Paduda: How's the Work Comp 'System' Today?

Monday, March 21, 2022 | 0

A panel discussion on the state of the workers’ comp system featuring Alan Pierce, David Langham, John Ruser and Bruce Wood closed the Workers Compensation Research Institute's 38th conference in Boston.

Joe Paduda

The discussion was spirited and there were significant disagreements, all handled with respect and courtesy. Take a lesson, Washington!

There’s no question that the “system” is way better than it was 50 years ago when the National Commission’s report was published. The panelists disagreed on how much “better” it is, among other issues.

Unfortunately, what was not addressed in any detail was the state of the “system” today. Rather, the panelists focused mostly on how we got here. That was a miss, although my bet is Ruser just ran out of time.

Alan Pierce opined that all cost-cutting efforts came at the expense of the injured worker, citing changes in Massachusetts’ reduction of benefits in the '90s and other events. He also noted that issues related to compensability of injuries incurred by older folks with degenerative conditions are increasing, often to the detriment of the injured worker. Pierce is a passionate worker advocate with deep experience, albeit in one jurisdiction, Massachusetts.

Pierce asserted that this has happened in large part due to the decline in organized labor and increased political power of employers. Unfortunately, Pierce went way over his allotted time, reducing other panelists’ time and robbing the audience in the process.

After Pierce completed his soliloquy, Bruce Wood weighed in. Wood noted that many states adopted key recommendations set forth by the commission. Then the work comp market collapsed around 1990, creating an “existential crisis.”

Wood noted that the industry was in such dire financial shape that state regulators adopted measures to address the largest cost driver in comp: permanent partial disability. He also challenged Pierce’s characterization of the industry’s prior acceptance of paying for care for age-related conditions, citing changes in specific states to address that issue — changes that Bruce stated were necessary to help regain financial stability.

David Langham, a workers’ comp judge in Florida, criticized the production of the National Commission’s report, averring that the report was limited due to time constraints. Langham noted that there needs to be a balance, and legislators/regulators seem to make changes that are weighted too far toward employers or employees. Langham called for legislators to focus on getting things back in balance, noting that few or no injured workers are involved in the legislative process, nor are any smaller or midsized employers, for that matter. Kudos to Judge Langham for keeping to his allotted time.

Asked about the role of the federal government, Pierce suggested that perhaps there should be a set of minimum standards for worker benefits states should comply with, then noted that this might become the de facto universal standard, thereby the “floor” becomes the ceiling.

Langham noted that the public doesn’t have much faith in the federal government, but he failed to point out why that is the case, which I would argue is caused by two factors:

• The vilification of public service by many pundits and politicians.
• The abject failure of most elected officials to actually work for us, instead whipping up outrage and working only to get reelected. Of course, the federal government has problems; every large organization does. Have you tried to use your health insurance lately? Called your cable company? Mobile phone company?

Wood noted that the last time Congress addressed any of the federal programs was 1984. I would note that this is NOT the fault of those programs, but rather the responsibility of Congress. Which, frankly, has not done its job.

My view

Change has to be driven by stakeholders.

Well, insurers are making record profits; they don’t see any need to change. Employers’ workers’ comp costs are at a historical low; they don’t see any need to change.

Injured workers may well see a need for change, but their intentions and desires are often co-opted by profiteers cloaking their insatiable thirst for yet more dollars in the guise of “helping workers.” I’m looking at you, mail-order pharmacies masquerading as advocates.

Physician dispensing accounts for half of all drug spend in several states yet delivers zero benefit to injured workers and sucks hundreds of millions out of employers and taxpayers.

Many, but not all, hospitals in Florida are absolutely screwing employers and taxpayers, yet legislators and regulators in the pocket of the hospital industry aggressively resist any attempt at reform. Meanwhile, Florida’s doctors get paid less to treat work comp patients than their fellow physicians in pretty much every other state, and those same legislators and regulators do nothing.

I ran into old friend and colleague John Swan on the way out of the hotel (BTW, I love the Westin Copley Square; great service, terrific gym, WiFi works).

John said something we, and I, need to ALWAYS remember: The only people with “standing” to work on policy and interact with legislators are workers and employers.

The rest of us – insurers, third-party administrators, service providers, brokers, consultants, judges, attorneys, medical providers — are tangential at best.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.