The workers’ compensation system here in the US has existed for more than a century. So how are we doing, after all that time? The US Department of Labor recently posed the question, “Does the Workers’ Compensation System Fulfill Its Obligations to Injured Workers?” They published their findings in an exhaustive report. It is not flattering.
In fact, the report offers what the DOL calls an “alarming” conclusion: “working people are at great risk of falling into poverty as a result of workplace injuries and the failure of state workers’ compensation systems to provide them with adequate benefits.”
The system was meant to protect injured workers
Back in 1972, the National Commission on State Workmen’s Compensation Laws established five objectives. Every state was supposed to meet these standards:
Broad coverage of employees and work-related injuries and diseases
Substantial protection against interruption of income
Provision of sufficient medical care and rehabilitation services
Encouragement of safety
An effective system for delivery of benefits and services
But, according to the DOL report, almost 50 years later, injured workers are actually worse off. Many states have failed to meet the required objectives. And more than a few have found new ways to separate employees from their benefits. For an increasing number of injured workers, it is tougher to get claims approved, the report says. Tougher to access medical care. And, in some cases, their monetary benefits are woefully inadequate.
Some states have cut benefits, and continue to do so. “It was a race to the bottom,” says the report, “as each state compared its statute with those of neighboring states, found areas of greater generosity, and moved to change those provisions of the law.”
The report cites areas of greatest concern
The system is not providing the financial protections intended for injured workers as they recover, the DOL says. One reason is that employers naturally see workers’ comp claims as a cost. So their focus has been on saving money. And they are indeed doing that. But they’re doing it at the expense of their injured workers.
The DOL says, “Only a small portion of the overall costs of occupational injury and illness is borne by employers. Costs are instead shifted away from employers, often to workers, their families and communities.” And longer-term disability costs have shifted from employers and the workers’ comp system to federal social service programs, particularly Medicare and SSDI.
This situation has produced another negative side-effect. According to the DOL, “As the costs of work injury and illness are shifted, high hazard employers have fewer incentives to eliminate workplace hazards and actually prevent injuries and illnesses from occurring. Under these conditions, injured workers, their families and other benefit programs effectively subsidize high hazard employers.”
The Department of Labor warns that we must address the system’s inadequacies. To do so will require a significant change in approach for some companies. In particular, it will be crucial for more organizations to identify best practices that will lead to improved benefits for injured workers. Adopting best practices will also improve opportunities for injured workers to access the wage replacement benefits they need while they are recovering. At the same time, best practices should continue to support cost reductions for employers.
The most effective way to reduce workers’ comp costs? Prevent work injuries and illnesses from occurring in the first place.
The report identifies four policy areas for exploration:
Possible increase in federal oversight of workers’ comp programs, if states fail to meet minimum standards
Building stronger links between workers’ comp and prevention practices
Establishing evidence-based standards useful to all stakeholders
Updating coordination of worker’s comp benefits with Medicare and SSDI, to reduce financial impact on social insurance programs
Meanwhile, the workers’ comp community continues to search for solutions
The DOL report’s tone is depressing – one might even say pessimistic. Individual employers and medical providers cannot resolve these broad policy issues. But there are those within the workers’ comp community who are working to improve injured workers’ experience.
For one thing, the report does acknowledge that more employers have increased their Return to Work efforts. Much more recently, the concept of mobile physical therapy has gained attention. It is popular with both employers and injured workers, because it:
Focuses on collaboration rather than an adversarial relationship
Improves communication among all stakeholders
Focuses on recovery rather than disability
Keeps injured employees engaged with their worksite and co-workers
Provides a convenient alternative that improves compliance
Employers who have switched to mobile PT say costs are down and compliance is up. Injured workers return to their jobs sooner, and suffer fewer repeat injuries. In addition to addressing common frustrations, mobile PT offers employers and workers another major benefit. This directly supports the DOL’s recommended focus on preventing workplace accidents and illnesses. It also supports another emerging approach – taking a holistic, worker-centric approach to worksite injuries and recovery. We discussed the benefits of this approach in a recent blog article.
What will happen next?
With a new presidential administration taking office, there will be new leadership across all cabinet positions. That includes a new Secretary of Labor. As the head of OSHA, the individual will have considerable influence over workers’ comp programs and priorities. The general assumption is that the Trump administration will bring even less enforcement. And perhaps less regulation. Employers see that as a benefit. It would further reduce their obligations as well as costs.
But will that happen? It’s anybody’s guess at this point. We’ll just have to wait and see.