Waste-Not Want-Not!


I hesitate to admit it, but I have been wasting my time and energy, the medical expertise that I possess and other people’s money.

In my practice I undertake one or two medico-legal assessments as an independent doctor each week on workers I have never seen before. There were about 65 of these assessments during 2016 and about 30 so far this year. About 70% of these assessments relate to injured workers being assessed about their entitlements within the Tasmanian Workers Compensation system and a further 20% are motor vehicle accident cases. They cost the person or organisation who requests the assessment just over $2,000 each, on average. In addition, there are nearly as many review assessments of workers I have previously seen.

On that basis, at this practice alone, over $150,000 is paid each year for independent opinions about workers being managed within the local workers compensation and motor accident jurisdictions. These opinions rarely contribute directly to an injured worker getting better, they are used to sort out whether the person belongs in a compensation system or not, whether they are entitled to treatment and the extent of their entitlements. I like to think my recommendations about treatment or the subsequent resolution of liability issues will actually help recovery, although I have no data about that, except the occasional anecdote There is however a significant body of research evidence that confirms that Independent Medical Examination (IME) processes can have negative effects on recovery and return to work, as well as being a source of significant frustration to the doctors providing treatment.

I have analysed the independent assessments undertaken at this practice on claimants within the Tasmanian workers compensation system. On average each claimant has had several IME assessments conducted by other practitioners before they had been seen at this practice.

I recently reviewed a worker for medico-legal purposes and counted up about 25 reports that had been prepared over the 6 year period of his claim, included more than 10 IME assessments, with the balance being formal reports sought from treating practitioners. Perhaps up to $50,000 had been spent on reports in this one case!

On the basis of the above estimates, it seems likely that about $0.5M annually is spent on medico-legal assessments on the workers being assessed at this small practice alone i.e. extrapolation of this practice’s data to include the costs of the assessments already undertaken by other practitioners.

In Tasmania there are about 7,500 workers compensation claims each year. If 5% become “litigated’ and/or complex, that is about 375 cases per year. Some estimates put the number of complex cases at 20%. That would equate to 1,500 claimants annually.

If my own practice experience is typical of litigated/complex claims, that would mean more than $10M is spent Statewide on IME assessments in the workers compensation system. Add to that the legal costs of both the insurers and the workers, surveillance and related administrative costs and the costs to determine liability and entitlements are very significant.

According to WorkCover Tasmania figures, legal and investigation payments (including IME assessments) in the 2015-16 year were nearly $15M (and rising each year). In addition, there are legal and other investigation payments included in the WorkCover figures for lump sum settlement payments. This suggests that legal and other investigation payments might be as much again as the payments for IME’s.

An important function of the WorkCover organisation is to oversee the system. WorkCover is principally funded by a levy on the premiums charged at a rate of about 4% of $150M total premium pool i.e. about $6M. This represents a necessary further overhead expense on our compensation scheme.

Within just the workers compensation system of a small state like Tasmania there is probably more than $20M spent annually to determine eligibility, entitlements and to oversee the system. A large proportion of this activity utilises medical resources.

There is the motor accident insurance system as well with over 2,500 claims a year and $43M paid in claims.

The total paid is likely to be nearly $30M per year between those two schemes on independent medical, legal and investigation costs without any direct benefit in terms of provision of health care and rehabilitation. These processes also have potential to worsen outcomes and further increase costs by driving up treatment costs and prolonging recovery.


The state health systems are crying out for money to meet the mounting health care costs of a growing and ageing population. For example, there are serious problems with under-staffing and lack of beds at the Royal Hobart Hospital. Better funding for general practice would help keep patients out of hospital, but that will not be enough.

Injured workers and those injured in motor vehicle accidents that choose not to claim and those excluded from compensation systems or don’t recover can end up receiving their treatment through this stretched and under funded health system.

On a national scale the costs of work disability are staggering. Professor Alex Collie from Monash University has estimated that in Australia $25B annually is spent on income support though the various workers compensation and motor accident schemes and the Centrelink Disability Support Pension for people with reduced capacity for work for health reasons.

Real value to the community comes from funding treatment and rehabilitation and improving health and capacity to work. These services add real value, not just sorting out which ‘silo’ a patient is managed within.

The trend in interstate jurisdictions is to limit entitlements for workers compensation, covering only 2 years post-injury. Perhaps it would be better to have clear-cut liability criteria for compensation, e.g. only traumatic injuries and/or time-restricted benefits to reduce the waste of resources on IME, investigation and legal expenses. The resources saved could be utilised to fund return to work services, rehabilitation and health care services to address work disability no matter what is the cause of work incapacity. Some proactive employers already fund rehabilitation and return to work irrespective of causation. They value their workers.

Such an approach also has the potential to reduce the toxic effects of compensation systems,  improve health outcomes and save money, but there would be many challenges in such a change for the current stakeholders and various vested interests.

I will expand on potential new approaches in my next blog article.



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.
This entry was posted in Uncategorized. Bookmark the permalink.

13 Responses to Waste-Not Want-Not!

  1. Rosemary says:

    Peter you and I both know that there is a much better way forward, one where injured workers are returned to the central focus of their workers compensation claim and where injured workers actually help shoulder the responsibility of their own outcomes.
    Like so many I am tired of going to conference after conference after conference where speakers talk about cost control and cost reduction and a raft of other control and entrapment concepts; as someone who has worked in this industry for over 2 decades and as someone who has researched and written and launched an end to end outcome focused program, I know all to well that what is currently in the market place is not focused on outcomes for injured workers or the employer it is focused on maximizing profit for the provider.

    Last Saturday I gave a mustard spoon overview of my work and the changes that it brings into the workers compensation arena.
    I remain hopeful that someone will actually invite me back to have a serious discussion about my work.

  2. Lyndon Richardson says:

    There certainly are issues with an insurer controlled claims process. The aims and intentions of the Act and Regulations are far too easily manipulated to produce outcomes that hinder rehabilitation.
    Many of those who pay the ever increasing premiums to cover their employees would be confused by the wastage in the system if they were made aware of it, wastage that doesn’t benefit their employees in the slightest and in many cases can hinder their rehabilitation and return to work, therefore costing those businesses even more in premium increases in future years. It is quite telling when less than 50% of money in the system actually goes to assisting the injured.
    If funding the rehabilitation of injured workers is the your business, and you see it as reasonable that less than half of the funding pool goes towards that aim, then quite simply, the system is broken.

    I look forward to reading your thoughts on alternative approaches in your next blog article.

    • Rosemary says:

      There is a saying that goes something like this “this is the way we have always done it”, when the focus is removed from the injured worker and the employer to the profit/loss of the workers compensation system, then it is time to revisit the intent of the concept.
      The intent is to return injured workers to the workplace in a meaningful and outcome focused manner, anything less not only removes the ability for injured workers to return to open employment, but it also impacts on the employers bottom line.

      I am also looking forward to Peter’s next blog.

  3. Tasworkdoc says:

    Thanks Rosemary and Lyndon
    I don’t usually take a primarily financial perspective, but it seems to me whether you take a health, financial or even a moral perspective, there are significant problems within our compensation systems. Whether you are a worker with an injury managed within the system, an employer paying a premium to cover your workers or the taxpayer that picks up the costs when the compensation system won’t accept any ongoing role, there are significant problems.
    I am coming to the conclusion that fundamental structural change is necessary, but that will require significant political will.
    Peter Sharman

    • Rosemary says:

      In 1997 a not well publicized paper was released. The Paper was written by Richard Grellman CPA for the then New South Wales WorkCover Corporation. The paper spoke about the need to remove the silos that had developed within the workers compensation system- oddly enough The Dark side of Rehab Symposium also referred to the need to remove silos 20 years after Richard Grellman wrote about it)
      We must return to understand the intent of workers compensation.

      When I started my “career” in workers compensation it was as an injured worker- the first 3 years was Hell on steroids is about as close as I can describe and still remain on the polite side of insanity; It is something that I would not wish on anyone- when I finally started to understand what was going on my training told me that what was happening was morally and ethically wrong.
      The surveillance team followed my car for days on end without realizing that I was not the person driving my car.
      The IME diagnosed I had separation disorder and not a physical injury.
      The medical treatment was written up for my dominant arm- everyone assumed it was my right arm, each week I would say I am left hand dominant, every week they would say “we will fix that next week”
      The legal team didn’t win anything for me that the legislation didn’t already secure for me, all I got was a legal account that was paid before I received the remnants of the compensation payment.
      And at the end of it all, the final payment did not return me to an uninjured state, my body is still damaged- all that had been achieved was a lot of people had been employed for a day under 5 years to run my workers compensation claim and for the majority of that time it was run without me involved in it.

      All of this plus a lot more sent me back to my training and into research and into an education that no other injured worker has ever had or is likely to ever receive again.
      It has taken me years to get the knowledge I now have I have no idea as to what the financial cost has been I lost track of that a long time past.
      There is no university course that teaches what I know.
      Setting my work up here in New South Wales is the change that you are talking about Peter, I know that because my work covers every aspect of the workers compensation system, my work focuses on the 2 key people within the claim- the injured worker and the employer.
      Other than 1 person no one has seen the full program for Craig’s Table. It is all written up and will start to unfold in the coming weeks.
      All of my work sits within the frameworks of legislation because that is where the original intent still resides.

  4. John Quintner says:

    Peter, has anyone dared to attempt to perform cost-benefit analyses on the various systems of personal injury compensation?

    • Rosemary says:

      The closest I have seen is Christine Roberts-Yates, but even that feel short.
      The challenge we have is that the ATO deems injured workers to be “gainfully” employed and ACOSS doesn’t recognise injured workers as “being at risk”

      So any true research required re the impact of a workers compensation injury quite simply has never been done, even though the number of injured workers in Australia is substantial and I could easily name the best person to head such a research project (not me)
      We just need the conversation to start and then the funds made available so the research can actually happen.

    • Rosemary says:

      John I have re-looked at my copy of Aftermath -The social and economic consequences of workplace injury and illness I found it on line many years back and called New Zealand Dept of Labour who sent me a copy. Sadly it doesn’t appear to be available on line anymore. Aftermath speaks about the impact of a workplace injury/illness but also acknowledges it is not complete
      “Many of the consequences cannot be measured directly as an economic or financial cost”
      The Report is just under 250 pages in length- to the best of my knowing I am the only person in Australia who has a copy of this Report, I am basing that on when I spoke to the person in New Zealand she said that Aftermath had not been requested outside of New Zealand. From memory that would have been 2005.

  5. Justice Seeker says:

    Good work Peter!!! The whole system would work better if treating doctors ran the case and sent the injured worker to a relevant specialist without interference from some case manager who had no respect for the person they are managing and no knowledge of any medical concept!! People like you are perfectly placed to simply assist an employer in rehab and getting the right conditions for a safe return to work for an injured worker.
    I have a fairly significant knowledge of the impairment guidelines and cannot see why a treating specialist in the area of your injury could not simply carry out an assessment if provided the guidelines and this could be sent off for the calculation of a lump sum if that is required. As regards to weekly compensation, if a person is unable to work due to injury then just pay a reasonable compensation until they are able to work or top up payments if they are working part time. Not very hard if you ask me and way less costly than the whole experience of IMEs and dispute processes!! in my case my file notes show the extent the case manager went to to get me to the assessor they wanted so as to deny liability. It is all mapped out nicely how they intended to deny the claim when they stated the claim should have been settled. They had no defence so disputed the claim and then set out to use an IME to “get a defence” from the IME suggesting to him what they wanted!! it all went wrong for them because I knew of the IME and made my objections before seeing him describing his past behaviours so when I attended and he did exactly what I stated he would do so they could not use the report. The insurer advised me they wouldn’t use him any more, but only because they were caught out!! So unethical!!! I was recently a witness to the Parliamentary inquiry in NSW and I am happy to say some of the recommendations are directly related to the evidence I provided. I provided a copy of my file that evidenced the case managers actually stating what they were doing so this gave credibility to the notion insurers and their solicitors spend more on causing dispute than on assisting people to overcome the impairment caused by injury. I was one of the lucky people to get out of the system but not until I was significantly damaged by the insurer’s actions. How many others are being punished for the sake of more work for insurer’s solicitors and the particular IMEs they use to give them a fraudulent reason to cause a dispute and thus more money for them and the IMEs who have no integrity!
    You are honest and no doubt you are not one of the “preferred” IMEs who are willing to make false declarations but sadly there are many who are happy to make up anything to ensure return work!!
    Workers compensation management is one of the most corrupt systems I know of and I base view this on my own experiences and of those in my family and of friends where I have witnessed the same corruption.
    My husband and I have spent years gathering evidence and it is just disgusting to see what has been allowed to happen and the fact this goes on with the knowledge of those managing the system is astounding.
    One thing I would also like to expose is the disgusting things case managers are saying about those injured workers they manage. I have read the words “f..ktard” used to describe injured workers with psych claims as well as case managers commenting saying things like “These people belong on the “loco” motion.” and “We are the normal ones. The people we are dealing with are not normal” and “I can’t wait to shoot these motherf….ers in the face” and many more disgusting comments. The comments demonstrate the lack of regard the case managers and their team leaders have for injured workers. When I have a significant psych injury and I read in my file “(My name)…is full of self pity” (when I was suicidal) it just demonstrates to me these people should should be as away from managing psych claims as the end of the earth allows.
    Thanks again for fighting and for doing your job ethically!!

  6. John Quintner says:

    Peter, it is my impression that, over the years, the various systems of workers’ compensation have presided over an erosion of trust by injured workers in members of the medical profession. Could it be that the behaviour of a few IMEs have been largely responsible for this loss of trust? If so, can trust be restored?

  7. Steven Barnes says:

    Peter, I recently heard an RTW Nation podcast that you were featured on and although this reply may not be directly related to the subject of the post, I would like to tell you about a partial US Based solution to your “Magic Wand” wish related to the adversarial nature of the workers’ compensation process. I’m very new to working in a field that focuses on return to work. I’m a New York based computer consultant that provides benefit fund administration computer systems to unions. That doesn’t provide me with the credentials or qualifications to work in a field focused on return to work. However, my dad was a New York based Labor attorney for 50 years and he just retired. He’s 80 years old, his mind is still sharp as a knife and he’s still working hard for labor. He had a staff of 8, which was pretty much replaced by me, so I’ve been recently exposed to the opportunity to work with my dad in assisting injured workers with return to work, and here’s how. In the United States there is an agreement called a PLA (Project Labor Agreement). Without getting into too much detail about a PLA, it’s basically an collectively bargained agreement between management labor working on large construction projects whereby labor and management agree on things like no strikes, wage rates, benefits, grievance procedures and basically PLA’s allow for large projects get done on time and under budget. The first PLA was successfully used on the Boston Tunnel project back in the 90’s and my dad brought the concept of the PLA to the NY Metropolitan area and it’s been a major success and it’s a big part of his legacy as a labor attorney. With regard to the idea of return to work, my dad realized that one of the advantages of a PLA is that the New York State Workers’ Compensation Board (NYSWCB) allows for an ADR (Alternative Dispute Resolution) program to be offered within a PLA. The ADR program was borne out of a pilot program within the NYSWCB that was designed to streamline the workers’ compensation system. Basically, under a PLA an ADR Program can be established to focus on return to work. The program may be limited to union labor working under a PLA, but it allows for labor and management to design their own program to get injured employees back to work. The program includes putting together a medical network of doctors that are focused on return to work and an ombudsperson that pretty much replaces the Workers’ Compensation Board in terms of authorizing medical procedures and treatment. Basically, if a worker gets injured, the ombudsman, along with the management based job site safety personel, direct the injured worker’s medical care by getting him or her to a network doctor or hospital for treatment, following up with support and rehab, including transportation to and from home or work. Help with this alternative workers’ compensation process is offered to the injured worker every step of the way. Then, when worker is ready to return to work, he or she will be put on light duty until they are ready to return to work at full capacity. This process is almost completely non adversarial. Lawyers, including personal injury lawyers, are not allowed to be involved in the process unless the ombudsman, a mediation process and if necessary an arbitration are unable to achieve return to work. What we find is that union workers, and probably most workers for that matter, want to return to work. However, a union worker that is promised a pot of gold by an attorney doesn’t always realize that the pot of gold doesn’t come through for many, many years, if ever, that the attorney takes a third of the settlement and that the WCB has to be reimbursed for medical expenses from any settlement money collected. The injured worker usually ends up with much less than what was promised, included a lost career that may’ve been salvageable. We explain to the injured worker that by staying within the ADR program, she won’t lose her union benefits like medical coverage for her and her family, pension contributions, annuity contributions and other benefits offered by the union to their “employed” and dues paying members. The attorney trying to convince the injured worker that there is a pot of gold waiting for them on the other side of the rainbow never explains about the unnecessary loss of union benefits and focuses mainly on building a case based on damages, whether damages actually exist or not. So, hopefully there’s part of your “Magic Wand” wish. A return to work process that is non-adversarial. I’m sure that you were already familiar with ADR, but if not, I hope I’ve been able to provide some useful information regarding this successful return to work program. We have had ADR programs on 4 billion dollars in construction projects. We’ve achieved a 98% return to work rate and have experienced no third party over claims by outside attorneys because if a worker returns to work, there are basically no damages. If you’re interested you can read a Cornell University report called Alternative Dispute Resolution [ADR] for Workers Compensation in Collective Bargaining Agreements: An Overview by Fred B. Kotler that describes the benefits of a successful ADR program. Again, I am very new to the ideas and concepts of return to work so please excuse me if I used a concept or terminology incorrectly. Steve Barnes

    Steven Barnes
    TPA Computer Corporation

  8. Steven Barnes says:

    And here’s one more quick follow up to the non-adversarial nature of the ADR program referenced above regarding the doctors. The first return to work related project I was given was to build a medical network of workers’ compensation certified doctors. I met with the CEO’s of several major medical groups and their first response was “No. We’re not looking to build up and take on more workers’ compensation cases because dealing with the worker’s compensation system is too difficult”. They explained to me that it takes weeks if not months to get approvals from the Workers’ Compensation Board for medical procedures and treatment. I explained to them is “that’s all gone now”. A doctor only needs to obtain approval from the ombudsperson who is just a quick phone call away and that’s it. The response was always “sign us up”. The ADR program also makes the doctor’s relationship with the Workers’ Compensation Board, or in this case the ombudsperson, non-adversarial.

    • Rosemary says:

      Good morning Steven.
      as you would know workers compensation is an international industry the only thing that is different is the legislation behind the various international systems- the intent of workers compensation has been clouded over by the various factions and various providers within the industry over the many decades, and each alteration of the legislation has clouded the industry even more.

      Thank you for sharing the link to the ADR; I have had a copy of the ADR since it was first released on line, I used the concept of it when I was writing my concept for injured workers to enable them to regain their sense of self worth and understand that they have an injury but they are not their injury.

Comments are closed.