these essential elements out of professional hockey. And on the insurance front, who would you pool the risk of mixed martial arts competitors with? In these sports, the economic model of what you can get ‘workers’ to do, is really an economic expected value one. The pay and contracted benefits are going to have to convince the sports competitor (and his agent) that the residual risks of competing are being properly anticipated and compensated while the ownership (and those setting the rules) are going to have to make assurances sound enough to likely fend off potential suits.
Is there a case for their inclusion of sports competitors? Aside from the inherent externalization of necessary health care costs to the public purse (or a violation of the Canada Health Act principles if the sports team ownership pays for those services) and the principle of universality on its own, I don’t think so. That said, I don’t see any rationale for excluding coverage for the team coach, trainers, managers and other staff. Their work and risks are not dissimilar from recreation facility staff, fitness instructors and equipment managers in many other sectors (schools, universities, private gyms, community recreation facilities).
I would be interested in your views.
Thursday, May 13, 2010
Are all reported Injury Rates (IRs) equivalent?
I look at a lot of reports and see a wide variation in the reported injury rates among what should be similar jurisdictions. What accounts for these differences? In some cases, there are wide differences in the ‘mix’ of industries covered. You can expect a jurisdiction with a large service sector and small primary resources and construction sectors to have a lower injury rate than one dominated by construction, mining and forestry. That aside, variability can also have a lot to do with definitions.
The AWCBC reports an Injury Frequency statistic based on the following definition:
Note the definition depends on what is counted in the numerator (lost-time claims) and what is used as the denominator (workers of assessable employers). AWCBC also defines Lost-time Claims in this way:
So, another source of variability is in what is reported as compensated. If a jurisdiction has a waiting period or actively promotes ‘stay at work’ programs, claims involving loss of wages will be lower in that jurisdiction than in a similar jurisdiction without a waiting period or significant stay-at-work program.
In a previous blog, I noted the difference in reporting requirements. In addition to those issues, the source of the statistic also needs to be considered. In the US and Europe, most published data is based on Occupational Safety and Health data. In the US, OSHA has specific definitions for what is reportable and these ultimately have an impact on the reported IR. Further, within the reportable cases, there is a distinction between ‘days away from work’ cases and those where ‘alternate duties’ are assigned. While most workers have workers’ compensation coverage in the US, most published IRs are not based on claims.
At WorkSafeBC we report a Provincial Injury Rate in accordance with the AWCBC definition. For BC, where 93% of the employed labour force is covered, this is a pretty reasonable estimate of the provincial IR. Note, however, that it reflects assessable employers only. It does not include, for example, the injuries that occur within the Provincial Government public service as the Provincial Government is not an assessable employer. In provinces with lower covered populations and higher proportions of non-assessed employers, what is reflected in the IR may be far less representative of the provincial injury rate.
Finally, the IR that is reported in some other jurisdictions excludes from the numerator claims (or work absences) of very short duration. WorkSafeBC’s Injury Rate is an IR0 (claims involving at least some wage loss) and the US generally uses IR0 (reportable cases involving days of work absence) although some reports use IR3. In Australia, where one week of work absence is the threshold for a claim in most jurisdictions, their reported claim rates would be equivalent to IR5 or IR7 (depending on the basis for compensation being 5 or 7 days).
So, when you are looking at injury rates in other jurisdictions, dig a little deeper and understand the inherent differences before drawing any conclusions. For the record, WorkSafeBC’s Injury Rates are as follows:
The AWCBC reports an Injury Frequency statistic based on the following definition:
Number of new lost-time claims for assessable employers per 100 workers of assessable employers
Note the definition depends on what is counted in the numerator (lost-time claims) and what is used as the denominator (workers of assessable employers). AWCBC also defines Lost-time Claims in this way:
A lost-time claim is a claim where an employee is compensated for a loss of wages following a work-related injury (or exposure to noxious substance), or receives compensation for a permanent disability with or without any time lost in his or her employment (for example, if an employee is compensated for a loss of hearing resulting from excessive noise in the work place).
So, another source of variability is in what is reported as compensated. If a jurisdiction has a waiting period or actively promotes ‘stay at work’ programs, claims involving loss of wages will be lower in that jurisdiction than in a similar jurisdiction without a waiting period or significant stay-at-work program.
In a previous blog, I noted the difference in reporting requirements. In addition to those issues, the source of the statistic also needs to be considered. In the US and Europe, most published data is based on Occupational Safety and Health data. In the US, OSHA has specific definitions for what is reportable and these ultimately have an impact on the reported IR. Further, within the reportable cases, there is a distinction between ‘days away from work’ cases and those where ‘alternate duties’ are assigned. While most workers have workers’ compensation coverage in the US, most published IRs are not based on claims.
At WorkSafeBC we report a Provincial Injury Rate in accordance with the AWCBC definition. For BC, where 93% of the employed labour force is covered, this is a pretty reasonable estimate of the provincial IR. Note, however, that it reflects assessable employers only. It does not include, for example, the injuries that occur within the Provincial Government public service as the Provincial Government is not an assessable employer. In provinces with lower covered populations and higher proportions of non-assessed employers, what is reflected in the IR may be far less representative of the provincial injury rate.
Finally, the IR that is reported in some other jurisdictions excludes from the numerator claims (or work absences) of very short duration. WorkSafeBC’s Injury Rate is an IR0 (claims involving at least some wage loss) and the US generally uses IR0 (reportable cases involving days of work absence) although some reports use IR3. In Australia, where one week of work absence is the threshold for a claim in most jurisdictions, their reported claim rates would be equivalent to IR5 or IR7 (depending on the basis for compensation being 5 or 7 days).
So, when you are looking at injury rates in other jurisdictions, dig a little deeper and understand the inherent differences before drawing any conclusions. For the record, WorkSafeBC’s Injury Rates are as follows:
IR0: 2.34, IR3: 1.75, IR5: 1.50, IR7: 1.35 (In the 2009 Annual Report, the Provincial Injury Rate [IR0] is reported as 2.37, the best estimate available at the time of publication).
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