Monday, July 25, 2011

Before Discussing Reform, Define the Mission

Panelists at the California Coalition on Workers' Compensation's 9th annual Educational Conference on Friday all had points of cost elements that they felt should get attention as loss ratios accelerate and impair the business of insurance in the state.

Each of the items mentioned by the panelists have been topics in this blog: discounting of policies by carriers, legal provisions that are regressive reward systems rather than providing progressive rewards, inefficiencies in medical care delivery that make injured workers get legal counsel, vagaries in the determination of disability indemnity benefits, friction in the legal system that makes adjudicating a work comp dispute complex and unnecessarily long, etc.

One theme that came out of the conference should meet nearly universal acceptance - whatever happens with workers' compensation should be focused on improving the system for the employer and employee.

This is a very difficult proposition to uphold because as the system is dissected and then put back together those in the legislative and regulatory bodies tend to focus on details and the big picture tends to get cloudy.

When you are a legislator or regulator, how do you define what is in the best interest of the employer and the employee? Do you define it in costs? Benefits? Some statistical element such as return to work ratio? Medical care access? 

Perhaps when we start talking about "reform" again, those who are entrusted with leading the discussion should first step back and define what it is that workers' compensation should be in an all encompassing, very broad, statement.

Sort of like a mission statement for the system.

California already has something that is akin to a mission statement, albeit in more legal terms - Article 14, Section 4 of the state Constitution. 

The problem with the Constitution is that it focuses on government - "The Legislature is hereby expressly vested with plenary power" to create a workers' compensation system. It doesn't define the mission of those most immediately affected, employers and employees, other than stating that the system will be no fault, provide full medical, provisioned by an insurance industry and an adjudicatory system.

Getting consensus on a workers' compensation mission statement would in the least be a very interesting experiment in social policy development, and at most would drive a very powerful discussion on just what the business of workers' compensation should be all about.

Before we start tinkering with the workers' compensation system again, I think we should step back and define what we want that system to be, and then ensure that whatever we do, we ask ourselves if a legal change fits the mission as defined. This is very hard to do, and I suspect may not fit within our society's penchant for instant gratification, but may be the only way we get a system that provides some stability and reliability to those most affected: the employer and employee.

No comments:

Post a Comment