Monday, May 4, 2015

Finger At The Moon

The Workers' Compensation Research Institute out of Boston, MA, last week released another of its CompScope Benchmarks reports (requires purchase), focusing on California.

There's lots of data and information about the cost of California's system, comparing it to other benchmark states (the others being Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia and Wisconsin) and if you're an analyst or other work comp wonk, the numbers are interesting.

For instance, California experienced a 5% decrease in medical payments per claim during 2013 and 2014, post SB 863.

And California logged a larger share of claims with more than seven days of lost time than most of the other states – 28% – and reported average indemnity benefits per claim of $19,422 – 10% higher than the $17,670 median reported for the 17 states in the study.

Average benefit delivery expenses per claim in California, at $8,957, was 71% more than the median for the study. California also reported a larger share of claims with medical-legal expenses than other study states at 27.2%.

David Bellusci, executive vice president and chief actuary for the California Workers' Compensation Insurance Rating Bureau, told WorkCompCentral that while these costs are going down, "we're not seeing the frictional costs go out of the system."

The California Applicants' Attorneys Association said those frictional costs are being used to deny care, rather than control expenses.

"UR and IMR are being used to bring down costs, but not improve health care and certainly not to provide care in a timely manner," CAAA President Bernardo de la Torre said in a statement to WorkCompCentral.

This is all good for debate within the industry, but this debate about costs, expenses, friction, etc. misses the salient point and misdirects the conversation: the reason for frictional costs is because the claims decision making process, in my opinion, now has too many cooks in the kitchen.

Claims adjusters defer to utilization review, defer to bill review, defer to this, that and the other.

Communication with the injured worker is hampered by state regulatory requirements of mandatory language and procedures, which are very bureaucratic and, frankly, scary much of the time - driving attorney involvement, and once an injured worker consults an attorney that attorney gets hired...

Relations with medical providers has deteriorated to the point where the physicians that are still accepting workers' compensation patients do so under huge volume pressures; treatment hardly involves any "bed" time, which studies have shown to be hugely therapeutic, but does correspond with more pill pushing.

Employers remain largely apathetic to the claims administration process, relying on the "expertise" of professionals without understanding that they have a say in the claim and, consequently, a voice in how their experience rating is affected.

There's plenty more friction to go around, and as I have said before, it is our own doing, and up to us as team members that may have disparate interests to work together to reduce that friction.

Otherwise we truly do risk the demise of an otherwise beneficial system and important economic tool.

So we can look at all the costs and expenses and determine what to trim, but this is looking at the finger pointing at the moon, rather than the moon.

"Emotional content, not anger. Don't think ... feel. It is like a finger pointing away to the moon. Don't concentrate on the finger or you will miss all that heavenly glory." Bruce Lee, Enter the Dragon.

We too often engage in workers' compensation with anger. We think, and don't feel, and miss the heavenly glory.

It's not about costs and expenses, it's about taking care of the claim.

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