Archive for April, 2004

Trading tax cuts for health care?

Sunday, April 11th, 2004

How important is health care to the average American? We certainly knew it was important, but an article in bizjournals about a recent poll on health care conducted by the Commonwealth Fund drove the point home: It is apparently important enough that “62 percent of Americans would be willing to give back all of the recent federal tax cuts in exchange for universal health insurance coverage.”

And also on the topic of health care coverage or the lack of it, read 10 Myths of the Uninsured, testimony presented to a congressional committee by economist Len Nichols, Ph.D., vice president of the Center for Studying Health System Change (HSC). He pokes holes in many common assumptions about health care, including the idea that American businesses pay $400 billion a year to provide coverage for workers, stating that “Economists believe that ultimately most workers end up paying for health insurance in the form of lower wages.” Thanks to Pulse for pointing us to this article.

George’s Employment Blawg also has a good post on health care issues, including a link to a report entitled Health Care Benefit Crisis: Cost Drivers and Strategic Solutions (note: 30 page pdf file) by Eric Parmenter of Grant Thornton. We will quote George in summarizing it:

Packed with facts and figures, this document begins with a comprehensive, yet concise analysis of sources of increases in health care benefit costs, including: the aging of the baby boomers, costs of new technology, legislative initiatives such as HIPAA, “managed-care saturation,” “direct-to-consumer prescription marketing,” “insurance industry consolidation and profit-taking,” our “litigious society,” poor health care quality, “preventable and avoidable accidents and health problems,” lack of insurance, and “consumer cost insulation.”

Rounding out our reading on the health care crisis, Tom Mayo at HealthLawBlog updates us on recent developments on the issue of drug costs. Tom says: “Who knows? Maybe drug costs will be the leading edge of a health-care reform movement that drags the country, kicking and screaming, into universal coverage (maybe single-payer, but probably not).”

You’re fired! Should you terminate an employee who is on workers compensation?

Tuesday, April 6th, 2004

Donald Trump’s TV series has everyone joking about firing or being fired, although for anyone who has ever been on either end of the equation – as the manager who fires, or as the employee who is fired – it is rarely a joking matter.

Some would make the case that in today’s litigious society, most companies don’t ‘fire’ employees outright anymore, fearing a charge of discrimination or wrongful termination. It does seem as though downsizing, outsourcing, re-engineering, plant closings, mergers, and a host of other euphemistic group actions have all but replaced the plain vanilla one-to-one termination, at least for large companies. Nevertheless, when there’s a continuing employee performance issue, terminating employment is sometimes the only course of action. And, in some instances, an employer may even be sued for not terminating an employee, such as when that employee poses a danger to other employees.

What about firing an employee who is out on leave for workers compensation?

That’s a question we often get. In these cases, we will often hear a long litany of complaints about the employee, sometimes going back years. From the employer’s perspective, the workers comp claim is often viewed as the final straw in a continuing series of problems with that particular employee; at other times, it simply may appear to be a convenient, neat way to resolve an ongoing problem.

Firing an employee while he or she is out on workers compensation disability leave is almost always a bad idea. For one thing, many states have laws that prohibit retaliatory firings for workers who file claims. Even if this were not the case, it’s not a good idea to use workers comp as a tool to resolve human resource issues.

There may indeed be some instances where termination would not violate the law, such as in cases of business necessity or for an egregious breach of policy.

Can “talking the talk” hurt your workers compensation program?

Friday, April 2nd, 2004

It’s long been our contention that when there is bad blood between employers and employees over workers comp, the issue is often one of communication. It might be helpful if employers thought and spoke in terms of “injured workers” rather than the depersonalized “claimants.” Similarly, employers and insurers often speak in terms of “incidents,” an officious euphemism that can trivialize what are often painful and bloody human occurrences. Work injuries are generally referred to as “accidents” as if they were inevitable or an act of God rather than the preventable events that they generally are. It seems impossible to prevent “accidents,” but most reasonable people would agree that preventing workplace injuries would be a worthwhile goal, and with some effort, largely achievable.

Much of the language that we use in the industry comes from the business of insurance and, let’s face it, the insurer approach to workers compensation is coming almost entirely from the financial perspective. That may well be as it should be – it’s the insurer’s job to assess compensability, and if suspicious circumstances are present, it is their job to raise the questions.

But employers shouldn’t fall in the trap of reducing what is essentially a human event to a simple financial transaction. In our experience, when employers address the human event of a work injury, and do so fairly, consistently, and with a focus on the employee’s recovery and return to work, a better financial outcome ensues than when focusing on the money.

That’s why we don’t encourage employers to build their workers comp system around fraud. Indeed, there are some fraudulent employees — it would be naive to think otherwise. (And let’s not forget that there are fraudulent employers and providers, too). But building a management system around the bad egg results in a punitive system that punishes the majority for the sins of the few. People generally live up to expectations, so expectations are better set to high rather than low standards.

When we meet with an employer who identifies fraud as one of their primary workers comp issues, that is often a sign that we are dealing with an employer that has more problems than just a high workers comp bill. With some exceptions – as in states like California where the issues are systemic – a serious workers comp problem is often the he tip of an iceberg representing a host of festering employer-employee issues and problems; it is the symptom rather than the disease. Either that, or in some cases, poor experience can be racked up to simple ignorance — a fundamental lack of knowledge about what workers comp is, and the misguided notion that some outside party will solve problems that must be owned and addressed from within.

An employer must build a system of management controls at every intervention point on the spectrum: first and foremost, prevention — the injuries that don’t occur are the least expensive ones, both in human and financial terms; second, immediate and appropriate point-of-injury response in the event an injury should occur — what an employer does to respond in the first few hours can set the tone for the future trajectory of events; and finally, post-injury management — a focus on the employee’s recovery and return to work. Communication is at the very heart of such a system, and good communication might best start for employers with thinking in terms of “people” rather than “claimants.”