I recently had a discussion with Greg McCarthy, until recently, CEO of RTWSA (South Australia’s Workers Compensation Authority). Greg explained to me some of the thinking behind the revamped South Australian workers compensation scheme introduced under his stewardship.
While I would accept that it is a political decision to determine the extent of coverage provided by compensation schemes, there is one concept adopted by the current SA model that has relevance to health outcomes. That is the concept of legislated ‘hard’ boundaries.
The limits to an insurer’s liability to provide funding can be ‘soft’ or ‘hard’. A ‘hard’ boundary is one where there is little or no scope for challenge. Such boundaries include cut-off dates, whether for period of income support or age restrictions on claimants, and ceilings on amounts payable. The current SA scheme limits income replacement to 2 years. Even the best lawyer can’t argue an entitlement beyond a cut-off date!
An example of a ‘soft’ boundary is the provision in Tasmanian Worker’s Compensation Legislation (and most worker’s compensation schemes) to limit liability for psychological injuries. The Tasmanian provisions are intended to save employers from liability where a psychological injury results from a reasonable employment decision. These include psychological injury arising from disciplinary action for poor employee performance or the psychological consequences for an employee missing out on a promotion.
In my experience, the reality is that the existance of these psychological injury exclusions leads to an environment where a very high proportion of psychological injury claims in the Tasmanian Scheme are disputed. There is significant ‘collateral’ damage from this provision for workers who have valid claims, but are rejected by the initial claims management processes.
Another ‘soft’ boundary is the stipulation that ‘reasonable’ medical expenses are covered by a compensation scheme. There can be protracted and expensive argument about whether some significant medical procedures, such as spinal fusion or neurostimulator implants are reasonable expenses. Sometimes the legal costs of the ensuing argument is more expensive than the procedure itself! At the GP management level, there can be debate or delays in proceeding with relatively routine medical investigations or treatment, causing delay and frustration.
The so-called ‘Narrative’ test for Victorian workers to gain access to Common Law (as an alternative to meeting the relatively high WPI criterion for access), is another example of a ‘soft’ boundary that has resulted in a burgeoning video surveillance industry to provide evidence to satisfy the legal system in its attempts to adjudicate on access to Common Law.
Although I have not had direct personal experience, I understand that legislated requirements to review work capacity in some Australian Compensation Schemes act as ‘soft’ boundaries. These have resulted in considerable waste of sources to settle the arguments that ensued from these requirements.
The negative effects on recovery and the psychological impact from the delay to resolve issues at these ‘soft’ boundaries need to be factored into the equation to optimise scheme design. What might be a best-practice legal process to negotiate a ‘soft’ boundary, through its inherent adversarialism, will result in a direct financial cost, and perhaps more importantly, often cause a delay that will impact of the health and rehabilitation outcome. This can undermine the intention of the scheme to assist recovery and return to work.
A ‘hard’ boundary alternative to liability for medical treatment, might be to specify limits to spending on treatment to a $ figure per case or having a blanket exclusion for questionable expensive medical procedures. The debate about what is reasonable is held at a ‘system’ level, rather than being worked at on a ‘case by case’ basis where individual claimants are directly impacted.
In my experience talking to patients under my care, the existence of a ‘hard’ boundary can be helpful in highlighting options available to progress treatment and recovery and remove the delay, cost and stress of legal involvement to pursue an uncertain outcome.
AN IMPORTANT CONSIDERATION FOR COMPENSATION SCHEME DESIGNERS!
Insult and Injury 
Peter,
There are few psyche claims diputed where there is a hard diagnosis. GPs get 47% of psyche diagnosis right. The other 52% are misdiagnosed. If sll GPs referred suspect psyche claimants to a psychiatrist at first presentation there wouldbe fewer disputes.
Thanks Richard,
The issue of psychiatric or psychological diagnosis is a vexed one. See the recent article in The Conversation (http://theconversation.com/all-tip-no-iceberg-a-new-way-to-think-about-mental-illness-80756) on this topic.
The conclusion to that article reads:
“The network approach also has a strong message for all of us who care about mental health and illness. We should abandon the last vestiges of our belief that mental disorders are best seen as medical diseases. The symptoms of depression, PTSD, or social anxiety don’t point to an underlying disorder. They are the disorder.”
Attributing causation is a different process to making a diagnosis, even if we accept the importance of diagnosis. I suspect you are linking a clear psychiatric diagnosis related to a specific workplace exposure (PTSD for example) as an example of a claim that might be readily accepted. The disputation of the majority of psychology injury claims might be a positive for the financial viability of our compensation schemes, but that doesn’t address the burgeoning problem of psychological ill-health confronting our working population. The approach you refer to only addresses a small proportion of the problem facing industry and the community at large.
Prevention strategies for psychological ill-health are important, but there needs to be better mechanisms for supporting workers than just letting the few with clear cut psychological ‘injury’ into a system to provide for their treatment and rehabilitation.
My view is that we have a flawed compensation system where it excludes the majority of those who need psychological support and care (and aggravates their condition in the process).
There are also real practical issues with your recommendation for psychiatric review before claim lodgement. It can take months to get to see a psychiatrist. What about the effects of that delay? Early intervention is everything!
I am not sure what standard you are using when you quote statistics about misdiagnosis by GP’s. Perhaps your ‘Gold Standard’ is what insurers can afford to accept without fundamental resign of our systems?
I look forward to your clarification.
At the time when Mr McCarty was stewarding WorkCover SA I was putting food on the table of injured workers.
International research tells us that 25% of injured workers live on or below the poverty line, I was working with the social providers to gain access to assistance in what ever manner was required, whether it be to have electricity turned back on, or waiving school fees or any manner of issues.
In the entire time Mr McCarthy was stewarding WorkCover SA I had 2 conversations with him- both of them at my instigation. .
Far too much attention has been paid to the financial impact of a workplace injury on the claims agents with scant regard to the impact the injury has on the injured worker and the wider community.
In the 20 plus years I have been a Community Advocate for injured workers I can hand on heart say I have met less than 10 people who did not want to go back to work, the others simply could not get the assistance they required to reshape their lives. Even those with a psychological claim simply wanted to be listened to and understood and then supported as they returned to work.
All too often an injured worker starts out with a claim for a physical injury which rolls over into a secondary claim for stress and anxiety.
Again there is myriads of international research that shows that the stress and anxiety does not come from the original injury but from the workers compensation industry.
Thanks Rosemary
Your observations are correct.
The purpose on my article was not to suggest where the boundaries should lie, but to illustrate the waste and problems of ‘soft boundaries’. You can have a very ‘generous’ scheme, but still hard boundaries.
I agree that no scheme should leave an injured worker in poverty. The resources of the scheme should primarily be focused on income support, provision of timely treatment and support for rehabilitation.
Peter when low income workers are injured they have no reserves to fall back on, the impact of a workplace injury all too oft traps them into a poverty cycle because the system as it is now fails to offer different options or opportunities for them to explore.