I welcome the recently announced review of Tasmania’s workers compensation scheme. It is long overdue.

What is wrong with the current scheme?

Like workers compensation schemes in every Australian jurisdiction, Tasmania’s scheme combines two fundamentally different functions:

• treatment, recovery and rehabilitation—essentially, health care; and
• income support and compensation for permanent impairment—similar to coverage provided by income protection and Total & Permanent Disability [TPD] insurance.

Bringing these functions together creates an inherently complex system. That complexity is compounded by legislated criteria governing entry to and exit from the scheme: whether an injury or disease is accepted as work-related; the extent of any incapacity, income loss or permanent impairment; and when entitlement to particular benefits should end.

The scheme also interacts with Medicare, private health insurance, social security and various superannuation arrangements creating a difficult ‘beast’ to manage.

Our system is an uncomfortable union of systems that do not sit naturally together 

At the 2025 Australian Insurance Law Association [AILA] Masterclass, I drew attention to an apparent imbalance. Relatively few doctors choose to work directly with injured workers or in the prevention of work-related injury and disease. By comparison, many professionals—including some medical specialists working predominantly as independent medical examiners—are engaged in managing and adjudicating claims.

My experience of workers compensation professional development events reinforces this impression. Claims management appears to be ‘big business’, judging by the topics presented and the prominence and sophistication of the marketing exhibits. Independent medical examination and workplace rehabilitation providers are highly visible, with large corporate providers dominating the sector.

By contrast, treatment services are rarely promoted at these events—or elsewhere. General practitioners, despite their critical role in treating and certifying injured workers, are seldom represented. Providing treatment for injured workers is apparently not ‘big business’.

A plaintiff lawyer recently told me that his firm could not keep up with demand from injured workers seeking assistance. Many prospective clients had to be turned away. He suggested there is a need for greater numbers of personal injury lawyers.

What do these observations tell us about the system? Are we investing too much in managing and contesting claims, while undervaluing treatment and rehabilitation? Is this the best use of resources?

Medical practitioner engagement

My experience over the past 35 years offers a perspective.

The Tasmanian medical workforce providing treatment to injured workers appears increasingly disengaged from workers compensation, despite various strategies instigated by WorkCover over the last 10 years. The Medical Advisory & Mentoring Scheme [MAMS], attempts at engagement through a Medical Advisory Panel [MAP], and a Scheme Medical Advisor role have come and gone without meaningful impact.

General practitioners [GPs]are the key treatment service providers, but are in short supply given the increasing demands on our health care systems. Increasingly, doctors are working in corporate practices where business pressures tend to favour shorter consultations, further limiting engagement.

Despite this reality, GPs are expected to act as gatekeepers to an increasingly complex workers compensation system. In addition to providing health care, they must certify work capacity, and provide sufficiently specific diagnoses and treatment plans to satisfy statutory and administrative requirements

These additional responsibilities take time, require judgement and may expose practitioners to administrative demands well beyond ordinary clinical care. It is unsurprising that many choose not to engage.

Claims management practices

The adversarial nature of claims management is a significant disincentive to medical practitioner participation.

Decisions about funding medical treatment may be made by claims staff without clinical qualifications. Whatever the quality or intentions of the individuals involved, this creates the potential for delay, misunderstanding and interference with treatment plans.

Medical practice is also increasingly affected by claims-management requirements: repeated report requests, demands for access to medical records and administrative processes intended to support decisions about liability and entitlement. Fees for consultations and reports may not adequately reflect the practitioner’s time, skill and administrative burden, while obtaining payment can itself require further effort.

Claims-management protocols increasingly rely on independent medical examinations early in the life of a claim. Early scrutiny may sometimes be justified, but routine recourse to an independent examination can foster adversarialism, delay treatment and undermine trust between the worker, treating practitioner, employer and insurer.

Different considerations apply when a claim is approaching closure. Nevertheless, the cumulative effect on treating-practitioner engagement may be much the same.

Such protocols provide reassurance to those responsible for scheme costs by instilling a sense that everything possible is being done to prevent unnecessary treatment, inappropriate claims or fraud, but at what cost?

The true cost is not limited to the fee for an independent medical report. It may also include delayed treatment, practitioner disengagement, increased conflict and poorer recovery in an already adversarial psychosocial environment.

Many other factors clearly affect the scheme’s viability. These include the growth in psychological injury claims, an ageing and increasingly unhealthy workforce, emerging workplace risks and more complex employment arrangements. Nevertheless, we should ask a basic question: does the disproportionate use of resources for claims management—at the expense of treatment and rehabilitation—ultimately increase costs and produce poorer outcomes?

Some possible directions for reform

Is it time to allow doctors—and the allied health practitioners working with them—to concentrate on treatment, with less reliance on them for repeated certification and reporting beyond an initial account of the injury and its consequences?

Incompatible functions could be separated – Health Care provision managed separately to Income Support and Compensation

Could workplace rehabilitation providers, who already have expertise in assessing work capacity and understanding of workplaces, take on a greater role? At the risk of incurring the wrath of some medical colleagues, I suggest that suitably qualified and appropriately governed providers might undertake routine work-capacity certification.

Should Rehabilitation Providers take on certification?

Could medical treatment approvals be administered through a system more closely resembling private health insurance—separate from decisions about liability, income support and permanent compensation?

An improved system that doesn’t hold up medical treatment is needed

The answer is not simply to employ more lawyers to deal with disputes. It is to design a scheme that facilitates early treatment and effective rehabilitation and reduces the circumstances in which disputes arise—at both the entry and exit points.

What do we need to design a better system?

The ideas above arise from lived professional experience. Experience can identify important questions, but sound reform requires data.

We need more than the expenditure figures published in the annual reports of WorkCover Tasmania and the Tasmanian Risk Management Fund or the results of the annual RTW survey. We need a coherent picture of how the present system operates as an economic model and how its resources are distributed.

The review should ask:

• Who benefits from existing expenditure?
• Who does not benefit—but should?
• Are injured workers receiving the benefits the scheme was designed to provide?
• How much expenditure reaches treatment and rehabilitation?
• How much is spent on claims administration, legal services and independent medical examinations?
• How much leaves Tasmania as corporate profit?
• Do service providers contribute to the scheme’s future capability and sustainability?
• How much is consumed by processes that do not improve health, return-to-work or fairness?

In short, we need to understand the money trail, the outcomes it purchases and the interests that the current arrangements serve.

Insurers underwriting the liabilities of the private scheme are entitled to earn a reasonable return for accepting and managing risk. However, the review should consider whether the scheme also enables excessive profits to be extracted by service providers without a corresponding contribution to better outcomes or the scheme’s future capacity.

I do not presently have the data to determine whether this is occurring. That is precisely why a transparent analysis should form part of the review.

An important element of reform should be a reassessment of the value placed on treatment and rehabilitation. These services should be properly funded and respected. Better treatment and rehabilitation may, in turn, reduce reliance on legal and independent medical services that add cost without consistently adding value.

Scheme Review Governance

Begin with purpose

At the heart of any workers compensation scheme must be a shared understanding of its purpose.

Is the scheme intended to provide temporary support, with other social-support systems assuming responsibility after a defined period (usually 2 years), as occurs in some jurisdictions? Or is it intended to meet all the long-term consequences of work-related injury and disease?

Should it cover long-latency occupational diseases and psychological conditions within the general scheme, or should some conditions be managed through separate arrangements, as occurs with asbestos-related disease?

These questions should be answered explicitly. Without a clearly defined purpose, it will be difficult to judge whether the scheme is successful or to determine what reforms are appropriate.

Consultation—and the risk of too many cooks

Broad stakeholder consultation is essential, but its timing matters.

Consulting widely before clarifying the principles, objectives and scope of the review risks producing a collection of competing demands rather than coherent reform. The result may be a compromise that satisfies established interests but fails to address the scheme’s underlying problems.

Tasmania first needs a small group of thoughtful, independent people capable of defining the central objectives and principles. They should represent the long-term interests of Tasmania—its workers, employers and broader community—rather than any one stakeholder group.

Wider consultation can then test those principles, identify practical consequences and help develop a workable scheme.

Final thoughts

Let us develop a workers compensation scheme, informed by data and economic modelling, that:

• values the prevention of work-related injury and ill health;
• supports early, effective treatment and rehabilitation;
• integrates sensibly with other health and income-support systems;
• makes good use of technology;
• reduces unnecessary conflict and administrative burden; and
• invests its resources locally for the long-term benefit of Tasmanians.

Let us not build a scheme that allows corporate or private-equity interests to benefit at the expense of injured workers and the businesses that employ them.

Resources intended to prevent and manage work-related injury and disease should produce better outcomes for Tasmania—not simply be exported as profits to entities outside the state.

Already I have heard some positive suggestions from the legal profession about how the impact of claims acceptance processes can be reduced during the initial lodgement period for psychological injury claims.

Let’s get the ‘thought leaders’ together soon.

If Tasmania is going to review its workers compensation scheme, let us do it properly—and let us do it for Tasmania.