Creating Healthy Boundaries

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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.


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The State of Play in Tasmania


This article is based on my introduction to the presentation by Professor Alex Collie at the Pre-Symposium Seminar held in Hobart on 15 June 2017.

I have previously tried to explain the reasons for my interest in reform of compensation systems. I made an amateurish video to explain, but my wife was aghast that I was wearing what appeared to be a flannelette shirt in the video. That probably represents the Sharman background as farmers on Tasmania’s NW Coast!

As I tried to explain in the video, what I see in my current practice, on an almost daily basis, are workers whose recovery  is unnecessarily impeded by ‘the system’. While some have argued that Tasmania performs better than inter-state jurisdictions, I don’t think it matters too much about how we compare, rather any worker’s recovery unnecessarily affected by the system is a waste. That’s my concern.

I started my medical career in Tasmania in 1981, working at Tullah on Tasmania’s West Coast as the doctor for the Construction Workforce for the Pieman River Hydro-Electric Scheme. I vividly recall 3 fatalities during that period – a construction worker on a power station roof feel to his death, a loader operator in a sand quarry was buried alive when the wall of the quarry collapsed and a diver who died trying to retrieve valuable stainless metal gates used to close off the diversion tunnel from very deep within the cold and dark waters of the Murchison Dam.  During my later period of employment with the Hydro, I recall an incident causing multiple confined space deaths  at the Tungatinah Power Station in the Central Highlands. There were serious accidents that didn’t result in death and even some positive stories. I remember a seriously injured construction worker who went on the a prominent career in Human Resources in the Mining Industry as a result of his incapacity for ongoing physical employment.

What I have seen over the years is a reduction in these types of incidents with improvement in workplace safety generally, as reflected by falling incidence of workplace injury and associated compensation claims. I have however witnessed an increasing problem with chronic pain and secondary psychological consequences resulting in long-term disability following work injuries. Most of these cases end up receiving income support from Centrelink.

The overall trend in claims management has been a tougher approach. I recall the days when the Tasmanian Government Insurnace Office (TGIO) operated in Tasmania and acted as the insurer for the Hydro Workforce. There was sense from the claims personnel of doing what was right for the greater good, not just the financial benefit of the insurer they worked for. That ethos has all but disappeared. In the late 1980’s there was enthusiasm for the new concept of ‘workplace rehabilitation’ and I have a certain nostalgia for a generally positive and co-operative approach to help injured workers back to work at that time.

In recent years, I have become ‘politically’ involved because of my observations about escalating adversarialism and worsening claims outcomes from a medical and rehabilitation perspective. My observation might reflect the change in the work I undertake. I have changed from a role as company doctor involved in strategies for both prevention and rehabilitation through to my current role where I see the worst end of the compensation system – the litigated, controversial and long-term cases of incapacity.

An alternative explanation is that the apparent deterioration in our systems is due to increasing numbers of people with age-related and degenerative disorders being managed through our compensation systems where they don’t really belong. Or perhaps the change results from increased focus on financial outcomes and scheme viability. I can’t answer that, only guess. The evidence might provide some clues.

When I started talking to other practitioners about these issues, I became aware there were similar concerns amongst a variety of medical, allied health and rehabilitation practitioners, both in general medical and rehabilitation practice and the specialities that become involved in long-term compensation cases – pain physicians, clinical psychologists, rehabilitation physicians, orthopaedic & spinal surgeons, and psychiatrists.

Many doctors tell me they only get involved in workers compensation reluctantly and in some fields it is difficult to get a doctor prepared do see a workers compensation case at all.

The other significant development in recent years has been the apparent exponential growth in research in the field of Compensation Health.

The RACP/AFOM document “Compensable Injuries and Health Outcomes” released in 2001 stated:

There is good evidence to suggest that people who are injured and claim compensation for that injury have poorer health outcomes than people who suffer similar injuries but are not involved in the compensation process”


“However, research into causes of poor health outcomes for these people is fragmentary and inconclusive. Not enough is known of the effects of different types of compensation schemes or different methods of management of cases (by all practitioners involved) to allow the development of a  ‘best practice’ model. 

Any attempt to ‘reform’ the compensation system(s) must be informed by further rigorous research”

Since that time there have been organisations set up dedicated to research in this field e.g. ISCRR (Victorian-based) and the Recover Injury Research Centre (Qld Based).

When I was involved in putting forward ideas about how to improve the system, there was fierce resistance, initially from the insurers. I encountered this personally when I made a presentation a few years ago to the Private Insurers Group on behalf of the AMA.  Luckily that initially hostile reception has led to processes being put in place that have allowed constructive ongoing communication to occur between doctors and insurers.

When the same ideas were put to WorkCover as the regulator, it was questioned whether there was indeed any problem at all. WorkCover drew attention to Tasmania’s performance relative to mainland jurisdictions with the conclusion that Tasmania sits at the top of the “League Table” as follows:

  • the lowest proportion of compensated time loss payments (31% off work at 3 months in a 2010 ISCRR study)
  • According to the SafeWork Australia RTW survey, Tasmania achieves a 92% “Return to Work Rate” and 86% “Current RTW Rate”

This data has been questioned as to whether it accurately reflects health outcomes within compensation systems. Whether inter-jurisdictional compaisons can be made using this data has also been questioned, as follows:

  • Much of the data comes from insurers. Time loss data reflects time off where compensation was paid and doesn’t reflect actual recovery times (one researcher has suggested this approach underestimates time off by between a factor of 1 and 7 at one year post claim)
  • The SafeWork Australia RTW survey captures data about whether a worker has participated in any type of RTW programme at a defined point during the course of their injury, not their capacity to return to pre-injury or even full-time alternative employment
  • It is not valid to compare performance between jurisdictions because of the very significant difference between the way in which each system operates

There does seem to be agreement though that, if there was a problem, it is only 5-10% of cases managed through the workers compensation system. The majority of straightforward cases do well. Like in most systems though, it is the complex 5-10% of cases that incur the majority of the costs, both financial and health-wise.

WorkCover have publicised the results of the RTW survey and highlighted that Tasmania is performing well:

For a meaningful debate about the performance of our workers compensation system we need facts and evidence, not just speculation and opinion.

I asked Alex Collie, as former CEO of ISCRR and now Director of the Insurance Work and Health Group at Monash University about evidence about the following matters:

  • How do you measure the performance of compensation systems?
  • Can you compare different jurisdictions in relation to performance?
  • Are doctors withdrawing?
  • What does the existing evidence base tell us about
    • The Policy Environment and how our policy settings affect worker outcomes
    • How interactions between doctors, insurers & employers in injury schemes affect worker outcomes

My personal interpretation of the evidence I had seen was that there is a need for major reform of how Governments should manage “work disability”, including workers compensation. There is enormous waste and “collateral damage” to workers health from liability assessment processes. Resources expended on determining which system injuries affecting work capacity belong within, is a waste within our financially strapped health care system. Tasmania at present is unfortunately at the forefront with extreme pressure on its Public Hospital System. My presentation at the main TAVRP Symposium “The Dark Side of Rehab” on 16 June 2017, focused on that waste.

A link to my summary of Professor’s Collie’s responses to my queries and some of the other key presentations at the TAVRP Symposium is provided below:

TAVRP Symposium Evidence Summary

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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.


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Debate about Workers Compensation – Moves to Mid-Winter Hobart!

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At the time of the winter solstice Hobart is an exciting place thanks to David Walsh’s MONA with the DARK MOFO and Winter Feast Events. There are challenging events like the nude swim in the River Derwent and entertainment and art events that attract people from all over the globe.

This year there will also be a stimulating series of events relating to the normally dry subject of Compensation Systems and Rehabilitation / Return to Work.

The local professional association of rehabilitation providers, the Tasmanian Association of Vocational Rehabilitation Providers (TAVRP) has organised a Symposium – “The Dark Side of Rehab” with a quality line-up of speakers:

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Here is the Programme

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In association with that event, there will be a number of other events including a Pre Symposium Seminar organised by Hobart Occupational Medicine with Professor Alex Collie presenting a summary of research about compensation health and Post- symposium workshops including a session from the WorkCover Guy, Mark Stipic about overcoming ambivalence  by employers to RTW.

There will also be Injured Worker’s Forum about the need for additional support and representation for injured workers run by Rosemary McKenzie Ferguson from the SA-based Work Injured Resource Connection. Here is the Programme.


More information about these events will be posted soon.

I look forward to meeting you in Hobart.

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Choosing Wisely – Request for comments

I have become aware that the option of making comments on this article is no longer available.

Choosing Wisely was published recently and I was expecting some feedback from small business on this matter.

You can now comment below.

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Choosing Wisely – Workers Compensation Insurance for Small Business


Let’s forget momentarily about the effect of compensation systems on health outcomes. Rather, lets consider the position of a small employer taking out workers compensation insurance in Tasmania i.e. a small business perspective. There is a requirement for such insurance, but how does the business make a choice between the various licensed insurers?

Usually small business use a broking firm or agent to advise them about insurance matters, but how much can your broker tell you?

Some employers, I hope most, would want an insurer that helps them look after their injured workers, not just the cheapest possible premium to meet their obligation to comply with the law.


As a doctor working in the field, I am aware of the different approaches by the various insurers but, apart from insurance premium information, there is no other readily available information to help a small business choose their insurer, unless they have experience with claims to judge for themselves.

I have my own “League Table” of the various insurers based on my experience in dealing with those insurers as a doctor looking after injured workers. Interestingly my own table is quite similar to the ratings of other doctors who work in similar roles and the workplace rehabilitation providers who are prepared to share their own personal views on this subject.

I also have experience from discussions with insurers about communication protocols between my practice and those insurers. There is a wide divergence between insurers about how they are prepared to communicate with doctors. To me, this reflects on the willingness of the insurer to engage and participate in a team process to assist recovery and return to work. Some insurers behave in a way which suggests that believe they should have ultimate control over all aspects of management of the case, including which practitioners provide treatment, the scope of practitioner treatment and management of the worker’s rehabilitation. While the insurers in Tasmania can ultimately be financially responsible for associated costs, I believe there needs to be cooperation and respect for the role of others in the process, whose responsibility is to the welfare of their patients.

In my own practice we have introduced Adverse Event Reporting. Over the last 12 months we have flagged about one adverse event each month. Of the 11 events, 6 occurred with the State Service Scheme, 2 with Allianz Insurance and a single event for Comcare, GIO Insurance and a self-insurer. Most interestingly, the category of event that predominated were issues relating to management of the claim (5 occurrences) compared to 4 occurrences relating primarily to the workplace and the remaining 2 occurrences relating to rehabilitation issues and medical complications. The consequences of the events ranged from minor setbacks to the workers mental health through to significant periods of incapacity for work and even extended psychiatric hospital admission. Luckily there were no suicides in this small group. While the numbers are small and the sample from this practice is probably significantly biased, it does provide a glimpse into the operation of workers compensation systems in Tasmania.

If such reporting was adopted more widely, useful information would be available to all scheme participants.


In New South Wales, the Workers Compensation Independent Review Office (WIRO), now publishes a range of information in their regular WIRO Solutions Brief, including a breakdown of complaints by Insurer. The table below from December 2016 illustrates the type of information publicly available in New South Wales.


NSW WC Data Dec 2016 – Source WIRO Solutions Bulletin February 2017


In the wake of public concerns about the Life Insurance industry, the Australian Securities and Investment Commission (ASIC) prepared a report in late 2016, Life insurance claims: An industry review that detailed declined claim rates and claim outcome rates for a range of insurance products.

The most marked variation in rates between insurers occurred with Total and Permanent Disability (TPD) claims as illustrated by the table below.

screen-shot-2017-02-12-at-8-03-18-pmCOMPETITION PRINCIPLES

An important market principle is that consumers, in this case employers, can make an informed choice about how they support their workers who are injured in the course of their work. It should not simply be a choice based on price, but take into account the employer’s approach to human resource management.

At present only limited information is publicly available about the approaches taken by various insurers to managing claims from injured workers. The cheapest premium might save money up front, but consideration also needs to be to the less obvious and long term costs associated with an aggressive approach by their insurer in disputing claims or complicating access to medical and rehabilitation management.


WorkCover Tasmania publishes data about scheme performance. In the Scheme Review to 30 June 2016, there is separate analysis of data for the Tasmanian State Service, Self-Insurers and Private Licensed Insurers, but it would help employers, especially small employers without the experience of previous claims, to make an informed choice if scheme performance data was broken down further, separating out the private insurers. The insurers provide the data, so I wouldn’t expect that to be too difficult. It is already occurring in other jurisdictions.

Introduction of new measures of actual health outcomes and adverse events could also be considered, again broken down by insurer.

Perhaps Worker Assist could provide some data as well?

The measures would help small business CHOOSE WISELY in relation to important aspects of human resource management, the health and wellbeing of their employees injured at work.

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Tendentious – What Does that Mean?


@Bafflegab1 on Twitter describes himself:

‘Long-time critic of Ontario auto insurers; their defence lawyers; and their hired gun medico-legal assessors. Also critical of plaintiff bar lethargy.’

In a recent tweet, he referred to a judgement in the Canadian Superior Court of Justice from 2004 that I had not previously seen.

The judgement is of interest in that it considers the issue of an IME organisation that sought damages from The Canadian Broadcasting Corporation (CBC) in relation to a programme “Prove it if You Can” broadcast by CBC that had been derogatory about the conduct of the IME organisation – AssessMed.

Justice Paul Rivard ruled that the assertions made in the programme were objectively fair and there was no spite, ill will, any direct or ulterior motive on the part of the CBC by broadcasting the programme.  He states:

“I have already indicated that the comments in the program were based on true facts. The defendants honestly believed in the truth of the comments. The comments were based on facts upon which a person could honestly hold the opinions expressed. In such circumstances, I conclude the comments were objectively fair”

The judge calculated damages that might apply if his judgement was later found to be in error, however this ruling was that no damages were payable on the basis that CBC had made fair comment.

This brings me to the word ‘tendentious’, a word I had no knowledge of before reading this  judgement.

According to the Cambridge Dictionary this means:

“(of speech or writing) expressing or supporting a particular opinion that many other people disagree with”

Justice Rivard used the term tendentious in the context of describing the approach of Dr Richman, the director and Chief Medical Officer of AssessMed. Dr Richman had prepared an article “Manufacturing Disability” which to Justice Rivard revealed a clear and strong view held by Dr Richman that the majority of claimants studied at AssessMed wilfully misrepresented their situation, and that they did so often with assistance of their health care providers. His judgement includes the following:

‘While Dr. Richman’s opinions find some support in medical literature, they are considered too skeptical by others. Dr. Richman’s research in this area was based on discussions with assessors at AssessMed but not on any empirical or validated study. In my view, it reflected a tendentious approach to assessments, which subjected AssessMed to being viewed as partial to insurers.’

I have learnt a new word and am also aware of a judicial opinion rejecting a claim for damages by an IME assessment firm in Canada against Canada’s national broadcaster after it aired a programme that supported the notion that IME assessors can be biased in their dealings with motor vehicle accident claimants..

Are there any parallels in Australia?

Here is a link to the judgement for those interested:

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