Let me Explain! – the purpose of my blog

 

Let me explain

Recently I have received criticism that I am blaming the system, specifically the insurers/claims agents, for poor outcomes and not directing any criticisms towards other parties, particularly the medical profession (or injured workers themselves for that matter).

The purpose of this blog is to highlight an issue of personal concern to me i.e. that there is unnecessary collateral damage to injured worker’s health from the system that manages claims. This has come about through my experiences as a doctor on the ‘front-line’ following the progress of injured workers in the local compensation systems within which I work.

It is unsurprising, if insurers or claims agents are responsible for administering the system, that my blog might be seen as critical of them. While I have been critical of some practices by insurers and claims agents, my view is that these practices are encouraged by the system itself. My intention is to be constructive with a focus on system redesign, rather than the ‘blame game’.

At present, I also have the role as Convenor of the Tasmanian AMA’s Workers Compensation Reform Committee. I also convene the meetings between that committee and representatives of the insurers in Tasmania (The AMA – Insurer Forum). While there is an overlap in the issues between those of personal concern to me, as expressed in my Blog and those of the medical profession more generally (as represented by AMA Tasmania), the AMA Committee has a much broader focus.

The title of the AMA presentation to insurers about issues of concern to the medical profession was ‘A Question of Balance’. There has been as much recognition of the need to change the approach by doctors to managing work-related injury as changes by insurers. I believe those who are informed within the medical profession do recognise the need to have greater input into the workers compensation system, with doctors taking more responsibility for outcomes.

This blog does focus on a narrower range of issues that I think are relatively misunderstood, but I do not suggest that there are not a broader range of factors relevant to the effectiveness of our compensation systems.

This blog does not represent the views of the AMA, just my own!

 

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Prognosis or Diagnosis – that is the REAL question!

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BMC Medicine recently published an open access “Opinion” entitled:

The science of clinical practice: disease diagnosis or patient prognosis? Evidence about “what is likely to happen’ should shape clinical practice.

This question is highly relevant in the workers compensation context. The following statement in the paper could not be more relevant to work-related injury:

‘The multiplicity of biological, clinical, and social factors that inform the likelihood of an individual’s future outcome challenges the idea that prognosis and treatment selection are exclusively determined by diagnosis’

and, specifically related to back pain:

‘Evidence that clinicians and patients can integrate disease-based explanation within a broader framework of prognosis is provided by back pain. Primary care practitioners undertake initial triage in a diagnostic framework to identify rare underlying conditions which have a poor immediate prognosis unless treated (e.g. cord compression from a tumour). Once these are excluded, the task diverts from diagnosis and considers the clinical problem as the risk of poor long-term outcomes (work loss, persistent pain). Activity limitation, psychological distress, and capacity to cope are used to classify people into prognostic categories that drive treatment decisions. The many at low risk of a poor outcome are managed without referral or investigation, whereas more intense care is targeted at those with poorer prognosis. This exemplifies the principle of ‘stratified care’. Use of this prognostic approach to select back pain patients for different treatment programmes was effective and cost-effective in a randomised controlled trial.’

The AMA Tasmania Workers Compensation Reform Committee has put forward the concept of a “Complex Case Management Model” which utilises the “stratified care” concept above.  This model relies heavily on the principles expounded in the paper referred to above and is supported by Committee recommendations to alter the information on certificates so that the doctor documents the prognosis as early as possible.

The principle of the “Complex Case Management Model” is:

‘…….. the doctor involved in the early stages of management of a work injury is empowered to consider prognostic factors and identify ‘complex’ cases at the earliest opportunity. The cases flagged as complex could be streamed into an alternative management pathway managed by a medical practitioner with enhanced skilled in “complex case management” ‘

The insurance industry in Tasmania has expressed interest in working with the medical profession to work out the detail about how such a system might work in practice.

The treating medical practitioner can consider prognosis taking into account biomedical and psychosocial factors. The employer and insurer could also contribute  to the identification of poor prognosis cases with information not available to the treating doctor that might impact on prognosis. The risk with this approach is that the insurer might respond by measures to avoid liability, rather that be prepared to put the necessary resources into those cases.

Further issues might arise if a referral to another practitioner for “complex case management” is seen to be contrary to the principle that the worker can choose their treating doctor. The solution is that the referral for “complex case management” be managed like any other referral within the medical system with the general practitioner conferring with their patient (the injured worker) about the choice of doctor. Problems are only likely to arise if there is interference by other parties in that choice.

While biomedical diagnosis remains important, the evidence suggests:

An informed assessment of prognosis is a key ingredient to considering resources necessary to improve health outcomes in our workers compensation systems.

Incorporating that concept into Workers Compensation System design should be carefully considered.

 

 

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Tassie Compo Payments – WorkCover’s Response

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Since I posted the article Tassie Compo Payments up! – Looking behind the figures!, I have been able to obtain comments from WorkCover Tasmania.

The only source of information they have is from the insurers, however WorkCover believes their figures are ‘reasonably accurate’.  They are not able to audit individual claims to check the accuracy of data and wouldn’t have the resources to do so in any case, but they do conduct some validation checks.

Further WorkCover have clarified that only the costs ‘claimed’ are reflected in the figures, so that a worker who incurs costs for treatment of a work-related injury or seeks legal advice and that is not covered by the insurer, the figures are not reflected in WorkCover figures.

What WorkCover Says

WorkCover confirmed ‘the average cost of medical benefits for 2013/14 was 5% higher than the previous year. Around $5,500’.

In relation to the increase in lump sum payments WorkCover advise:

‘It is difficult to interpret the increase in lump sum payments given these payments represent a combination of payments for future lost income and medical treatment in addition to payments for permanent impairment. The trend could indicate an increase in the desire to settle claims over long-term payment of compensation benefits or just reflect worsening outcomes and associated costs. Analysis of the components of these lump sum payments would be needed to interpret this increase.

The 2009 amendments to the Act brought in the two year rule for redemption payments. This saw lump sum payments fall from around $40M in 2009/10 to $35M in 2010/11 and 2011/12.

Since 2012/13 there has been a ‘catch-up’ phase where the two year waiting period for a number of claims has expired and claimants are now preceding with redemption payments, hence the increase in lump sum payment to $46M in 2012/13. This would also account for some of the increase in 2013/14.

In 2013/14 there was also the unique single large claim of $10M and a further $8M to number of other large common law claims settlements and redemptions over $1M. It is expected that lump sum payments will go back to ‘normal’ (around $46M) again for 2014/15.’

In relation to Legal and Investigation Costs, WorkCover states:

‘Legal and investigation costs of $13.4 million were up 17% in real terms in 2013/14. This follows increases of around 19% per annum in the years 2011/12 and 2012/13. We expect the increase legal and investigation costs is linked to the changes in lump sums following the 2009 amendments, reflecting both the initial slow down and subsequent catch-up in redemptions and, to a lesser extent, the increasing number of claims receiving multiple lump sums.

It is expected that legal and investigation costs will be around $14.0 million next year.’

In relation to the comments by Macky, WorkCover says:

‘The gist of what this Victorian lawyer is saying is correct, though not everything he says lines up exactly with our expense categories.

Prior to 1 July 2012 we used to only collect data on two types of expenses – legal expenses and investigation expenses. Here worker and insurer/employer payments were lumped together. Since July 2012 (and with the implementation of the new data system) we are able to split these categories up.

 The new payment categories are listed below.’

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‘We at WorkCover rely heavily on insurers allocating expenses to the correct category. It will hopefully allow us to see where these types of payments are going.

The graphs below show the breakdown of the payments for the past 2 years. It would seem that about a quarter of payments relate to the worker’s legals and the remaining split between the insurers legals and investigations.’

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What Conclusions Can We Draw?

To me it seems that while there are other explanations, and the answer is not clear, the data is consistent with increasing legal and investigation costs due to a more legalistic approach to claims management, even though legislative changes regarding lump sums might be driving some of the costs. There is however no ‘blow out’ in medical treatment expenses.

Whatever the cause, rising lump sum and legal/investigation expenses is a poor reflection on the health of the scheme.

 

 

 

 

 

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Are our compensation systems an occupational hazard?

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According to Wikipedia, ‘A hazard is a situation that poses a level of threat to life, health, property, or environment’ and, in relation to Workplace Health & Safety:

‘Although work provides many economic and other benefits, a wide array of workplace hazards also present risks to the health and safety of people at work. These include but are not limited to, “chemicals, biological agents, physical factors, adverse ergonomic conditions, allergens, a complex network of safety risks,” and a broad range of psychosocial risk factors.’

The publication “Compensable Injuries and Health Outcomes” published by the Australasian Faculty of Occupational Medicine/Royal Australasian College of Physicians (AFOM/RACP) in 2001 draws the following conclusions:

‘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’

and

‘Although most people who have compensable injuries recover well, a greater percentage of these people have poorer health outcomes than do those with similar but non-compensable injuries. There is sufficient good quality evidence to show this to be true, and significant agreement among practitioners in all relevant fields (medical, legal, insurance, government oversight bodies) to support the evidence and to suggest that a complex interaction of factors is responsible for this.’

In addition to individual factors that lead to susceptibility, the AFOM/RACP document lists some of the likely reasons for poorer health outcomes:

‘The initial response to claimants by insurers, the management of initial treatment not encouraging resumption of normal behaviours as far as possible or encouraging return to work or normal activities, the handling of case management by insurers, the handling of case management by treating doctors, including specialists and the number and type of medical examinations required by the insurers and by the claimant’s lawyers.

The effect of these appears to be twofold: to entrench illness behaviours and to prejudice the claimant further against the insurance company’

While in a later publication entitled the “Health Benefits of Work”, AFOM, (now the Australasian Faculty of Occupational & Environmental Medicine – AFOEM) concluded overall positive benefits from involvement in work. This publication balanced the previous emphasis on the negative aspects of work and has been widely used by occupational practitioners to support an emphasis on the value of return to work for injured workers.

There is no doubt in my mind that, while there are a range of health hazards associated with work, engagement in the workforce has  an overall beneficial effect on physical and psychological health. The important strategy is to identify hazards to health that occur in the workplace and manage them appropriately.

More recent research has confirmed that it is likely that some aspects of the claims management process are a significant contributor to the hazards from compensation systems. In my earlier blog article about research http://wp.me/p3L4Uy-2PI I discussed the lack of research, but there is now a growing evidence-base.

A recent article by Kilgour et al ‘Interactions between Injured Workers and Insurers in Workers Compensation Systems’  highlights all the issues familiar to doctors who treat patients in the WC system. http://t.co/gMO4lmtL2l

An important principle in workplace hazard management is the ‘hierarchy of controls’. The priority to manage any hazard is the eliminate or modify the hazard by ‘engineering’ means, so that the hazard is removed or its effects reduced. If that is not possible there is an accepted hierarchy of measures, including administrative controls to separate workers from the hazard and finally provision of ‘personal protective equipment’. A strategy based purely on treating injuries and rehabilitation is unacceptable.

It seems to me that, as currently constituted, our workers compensation system, can be a hazard, at least for some injured workers. Should not the same principles be applied to manage any risks associated with that hazard, in accordance with accepted WHS principles?

Some workers are more vulnerable to the effects of a hazard than others. The workers exposed to our workers compensation systems are those who have had already had a physical or psychological injury. Those vulnerable to injury for whatever reason are the ones exposed to the additional hazard of our compensation systems.

Can we apply the hierarchy of controls here?

An occupational physician colleague who works in the public sector recently suggested that compensation systems create too many additional problems and we might be better off without these systems altogether. While it is very doubtful that there would be many who would support such a radical move, it is useful to consider the alternative to a specific system to manage work-related injuries. Could funding for treatment for work injuries be carried by our Medicare and Private Health Insurance schemes? What impact would the decoupling of the cost of workplace injury from employers have on workplace health and safety programmes? How would our other systems that provide income support function, in the absence of a workers compensation system i.e. could employer sick leave systems or private income protection insurance schemes be extended,  or perhaps expand the government social security safety net to provide income support. I think not. Even if we did, I suspect we might substitute just another hazard for the one eliminated.

While we might not be able to eliminate the hazard, can we ‘engineer’ the system to make it safer? I think the answer is a resounding ‘YES’ once the risk is identified and we know what aspects of the system contribute to the hazard. Recent research is highlighting how we can better design our compensation systems to reduce the risks of secondary injury.

We cannot rely on the lower rungs of the hierarchy against hazards ladder i.e. ‘personal protective equipment’. While in the context of the hazards discussed here, an argument could be made for protecting workers by providing ‘resilience training’ or some similar strategy, this would be very impractical and I am very doubtful of any useful benefit.

It troubles me that some other IME doctors actually contribute to the hazard discussed here through their role as part of the claims management system. Rather than being part of the solution, they are part of the problem! Occupational Physicians are doctors with expertise in the identification and management of workplace hazards. The emphasis by doctors, particularly occupational physicians, should be on providing advice about hazard reduction.

Redesign of our workers’ compensation system to address the hazards is the way to go.

Yes, and occupational hazard management can be applied!

 

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More on Medical Panels

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The following article I prepared was published in the AMA Newsletter last year. The Supreme Court decision referred to in the article had highlighted some of the issues about the use of Medical Panels in Tasmania that deserved some commentary.

I thought there may be some wider interest in the article.

THE MERITS OF MEDICAL PANELS

A suitably convened panel of qualified and experienced doctors can assist with the resolution of disputes about medical issues in workers compensation matters (or other legal jurisdictions). This approach is more closely aligned to normal medical decision-making and has the potential to avoid the ‘collateral’ damage to injured workers from the stresses and delays associated with traditional medico legal decision-making where a legal practitioner decides the merits of opposing independent medical opinions.

In an article published on my personal blog earlier this year, the benefits of Medical Panels are discussed. Here is a link to that article PANELS PANELS PANELS OI! OI! OI!

One of the debates underway at present is whether a small state like Tasmania can support a fully functioning Medical Panel system. Although Tasmanian Workers Compensation Legislation makes provision for Medical Panels very few panels have been convened since 1988 when the Workers Rehabilitation and Compensation Act first made provision for panels (initially referred to as Medical Boards).

On the other hand, the Medical Panel formed to make decisions about compensation under the Tasmanian asbestos compensation legislation has seemed to work well with local respiratory physicians successfully  the panel and apparently avoiding issues of conflict of interest. Although there was provision to use panelists from interstate this has apparently not been necessary.

Section 50 of the current Workers Rehabilitation and Compensation Act states:

‘(1) The Tribunal is to keep and maintain a register of suitably qualified medical practitioners who are willing to be selected on a medical panel.

(2) On the referral of a medical question to a medical panel, the Tribunal is to select 2 or 3 practitioners, at least one of whom is to be a general practitioner, from the register to form the medical panel.

(3) At least one of the medical practitioners is to have particular expertise in the medical field to which the question relates.

(4) The Tribunal must appoint one of the medical practitioners to be chairperson of the panel.

(5) The Tribunal must not nominate a medical practitioner to be a member of a medical panel for the purpose of obtaining a determination in response to a medical question in respect of a worker if the medical practitioner –

(a) has, in any capacity other than as a member of a medical panel, been involved in the examination or treatment of, or has provided medical services (including an assessment of impairment) to, the worker in relation to the injury in respect of which the medical advice or opinion is sought by the Tribunal; or

(b) informs the Tribunal that, for any reason, the medical practitioner’s appointment to the medical panel could give rise to a conflict of interest.

(6) The Tribunal is to ensure that the medical panel is provided with any information in its possession likely to assist in determining the medical question.’

A recent decision in the Supreme Court of Tasmania  – State of Tasmania v Treloar [2014] TASSC 51 (19 September 2014) has illustrated some of the issues with the appointment of Medical Panels in Tasmania.

Commentary in Curwood’s casenotes states:

 WorkCover Tasmania medical accreditation not required for assessments of permanent impairment – State of Tasmania v Treloar [2014] TASSC 51 

‘The Chief Commissioner initially referred the matter to a medical panel, but before nominating the panel members changed his mind and determined that the Tribunal was unable to refer the question to a medical panel.  Under s 50 of the Act, the Tribunal is required to select members from a register to form a medical panel, and must include at least one general practitioner.  The Chief Commissioner considered none of the general practitioners had psychiatric expertise, nor were they qualified ‘medical assessors’, and accordingly, could not assess impairment of a psychiatric condition.  As such, a medical panel could not be formed, and the Chief Commissioner referred the matter to an arbitrated hearing instead.’

However the Supreme Court found that the Commissioner had erred:

‘His Honour held that the Chief Commissioner had erred in law in determining that the assessment of impairment could not be referred to a medical panel.  According to his Honour, it was clear from the wording of s 50 of the Act that it was not necessary for every member of a medical panel to have particular expertise in a relevant medical field, and that a general practitioner could be elected onto a medical panel without being accredited for psychiatric assessments of permanent impairment.  Section 50(3) of the Act required that only one of the medical panel members had a particular expertise.’

The decision has implications for legal practice:

  • Members of a medical panel pursuant to s 50 of the Workers Rehabilitation and Compensation Act 1988 (Tas) (theAct) who are assessing permanent impairment are not required to be accredited medical assessors by the Tasmanian WorkCover Board.  All that is required is that at least one member is a general practitioner, and at least one member holds particular expertise in the medical field referred to.
  • The system of appointment of medical practitioners making up the members of a medical panel pursuant to s 50 of the Act, is independent from the Tasmanian WorkCover Board’s system of accreditation for medical assessors pursuant to s 3 of the Act.
  • The Workers Rehabilitation and Compensation Tribunal of Tasmania (the Tribunal), is in a better position than the Court to determine whether medical questions should be referred to a medical panel, given the Tribunal’s knowledge of the expertise held by medical practitioners on the register.

 From the perspective of optimum medical decision-making, the Tribunal’s reluctance to put together a Medical Panel and the Supreme Court’s decision does illustrate the difficulties with resourcing medical panels with suitably qualified and independent practitioners in a state like Tasmania. While the legal decision is that Medical Panel members do not need to be accredited by WorkCover Tasmania, it is clearly desirable that panelists should have qualifications and experience relevant to the task they are being asked to perform. Impairment assessment, for example, is a complex area requiring training and accreditation to be able to properly provide opinions. The Commissioner’s decision to not form a panel was understandable in the circumstances even though a higher court ruled otherwise with the clarification, that only one member of a two or three member Medical Panel needs to have the necessary qualifications and experience.

The fundamental underlying problem with creating a system of effective Medical Panels is that there are relatively small numbers of appropriately qualified doctors in the pool of practitioners willing to serve on panels from which to choose, combined with potential for conflict of interest for those doctors that had already been involved in treatment or providing independent assessments.

Apart from the relatively small numbers of medical practitioners in Tasmania, a likely reason for the dearth of interested practitioners is the general reluctance by doctors to be involved in workers compensation compounded by lack of clarity about what is expected and the control of registers of accredited doctors and potential panelists by the Tribunal and WorkCover Tasmania.

The wording of the Act suggests that the Tribunal has knowledge of the state’s medical expertise as follows:

 ‘…….given the Tribunal’s knowledge of the expertise held by medical practitioners on the register’ 

The medical profession however itself would have the best knowledge and understanding of the expertise required to consider any particular medical question that may be put by the Tribunal.

One initiative would be to amend the legislation to require the Commissioner to consult with the medical profession about the appointment of panels. The Tasmanian AMA Workers Compensation Reform Committee has identified benefits if Government appointed a ‘Medical Standards Committee’. One function would be to provide such advice to the Tribunal.

The proposed committee could also have a role in encouraging doctors to be involved in Workers Compensation matters, serve on panels and participate in training to be accredited in various facets of workers compensation. Where there are insufficient local practitioners arrangements to utilise interstate Medical Panels could be considered. The involvement of respected local senior clinicians would greatly assist the engagement of the medical profession in workers compensation matters.

The key is for the medical profession to have greater input into the decision-making system in disputed workers’ compensation matters.

 

 

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The T.I.P.S. Site

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While ‘Insult and Injury’ is a blog focusing on impacts on health outcomes from workers compensation systems, another controversial subject is that of ‘RSI’.

My new blog’s subject is what I have termed Technology Interface Pain Syndromes (T.I.P.S.) to encompass the spectrum of upper limb disorders that have been associated with use of computers and similar devices, in addition to older technologies like the telegraph and even writing!

The continuing expansion in the use of computers, smart phones and other types of technology means there are likely to be increasing health problems associated with their use – not only in occupational, but also domestic, educational and recreational settings.

Please read, enjoy and challenge what appears.

Here is the link:

http://thetipssite.org

 

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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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Tassie Compo Payments up! – Looking behind the figures!

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“Big jump in payouts for work injuries”

This was the title in an article in today’s Hobart Mercury Newspaper.

The newspaper article highlighted a 50% increase in lump sum compensation payments from $43.2M in 2012-13 to $63.6M in the 2013-14 year, an increase of about 50%. Apparently there was a single $10M common law claim from a 2005 injury that accounted for a proportion of that increase.

The figures appeared in the WorkCover Tasmania Annual Report for 2013/14.

What does a closer look at the figures tell us?

The number of actual claims has dropped from 8,417 in 2012/13 to 7,841 in 2013/14, a drop of about 7%, yet total claims payments have risen from $150.2M last year to $170.9M in 2013/14, an increase of about 13%.

Weekly Benefits payments have dropped in absolute terms, Lump Sum payments have increased as identified in the Mercury article, while Medical and Related Benefit payments have remained stable at about $46M, representing a small actual increase in medical costs per claim from about $5,400 per claim to $5,800 per claim, an increase of about 8%. This is not much above the annual average medical inflation rate of about 5% over the last 10 years.

It is difficult to interpret the increase in lump sum payments given these payments represent a combination of payments for future lost income and medical treatment in addition to payments for permanent impairment. The trend could indicate an increase in the desire to settle claims over long-term payment of compensation benefits or just reflect worsening outcomes and associated costs. Analysis of the components of these lump sum payments would be needed to interpret this increase.

The interesting figure is the increase in Legal & Investigation payments. The costs have increased from $ 11.6M to $13.5M, representing an increase from about $1,375 to over $1,700 per claim. An increase of 25%!

Legal and Investigation payments, in some ways reflect the failure of the system. In an ideal compensation system such costs would be minimal. These payments represent funds directed to lawyers and investigators that don’t benefit the injured worker, in terms of advancing their recovery, maintaining their income or providing compensation for permanent impairment.

It would be useful to understand the factors behind the increase in Legal and Investigation payments. Are increasing claims costs driving the insurers to utilise legal and investigation resources to contest liability or challenge medical costs of treatment in the hope of an overall reduction in the cost? Are legal fees rising at a rate greater than inflation? Is there an increase in the frequency of fraud? Are there more disputes over impairment assessments? I don’t know the answer, but it does seem clear that there isn’t a blow out in medical costs driving claims costs as is sometimes suggested, despite the increasing costs of medical technology and pharmaceuticals.

My view is that there is too much spent on legal and investigation costs. Better and cheaper outcomes could be obtained by enhancing expert medical and rehabilitation expertise in the early phase of a claim to overcome identified risk factors for poor prognosis and reduce the burden of chronic pain and depression and associated disability that seems too common an outcome in the cases that I see.

It would be interesting to hear the perspectives of the various insurer, legal, rehabilitation and medical practitioners on this issue to see if some conclusions can be drawn from these figures.

I look forward to comments.

Link to WorkCover Annual Report:

http://www.workcover.tas.gov.au/__data/assets/pdf_file/0020/270074/Annual_Report_13-14T.pdf

 

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Surveillance – Sharp Focus or Blunt Instrument?

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In my work as an independent medical assessor, and occasionally as a treater, I am asked to view video surveillance of compensation claimants. This occurred again recently and caused me to reflect on the whole business of covert surveillance.

There was the usual report from another doctor who had viewed the surveillance saying that the worker moved easily and therefore had capacity beyond what they claimed with the almost inevitable conclusion that the worker was fit for unrestricted work.

On careful analysis of the surveillance the worker was, in fact, showing evidence that there was limitation of their activity and, after I met the worker to discuss the surveillance and some apparent inconsistencies, it was clear to me that, apart from a little miscommunication, there was no evidence of fraud or misrepresentation.

I get an uncomfortable feeling when I am asked to look at video surveillance. Should I be peering at injured workers who are oblivious to the fact that they have been watched by a private detective filming their everyday activities? Is it right that their spouses and children get filmed as well? Is it right to film an injured worker dropping off their children at school and in the process other children are filmed ?

By hey! The worker might be committing fraud by claiming that they are worse than they really are, or heaven forbid, there might actually be nothing wrong with them at all! Surveillance must be OK – it can’t hurt anyone and provides an objective means of detecting fraud, doesn’t it? How else can the guardians of our system determine if a claim is without merit?

Surveillance of injured workers seems to be an accepted part of the workers compensation landscape. Even lawyers with a focus on an individual’s rights seem to barely bat an eyelid about surveillance. It just happens and almost routinely at that. Surveillance is viewed and discussed behind closed doors by insurers and their advisers and occasionally sees the light of day in the courtroom.

There is no doubt in my mind that surveillance is widely used as a tool to try to determine an injured worker’s honesty. Many, if not most, of the injured workers I am asked to assess as an independent doctor have been under surveillance at some point in their claim.

I haven’t been able to find any scientific literature about the risks and benefits of surveillance, so I have to rely on my own experience and opinions of others. Perhaps the insurance industry has research evidence about its utility, but even some seasoned claims staff tell me that surveillance rarely provides definite proof of fraud.

I have however seen significant harm caused by surveillance, even the possibility that it might occur can have an effect.

I have cared for injured workers through my practice who have developed significant psychological illnesses once they became aware that they were under surveillance. I have seen the benefits of months of intensive psychology treatment undone by ill-conceived surveillance. More importantly perhaps, many injured workers restrict their activities for fear of being filmed. This can impinge on physical recovery (and Vitamin D levels) when they remain indoors in the safety of their homes and avoid the resumption of activity that is an integral part of their rehabilitation.

Yes, sometimes surveillance does reveal that an injured worker is exaggerating the effects of their injury and very occasionally that there is gross misrepresentation, but the common scenario is that surveillance shows people trying to get on with lives as best they can, despite their injury.

Surveillance can tell you what a claimant is doing for short periods if the identity of the person is clear, but it cannot reliably indicate the presence of pain and does not show the after effects of a particular activity. It cannot tell you how much medication they have taken for pain. It certainly is not an accurate tool to measure capacity for work. Brief periods of surveillance are useless for determining capacity for sustained activity.

A short sequence that shows a claimant lifting a laundry basket or their 3-year-old child does not equate to capacity to work in a laundry or child care centre.  A film does not usually indicate the factors that lead to an activity. Did they pick up their child because the child was hurt?

Film can be subject to manipulation by editing. Many workers have expressed to me concern that the videos of them are not complete and some important sequences have been deleted, but it is impossible to confirm that this has occurred as there are other explanations why film might appear edited. Some workers believe that surveillance is undertaken to intimidate, rather than any other purpose.

When a worker puts in a claim for compensation it is not explained to them that, as a part of the claims management process, they might be under surveillance  with the consequence that their families, friends and work colleagues might be filmed as well. Is the worker aware that when they are booked to see an independent doctor, their claims officer might ask a private detective to film their arrival and departure from the appointment? There are issues of trust here. Once a worker is aware that they are not trusted it can change the dynamic of their interaction with a whole range of claims and rehabilitation processes as well as the mind-set of the claimant. A decision to place a worker under surveillance is clearly not free of risk, or cost for that matter.

In my view surveillance is an expensive and blunt instrument, but does it have a place in our compensation systems?

The answer is probably yes, but only where there is evidence of frank fraud, an understanding of its limitations and controls over its use. Those who make judgements about surveillance need training to understand the limitations and those who do the filming need strictly enforced codes of conduct.

Decisions to put a claimant under surveillance should not be made by a claims officer on the basis of a whim, unsubstantiated gossip or as a ‘fishing expedition’ to look for evidence to terminate a long-term claim. Perhaps an independent member of the judiciary should be involved in the decision to ensure the risks and benefits are properly considered.

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Why Insult & Injury? – The Video

See the brief video where I explain the background to this blog!

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