Posts Tagged ‘reports’

At The Bottom Looking Up

Tuesday, November 13th, 2018

What does a nation owe its citizens with respect to health care?

For nearly all members of the Organization for Economic and Cooperative Development (OECD), the answer is guaranteed, high-quality, universal care at reasonable, affordable cost. For OECD founding member America, the answer seems to have become an opportunity to access care, which may or may not be of high-quality at indeterminate, wildly fluctuating and geographically varying cost.

It is indisputable that the US devotes more of its GDP to health care than other countries. How much more? For that answer we can turn to many sources, roughly all saying the same thing. The OECD produces annual date, as does the World Health Organization, among others. Another reliable and respected source is The Commonwealth Fund, which conducted a study of eleven high income OECD members including the US. The collection of health care cost data lags, so data from this study is mostly from 2014. Here is the cost picture:

As you can see, in 1980, US spending was not much different from the other ten OECD countries in the study. While high, it was at least in the same universe. But now, at 50% more than Switzerland, our closest competitor in the “how much can we spend” sweepstakes”, we might be forgiven for asking, “What in the name of Hippocrates happened?” As if this weren’t enough, the 2014 GDP percentage of spend, 16.6%, has now risen to nearly 18%, according to the CMS.

So, what do we get for all that money? We ought to have the highest life expectancy, the lowest infant mortality rate and the best health care outcomes in the entire OECD. But we don’t.

For many readers, it is probably galling to see both the UK and Australia at the top of the health care system performance measure and at the bottom of the spending measure. In the early 2000s, each of these countries poured a significant amount of money into improving its performance, and the results speak for themselves.

Consider all of this mere background to the purpose of this blog post.

Last week, we wrote about the terrible, 40-year stagnation of real wage growth in the US, pointing out that in that period real wages in 1982-1984 constant dollars have risen only 4.5%. But, as we have seen, health care spending did not follow that trajectory. This has resulted in tremendous hardship for families as they have tried to keep pace with rising health care costs. For, just as US health care spending has risen dramatically since 1980, so has what families have to pay for it.

To put this in perspective, consider this. Since 1999 the US CPI has risen 54%, but, as the chart above shows, the cost of an employer offered family plan has risen 338%. If a family’s health care plan’s cost growth had been inflation-based, the total cost to employer and employee would be $8,898 in 2018, not $19,616. In 2018, the average family in an employer-based plan pays 30% of the plan’s cost ($6,850), plus a $2,000 deductible, plus co-pays that average $20 whenever health care is accessed, plus varying levels of co-pays for drugs.

On top of all that is the enormous difficulty people have in trying to navigate the dizzying health care system (if you can call it that). American health care is a dense forest of bewildering complexity, a many-headed Hydra that would make Hesiod proud, a labyrinthine geography in which even Theseus with his ball of string would find himself lost.

With wages and health care costs growing ever farther apart, America has a crisis of epic proportion. Yet all we can seem to do is shout at each other about it. When do you think that will end? When will we begin to answer the question that this post began with: What does a nation owe its citizens with respect to health care? When will our nation’s leaders realize we can actually learn from countries like Australia, the UK, Switzerland and all the other high performing, low cost members of the OECD? Continuing on the present course is no longer a viable option.

 

Note: You may be questioning The Commonwealth Fund’s research. To put your mind at ease about that, here are the study sources:

Our data come from a variety of sources. One is comparative survey research. Since 1998, The Commonwealth Fund, in collaboration with international partners, has supported surveys of patients and primary care physicians in advanced countries, collecting information for a standardized set of metrics on health system performance. Other comparative data are drawn from the most recent reports of the Organization for Economic Cooperation and Development (OECD), the European Observatory on Health Systems and Policies, and the World Health Organization (WHO).

 

 

It Is Time

Monday, November 5th, 2018

This is not a piece about insurance or health care. It won’t make the cut for Health Wonk Review and it will probably cost us readers (Well, 15 years has been a pretty good run). What this piece is is one that addresses the health of our nation.

Today, the Bureau of Labor Statistics (BLS) released a chart showing gains in productivity and hourly wages from Q3 2017 to Q3 2018. It looks remarkably similar to the chart BLS released at the end of Q2. Impressive Productivity and Output gains in both quarters. And, if you didn’t know better, you’d think Hourly Compensation is rising pretty well, too.

However, look to the far right of both charts to see the change in Real Hourly Wages, which are wages after inflation is factored in. The Trump administration and most of the press have trumpeted (pun intended) the nominal wage increase of 2.8% for Nonfarm Business and 2.2% for Manufacturing in Q3, 3.2% and 2.5%, respectively, in Q2, without saying a thing about the negligible, and in some cases decreasing, Real Wages.

Real Wages for Nonfarm Business during this one-year period (Q3 to Q3) are up a measly 0.1%, after rising an anemic 0.5% in Q2; Manufacturing Real Wages in Q3 are actually down 0.4% after being down 0.2% in Q2. And this is not a new phenomenon. In the 40 years since 1979, Real Wages for hourly and non-supervisory workers have increased by a total of only 4.5%. During that same period, the CPI has risen 247.7%.

These are not “alternative facts.”

Since the day Donald Trump and his cronies got the keys to the kingdom, Real Wages per week have risen from $349 to $351 in constant 1982-1984 dollars. Two bucks! For the mathematically inclined among you, that’s an increase of 0.005%. During the same period, the Dow Jones average has grown 20.9%, and that counts the recent decline. I like the stock market as well as the next guy, but barely one-third of families in the bottom 50% of earners own stocks, according to the Federal Reserve. The fact is, lower-income Americans don’t have extra money to put into stocks, and a third of workers don’t have access to a 401(k) or another retirement plan, according to Pew.

The facts make clear that since Republicans took control of everything, the economic gains  have gone to the top earners. Folks in the middle and lower end have, to a large degree, been left by the wayside. Inequality reigns supreme. It is beyond baffling that these people who continue to get the smelly end of the stick resolutely remain, seemingly unperturbed, in the center of Mr. Trump’s base. Look at the enthused, smiling faces at his rallies. Sociologists have written about this, but I have yet to see anything that explains it fully.

Regardless, tomorrow is Election Day. Many of us have already voted. Many more will exercise the option tomorrow. Predictions call for a large turnout, large being defined, God help us, as perhaps a little more than half. I’m now in my eighth decade, and I cannot recall a more consequential election.

Many Americans (as well as some of my friends) are highly satisfied with the tax law changes, the rise in the stock market and the new makeup of the Supreme Court. In exchange for those they allow, without condemnation, the bullying behavior, the constant hyperbole, the ad hominem attacks and the non-stop lying.

It is time for the better angels of our nature to rise to the challenge. It is time to demand decency, and it is time to reject the abject vulgarity that oozes from the awesome edifice where John Adams, Thomas Jefferson and Abraham Lincoln once lived and guided the nation. It is time to raise up America to its true potential. It is time for America to become once again the world’s beacon of hope. Maybe tomorrow America will say, “It is time.” To quote John Milton, “Hope springs eternal.”

Perhaps it is fitting to end this non-insurance piece with the words John Adams wrote to his wife Abigail at the end of his first day residing in the yet-to-be-completed new White House in 1800. Franklin Roosevelt had the words engraved onto the mantel of the White House State Dining Room in 1945. Adams wrote, “May none but honest and wise men ever rule under this roof.” I wonder if the current occupant has ever seen those words.

Job Loss, Wage Stagnation, Low Productivity: We’re Great Again!

Monday, October 30th, 2017

A couple of years ago, as he finished his Gatling Gun presentation to conclude the Workers’ Compensation Research Institute’s annual conference in Boston, I asked the big-brained, really smart Bob Hartwig if he was alarmed at all that in the last 40 years inflation-adjusted hourly wages had risen only 4%. His answer: “Yes. Very.”

Since then, regardless of the playground-like antics in our nation’s capital, or maybe because of them, not much has changed. So, in this post I want to discuss some of the factors and trends that have contributed  to this economic wage crisis and suggest it played a powerful role in the rise of Donald Trump who, with rhetoric as sharp as the edge of an axe, seized on the frustration and outrage within the lower wage working classes whose nearly biblical devotion led to his election.

That it is a crisis has been borne out over time by a mountain of complex research that cannot be explained in a tweet. The latest brick in this ugly house was laid last week with the release of a study from The Hamilton Project at the Brookings Institution.

In The Hamilton Project at Brookings report, Jay Shambaugh, Ryan Nunn, Patrick Liu and Greg Nantz offer Thirteen Facts About Wage Growth with solid research buttressing each fact. The point of the paper is to explain why wages for production and non-supervisory workers have been stagnant for so long.

In order to explain the why, they first had to prove the point. To do that they divided the period since 1981 into four business cycles: 1981-90, 1990-2001, 2001-07 and 2007-17. They found that in the first three of those business cycles nominal wage growth (wage growth without any adjustment for inflation) averaged just a bit above 3%. In the last cycle, which started at the beginning of the Great Recession, growth has been 2.34%.

However, when one considers real wage growth (growth adjusted for inflation) each business cycle saw wages increase significantly less than 1%. Despite this 36-year run of bottom-of-the-bird-cage wage growth, according to the Bureau of Labor Statistics’s Inflation Calculator, what you bought for $1.00 36 years ago in 1981, the first year of this study, cost you $2.84 in September of 2017. This puts American workers in the position of trying to outswim a Navy Destroyer. Every moment they fall farther and farther behind.

The authors point out that our long-term wage stagnation can be traced to many trends, including the decline in US workers’ share of income.

The portion of national income received by workers fell from 64.5 percent in 1974 Q3 to 56.8 percent in 2017 Q2. Over the past few years the U.S. labor share has ceased falling, but this might reflect the ongoing economic recovery rather than any change in the long-run downward trend.

A number of factors have played a role in the fall in Labor’s share of income, including, but not limited to:

  • The long-term and continuing offshoring of labor intensive production;
  • The decline in union membership;
  • The decline in the real minimum wage;
  • The growth of non-compete contracts for even low-skilled workers;
  • The growth in income inequality between the top and bottom earners;
  • The continuing increase in the “education wage premium.”

To elaborate on a few of these factors:

Union Membership:  In 1956 about 28 percent of all workers belonged to a union; in 2016 that number was a little more than 10 percent. In the private sector, union membership has dropped to 5%. Regardless of what you think of unions, the fall in union membership directly correlates to an increase in wage inequality.

The Real Minimum Wage:  The Project Hamilton Report demonstrates how insidiously the federal minimum wage has limited wage growth among low wage earners. Since 1968 the real minimum wage (minimum wage adjusted for inflation) has fallen more than 20%.

Right now state minimum wages range from a low in Georgia of $5.50 to a high in the District of Columbia of $12.50. A number of states have passed legislation to gradually increase their minimum wage  over the next few years. Others have indexed theirs to the CPI. Regardless of what the states do, their minimum wage cannot be lower than the the federal minimum wage of $7.25 for any worker covered by the National Fair Labor Standards Act. If a worker in Georgia isn’t covered by the Act, however, $5.50 reigns.

The Education Premium:  The wage benefit of a college degree increased dramatically during the last two decades of the 20th century, leveling off around 2000 at an historically high level.

Bachelor’s degree holders ages 25 to 54 in 1979 could expect to earn 134 percent of the wages received by those with only a high school education, and advanced degree holders could expect to earn 154 percent. By 2016 the wage premiums for a bachelor’s degree and an advanced degree had risen to 168 and 213 percent, respectively.

Another way to look at the wage value of higher education is this: Although only 40% of the nation’s workers hold four-year college degrees (23% in 1979), in the top two earnings quintiles college graduates make up a clear majority, 78% in the top quintile. Only 15% of the bottom quintile are college graduates.

One last point about the Education Premium: In its most recent survey of college pricing, the College Board reports that a “moderate” college budget for an in-state public college for the 2016–2017 academic year averaged $24,610 (tuition, board and fees). It’s true that financial aid is available to most students. However, with the income of today’s low-wage earners falling farther and farther behind workers sitting serenely much higher on the economic pyramid, how do you think they’re going to manage to send their children off on a quest for a four year college degree, even at an in-state public college? This is a self-perpetuating educational death spiral.

Maybe you’re asking what this has to do with workers’ compensation?

Well, if US workers on the bottom half of the income scale have seen their wages lag behind the CPI for four decades, they are right now hard pressed to contribute to the country’s economic growth and viability. Moreover, when one of them suffers a lost-time injury at work, that worker will suddenly see his or her take home pay reduced because of state workers’ compensation laws, which will make it even harder to support a family. Research shows this, among other things, contributes to underreporting of workplace injuries.

For more information on this issue, see Bureau of Labor Statistics data and a recent New York Times economic report by Ben Casselman.

I have a hard time believing decades-long negligible wage growth, especially for those on the lower end of the income scale, can be anything but harmful for America, its economy and the quality of life of its workers. I suggest this is a significant cause of the frustration and outrage that led to the rise of the Tea Party and Freedom Caucus. Donald Trump saw this frustration, this outrage, as a mammoth opportunity and continues to feed it like red meat to a hungry lion. That type of divisive behavior can be nothing but destructive. But until our elected officials grow enough spine to do something meaningfully constructive and productive about it, I fear this situation will continue to divide and erode us as a nation.

That is terribly sad to contemplate.

 

 

 

Workers’ Comp as Percentage of Payroll: NASI Report

Tuesday, October 10th, 2017

The National Academy of Social Insurance (NASI) recently issued its 20th annual report on Workers’ Compensation: Benefits, Coverage, and Costs. The study provides estimates of workers’ compensation payments—cash and medical—for all 50 states, the District of Columbia, and federal programs providing workers’ compensation.

The study showed that

  • Benefits per $100 of payroll fell from $0.92 in 2014 to $0.86 in 2015, the lowest level since 1980.
  • Workers’ compensation employer costs per $100 of payroll dropped to 1.32 in 2015, reversing consistent growth that began after the recession.
  • In 2015, workers’ compensation coverage extended to an estimated 86.3 percent of all jobs in the employed workforce, comprising more than 135 million workers.

Study authors say the drop partly reflects improved workplace safety. Also noteworthy:

“Both the incidence and severity of work-related injuries have declined steadily since 1990. In fact, according to the Department of Labor, the proportion of workers who experienced injuries that resulted in days away from work reached a 25-year low in 2015.”

The study encompasses state-by-state changes in coverage, benefits, and employer costs over the last five years. The state-level results show that between 2011 and 2015:

  • The number of covered workers increased in every state except West Virginia, with 11 states experiencing double-digit growth in covered employment;
  • The amount of covered wages increased in every state, and by more than 20 percent in 16 states;
  • Benefits per $100 of payroll decreased in all but three states, with the biggest declines in Illinois (-$0.33), Oklahoma (-$0.41), and West Virginia (-$0.52)—three states that implemented significant changes in their workers’ compensation systems during this period;
  • Employer costs per $100 of covered payroll increased in 24 states and decreased in 27 states. West Virginia, Montana, and Oklahoma experienced the largest reductions, with costs dropping more than $0.30 per $100 of covered payroll. Employer costs increased by more than $0.20 in Wyoming, Delaware, and California.

NASI workers comp infographic

Automation Designed To Keep People Safe Can Produce The Opposite Result Through No Fault Of Its Own

Monday, September 18th, 2017

A fascinating article in today’s Daily Alert from the Harvard Business Review describes how our dependence on automation can erode cognitive ability to respond to emergencies.

In “The Tragic Crash of Flight AF447 Shows the Unlikely but Catastrophic Consequences of Automation,” authors Nick Oliver, Thomas Calvard and Kristina Potocnik, professors and researchers at the University of Edinburgh Business School, report on their analysis of the horrific crash of Air France flight 447 in 2009. Their research, recently published in Organizational Science, describes in riveting detail the series of preventable cascading events that led to the deaths of all 228 passengers and crew.

Although the crash of AF447 is a transportation tragedy, it also can serve as a stark reminder that employees who depend on technology, especially technology that controls dangerous work, say self-driving 18-wheel trucks, for example, need a lot of training to take the right steps when technology reacts to emergencies. Without that training, the authors contend, the cognitive ability to take manual control and successfully deal with the emergency is problematic at best.

The authors provide an example:

Imagine having to do some moderately complex arithmetic. Most of us could do this in our heads if we had to, but because we typically rely on technology like calculators and spreadsheets to do this, it might take us a while to call up the relevant mental processes and do it on our own. What if you were asked, without warning, to do this under stressful and time-critical conditions? The risk of error would be considerable.

This was the challenge that the crew of AF447 faced. But they also had to deal with certain “automation surprises,” such as technology behaving in ways that they did not understand or expect.

The point here is the technology offering up the “automation surprises” was doing exactly what it was programmed to do. The technology did not fail; the pilots, all three of them, failed in their response to the “surprises.”

We are now at the beginning of a monumental shift in the way work (and play) is done. The natural gravitational movement of artificial intelligence assuming more and more control in our daily lives is unstoppable. Think of how it has brought tremendous improvements in air safety. To prove that, consider this astounding statistic: In 2016 the accident rate for major jets was just one major accident for every 2.56 million flights. But this bubble of safety can breed terrible complacency. How humanity deals with and prepares for the rude “automation surprises” that will surely come along on the way to the future should be a critical component in the thinking of organizational leaders and safety professionals.

 

Update On Medical Marijuana

Friday, March 3rd, 2017

Yesterday, while attending WCRI’s Annual Conference in Boston, we wrote about the National Academy of Sciences (NAS) new research results concerning the effectiveness of  medical marijuana (cannabis) in the treatment of chronic pain. The NAS research concluded there is “conclusive support” that cannabis is effective with respect to chronic pain. A number of states are allowing cannabis to be employed in this regard.

However, marijuana is federally illegal in any usage, medical or otherwise.

We learn today from the Boston Globe that a bill was introduced in the US House of Representatives by Virginia Representative Thomas Garrett yesterday to remedy this situation. From the Globe’s story:

A freshman Republican representative from Virginia introduced legislation this week that would end the federal prohibition on marijuana use and allow states to fully set their own course on marijuana policy.

The bill seeks to remove marijuana from the federal Controlled Substances Act and resolve the existing conflict between federal and state laws over medical or recreational use of the drug. It would not legalize the sale and use of marijuana in all 50 states — it would simply allow states to make their own decisions on marijuana policy without the threat of federal interference.

‘‘Virginia is more than capable of handling its own marijuana policy, as are states such as Colorado or California,’’ Representative Thomas Garrett said in a statement. Neither recreational or medical uses of marijuana are allowed in Virginia.

Senator Bernie Sanders introduced a similar bill last year, but no one would co-sponsor it, and it never even got a hearing. Garrett, however, has four co-sponsors already.

We will continue to watch this.

Who Knew? Medical Marijuana Works (at least for chronic pain)

Thursday, March 2nd, 2017

Dean Hashimoto, MD, JD, is a highly-respected researcher and teacher, practicing at Massachusetts’s Partners Health Care (think Harvard and Massachusetts General Hospital) and teaching at Boston College Law School. Today, at WCRI’s Annual Conference, his topic was Medical Marijuana and Workers’ Compensation: Recent Scientific, Legal and Policy Developments.

He led off with the results of a January,2017, scientific report from the National Academies of Sciences, Engineering and Medicine (NAS). The NAS report is a comprehensive, in-depth review of existing evidence regarding the health effects and potentially therapeutic uses of Medical Marijuana (cannabis). The report arrived at nearly 100 research conclusions categorized by the weight of evidence (conclusive, substantial, moderate, limited, no or insufficient).

One of the report’s conclusions that had “conclusive and substantial support” was this: Medical Marijuana is proven to improve chronic pain in adults. There is “moderate” support for the conclusion that Medical Marijuana improves short-term sleep outcomes for both fibromyalgia and chronic pain.

Of course, there are downsides. The report also concludes (DUH!) that Medical Marijuana carries with it an increased risk of motor vehicle crashes. Also, however, there was conclusive, substantial support that taking Medical Marijuana can lead to the development of schizophrenia and other psychoses. Yikes!

The NAS report also investigated whether there was an association between cannabis and occupational injury. The conclusion? There was no conclusion, because the available studies do not permit one to be made with any degree of certainty.

The bottom line? Medical Marijuana presents a potentially therapeutic benefit in the treatment of chronic pain.

Well, that’s not really the bottom line. No, because the larger issue is this: Medical Marijuana is being used in a number of states. Today, along with Dr. Hashimoto, we also heard compelling stories from Paul Sighinolfi, of Maine’s Workers’ Compensation Board, and Paul Tauiello, of the Colorado Division of Workers’ Compensation, describing the successful medical use of cannabis which is generating momentum in both states toward the therapeutic use of cannabis. The trouble is the usage of Marijuana in any form is federally illegal in every state. Seems there is a collision coming, and it may not be pretty.

Mike Manley On The Oregon Workers’ Compensation Premium Rate Ranking Study

Monday, October 10th, 2016

I have always tried to surround myself with people smarter than I. People such as Gary Anderberg, Peter Rousmaniere, Jennifer Christian, Joe Paduda, Bob Wilson, Mark Walls and Julie Ferguson, to name just a few of the legion. Mike Manley is in the group, too. Mike is Research Coordinator for the Oregon Department of Consumer and Business Services and co-author of what is known in the biz as The Oregon Study.

For three decades, the state of Oregon’s workers’ compensation research group has published this bi-annual study, which won the 2006 IAIABC Research Award. The executive summary of this year’s study is due to be released in the next few days, and the findings are closely watched in quite a few states. Unlike the National Academy of Social Insurance report, issued last week, the Oregon study takes the comparison beyond simple averages. Instead, Oregon derives average rates for what a hypothetical set of comparable employers would pay, thus factoring out much of the difference in states’ risk profiles.

With any comparison across states in the workers’ compensation arena, there are caveats and fine points to be considered. Naturally, there are questions that arise about the methods and interpretation of the findings.

At the Insider, it’s unusual  to have guest bloggers; we’ve only done it a handful of times over 14 years. But for important issues, we make exceptions. The Oregon Study is such an issue. So, I asked Mike if he would write something he wanted our readers to know about the upcoming study. He came up with a list of ten, and we’re going to publish every one of them right here right now. Who knows? You may be reading the latest study tomorrow, but if you are, you’ll be armed with Mike’s intelligent cheat sheet. What follows are the ten things to know about the Oregon Study, by Mike Manley.

           Ten things WC professionals should know about the Oregon Study

  1. This isn’t a report card! The study isn’t an overall evaluation of states’ workers’ compensation systems. There are other important aspects of workers’ compensation systems that are beyond the scope of this analysis. The study focuses on one aspect of workers’ compensation systems: rates paid by employers that purchase insurance.
  2. The study uses a consistent hazard mix across states. This is done by giving each state the same hypothetical distribution of risks, in order to control for the differences in risk across states. This distribution is most similar to Oregon (a national distribution doesn’t exist). Occasionally there have been concerns that this might create some kind of bias, so we’ve checked into that question. Looking at other methods that don’t use the Oregon risk distribution to standardize risk, we find no basis for this concern. The other studies have results that are very similar, once a consistent hazard mix is used.
  3. Rank values are useful, but they have major limitations for interstate comparison. So, we publish a second comparison factor, Percent of Study Median. We recommend using this measure, rather than rank values, for comparing states’ relative rate position over multiple studies.
  4. We study rates using a snapshot on January 1 of the study year. We look at where the rates are on the date of the snapshot, not whether they are going up or down.
  5. Index Rates are averages, sort of. The study’s Index Rate is different than a simple average rate. Premium rates within a state vary dramatically by the risk classification involved, and states’ economies have a different mix of these classifications. The study controls for these differences by looking at premium rates as if each state had the same mix of risks. This figure is the Index Rate, which is not the state’s actual average; instead it’s an average that has been weighted for comparability across states.
  6. High-wage or low-wage state? Don’t worry, wage rate differences across states have little or no impact on the results. Here’s why: rates in workers’ compensation are measured in dollars per $100 units of payroll. High-wage states may have higher benefit levels, but they also have higher wage bases. So, when both parts of the computation increase with higher wages, the resulting rate isn’t affected.
  7. Pure premium rates are a big part of the rate comparison, but only a part. The study also includes factors for insurer overhead and state administrative agencies’ assessments, when these can be put on a comparable basis.
  8. Study data don’t tell us why a state’s rates have been going up or down, or where they might be in the future. Nor do they tell us how effective a system is in minimizing disputes, getting injured workers back to work, paying out adequate benefits, or getting cost-effective medical treatment. Clearly, those are important performance areas too.
  9. The study doesn’t consider insurers’ profitability, discounts, dividends, or activity in the state’s assigned-risk plan. Those items aren’t available for all states, and even when they are available, they’re often incomplete during the year we’re studying. Employers that self-insure (or, in a few jurisdictions, opt not to insure) aren’t included in the study because they aren’t paying workers’ compensation premiums.
  10. Need more detail? We’ve got more! There are two publications that report Oregon’s findings in each study cycle:
  • a summary, typically published in the fall of even-numbered years, and
  • a full report with much greater detail, published the following winter.

Prior studies, both summary and full reports, are available at: http://www.oregon.gov/DCBS/reports/Pages/general-wc-system.aspx

 

The GB Journal: Pithy, Trenchant and Chock Full Of Stuff You Can Use

Thursday, August 11th, 2016

In March of this year, friend and colleague Dr. Gary Anderberg, Senior VP of Claim Analytics for Gallagher Bassett Services, had another one of his good ideas: Publish concise and useful information for risk managers who don’t have a lot of spare time to wade through oodles of research. In Gary’s words:

The basic purpose of The GB Journal is to keep our clients informed on new developments that impact WC, A/L, G/L and property coverages. The idea is that most risk managers are more than a little pressed for time, so a neat synopsis with a link or two for those interested in more details, will be helpful. We also see this as a neat vehicle for generating useful conversations between our account managers and our clients concerning important issues. I try to keep the average item to about 350 to 400 words and no more than three items per issue. That’s no more than five minutes of reading time total.

And presto, his GB Journal was born.

GB 11 August

I love the tagline: We deal in conclusions, not opinions.

Gary says the Journal is for clients of GB, but anyone can subscribe. He’s the sole author and publishes every other Thursday. The current issue summarizes the Workers’ Compensation Research Institute’s recent analysis of eight state’s attempts to curb physician in-office dispensing and discusses the new term of the day, BoT – Burden of Treatment.

At the Insider, for years we’ve been doing something similar when Julie Ferguson posts her News Of Note, but we have no set schedule for that and don’t limit it to three items. Gary’s approach is different, but certainly worthwhile and effective.

I like what Gary is doing. It’s good for GB’s business, but it’s also good for the workers’ compensation community at large. If you’re not already a subscriber, I recommend you become one.

 

It’s Been A Bumpy Ride Since 1972

Tuesday, June 14th, 2016

In its report to President Nixon, the 1972 National Commission on State Workmen’s Compensation Laws, created by the Occupational Safety and Health Act of 1970, concluded that workers’ compensation laws and benefits were vastly disparate among the states. Benefits in one state might be generous, while across the nearest border they’d be parsimonious.

Although Commission members differed on some points, they unanimously agreed parity among the states was highly desirable. They also recognized that to achieve this goal federal preemption as well as federal minimum standards were impractical for two reasons. First, the federal government had not demonstrated it was capable of successfully undertaking such an effort and, second, entrenched vested interests would fight to the death to preserve the status quo (I wonder what the members would say about today’s vested interests’ clawhold on the system?).

Consequently, in its report, the Commission made 84 coverage and benefit recommendations to the states, 19 of which it termed “essential” in order to establish an adequate workers’ compensation law. In the thirty-year period between 1972 and 2002, the states adopted an average of 12.9 of the 19 recommendations, or about 67% of them. The nationwide workers’ compensation crisis of the late 1980s and early 1990s put the brakes on any movement to adopt more of the recommendations.

In the recent past, workers’ compensation reform has percolated again, only this time in the opposite direction. For example, the October, 2015, Propublica/National Public Radio series, echoing back 43 years to 1972, once again threw a stark light on the continuing lack of uniformity in state benefits. In a kind of circle-the-wagons, and if that doesn’t work, head-to-the-bunker reaction, the series was roundly and caustically criticized by members of the workers’ compensation industry. But, as John Adams said in his summation when courageously defending British soldiers following the Boston Massacre, “Facts are stubborn things.” And one, inescapable fact is that in terms of the generosity of workers’ compensation benefits, in 2016 it matters greatly in which state an injury occurs.

Then there’s opt-out. Given the complexity and bureaucracy of the workers’ compensation system, I certainly cannot blame employers for saying, “We want out.” However, if employers are allowed to create their own systems, what happens, as I’ve written before, “down the street, around the corner at Kenny’s Citgo when one of Kenny’s five employees is injured on the job?”

And now, in a little uphill blowback, the Florida Supreme Court has ruled it is unconstitutional to cut off temporary total disability benefits at 104 weeks to a worker who remains totally disabled and unable to work and has not reached maximum medical improvement. This harkens back to the 1972 Commission’s Recommendation 3.17, which said total disability payments should be paid for the duration of the disability without regard for dollar amount or time. It will be interesting indeed to see how Florida deals with this ruling. It is a serious setback for employers.

I have to admit a nationwide lack of uniform benefits makes no sense to me. I just don’t get it. The 1972 Commission also had a remedy for this. It recommended, “that compliance with these recommendations should be evaluated July 1, 1975, and, if necessary, Congress, with no further delay in the effective date, should guarantee compliance.” Well, that never happened did it?

So, where are we?

We’ve advanced some distance, but, as John Burton, the Chair of the 1972 Commission, suggests, if we continue to advance at this rate, the 19 essential recommendations will be law throughout the land sometime in the 23rd century.

As with everything else in business, this all comes down to money.