IAIABC Looks at What the Recession Will Mean to Work Comp

Friday, September 25, 2009 | 0

By Joe Paduda

During a morning panel discussion at this week's International Association of Industrial Accident Boards and Commissions convention in Minneapolis, Workers' Compensation Research Institute President Rick Victor discussed the factors impacting workers' comp.

His view is that the economic downturn will have lasting, and deep, effects on the economy. There will be less consumer demand; changes in housing markets as people seek cheaper places to live; and older Americans with drastically reduced retirement portfolios will work for more years in jobs that are likely more physically demanding.

Can't disagree with any of those points, and his take on the implications for comp.

Older folks take longer to heal, although they (we) tend to have fewer injuries as well.

A drop-off in consumer demand may well mean less investment in retail, shopping malls, and logistics - fewer jobs in higher-injury classes. And reductions in the value of housing stock (more sellers in wealthier/northern/older areas than buyers) will, in turn, reduce the tax base, likely leading to cutbacks in municipal and governmental services.

Some factors will push comp costs down, others are more likely to push costs up. But Rick's right, the economic downturn's impact will be felt for at least a decade, and perhaps even longer.

He also mentioned health care reform, and specifically the potential issues if work comp medical is included.

Fortunately, there is a less-than-zero chance that work comp medical will be included in a final bill, and (as I've been lamenting for weeks) I don't see reform happening this time around.

I know, one of the 564 amendments pending in the Senate is a move to expand medical coverage to cover all care for occupational injuries and illness, and care for auto accidents. The amendment is entitled "Universal 24-hour coverage," but sources who know told me that this amendment is Dead on Arrival, and has no chance of becoming part of the final bill.

As Sen Ron Wyden (D-Ore.) told me earlier this year when I asked about the chances for work comp being included in reform, "why would we pick a fight with anyone we didn't need to pick a fight with?" (that's pretty close to verbatim).

Indeed. There are plenty of opponents lined up right now; I don't think Baucus et al want to add state insurance regulators, work comp insurers, brokers, and risk managers to that list.

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Joseph Paduda's blog, managedcarematters.com, focuses on managed care for group health, workers' compensation, auto insurance, cost containment, health policy, health research, and medical news for insurers, employers, and health care providers. Paduda is the principal of Health Strategy Associates.
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