Worker’s Compensation – Who is the customer?

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“The Injured Person as a customer in the Tasmanian Workers Compensation System”

A medical colleague commented to me recently about the above title of a presentation by QBE Insurance to doctors in Hobart. Can an Injured Person be a customer?

QBE’s intention was to emphasise a positive approach to managing injury claims to achieve the best outcome for everyone. Their stated goal is  to create:

 “A 10/10 experience for all of  our customers, including the Injured Person”

QBE’s commitment is impressive, recognising the important role of the insurer as a key player in addition to the role of the Injured Person, Employer and Medical Profession.

QBE’s information includes the following statements:

“The QBE Quality Claims Program is based on the QBE Values of OPEN MINDED, NETWORKED, EMPOWERED, QUALITY APPROACH, BUSINESS ACUMEN,  EXCELLENT OUTCOME”

“Regardless of the liability decision made and even where there is a genuine dispute, the process aims to focus on the recovery and return to work of the injured person. Throughout the process of assessing liability there should be a concurrent focus on the recovery and return to work of the injured worker”

According to QBE, in the past a higher proportion of cases were disputed and legal costs sometimes exceeded the amounts paid for income support and medical treatment, however in 2014 97% of all claims have been accepted.

QBE’s new approach is summarised as follows:

“Consideration of the injured person as a customer in the Workers Compensation system is seen by QBE as ‘best practice’. We aim for our Case Managers to exceed the expectations of the injured workers by being contactable when needed; acting above and beyond to help; creating a smooth process for the injured person; being efficient; fostering great relationship with their Case Managers and ensure that we are courteous and supportive through their injury.

Critical to the process of QBE fulfilling this role is developing relationships of mutual respect and open communication with the treating practitioners providing care for the injured workers.”

Such a commitment by an insurer is very positive and should be commended.

Factors that can influence the level of ‘care’ by  Claims Managers

Leaving aside for a moment the commitment to care for injured workers by QBE, the description of the injured worker as a customer does however raise an important question about the relationship between the various parties within our workers compensation system.

In an ‘underwritten’ State like Tasmania, private insurers are licensed by Government to be able to provide  workers compensation insurance to employers. Every employer is legally obliged to have in place such insurance. As with any type of insurance there is a contract of insurance between the insurer and the insured i.e. the employer. The market can be competitive with various factors influencing the premium charged, most importantly the employer’s claims experience. The employer, in reality, is the insurer’s customer. The employer (the ‘insured’) is indemnified against the costs if an employee is injured. The extent of liability is defined according to relevant legislation. In Tasmania it is the Workers Rehabilitation & Compensation Act and any liability that arises at ‘common law’.

Is an injured worker under such an insurance arrangement any more a customer, than your car is a customer under the provisions of your personal motor vehicle insurance?

While a health professional has a ‘duty of care’ to their patients and an employer has a ‘duty of care’ to their workers, does an insurer administering a workers compensation claim have any such duty towards an injured worker? I am not aware of any clear legal duty by the insurer towards the claimant, rather their duty is to their ‘insured’ to fulfil their obligations under the contract of insurance.

My experience over the last 20 years, across a variety of employers and insurers, is that the extent to which ‘care’ is provided by an insurer to an injured worker can be influenced by the philosophy of the employer and their ability to influence their insurer. The converse can also occur i.e. an insurer can positively influence an employer by reinforcing the employer’s legal obligations about rehabilitation and compensation and encourage a helpful supportive approach.

An employer’s influence on an insurer can be affected by the importance the insurer attaches to the business, and the size of the premium paid by the employer. On that basis insurers can show a greater degree of care to injured workers in circumstances where a large caring employer influences the insurer’s approach. A small employer, even if they have a positive caring approach to their workers, will probably have less influence on an insurer who can dictate claims management on the basis of the terms of the contract of insurance. In such circumstances a positive approach by the insurer is more important than the approach of the small employer.

This principle is demonstrated by self-insurers who often demonstrate a more caring approach with claims management towards their injured employees.

An employer who has changed insurer has even less influence on the approach taken by their old insurer to the management of claims and hard-nosed claims decisions are often seen in such circumstances.

How can an Injured Worker really be a Customer?

I suspect that can only occur if injured workers accept some financial responsibility and contribute towards the cost of insurance carried by their employer. There seems to be a move towards limited liability within workers compensation and motor accident schemes in response to increasing cost pressures and their affordability to Government and Industry. In some jurisdictions benefits are limited to income support for 2 years or caps on medical expenses, unless there is a severe injury exceeding a defined impairment threshold.

Perhaps a solution is to have a statutory minimum for insurance cover – say 2-3 years of full income and medical benefits, but beyond that employers and employees can negotiate to agree on a level of cover with a contribution from the employee. Perhaps extended cover could be provided by an insurer that specialises in administering long-term benefits.

In my experience insurers in underwritten schemes prefer time limited liability rather than administering long-term benefits. Again like car insurance they are happy to fix or replace a written off vehicle and close their file, but not administer continuing payments ad infinitum.

Such a change would provide ‘skin in the game’ to workers and some influence through employee organisations in the way longer term incapacity benefits are administered.

If the costs of providing open-ended workers compensation benefits become too great government will be forced to structural reform along these lines. There will clearly be significant opposition from unions and employee organisations. There will be legitimate concerns that any reduction in an employer’s liability for compensation will work against injury prevention, as do restrictions of common law liability, but perhaps contributions from employees towards insurance arrangements for long-term injury might be the only means for the injured worker to become a genuine customer.

No, I don’t think the Injured Worker can be a true customer in our current workers compensation schemes, but a duty of care and commitment to treating injured workers in a caring manner by all parties will go a long way to improving outcomes for those injured at work.

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About Tasworkdoc

As an occupational physician in private medical practice in Hobart, Tasmania - the southernmost state of Australia, I see workers referred by their general practitioners with various types of work-related injuries and diseases. These are mostly musculoskeletal injuries, both of traumatic and gradual onset as well as various associated psychological disorders. With interaction with patients for treatment and providing advice about rehabilitation, I have the opportunity, first-hand, to observe interactions between individual patients and compensation systems. I also conduct independent medical assessments, including impairment assessments for musculoskeletal injuries and asbestos-related disease compensation. This provides another perspective of workers within compensation systems.
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9 Responses to Worker’s Compensation – Who is the customer?

  1. Peter first you need to understand what workers compensation is or at least what it isn’t.
    There are 3 components to workers compensation.
    1: workers compensation legislation -this is the framework set by the parliament.
    2: workers compensation system -this is the component that carries the day to day business of the legislation.
    3: workers compensation process -this is the interface between the employer who is required by the legislation to pay the levies, the claims agent who is in business to make profits for the share holders etc and the injured workers who are the “fuel” for the industry to feed on in order to generate an income to cover the costs of being in business.

    The 2 main players are the employers who are required by law to pay the levies and the injured workers who have no choice but to engage with the system post workplace incident.

    It matters not who the claims agent is, they are in business to generate income and a black bottom line.
    The legislation always stands as “law” until there is a challenge in a Court and a precedent is set, then we have judicial law.

    What is needed is not a change of legislation or change of system -that is where most people burn a lot of energy trying to put empathy in.
    What is needed is a change of process.
    For that injured workers need to be supported with a set of tools that till now they have not had access to-however the tools are now available plus I am working on more tools so that when an injured worker presents to any part of the workers compensation process they are in control.

    When the injured worker is in control then regardless of what the claims agents do or in many cases don’t do, it won’t matter because the injured worker will be the one who has the first and final say. Even the IME’s will have to listen because they will not want to be required to attend any form of legal proceeding and explain why the refused to acknowledge the information provided by the injured worker.
    I believe it is called checkmate.

    • Tasworkdoc says:

      Rosemary, I am not aware of the issues in SA, but in the system I work within in Tasmania, the Legislation and the WC System itself drive the good and poor aspects of the system. My concern relates to the relatively small proportion of claimants who do badly as the system here can’t handle long-term claims, especially those with chronic pain or other unseen injuries. Giving tools to the claimants to help them manage may help a bit but won’t change the overall dynamic and the problems that occur with those cases. My focus is on changing the system and an important part of the system is the governing legislation.

      • Peter the person in control is the person who “runs” the system-give injured workers control of their own claim and the system will have no choice but to work within its own legislation.
        Malcolm Gladwell says that the tipping point is just 5%, which means that “slide point” is around 3%.
        Given the small number of long-term injured workers in any State or Territory is around 3.5% these are the very people who can make the changes required not just for themselves but for all injured workers and also for the betterment of the employers.

  2. Tasworkdoc says:

    If you have access to Linkedin – view the discussion in response to this article in the Workers Compensation Australia Group!

  3. Mark Keam says:

    Are QBE saying that claim determination is only part of the process, and that accept, reject or defer, they will still have a separate focus on recovery and return to work? That’s where the mould will get broken. Will all the other stakeholders join in?

    • Tasworkdoc says:

      Thanks Mark
      I am not sure how much support QBE would or could provide without liability being accepted.
      In my experience some insurers in Tasmania are able to provide some ‘without prejudice’ financial support for medical treatment and rehabilitation services at least until it is clear that they are not liable i.e. until some direction is provided by the Workers Rehabilitation and Compensation Tribunal.
      Some insurers seem to assume that doctor’s asking for such support are questioning the decision about liability, when that might not necessarily be the case. Rather, in many cases, the doctor is just trying to keep treatment and rehabilitation moving forward.
      It would be good if QBE would participate directly to answer your query.
      I agree there would be value if everyone adopted an approach to allow necessary treatment and rehabilitation to proceed.

    • Mark you and I both know the way QBE operate within the workers compensation industry.
      They will do what they need to do in order to gain maximum market share, they would even take a financial loss (remember it was QBE who offered to “buy” the unfunded liability here in South Australia)
      The devil would be in the details which would be “commercial in confidence”

  4. Tasworkdoc says:

    This is my recent post on LinkedIn – Workers Compensation Australia Group – in response to the discussion on that site:

    I am not sure the system is broken, at least in Tasmania. There seems to be agreement that the majority (perhaps 80-90%) of injuries have reasonably good outcomes. The concern to me are those where the system creates or compounds injury and incapacity and those with more serious injury who do not do well in a system that caters best for short term incapacity. This is the reason I suggested the need for a different management model to cater for the long-term injured in my blog article, although no doubt transitioning from one system to another at some point would create a new set of challenges.
    In Tasmania the AMA has put forward a number of proposals to improve the operation of the current system, in particular to reduce the frequency of poor health outcomes, particularly chronic pain and depression. The most significant recommendations are to ‘stream’ identified poor-prognosis cases into an alternative management pathway and, secondly, to allow the medical profession to have greater input into the design and operation of the system, to improve decision making from the perspective of optimum health outcomes. To achieve the first goal general practitioners would need to be empowered to identify ‘poor-prognosis’ cases at the earliest opportunity and work co-operatively with the claims management system to address the identified risk factors for chronicity.
    I am not sure there is any alternative to an ‘insurance-based’ system to cover the liability from work-related injury, it is a question of how the system is managed. One of the fundamental principles over the last 30 years has been to integrate RTW and Medical management (so-called injury management) for injured workers. I wonder sometimes about decoupling these management systems so that decisions about medical treatment are divorced from the management of return to work and provision of benefits for lost income. But perhaps that would be throwing out the baby with the bathwater!

    • Peter anyone who works within the workers compensation industry knows that the top 90% of injures are the claims where the injured worker suffered little to no time lost -the real cost of the claims that full into the remaining 10% is also broken down into claimants that have multiple injuries that take longer to heal and the injured workers that are for no rhyme or reason the injured workers are simply churned to generate income for the very system that is meant to be in place to support them and get them back to work.

      Every day at the Centre I run here in Adelaide I prove that once there is support and opportunity placed in front of injured workers they will rise above their own expectations, I have proven time and time again that the only thing that needs to be removed from many injured workers lives is the churning component of workers compensation.
      I am always amazed that employers are not demanding value for money when it comes to workers compensation because it is the employers who pay for the workers compensation concept that neither delivers or serves what the glossy adverts and brochures promise.

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