It's Not Rocket Science, But Close

After the NCCI Annual Issues Symposium (AIS) I received an email from Peter Rousmaniere, a noted columnist who covers the workers' compensation industry for Risk & Insurance Magazine.

Peter was at AIS and I was fortunate enough to share a couple moments with him, though not enough. I've always considered Peter's observations on workers' compensation to be sharp and insightful - considerate of the many interrelations necessary to make the system work.

In an email to me after AIS, Peter said: "I am repeatedly struck when I come to this conference how all consuming, for professionals in it, is the work behind the sustainability of insurance enterprises, which is such a hugely complex undertaking, which branches out into brokerages, the delivery of insurance throughout the complex economy, the demand that not a single claimant be left holding the bag (almost), and the recruitment of the next generation of leaders for the task."

Peter makes a very poignant observation.

Most of the time we deal in the claims environment. For instance, most "reform" legislation and regulation deals with benefit delivery, i.e. claims.

In claims we focus on the friction between the payer (be it insurance company, self-insured/administered employer or self-insured/third party administered employer) and the recipient (injured worker or vendor).

The claims process is complex and requires coordination of many moving parts to successfully accomplish the conflicting goal of resolving expenses and rendering medical services and indemnity to the claimant.

When done right we can say that the claims process has delivered value to all constituents, particularly if the process executes timely and efficiently.

Most of us lack much understanding of the complexity of gathering, maintaining, and protecting the resources that are necessary in order to meet the delivery promise of claims.

At AIS, as Peter observed, one comes to a much better understanding of what the "front end" (policy procurement) of workers' compensation requires in order for the "back end" (claims fulfillment) to meet obligations.

To say that the hugely complex process on the front end is tenuous and frail is accurate - there are so many moving parts to the front end of the insurable obligation that it is a wonder that the workers' compensation industry is able to stay right side up.

When working the front end, consideration needs to be taken of the general economy - and not the present general economy, but forecasts of economic trends overall, and within industries, and even within sub-industries.

Complete understanding of the market risk being undertaken is absolutely necessary - sort of a micro-risk analysis - because the ability to manage anything requires detailed knowledge of the subject.

Corollary to understanding the micro-risk is understanding the investment risk. Underwriting profits (premium minus claims) is virtually unheard of in workers' compensation. The lure of workers' compensation insurance business is cash flow to place into investments that theoretically will beat inflation and return a profit.

Typically insurance cash (gross premium less reserves and less operating expenses and losses) is placed into relatively safe, albeit benign, investments - bonds.

As we know, there are all sorts of different bonds with different maturities and different rates of return. Insurance financiers have their hands full now as older bonds that were purchased years ago with good yields (when inflation was relatively high compared to today's environment) are maturing and need to be replaced - but historically low interest rates don't give bond purchasers many options for returns.

So the long term portfolio of carriers is not going to generate the same returns as in years past, which puts pressure on rates and premiums in order to keep cash flow sufficient to meet the legal obligation of paying claims.

What a conflict of resources versus market acceptance to manage.

Then there is the risk management part of the front end - reinsurance.

Reinsurance is simply insurance for insurance - protecting the really big downside to prevent complete catastrophe. The reinsurance game is insurance on a much larger scale, involving much bigger money, much bigger investments and much bigger claims.

Reinsurance is that funny sort of dichotomy where insurance companies find themselves as insureds, paying premiums and making claims. The complex financial instruments that are used to manage this relationship can sometimes back fire (see Unicover) and then there is complete disaster because of cash flow impingement on insurance companies - and particularly in insurance, cash is king.

Then there's the whole cadre on the sales end of insurance - brokers and agents.

The complexity of the broker relationship in the industry is completely under valued and misunderstood; talk about potential conflicts of interest!

The broker's obligation is to place the employer with the most satisfactory insurance product available for the employer's particular risk. Most of the time this is dictated by cost, aka premium. Some of the time, though, this is dictated by service quality and risk management techniques and systems. Some of the time there simply isn't a market for an employer's risk. And some of the time brokers need to come up with creative, sophisticated contractual relationships in order to get the best value for an employer.

But the broker is paid in commissions - so there is this tension in the relationship that is dictated by the conflict in getting the best value for the employer versus the amount of money that a commission is going to generate off a particular policy.

Going to AIS is going to a different workers' compensation world - one where the language is different, and the concepts are complex and difficult. It is an objective world.

I look at the front end as the more objective side of the workers' compensation industry. The front end is highly consumed with lots of numbers because it is the numbers that ultimately drive the financial ability of the system to work. When it all is considered we're really just talking numbers on financial statements. There's not a whole lot of fuzziness when just numbers are involved.

I see the back end of the industry, claims, as largely subjective. We have numbers to track costs and efficiencies, but ultimately we're dealing with the feelings of the end-subjects of the claims processes - the injured worker and to some extent the employer. Because of the emotions that are part of claims there's quite a bit of fuzziness involved - it is much more subjective.

That workers' compensation even works is amazing and testament to social intelligence. I spend a lot of time in this blog criticizing "the system." But every once in a while it's good to pull back and take a look at everything that needs to come together in some coordinated fashion for the system to work.

Workers' compensation is amazingly complex and sophisticated which is why it is so hard for those not in the industry to understand it. It's not rocket science, but darn close.

And most of the time the system does work.

Boulders and Making A Life Better

Bolders bring out the best in us, and boulders consequently bring out the best in life - our relationships with others.

That was the message that Aron Ralston delivered to an enraptured audience at NCCI's Annual Issues Symposium (AIS) yesterday.

Coincidentally I had read his book - Between a Rock and a Hard Place - several years ago on a transcontinental flight traveling to and from Florida for a conference (might have even been an NCCI conference).

Ralston is the outdoorsman who was hiking the Utah badlands when a rock slipped as he was climbing down into a crevasse and pinned his hand so he couldn't move - and after 6 days he cut his hand off to escape.

Wow - what a tremendously powerful speaker and story. It was one of the most awe-inspiring speeches I had ever heard: lively, engaging, dramatic, comical, with a powerful, powerful message that he dramatizes in the most extraordinary manner. 

I started a standing ovation for him when he was done, I was so moved by his speech.

The boulder that had his hand pinned became his metaphor for obstacles in life.

His primary message - boulders, when confronted and dealt with directly, bring out the best of us and as a consequence, of life. 

Everyone encounters boulders in life. Some are small, some are large. Some are personal, some are institutional. 

The challenge in life is not to avoid boulders, because that is impossible, but to confront boulders directly and to deal with them. Only in taking on the boulders can we grow and appreciate what life truly is about, and thus appreciate and deal with our own limitations.

Survivalists are taught an acronym - S.T.O.P.: Stop (i.e. slow down, don't panic, so that you can...), Think (get a clear head, you have to be able to examine the...), Options (there are always options and some are better than others, but until you stop and think you can't see the options, and once you have identified the options you....), Plan (set up the plans to extricate one's self from the boulder that has you pinned).

The message - don't panic. Take the available time necessary to examine the situation so you can craft the best possible solution.

Sometimes that solution isn't very palatable, but it may be the only solution and so we need to plan the execution of that solution carefully and understand the consequences of our action.

In Ralston's case, his only solution was to cut off his arm. He faced smaller boulders though - his knife wasn't sharp so he had to stab with it. But then he encountered bone ... forgot about that detail ... so he had to use his body weight to leverage against the boulder to break the bones to finish cutting.

He improvised a tourniquet, and had the good fortune to time his exit just as a family of hikers was in the area and could summon help.

In the face of extreme adversity, Ralston came up with solutions that ultimately, with a little luck, saved his life.

Indeed, changed his life.

Ralston unwittingly made a direct correlation to the workers' compensation industry in his personal observation about our Purpose in Life: it is simply to enrich the lives of others to make their lives better.

So simple.

And when we get down to the very basics of workers' compensation, that is the fundamental purpose of our jobs - to enrich the lives of others to make their lives better.

This is the Zen of workers' compensation.

At the NCCI AIS there was plenty of actuarial talk, lots of numbers, statistics, data, big picture overview stuff that insurance wonks love to describe with big, confusing, multi-syllabic terms.

But what all of these numbers and statistics actually mean are the real world is the business side of making the lives of those who get into bad situations better.

Of course Ralston didn't know that his interpretation of the purpose in life was such a powerful metaphor for the workers' compensation industry. Ralston was talking about relationships and how, when he was recording what he thought would be his last words, his focus was on saying good bye to family and friends - the things that really matter in life and for which there is little appreciation until one faces death while still living.

I always learn a lot at the NCCI AIS every year. This year I learned much more than I usually do.

Today, forget about the costs, the utilization review or treatment guidelines. Forget about rates, premiums, fraud, opioids, liens.

Instead, make someone's life better. That is your job.

Who's To Blame?

I've written about Derek Boogaard, chronic traumatic encephalopathy (CTE) and Toradol several times in the past in this blog. Boogaard is the National Hockey League player who died at age 28 in 2011 from a prescription drug overdose and the autopsy showed that he had CTE, which is a a degenerative brain disease seen in people with a history of multiple concussions.

The estate of Derek Boogaard on May 10 filed a wrongful death lawsuit against the NHL in the Circuit Court of Cook County, Ill. In addition to alleging that the league failed to warn Boogaard about the risks of concussions and the drug Toradol, the complaint also says the league failed to monitor the prescribing practices of team doctors in the dispensation of prescription pain killers.

This is a new twist to the professional athlete lawsuit trend and in particular those brought by National Football League players against the league seeking compensation for CTE and the mis/over-use of Toradol.

Boogard's estate alleges, essentially, medical malpractice at the direction of the NHL and the teams Boogaard played on.

Some of the allegations:

1. After fracturing his tooth during a fight in October 2008, Boogaard received 19 Vicodin prescriptions from nine different physicians, dentists, trainers or staff with the Minnesota Wild. According to the complaint, he received a total of 432 pills for the fractured tooth.

2. On April 14, 2009, Boogaard underwent nasal surgery and was prescribed 40 pills of oxycodone. On April 21, 2009, he had shoulder surgery and was prescribed an unknown number of oxycodone pills.

3. During the 2008-2009 season, Minnesota Wild team doctors wrote Boogaard more than 40 prescriptions for more than 1,000 narcotic painkillers, the complaint says.

4. Boogaard sought treatment for an opioid addiction in September 2009 at an inpatient facility in California and enrolled in the league’s mandatory substance abuse and behavioral health program and aftercare program. He was told to refrain from taking opioids in the future, and that he could be suspended or kicked out of the league if he relapsed.

5. In the summer of 2010, after he signed a contract with the New York Rangers, Boogaard started asking team trainers for Ambien and Vicodin. According to the complaint, while Boogaard was supposed to refrain from taking painkillers and Ambien under the league's substance abuse policy, New York Rangers doctors wrote him five prescriptions for hydrocodone and 12 prescriptions for Ambien or a generic equivalent.

6. Boogaard relapsed in 2011 and was placed in an inpatient facility in California after he showed up for practice so impaired that he could not stand up. While he was in treatment for the second time, Boogaard made plans to attend his sister's graduation from college.

While his doctor advised him not to attend and the league was aware of this, it did not provide Boogaard a chaperone or explain to him the risks of leaving the treatment facility in California, according to the complaint. Boogaard was released from the facility on May 12 and was found dead the next day. The cause of death was an accidental drug overdose.

Besides the jurisdictional challenges that the Boogaard case faces, the allegations of intentional delivery of narcotics not only plays off the current national consternation over opioid abuse and physician prescription, but I think gets to the very, very deep core of the entire opioid debate - and that is responsibility.

Obviously workers' compensation is supposed to be a "no fault" system - under the ideal operating environment, a worker who is injured gets medical treatment and some money regardless of who was ultimately responsible for the claim.

Tort litigation is all about blame, and pinning responsibility on someone other than the claimant.

One of the arguments we hear from those who have an addiction problem, particularly in litigation of course, is that the addict is not responsible for his or her fate - it was the physician, or the insurance company, or the employer, or the drug company, or the pharmacy, or the government who created this monster of a problem.

But it is never the addict's fault.

One of the first tenets in addiction therapy is the removal of blame in the addict's lexicon. Only when the addict does so and takes responsibility for his or her own self can there be any recovery. Until then, any type of therapy is useless.

Time after time, interview after interview, I have heard former addicts who have successfully beat their addictions repeat over and over again that there was no one to blame other than themselves for getting into trouble.

It is the ownership of the problem that is the core to a) recovery and b) successful long term sobriety.

The issue of who is to blame for opioid addiction and exploitation is a complex problem for sure and one that will torture the social, legal and medical systems for some time to come. It is not an issue that can be swept under the rug.

Certainly Boogaard, and those similarly situated, must share in the responsibility of getting into that situation in the first place. And just as certainly those who aided and abetted also share the blame.

One of the trend workshops at the NCCI Annual Issues Symposium that I am attending here in Orlando, FL deals, of course, with prescription drugs and NCCI's statistical research on the issue. I don't think anything surprising will be unveiled or that there will be any breakthrough information provided - we will get plenty of statistics and facts that will be scary for sure.

Regardless, I don't expect the statistics and research that will be presented today by NCCI Chief Economist Harry Shuford and Senior Actuary and Practice Leader Barry Lipton to provide any comfort or insight and certainly no direction on responsibility or correction.

Off To Florida For A Pulse Check

I'm on my way to the National Council on Compensation Insurance's (NCCI) Annual Issues Symposium (AIS) in Orlando, FL.

The AIS is particularly interesting because it provides a national perspective on the health of the industry away from the outsized influence that California's mammoth system imparts. Because NCCI is the rate maker for the vast majority of this country's state systems, it has a broad collection of data to interpret and compare.

Just a few weeks ago NCCI issued its annual report. In summary, NCCI sees claims frequency and severity (i.e. the number of claims filed and the total cost of such claims) as moderating while the overall underwriting market is starting to harden. In general this is good news for insurance companies writing this line of business - less money going out, more money coming in...

In addition, noted insurance economist Robert Hartwig, PhD says in the report (and I'm sure will present at AIS) that while the economic recovery isn't robust, there is still a recovery and this means increased payrolls, ergo increased premiums, for carriers.

The payroll increases are not necessarily going to be the product of an increase in the number of people actually employed though. Hartwig is optimistic on employment figures but I didn't see him mention the large number of people that are no longer reflected in the government's unemployment statistics - the "lost unemployed" or those people who have been unemployed for so long that they will never return to the employment roles.

Indeed, recent anecdotal evidence published in business tomes reflect that, for example, while domestic manufacturing is on the increase in the United States, much of this production is due to technology gains and investments in robotics.

Even Hartwig notes that the Great Recession decimated the construction industry (which has a outsized influence on some states such as California, Florida and Nevada), which shed 2.3 million jobs - or one-third of the construction industry employment rolls - as a consequence of the recession. Though the construction industry is picking up steam, and is expected to continue to grow (albeit tepidly) for the next few years, there's a lot of jobs still on the side lines.

And Hartwig notes that the recovery is not treating all states the same. Nevada, California, Florida and a couple of other states are still in or very near double digit unemployment percentages, while North Dakota has almost no unemployment.

The bigger the state, and the more reliance to real estate for economic activity, the slower the recovery.

So basically, while the economy is recovering, it is still slow and not across the board in either job sectors or state lines.

But overall, the expectation if you're an insurance company is that the workers' compensation market is heading towards black ink, which is delightful news to underwriters and brokers.

That sentiment was apparently echoed at the 12th Annual JMP Securities Research Conference in San Francisco where the chief financial officers of Amerisafe and AmTrust both expressed that it was their belief that the trend is pointing to a hardening market.

Albeit, both of these companies do not represent the average workers' compensation insurance company - both are in niche markets.

Still, this means to me that employers in all of the states that have passed reform laws this past couple of years may not see all of the savings that were predicted.

Data from the Council of Insurance Agents and Brokers shows that in the first quarter of 2013 more than 80% of workers' comp policies had rate increases. In comparison, during the third quarter of 2010, more than 80% of work comp policies had no change or rate decreases

While the insurance market hardens, the big challenge for carriers is still getting a return on cash flow sufficient to keep investors satisfied.

Investment returns have been, and are staying, comparatively low, so the industry's underwriting profits will show a pretax loss of 1% for 2012 according to NCCI's report.

The common thinking is that in order to maintain a consistent return on equity, a 1% decline in the investment yield means companies need to improve their combined ratio by 5.7%. That's nearly impossible in the short term unless some law drastically slashes benefits (either medical or indemnity or both) - for example when SB 899 in California was passed, carrier combined ratios plummeted.

But these ratios increased rather quickly in California as SB 899 worked its way through the courts and the various parts of the workers' compensation machine refined their systems and operations to take advantage of new areas of vagaries and opportunities.

I interpret all of this to mean that employers in general will be seeing bigger premium bills, regardless of competition and reform, on a consistent basis for the next few years as the industry cycle continues to revolve.

One of the elements that keeps me interested in workers' compensation is this omnipresent tension between carriers, employers and workers. It's interesting to me going to different events and seeing how insurance executives, or business owners and risk managers, or injured worker's attorneys, or physicians all react to the same news in different ways.

Because if carriers can't make a reasonable profit on the workers' compensation line of insurance then they will get out of the market.

If premiums paid by employers get too high, then employers change their business models, get out of business or move somewhere else that is cheaper or isn't regulated (Bangladesh anyone?).

And if workers aren't protected and don't get the benefit of the "great bargain" then there are lawsuits, protests or other social unrest that will challenge society, or at least legislators.

This tension is what drives the continual cycle of reform, adjust, inflate, complain, and reform.

So off to Florida I go to take the pulse of the nation's workers' compensation insurance market and to see just where we are in the overall cycle of the industry - at least from the insurance company perspective.

Chasing the Herring

Senate Bill 36 passed out of the California Senate Appropriations Committee on Monday.

The proposed law would require the California Department of Insurance (CDI) to publish on its website various financial information about workers' compensation carriers.

The bill was introduced by Assemblyman Ben Hueso, D-San Diego, who said in Senate testimony Monday that based on a recommendation Rand Corp. made in a 2009 report titled, “California’s Volatile Workers’ Compensation Insurance Market: Problems and Recommendations for Change.”

Rand at that time was responding to a request by the Commission on Health and Safety and Workers’ Compensation (CHSWC) pursuant to legislative request to determine the cause of carrier failures leading up to the meteoric rate increases in the early 2000s.

One recommendation was to post annual and quarterly financial statements on the Insurance Department website so more people can view the reports.

The problem as identified by Hueso and supporters is that carrier information, while publicly available, is not easily accessible or identifiable.

Carriers were against it because the bill is over-broad and discriminates against workers' compensation when the same sort of requirements aren't made on other lines of insurance.

Apparently those objections were quieted when Hueso amended the bill when it came out of the Senate Insurance Committee.

The bill would add section 901 to the Insurance Code, and as amended would read:

The department shall include on its Internet Web site a dedicated Internet Web page that includes workers' compensation data, statistics, and reports covering both insurers and self-insurers, including, but not limited to, claims loss data, expenses, and financial reports. The department shall only use data already collected by both the department and the Department of Industrial Relations. Nothing in this section shall be construed to authorize the release of information protected by other applicable law.

To implement the bill it will cost taxpayers somewhere between $65,000 to $128,000 in one time expenses and ongoing annual expenses of $24,000 to $40,000 - all depending on how the data is obtained and maintained.

That's not a whole lot of money in the grand scheme of things.

But that doesn't make the bill any more appealing.

When we really get down to it, this is much to do about nothing.

Having this financial data published so that it is more easily accessible isn't going to create any better oversight of the insurance industry because, bottom line, the public doesn't care and doesn't know how to read insurance financial statements.

There might be a few brokers and consultants that would benefit from easier access to this information, but there's not guarantee of that, and there's no guarantee that this information is going to create any better oversight or enforcement activity.

In addition, the CDI's job is to review company financials on a regular basis and call into question irregularities of other elements that set off alarms on a carrier's or self insured's health.

CDI had that power in the late 1990s and early 2000s, but that didn't provoke the agency into amelioratory action until it was too late and carrier carnage had been passed off on to policy holders, even while there were calls to action by industry experts as reinsurance treaties were passed up the food chain with ever lower strike points upon which primary carriers relied in underpricing their product.

Financial statements would not provide the insight into such activity, and in fact might even hide such activity because the cash position of carriers would actually look healthier than in practice and anticipated liabilities would be offset by reinsurance assets.

When the primary carriers that bought into this reinsurance scheme (see "Unicover Partners") they didn't think that reinsurers would deny their claims - it was the denial of reinsurance claims and attendant delay inherent in litigation of billions of dollars of liability that put these carriers out of business because cash flow was shut off.

Carrier information would have done nothing to prevent that crisis.

The effort to get SB 36 into law would be better put to use beefing up claims enforcement and oversight via either the Division of Workers' Compensation's Audit Unit or reinstating stronger penalties for private action against recalcitrant claims payers either ignoring their duties or willfully failing to adhere to the law.

We don't need information. We need enforcement action.

OK Opt Outs - Hold Your Horses!

While there is quite a bit of attention being paid to Oklahoma and the opportunities that its new opt-out program may bring to employers with the resources to participate, a recent case out of Texas is a reminder that if you are going to have an alternative work injury protection plan in place you had better have all of the details accounted for, otherwise that plan is for naught.

PM Leasing hired Rita Murdock to work as a nursing assistant at Park Place Care Center in Georgetown, Texas, on April 21, 2003. She signed a binding arbitration agreement as a condition of her employment with PM Leasing.

Murdock later became an employee of Trisun Healthcare, which provided professional and licensed staff to the nursing home.

In August 2005, Trisun called its employees into a meeting and informed them that it had elected not to purchase workers' compensation insurance but was instead implementing the Trisun Healthcare Associate Injury Protection Plan. Murdock signed an acknowledgment that she had attended the meeting and received copies of the plan and an arbitration agreement.

The acknowledgment form that Murdock signed notes that she accepted the plan's arbitration agreement, but the documents that Murdock received are not included in the court record and the acknowledgment form does not summarize or provide the terms of the plan's arbitration agreement.

Of course Murdock gets injured, seeks benefits and files suit for negligence. And of course Trisun files a motion to compel mandatory arbitration.

Trisun lost.

The court said that under the Federal Arbitration Act, in order to compel arbitration, a party must establish that there is a valid arbitration agreement and that the claim in question falls within the scope of that agreement.

It all comes down to the evidence:

Trisun did not attach the plan's arbitration agreement to its motion to compel. The acknowledgment form that Murdock signed does not prove her consent, according to the opinion, because the arbitration agreement it references is not in the record and that form also does not make any mention of the prior PM Leasing arbitration agreement.

The court noted that prior case law has established that Texas employees can consent to an arbitration agreement if they continue working for an employer after being informed of its contents, but such notice must be proved through evidence. Trisun had not requested an evidentiary hearing and submitted no documents that even summarized the arbitration agreement that Murdock had purportedly consented to.

"The absence of these material terms raises issues about the existence of a mandatory arbitration policy effective at the time of Murdock's injury covering the claims at issue," the court said. "Trisun's summary proof does not include any evidence that resolves those issues, such as evidence of communications occurring at the Plan announcement meeting notifying Murdock of the material terms of the Plan or other proof of the contents of the referenced summary plan description book, highlights brochure, or arbitration agreement."

A non-subscribing, opt-out employer needs to keep accurate, timely records and be prepared to produce those records when litigation arrives challenging the alternative work injury plan.

The case is Murdock v. Trisun Healthcare Inc., No. 03-10-00711-CV, 05/09/2013.

Of Regulation, Social Responsibility and Opt-Out

Once I survived being a teenager and began making my way through college, my political and social sentiments went decidedly conservative. As far as I was concerned, if I was able to work my way up through the evolutionary vagaries of adolescence to adulthood, get an education while working 30+ hours a week, and actually get into law school, then anybody else could too.

And if they didn't that was their own problem - not mine.

This was during the Reagan era - the man who shut down federal funding for mental in-patient facilities, fired all of the air traffic controllers, took on Leonid Brezhnev and the Berlin Wall, and survived an assassination attempt.

I was full blown Republican (or at least as Republican as a Southern California surfer could be). Less government. Free enterprise. Reduced regulation. Trickle-down economics.

Then those professors at law school warped my sensibilities. And this was at Pepperdine University School of Law - known to be a conservative institution (imagine if I had gone to Boalt Hall at Berkeley)!

I began to see the other side of the story and understand that the reason we have laws and regulations is because there is a minority of the population that can't behave themselves, or don't fit well into society, and they need guidance.

Or sometimes they just need to be outright controlled.

Because this minority of population can make life miserable for the rest of us.

Recent events, some having to do with work comp, some not, have really brought this home to me.

The Rana Plaza garment factory building collapse in Dhakah, Bangladesh, where the death toll is now reported to be over 900 people, is a current example (and just yesterday there was yet another garment factory fire in Bangladesh where at least 8 have perished).

The average wage of a garment worker in Bangladesh is 3000 taka a month. To put this into perspective, this equates to about twenty-one CENTS per hour if extrapolated to a 40 hour work week.

U.S. garment wages range from $8.25 (573.38 taka) to $14.00 (973 taka) per hour, based on production. And this does not include healthcare, vacation, holidays and other benefits.

So basically a garment worker in Bangladesh works an entire month to make the same as an American working about 4 hours. I know prices are lower in Bangladesh, but we're still talking extreme poverty and, when you consider that the garment worker's bosses "ordered" them to work despite concerns with building safety, it is in my mind essentially slavery.

Yet Bangladesh is the third largest exporter in the world of garments to the U.S., following only China and Vietnam, shipping $3.41 billion worth of garments to the U.S. in 2009. You can bet that only a handful of people in Bangladesh benefit from those export numbers.

According to the LA Times, "The Bangladesh garment industry, a national golden goose, is politically well-connected. Clothing accounts for a whopping 80% of the country’s $24 billion in annual exports and employs 4 million people, with dozens of lawmakers closely linked to factory owners."

Not to mention there's no workers' compensation to take care of the families devastated by the loss of income from a now dead garment worker.

Closer to home, the West Fertilizer Co. explosion in Texas further serves to remind us that sometimes there's a reason for regulation, and enforcement.

"It's rare for Texas to require insurance for any kind of hazardous activity," Tyler lawyer Randy C. Roberts told The Huffington Post. "We have very little oversight of hazardous activities and even less regulation."

Roberts expects West Fertilizer Co. owner, Adair Grain Inc and its owner, Donald Adair, to ask the court, in response to the various lawsuits coming its way, to divide the paltry $1 million in insurance and then seek bankruptcy protection against all other claims.

Adair's public statement says nothing about making people whole, but proudly announces that his church is offering grief counseling.

Grief counseling through his church - that's all he can offer? I can only assume that Adair's safety and risk management consisted solely of prayer based on the abysmal safety record (so abysmal there really isn't much of a record) of the plant.

Even closer to home is the case about the death of Charles Romano at the hands of Sedgwick Claims Services.

These are just recent examples.

When SB 30 was signed into law by California Governor Pete Wilson in 1992, I was still more to the right. I believed that this free market maneuver was the best thing for the state and that the carriers that couldn't survive without an artificial rate floor didn't deserve to be in business.

Boy, was I wrong on that one - the fact is that workers' compensation is a captive market, and anytime a market is captive it is subject to gross abuse.

And that's exactly what happened as the small specialty carriers that actually did provide good, well managed, claims services were wiped out by the big multi-line carriers that price competed and systematically destroyed employer's experience modifications with sloppy, inadequate claims handling.

What does all of this have to do with this week's extended rants?

Regulation - of safety, of financial responsibility, of the treatment of fellow human beings. Most of us, likely anyone that reads this blog, have a sense of social norm and etiquette.

I know YOU are offended by Raza Plaza, by West Fertilizer, by Sedgwick. Yet we are bound by the same regulations and laws that get created when this minority of luddites make the lives of others miserable.

Because without regulation these people can't behave themselves.

At my semi-advanced age I'm understanding that laws and regulations exist for a reason - so that the majority of the population is protected from that small minority of arsholes that ruin our lives and livelihoods.

We bemoan what we deem excessive regulation but I have come to ask myself, particularly over these past few months when so much misery and social expense could have been prevented with some strong regulatory action, "would I trade our regulatory environment for death or life ruination at the hands of some non-caring, contemptible anus?"

I'd like less regulation. I'd like the freedom of being able to conduct my life as I see fit because I'm a conscientious, responsible person.

But there's a cadre of society without conscience, or lacking etiquette, or just so selfish and narcissistic that common decency escapes them and the rest of us need protection from them.

Which is why there's so much excitement about Oklahoma opt-out. This gives employers with the resources the ability to create their own regulation and customize compliance to fit with their employment culture.

Sure, saving money is a prime motivator but when you talk to employers that have good non-subscriber systems in Texas and why they are excited about Oklahoma's option, it is because they can escape the rat's maze of regulatory burden that otherwise wouldn't be applicable to them, and can devise their own systems to do what is right.

In opt-out, regulatory mandate won't drive employer compliance and safety, the insurance market will because employers won't be able to cover their risks if they don't comply with underwriting requirements.

Peter Rousmaniere, a workers’ comp consultant who published a study on opt out last year, notes that only employers that can document and commit to three important changes to their practices will be able to obtain coverage: employers must have an ERISA (Employee Retirement Income Security Act) plan that specifies benefits for occupational injuries, separate mandatory arbitration provisions, as well as an effective safety and loss-prevention program aimed at mitigating negligence liability risk.

Opting out in the Oklahoma system requires a commitment beyond regulatory compliance - a company's cultural is going to determine success for both employer and employee.

There's going to be a couple of anal fissures, to be sure. But in Oklahoma, there is no "going bare" like there is in Texas, so Adair probably won't be interested in moving operations there, and certainly no Bangladeshi garment factories will be opening in that state.

I'm hoping my conservative roots get vindicated and that the market serves Oklahoma right. But as we have seen, it takes only one to ruin it for the rest of us.