Two New Major Reports on Workers’ Comp

March 4th, 2015 by

In what can be nothing other than a coordinated move, both OSHA and ProPublica today released major reports targeting similar workers’ comp issues. ProPublica’s report was co-produced with National Public Radio.
The Demolition of Workers’ Comp
ProPublica’s Michael Grabell and NPR’s Howard Berkes wrote this report, which sledgehammers the workers’ comp industry, specifically insurers, state regulators and the business community. No matter how you feel about it, if you’re a workers’ comp professional, you should read this report.
In their skewering of the industry, Grabell and Berkes point to the gross differences in benefits provided by the states. They ask, “How much is an eye worth?” Then go on to show that it’s worth ten times more in Pennsylvania than it is in Alabama (around $261 thousand compared to $27 thousand – if you’re going to lose an eye, Pennsylvania’s the place to do it).
They note that workers’ comp premiums around the nation have been falling since the early 1990s, something we’ve written about often, and are now at the level of the late 1970s. Moreover, they note that:

Since 2003, legislators in 33 states have passed workers’ comp laws that reduce benefits or make it more difficult for those with certain injuries and diseases to qualify for them. Florida has cut benefits to its most severely disabled workers by 65 percent since 1994.

Despite this, Grabell and Berkes write that business owners clamor for still lower rates and more restrictive benefits in order to keep and attract business.

“That was always the No. 1 issue,” said state Sen. Brian Bingman, the Republican president pro tem of the Oklahoma Senate. “Your workers’ comp rates are way too high.”

Well, in thirty years of working for employers I have yet to meet one who did not think workers’ comp rates were too high – no matter how high or low they were.
Inequality of state workers’ comp benefits is a serious issue, yet one which I don’t see being addressed by anybody anytime soon. Do you?
This piece is thought-provoking and intelligently written. And Grabell and Berkes have heavy-hitter John Burton agreeing with them. Of course, that might have something to do with Dr. Burton’s Quixote-to-the-windmill quest for another workers’ comp national commission.

The recent changes are “unprecedented in the history of workers’ comp,” Burton said in an interview. “I think we’re in a pretty vicious period right now of racing to the bottom.”

I urge all workers’ comp professionals to read this informative piece of investigative journalism.
The OSHA Report
In today’s tag team match, OSHA released Adding Inequality To Injury: The Costs of Failing To Protect Workers Injured On The Job. This is a seriously impressive work.
In a 20 page, well-researched, well-sourced paper, complete with 37 endnotes, the agency takes the baton pass and sounds its own ringing indictment, taking aim at employers who evade workers’ comp responsibilities by misclassifying employees, labeling workers as independent contractors when they’re really employees, outsourcing high-hazard jobs and making heavy use of temp agencies. In this regard, OSHA cites research indicating that workers’ comp covers only 21% of the costs of injuries for these employees, while 50% is borne by them out-of-pocket (Leigh JP, Marcin JP. Workers’ compensation benefits and shifting costs for occupational injury and illness. Journal of Occupational and Environmental Medicine 2012;54:445-450).
One of the report’s more serious charges, among many, is found in this paragraph:

Moreover, only a fraction of injured workers receive any workers’ compensation benefits through state workers’ compensation programs. Several studies have found that fewer than 40 percent of eligible workers apply for any workers’ compensation benefits at all. Indeed, recent BLS-supported analyses that match cases reported to workers’ compensation carriers with those cases recorded by their employer on OSHA logs, treated in emergency rooms or admitted to hospitals, found a sizable proportion of injured workers receive no benefits through the workers’ compensation system. For example, a review of all recordable work-related amputations in Massachusetts found that less than 50 percent of the cases received any workers’ compensation benefits.

Just for a moment, suppose that Grabell and Berkes and whoever wrote the OSHA paper (it’s uncredited except for all those endnotes) are right. Would that mean that all of us, the professionals who labor in the workers’ comp vineyard, have had our collective heads in the sand for lo these many years? Is that possible? Perhaps it is. What would that mean for the future?
Well, here’s a suggestion for all of us. Read the ProPublic/NPR report. Then read the OSHA paper, paying particular attention to those 37 endnotes. Then, perhaps we could begin a conversation about how, while we’re all helping employers and insurers to reduce costs, we could actually deliver the lawful benefits to which all of America’s injured workers are entitled.
There’s an idea.
Hope to see you tomorrow in Boston where we might begin the conversation.