Does It Matter?

Dallas, Texas, is where a large diverse group of workers' compensation interests have gathered to start a national conversation about what work comp should look like and act like in this new economy.

Whether work comp is even relevant any longer is on the table too.

The issues are voluminous, the opinions diverse; solutions amorphous.

Yesterday I opined that ultimately the state of workers' compensation will return to entropy - the natural order is chaos; we can corral competing interests for some period of time before elements escape that order and operate outside the mean.

That would explain why the bigger jurisdictions seem to "reform" workers' compensation on a rather regular cycle.

I also reviewed the theory that more of decision-making is based on irrational thought, rather than logic.

This explains perfectly why workers' compensation is the way it is. Work comp is a pure political animal. Politics is all about emotion, not so much about logic.

For instance, Kentucky Gov. Matt Bevin this week replaced all seven members of the state’s Workers’ Compensation Nominating Commission in an executive order Monday "… to achieve greater economy, efficiency and improved administration of the Kentucky workers’ compensation system.”

But that order is clouded in political machinations that appear to be more about personal vendettas than the will of the public.

Bevin, a Republican who took office in December, called into question several actions taken by his Democratic predecessor, Steve Beshear, during a speech on April 19, targeting the Department of Workers' Compensation Claims. Bevin noted “two major potential irregularities within the workers’ compensation branch,” pointing to settlements for volunteer firefighters and requisition of defense attorney services.

The Workers’ Compensation Nominating Commission is the third state board that Bevin has overhauled or purged of members appointed by Beshear, according to a report by the Courier Journal.

Curiously, Beshear’s son, Kentucky Attorney General Andy Beshear, filed a lawsuit against Bevin last month, saying the governor acted illegally in cutting higher education spending without legislative approval.

That administrative law judges require political appointment in the first place is not a rational personnel management process; that any aspect of a public service is held against unrelated political maneuvers is the entropic consequence.

The Kentucky story is just one example in an endless supply of political emotion overriding logical decision-making. It is a demonstration of how outliers get created.

And when we really get down to it, workers' compensation itself operates outside the mean. The vast majority of people do not get hurt or ill at work. So, work comp itself is an outlier.

I wonder then, whether discussing what to do with work comp, or how to make it more effective, or any other discussion relative to such a minor subset of existence, really even matters; because what we're talking about is restoring order to a very minor subset of the greater social order.

But as we see in the theory of entropy, chaos spreads, eventually infecting all of order - and when all order is dislodged then we have anarchy.

The origins of work comp are rooted in anarchy. Work comp was intended to bring order to the chaos that can occur to business, to labor, to society, when people get hurt performing labor that results in financial ruin for the worker, the business and perhaps the community.

So, I've answered my own question. What we're doing in Dallas, what others are doing in other discussions around the country (and world frankly), is necessary. The containment of anarchy starts with the minor subsets/outliers because entropy is infectious.

Work comp, or some system of work injury protection, is necessary for the economy and greater good. Very few will have to avail themselves of "the system" but it must be available when needed.

And it must be effective and responsive.

That's why we're in Dallas.

The Natural State

The relevancy of workers' compensation is in question, so that is bringing industry professionals, and injured workers, together in various forums to open dialogues about what a modern work injury protection system should do, how it should function and what it would look like, including the 2016 Workers' Compensation Summit in Dallas TX that starts today (I will miss the first day due to travels).

Work comp escapes general insurance/risk management definitions. Most lines of insurance/risk management are monopolistic - there is only one element to worry about, only one principle to manage.

For instance health insurance only deals with medical, life insurance only deals with (curiously) death. Even auto or home insurance, which could have a "medical" provision, is really monopolistic because the medical component is just reimbursed, not managed.

Workers' compensation, however, is a triad: disability and medical lines are directly controlled and managed in the work comp setting, and so is liability (because of the exclusive remedy portion).

There's a lot of ideas floating around, and a lot of concepts being discussed. Some of that conversation is fairly basic, working within the existing framework of work comp. Some of it is more radical suggesting strategies that dismember the triad.

Regardless of what the "ideal" system is (and I don't think there are any, just compromises), there are plenty of outside forces which the laws of physics and mathematics say will impact whatever is implemented.

Economist Daniel Kaheneman, in his book, Thinking, Fast and Slow, argues that most decision-making, even at the highest level, is impacted by swarms of intuitive biases, misinterpretations of data, illusions and misconceptions of which those making decisions are blindly unconscious and thus no one decision-maker (and thus, over time, no one decision) is consistently superior to another.

The theory of entropy also comes into play; that is, the natural state of all things is chaos, i.e. without order. Regardless of how much we implement rules, constrictions, fortifications, etc., eventually all order returns to its natural state of chaos.

Think about computers for instance. Computers essentially manage electricity to create the illusion that there is order and stability, so I can type this blog. It seems reasonably reliable and I can predict that when I hit the "R" key an R will appear on the screen.

But we know that computers eventually all crash and cease function. That's because the natural state of electricity is chaos - electricity is nothing more than the harnessing of electrons zipping around space into some short form utility until that energy is release and the electrons return to a disordered state.

Light bulbs exemplify this - light is temporary and transient. It is "on" only when the electricity is ordered to vibrate a filament, and when the electricity to the filament is terminated the light ceases.

If we take the theory of entropy, and apply Kahenaneman's argument about decision bias, then it would seem that no matter what we do with workers' compensation, or any work injury protection system, there will be, in mathematical terms, a return to the mean, a natural state of chaos, in part because of bias in the decisions that produce the design.

Which is to say there will always be winners and losers, there will always be a vast majority for which the system will work, and there will be outliers that fall between the cracks or get more than what they're supposed to.

The purpose of this dialogue that is occurring around the country is to propose work injury protection schema that serves the modern, information age, economy.

Trauma incidents for the most part are limited to a very small subset of occupations, for instance, so perhaps the triad of work comp isn't the best way to manage most exposures. Health care remains the biggest exposure for most of the populations, so perhaps that is a component that needs to be available to all working people, not just those who can afford it.

Disability is an even smaller subset than medical care. The vast majority of the working population won't ever be disabled, not even temporarily, at least not to the extent that work productivity is compromised.

Even liability - one of the most sacrosanct features of work comp is exclusive remedy, but perhaps that's not relevant to most employers in the 21st century as it was 100 years ago because of safety laws, oversight and simply the fact that we're not so industrial any longer.

100 years of work comp, 100 years of order, and we're seeing entropy creep in.

Court rulings, unconstitutional provisions, uncompensated workers, increasing costs, profiteering, and downright bad behavior; it simply is a return to the mean, a return to the natural state of things.

If we believe, as most do I think, that the vast majority of people are essentially "good", then the mean will function quite well no matter what the natural state is. The examination of entropy that is now ongoing is a product of the outliers; functions, actions, people and things that don't concern the vast majority of the population.

So while it may be time for a rebuild, a time to return order and a new architecture drawn, the reality is that theses discussions are about re-ordering the outliers and broadening the bell curve that got castrated over time as a consequence of entropy.

How all this plays out is anyone's guess. I'm just saying that no matter what is done, eventually it too will return to a state of entropy because decisions are not rational no matter how rational we believe the decision-maker to be and we can't control nature.

That's not to say that what is work comp now can't be better or that there is a better model for work injury protections.

But what replaces the work comp that we have known the past 100 years will also, eventually, regress to the mean, have outliers on the curve, and entropy returns.

But that may take another 100 years.

It's The Culture

I'm at the Public Agency Risk Management Association's 42nd conference in Indian Wells, CA.

The agenda has good workers' compensation coverage with sessions about managing disability and accommodation, using alternative dispute resolution, and key decision making.

Being that this was my first time to this conference, I felt compelled to ask attendees about their experiences in the public sector.

Curiously, the vast majority of the people I talked to started out their risk management lives in the private sector, so this provided a great opportunity to compare and contrast.

The folks I talked to noted differences in how money was viewed, with the private sector understandably much more concerned about the bottom line than public entities ("just raise taxes," noted one person).

The risks are inherently greater in public sector work because of the basic tasks of protect and serve with police, fire and other emergency services provided by governmental entities. Or, as Los Angeles County Workers' Compensation Administrator, Alex Rossi, once told me, "When someone yells 'fire' the private sector runs out of the building; but the public sector runs into the building."

There are also distinct legal differences too. Many public sector jobs are statutorily provided presumptions that certain injuries or illnesses are caused by work. For instance, Idaho firefighters are seeking a law declaring certain cancers to be occupational in nature.

Usually these presumptions can be rebutted, but doing so against the liberality of these laws is not typically successful. There really has to be nearly insurmountable evidence that there is no tincture of employment causation.

Presumption cases turn on how this evidence is gathered and presented.

A short case out of Florida's 1st District Court of Appeals (the 1st DCA has original jurisdiction over all work comp appeals in Florida) is demonstrative.

Florida Statutes Section 112.18(1)(a) provides that any condition caused by tuberculosis, heart disease or hypertension, which renders an officer or firefighter disabled shall be presumed to have been suffered in the line of duty, unless the contrary is shown by competent evidence.

Thomasena Mitchell had worked as a law enforcement officer for Miami-Dade County. Before she was hired, she underwent a physical exam which revealed no indications of heart disease.

Doctors later diagnosed Mitchell with supraventricular tachycardia – an abnormally fast heartbeat – and declared her totally disabled by her condition. She was barred from returning to her work as a law enforcement officer so she consequently sought workers' compensation benefits.

Her claim was denied. At trial the condition was declared compensable. On appeal that decision was reversed - the court said the trial judge ignored a vast body of evidence finding the condition congenital.

So on remand the trial judge declared Mitchell's condition not compensable.

On appeal once again, the 1st DCA told the judge to slow down - just because a condition had its origin congenitally doesn't mean it couldn't have been aggravated by work.

The court said that a congenital condition can be aggravated by a person's work, and if that occurs, it is a compensable injury.

Thus, for the county to defeat Mitchell's claim, the court said it had to establish competent evidence that the "trigger" for Mitchell's congenital condition, causing the tachycardia, was non-occupational. So it sent the case back to the trial level for more evidentiary hearing.

Certainly, this type of case would be handled much differently than if it originated in the private sector.

Or would it?

To the one, despite the differences between public and private, everyone I talked to agreed - it all comes down to the culture of the work place and that starts from the top down.

The bottom line based on my discussions here is that work place cultures that value employees as an asset, rather than a liability, experience lower frequency, lower severity, less claim costs, happier employees, and greater productivity.

So while public sector employees may, in general, engage in more dangerous work, or may have more legal protections, workers' compensation is all about people.

And when we're dealing with people it's the culture and attitude of management and the employer as a whole that can make or break a workers' compensation program.

My Dream

In just five days hundreds of people from around the nation will gather for the Fourth Annual WorkCompCentral Comp Laude Awards and Gala.

That's a mouthful of a title for a dream I've had for some time - get as many different workers' compensation interests together into one space for just an evening, and recognize what goes right with work comp.

I know it sounds Polly-Annish, and perhaps it is just wistful thinking; the hope is that if claims executives meet the subjects of benefit distribution; if the medical community meets the employers that pay into the system; if lawyers meet service providers; if government meets vendors ...

That if everyone that has anything to do with workers' compensation all get together for one day, one evening of recognizing that there are good things that can happen with the work injury protection system(s), stories will be told, messages will be heard, understandings will occur - and maybe, just maybe, people will work towards the common good for the sake of society, rather than for individualistic opportunism.

I'm not completely naive. I know that one night of education, camaraderie, and celebration isn't going to solve the problems we face in workers' compensation.

But it's a start.

Every conference I go to around the nation there is a recurring theme: silos.

Each independent interest in workers' compensation has their own conference or two.

Attorneys that represent injured workers have their own conferences;  Employers have their own conferences; Physicians and the medical community have their own conferences; there are even smaller gatherings for regulators, special vendors, researchers, insurance executives, and sub-specialty gatherings.

Even the single biggest gathering of broad workers' compensation participants, the annual WCI Conference in Orlando, FL every August, is still a hegemony of special interests - there are a dozen different education tracks that cater to each of the silos but none that speak to everyone.

Each of these conferences and seminars come with content specific to the interests of their singular groups, each of them focused on how to take advantage of some aspect of the system or law to minimize costs or maximize outcomes.

Not one of these gatherings includes injured workers. Many include their representatives, but that faction again speaks to their own interests first, and the needs of the beneficiaries second. And not one of them tells success stories.

For every story of failure, grief and hardship that we read about in the general media, there are dozens of stories where individuals go above and beyond to good outcomes, and sometimes these stories are of compelling, remarkable accomplishments.

Comp Laude is the only event where everyone from all segments of workers’ compensation are not only welcome, but encouraged, to attend and participate: executives, injured workers, claimant attorneys, defense attorneys, doctors, case managers, claims adjusters, researchers - you name it. 

My goal is to get EVERYONE under one roof at a nice event where people actually TALK AND LISTEN to one another, hear the stories, and understand all the diverging points, conflicts, interests, and perhaps, come to some understanding as to why certain things are the way they are.

At a time when workers' compensation, as a system, is under attack from the general media, the public, and lawmakers, it's important that we come together.

We don't have to change the way things are, and we don't have to solve all that ills workers' compensation.

We just need to come to a collective understanding of why things are the way they are.

It is my hope that we will, with Comp Laude, eventually help shape policy for the future that benefits all of society. 

It’s a big mission and a big risk.

But the dream is compelling to me. That dream drives me like a locomotive pulling a train, a long train filled with many people on a singular destination.

Some may disembark, some may never get aboard. Those that do ride along, I know, are aligned with that dream - that the single largest privatized social benefit system in the world can not only work, but work well, protecting people and businesses and provide stability to the economy.

We've made it easy for YOU to attend. We have special pricing for injured workers and claims examiners. We have deals for professionals that are members of recognized associations (nearly all of them!). Bring a Toy for Tots and there's a discount.

We're all in this thing together. We need to recognize that, if for only one night.

WTF of Work

You knew it was going to happen.

A group of technology executives, financiers, labor union leaders and public policy experts sent a letter, also published on the website, "Medium," posit to congressional lawmakers asking, "WTF?", or What's The Future of work.


Because workers are much more portable, and temporary, that in the past, the traditional two tiered analysis of employee and independent contractor no longer meet the needs of the economy or society, the letter argues, and it is now necessary to start discussions on a way to provide protections to the workers who are Dependent Contractors, the letter posits.


The earliest use of the term Dependent Contractor that I have found occurred all the way back in 2005 in a Berkeley Journal of Employment and Labor Law article by Elizabeth Kennedy.


In that article, "Freedom from Independence: Collective Bargaining Rights for Dependednt (sic) Contractors," Kennedy examines the history of collective bargaining, and goes back to the early 1930s and an attempt by newsboys in Los Angeles to organize.


That backdrop case, NLRB v. Hearst Publ'ns, Inc., 322 U.S. 111 (1944), recognized that there were marginal classes of workers that did not have sufficient bargaining power themselves to negotiate fair labor standards and benefits.


"The Court recognized that economic forces themselves may create conflict between employers and workers, who by strict definition do not have a proximate employment relationship," Kennedy summarizes. "In those instances, the economic realities of the relationship may more closely reflect the evils sought to be remedied by the NLRA [National Labor Relations Act] and justify the inclusion of independent contractors under the Act. The drafters of the Act had this imbalance in bargaining power in mind. This was the 'mischief' the NLRA sought to correct."


Business didn't like it, so Congress was petitioned, and did, exclude independent contractors from the NLRA when it passed the Taft-Hartley amendments to the Act in 1947.


Kennedy argues that the twin silo distinction between employee and independent contractor harkens back to medieval concepts that were no longer adequate to define the modern work force.


And the problem is that a large population of the modern work force is left without a voice, without representation and, most importantly, left in the vast void between the two silos in the world of work protections.


Kennedy posits that a Dependent Contractor Labor Board should be established to provide a mechanism for these workers to access the rights and privileges of employment while ensuring the benefits of independence that both those workers, and their employers, seek to preserve.


The model is already in place, Kennedy notes, in California with the Agricultural Labor Relations Board.


Kennedy was examining collective bargaining by disparate groups of workers who were classified as independent contractors but were singularly reliant upon an employment relationship.


Come full circle ten years later, and seeing the risk to their business models that eliminate the friction of "employment" in the "gig economy," big business is seeking what Kennedy posits - a new, third, classification of workers.


The tech giants and their financiers say, "Everyone, regardless of employment classification, should have access to the option of an affordable safety net that supports them when they’re injured, sick, in need of professional growth, or when it’s time to retire."


The group's tenets: flexible workers are good for the economy and should have protections from unforeseen maladies and calamities; the Affordable Care Act is a stepping stone towards providing an avenue to protections to this third class; and it's time to open the conversation.


But the group doesn't say how all of this is going to be paid for. Presumably, for now, the necessary first step is business' willingness to open the discussion towards a solution that won't destroy the investments behind Uber, Lyft, AirBnB, etc., and this letter is that step.


I can't help but think that the workers' compensation industry is uniquely poised with the long term experience and knowledge on how to make the concept of Dependent Contractor a reality, and provide mechanisms for the financing and administration of such a system.


Indeed, this has already started to happen - the Opt Out movement has drawn criticism from skeptical Labor and Insurance because of lack of transparency, mis or non understanding of ERISA, and mistrust.


But what Opt Out fans are saying is that independence is what the modern economy dictates - independence from the traditional two silo version of work.


Dependent Contractor relations is, essentially, workers opting out, but still having a back-up in case something bad happens.


Now is the time for workers' compensation industry leaders to help shape this emerging public policy change. It is THIS industry that has the knowledge, the know how, the intelligence, and the experience, that can direct how a new classification will be defined, how a system can be constructed to administer and regulate the relationships, and ultimately, how it's all going to be paid for.


The Dependent Contractor status is creating huge new opportunities for the business world and the economy. It is also a new huge opportunity for insurance and related industries to introduce new products and services to meet the needs of business and workers as this all evolves.


Dependent Contractors will, ultimately, be legally recognized. I have no doubt about that. We can help define it, and consequently benefit by doing so.

Share This

The key note speaker at the NCCI Annual Issues Symposium last week was Salim Ismail. He's a technology guru, having served previously as a vice president at Yahoo.

Ismail spoke eloquently about how fast technology is evolving, and how the hockey stick growth curve of services like Uber and other "shared economy" companies is going to radically change the way America works.

Truthfully, the law has always been, and always will be, behind technology - because The Law is reactive. The law doesn't come into action until it is requested, or required.

Ismail also noted that the laws and regulations that govern America can not keep pace with the Information Revolution - even though he opined that this revolution is only about 1 percent underway.

What Ismail foresees is a radical, and fundamental challenge to work, the work place, and ultimately workers' compensation, and society is going to have to ask itself if people are really, really ready to take care of themselves.

Because that's what the "shared economy" is all about.

In the shared economy, goods and services that used to be the province of organized business are distributed by individuals who have no commitment, obligation or allegiance to any legal business entity.

Nor does any legal business entity owe those individuals providing those goods and services any promise beyond a commission check. Or at least that's the way they see it.

People that subscribe to the shared economy ideal, value the freedom, independence and virtually unlimited earning capacity of "micropreneurs."

All good and well until something bad happens, and something bad always happens eventually.

Then the micropreneurs find out what a lot of us real entrepreneurs already know - the world is a cruel place and there's no one to fall back on except one's self (and a whole lot of credit cards) when the proverbial excrement hits the fan.

And this is perfectly find and dandy IF society is willing to tolerate a whole new class of workers that don't have the skills, education, fortitude, determination, discipline, ability, and, ultimately, financing, to stand alone with out the structure and formality of traditional employment and its suite of legal protections.

Uber, with its multi-billion dollar valuation (and I "get it" - that hockey stick growth curve of explosive acceptance by the purchasing public) can't wait for driverless cars - then they can substantially limit the attendant liability of drivers, wrecks, passenger abuse, and of course workers' compensation.

Right now, the shared economy business model relies on dislocating employment liabilities onto the employed.

I suspect that the shared economy is just starting. It will grow. Very large.

Critics of the shared economy say that it will create a larger class of "have nots" - have no insurance, have no health care, have no work comp, have no protections.

Advocates argue the shared economy didn't create this disparity, that it has existed in cycles forever - that the cycle of technological innovation has always outpaced the law, and society's ability to deal with the entrails.

According to Rachel Botsman in an opinion piece published by the Wall Street Journal, organizations are already dealing with disparity outside the government: TaskRabbit has introduced a wage floor, making it impossible for workers to earn less than $12.80 an hour; Peers.org and Freelancers Union are creating ways for independent contractors to pool bargaining power to access discounted health insurance and telecom plans.; still others are working on how to share equity.

Botsman points to a recent survey of Lyft drivers who were asked if they would prefer to join a traditionally structured company - only 25% said yes. The rest, presumably, enjoy their independence and control over schedules, rates, etc.

The opposing argument by Andrew Keen is that the companies that create shared economy technology do great, but the workers get the shaft; i.e. these are "jobs" that have no legal protection.

Keen says that the shared economy is, in reality, a "very selfish economy."

Having been around for some 55 plus years, I can say quite confidently that the vast majority of people don't belong in a "shared economy." Most people don't have the stomach, the discipline, the fortitude, the chutzpah of an entrepreneur, and are grossly incapable of taking care of their own lives, let alone their own business.

There is a huge population for which the traditional employment model is not only beneficial, but necessary.

Will traditional employment succumb to the shared economy? I don't think so.

What will happen is that a lot of people will find supplemental income via the shared economy, just like E-Bay has become a new retail storefront for many.

So the "shared economy" may supplement traditional employment.

But these new micropreneurs will become disenfranchised once something bad happens - like a work accident - and they have no recourse or remedy.

Perhaps the laws don't need to change. Perhaps they are structured the way they are because we learned a hundred years ago as this country evolved through the Industrial Age that we have this pretty much figured out.

An independent contractor is an independent contractor until a court says otherwise - then the business that "shared" itself with that (now) employee takes a hit and perhaps goes out of business.

Isn't that why work comp came about in the first place

The more things change, the old saying goes, the more things stay the same.

Sure, "shared economy" is a neat buzz phrase that's been marketed by Silicon Valley. 

It doesn't mean anything to The Law.

Year of Awareness

This is The Year of Awareness.

Awareness by the General Public about workers' compensation issues.

There is the series by ProPublica, with 3 installments so far, and more to come. You might not like it, but Michael Grabell and his team are accurately portraying pain points in workers' compensation.

The Federal Occupation Safety and Health Administration's review of the literature over the past couple decades also fuels the fire about the inadequacy of workers' compensation, and the spill of employer obligations onto the general taxpaying population.

Last year the Texas Tribune ran a series, "Hurting for Work" that criticized that state's work injury protection system (or lack of it).

Is this the road to enlightenment?

And a Florida trial judge has taken the position that work comp is no longer of Constitutional grade.

Now, Mother Jones has published an article it says exposes the true intent of the opt-out movement: to take a model of unaccountable diminution of benefits across the nation.

Opt-out supporters contest that conclusion and say they only want employers (in this case, only Big Business can afford the resources to opt out) to be able to provide better benefits in a more consolidated manner to their workers.

They are not, however, shy in confirming that their intent is to take opt-out nationwide, to all states.

The latest test case is Tennessee, where Senator Mark Green's SB 721 has gone through several amendments in an attempt to address critics - albeit in my opinion these amendments fall far short.

There are two major issues with opt-out, and in particular with SB 721 if it is to be used as a model: 1) capping life time medical benefits; 2) no accountability to public regulators.

Most state workers' compensation systems have a limitation on both temporary disability indemnity and permanent disability indemnity.

There is, and has been for a long time, a debate as to the adequacy of indemnity benefits to keep the paycheck-to-paycheck worker sustained during recovery and those benefits differ greatly from state to state. This debate is sure to continue regardless of what "reform" ever gets passed.

This debate also applies to the adequacy of permanent disability indemnity; whether it adequately compensates for the loss of an eye, etc. Again, where one gets hurt makes a huge difference in how much money a disability is "worth," and the debate about this adequacy will never settle.

The provision of medical benefits for the lifetime of an injured worker, however, has never been on the table - that is a topic that is simply sacrosanct, for the very simple reason that it was part of the Original Grand Bargain.

State reforms have, however, over the past two decades done as much as possible to eviscerate life time medical by requiring adherence to guidelines, by scaling based on co-morbidities, by forcing third party reviews, by trimming reimbursement and/or rebalancing fee schedules, among other tactics.

These efforts have been in reaction to perceptions that employers are unfairly paying for someone else's problem, or because of abuses in the right to lifetime medical by unscrupulous providers. Broad brush attempts to correct these issues reel in unsuspecting victims, like tuna nets capture innocent dolphins.

The Mother Jones article is critical of the lobbying efforts of the Association for Responsible Alternatives to Workers' Compensation, implying that its big company sponsorships and money spend is sinful.

It's not - it's just political reality. Just because a bunch of people with resources get together on a specific mission is not a reason to castigate either the people or the mission. It's done on both sides of nearly any debate. That's how we do things in America.

Painful as it is for this industry, though, the fact is that workers' compensation is under attack - from all sides.

Employers are sick and tired of the cost of the system and how little control they have over it. They're paying for it and don't see much if any value or return on investment.

And guess what? Workers who go through workers' compensation are likewise sick and tired over the cost of the system and how little control they have over it. They are the beneficiaries of what employers buy, but don't see much value if disputes are piled on top of the trauma of injury sequelae.

Is this the fault of us, the professionals who are tasked with administering benefits?

In part, yes.

But the larger issue is what society wants and what all this attention lately is telling me is that society wants a way to provide security to both business and workers.

In a manner that is better than what workers' compensation has devolved into.

I don't view opt-out as evil. I do view it as a necessary element in the debate about the adequacy of workers' compensation to deliver on its original promise: protect employers from economic ruin when someone gets hurt, and protect the worker who is the unfortunate victim of getting hurt.

If you take ARAWC's mission at face value, what the group wants to do is laudable. They are saying that state work comp systems no longer are a viable piece of the social contract; that private industry can do it better.

Maybe it can, if there are reasonable protections that meet the essential elements of work injury protection and that means taking care of an injury for life and not stacking dispute resolution in favor of one party or the other.

But this column isn't about ARAWC, or opt-out; it's about an awareness that is developing.

Workers' compensation used to hide in the shadows of health care and disability. Ask anyone just a few years ago about work injuries and you'd get an earful about "workman's compersation" and how a neighbor is cheating the system.

Now the public is beginning to ask: What are all these businesses doing for their pay when there's all these people that are being thrown to the curb for trash pick-up day? Why are businesses paying for services that don't seem to be delivered on time or in enough quantity? How is it that an insurance company that agreed to take care of an injured person for life can delegate that obligation to public welfare?

As I see it, the public assault on workers' compensation, the trend that is developing towards opt-out systems, and the overall malaise that seems to have settled over work comp portends a much needed, long deserved, debate.

The public is asking questions. Hard questions.

Because the public isn't seeing the value in work comp that had been promised (and delivered) for so long.

We're entering into a whole new era of Business versus Labor dispute. The Haves and the Have Nots are drawing lines in the sand.

The last time this happened the Federal government threatened imposition. It could happen again.

What we rely on for work injury protection systems will be vastly different in 10 years than what exists now. It's clear to me this is what's happening.

Less clear is what will actually exist in 10 years.

I Won't Eat At This Restaurant

Sometimes its almost impossible to believe some reports of abusive employer conduct. Perhaps in some other country a tale like this would not be surprising, but in modern United States one would not expect this kind of story.

A recent Tennessee case demonstrates the extent of callousness and inhumane treatment some employers can display, even in the second millenium where society is presumably more advanced than in the Industrial Age.

Lance Erickson was employed as a co-manager of the Sonic Drive In restaurant in Oak Ridge, Tenn., owned by SDI of Oak Ridge Turnpike, LLC. On Nov. 14, the general manager of the restaurant asked him to repair a heating element used to keep food warm until it was served.

As Erickson attempted to repair the heating element, an unknown person plugged the device into an electrical socket, sending a 220-volt current through Erickson's hands and body. The shock rendered him unconscious for five minutes. Employees told him later that he fell and hit his head on the floor or a safe, but he had to call his fiance to take him to the hospital because workers at the restaurant were too busy, according to the court record.

Erickson was treated at the Methodist Medical Center but suffered chest pains, memory loss and sensitivity to light after the accident. He asked his district manager, Wade Bell, and Bell's successor Phillip Wheatley to pay his medical expenses. They told him they would "take care of it," but the bills remained unpaid.

On Nov. 3, 2008, 51 weeks after the injury, Erickson filed a workers' compensation claim fearing the statue of limitations would preclude him from reimbursement of his medical expenses.

A few days after filing his claim, Wheatley vulgarly expressed his anger, asking him, "What the ... do you think you are doing? I told you this was taken care of."

Erickson had worked at the Sonic Drive In for six years and had never received a reprimand the entire duration of employment.

But within weeks of filing his workers' compensation claim Erickson received two reprimands.

On the first occasion, he received a reprimand for giving a customer a $2.97 refund four minutes after the restaurant had closed and not properly reporting the refund so that it would not be logged onto daily sales records. On Dec. 20, 2008, he was reprimanded and later fired for leaving the store during his shift without another manager on site.

SDI placed Erickson on three days' suspension after the second reprimand, extended the suspension for three more days and then told him he was being terminated.

Remarkably, yet in an all too commonplace situation, SDI denied that Erickson's injuries were work related and alleged that he had been fired for misconduct.

At trial, co-workers testified that other store managers had routinely left the premises without other managers on site and that Erickson had used the usual process for reporting refunds.

Medical and vocational evidence was presented and the trial court found that Erickson suffered a 10% permanent partial disability and was entitled to a vocational disability benefit equal to six times the impairment rating − an award of $107,702.40 − because his employer had not offered him a meaningful return to work. The court also ordered the employer to pay continuing medical benefits for his injury.

SDI appealed and lost.

In addition the Tennessee Department of Labor fined the employer for failing to report the accident. The amount was not noted by the court opinion and as far as I'm concerned it wasn't enough.

My only solace in this case is that in all likelihood SDI's insurance didn't cover the judgment because the employer didn't follow its insurance claims reporting policy and likely the carrier denied both coverage and cost of defense.

I know the fast food industry is the bottom of the totem pole when it comes to working conditions, but employers like those in this case are all too common, and should frankly be put out of business. If a business can't treat the people who flip your burgers with any regard, how do you think they view their customers? I'm not taking the chance...

And in all honesty, knowing that appellate cases get published for the whole world to see and then taking an appeal with these facts is evidence that these business owners have zero interest in public perception of their brand. That can only translate to the quality of their products.

The case is Erickson v. SDI of Oak Ridge Turnpike LLC, E2011-02427-WC-R3-WC, 09/04/2012.

Chinese Work Comp Surprisingly Similar

Yesterday I posted on Facebook a link to a horrific photo in the Wall Street Journal of a Chinese construction worker getting steel bars cut from his body - the look on the faces of the people helping conveys the sheer terror of the situation.

The photo is here (I am unsure if this is subscription content, so it may not work):

http://online.wsj.com/article/SB10001424052702303734204577464740934182320.html?mod=WSJ_hps_PhotosModule_1#slide/1

I wondered if China had workers' compensation - turns out it does.

China passed a workers' compensation law that took effect January 2004. While workers' compensation is "voluntary" in China (until "ordered"), employers that do not subscribe to the insurance program are required to pay the same benefits available through the program.

Sort of like the Oklahoma non-subscription model that didn't pass this year with some key differences.

But China is different because such a large percentage of the population works for the government or the military. About half of the population is still agricultural.

China's work injury protection history follows a similar path to Western cultures that have workers' compensation systems and it is rooted (pun intended) in the transition from agricultural to industrial economies, and in China this means a transition from a command economy (where the government decides what is done, when, and with what resources) to a market economy.

It turns out that China, prior to its Cultural Revolution (between 1966 and 1976), had an employment insurance system which included work injuries. This system was interrupted by persecution of dissidents and the Cultural Revolution, and then beginning around 1978 the economic transition started.

This transition saw the migration of workers from agricultural regions to urban regions as the economy required more labor to build things, rather than feed themselves. At first these migrating agricultural workers were seen culturally as less than equal (sound familiar?) - they had low levels of training and skills, and consequently high rates of accidents and deaths on the job. These people were regarded as peasants and were not covered by insurance though arguably they were the most in need of some form of work injury protection.

While this migration pattern was going on there was also transition in State-owned Enterprises (SOE). Laws were changed as the economy moved from command to market based, and as a consequence SOEs had to compete on a cost basis with market based companies. This meant that savings were sought everywhere possible, and thus worker safety was secondary to company profit.

In 2004, with China's manufacturing economy rapidly growing, the government's Regulations on Work Injury Insurance became law. All employers are required to participate with insurance funded solely by employer premiums, which are generally less than 1% of payroll, with different rates based on classifications. Both injury and illness is covered and it is administered through the Work Injury Insurance Board affiliated with the Labor Department.

For employers that paid into the system as requested the insurance would pay for most compensation items such as medical expenses, lump sum indemnity, monthly pensions, survivor's benefits - there is no loss of earning compensation though - employers are required to maintain wages during the period of medical treatment. In addition an employer can not terminate an employee during the period of medical treatment and if an employment contract ends during that period the law requires its continuation until the end of the medical period.

For employer that did not pay into the system they would be "ordered" to do so - the penalty for failure to do so is that if a work injury occurred during the period of non-insurance the employer would be liable for all benefit just the same as though they were part of the system.

Benefits under the Chinese system are similar to Western systems, though probably with less subjectivity and more concrete divisions in levels of, for instance, permanent disability. Medical expenses are advanced by the employer or injured worker and then are reimbursed by work injury insurance. As mentioned above, wages are maintained so there is no lost earnings paid (thus no "temporary disability"). And permanent disability is paid via a lump sum system that is based on "degrees" of disability.

There is a bifurcated dispute resolution system in place depending upon whether the employer pays into the system or not. If the employer pays into the system then any dispute is between the injured worker and the Work Injury Insurance Board. If the employer is a non-subscriber then there are two systems: compensability is determined in an action by the injured worker to the Work Injury Insurance Board. But compensation matters are treated the same as labor disputes, with mediation, then labor arbitration, then litigation with review by a higher court.

And like counter parts in the West the system is subject to "reforms". And like in the West employers carry on about the cost and how it inhibits competition while Labor fights for fair treatment and working conditions.

There is one very big important difference from the Chinese model and the Western model that stems from how the different governments work: the Western model is a provincial level system - meaning that each state has its own system, and even different Federal risks have different systems (e.g. LSHW, DBA, etc.). But the Chinese system is national in scope - the provinces do not have separate systems. 

I have obviously glossed over the Chinese workers' compensation system, and certainly there are experts who probably should correct my many generalities here.

What I find of particular interest is that, even though it was established after almost 100 years after the Western model was established, how similar the system is with nearly the same types of benefits and detriments. 

It turns out that humans are all the same - regardless of whether we live in the East or the West, motivations, emotions, the process of life are no different.

What we have in the US may just turn out to be about as good as it can get. It may not be perfect, and there will always be disputes, but if the Chinese had 100 years to figure out something better you'd think they would - and it turns out they haven't...

A very good PowerPoint slide show on the Chinese workers' compensation system is available for download from the University of Ottawa's website.

NH Case Illustrates Legal Fiction in Causation

In his book, Stabbed In the Back: Confronting Back Pain in an Overtreated Society, Nortin Hadler MD argues that much of what we consider an "injury" in our health care and workers' compensation systems are not really injuries.

Dr. Hadler's book specifically addresses regional back pain as a condition that has gone from a normal experience of the human body, the product of general aging for the most part, to an "injury" providing substance to a grand medical sub-industry attempting to treat something with very limited success, if any at all, from a statistical and scientific standpoint.

What Dr. Hadler bemoans is how the laws and legal systems in the United States turn what otherwise would not be medically an injury into a condition that not only increases medical costs but disability. The import of Dr. Hadler's work is that society has essentially created injuries where none exist.

Much of what Dr. Hadler writes about is the product of the law, whether statutorily expressed or interpreted through cases - the point is that we legally recognize an injury (or the inverse, DON'T recognize an injury) other than the fact that the law says so with no underlying medical basis.

Essentially, Dr. Hadler points to confusion on causation. There is medical causation, and then there is legal causation.

A condition may have a basis in medical science, but not be recognized for legal purposes, which is generally tied to some system of indemnity and/or reimbursement for expense.

A New Hampshire case that was reported this morning in WorkCompCentral News is a perfect example of why physicians have a difficult time understanding how the law impacts what is, or isn't an injury.

The Supreme Court of New Hampshire decided that the Legislature intended to exclude a former business owner's depression from the list of compensable injuries, in the case of In Re Appeal of Letellier.

In the months before the business closed, Letellier saw a nurse at Concord Psychiatric Associates because of stress. He was diagnosed with major depression and hypertension, and filed a workers' compensation claim with Chartis Insurance for mental stress and severe depression.

The state's Compensation Appeals Board (CAB) awarded Letellier reimbursement for medical bills and expenses, but did not award indemnity benefits. Both parties appealed, with Letellier arguing for indemnity benefits and Chartis contending that the injury was not compensable at all.

The state Supreme Court noted that while major depression arising from work-related stress can be compensable, state law specifically exempts mental injuries caused by "any disciplinary action, work evaluation, job transfer, layoff, demotion, termination, or any similar action, taken in good faith by an employer." In other words, the statutory language bars compensation for mental injuries caused by good faith personnel actions.

"Like the listed exclusions, the possibility of a business failure is a normal condition of employment," the court wrote. "It, too, is often precipitated by poor company performance or general economic conditions. A business failure is indistinguishable from the specifically enumerated exclusions. Viewing the plain meaning of the phrase 'any similar action' in light of this fact compels us to conclude that the phrase encompasses a business failure."

To add to a physician's confusion over causation, even the law can't agree sometimes! In this New Hampshire case, two of the five justices on the court's panel dissented.

Chief Justice Linda Stewart Dalianis wrote that the statute only excludes "mental injuries that result from a good faith personnel action." She explained that even if the Legislature did not intend to allow claims such as Letellier's, the statute's actual language appears to render his claim compensable.

"Moreover, I believe that because of our obligation to construe the Workers' Compensation Law liberally to give the broadest reasonable effect to its remedial purpose, we must interpret the statutory exclusion at issue narrowly," Dalianis wrote. "Thus, I would hold that the claimant's cumulative occupational stress and resulting depression, caused by the failure of his business, do not fall within the statutory exclusion from the definition of 'injury.'"

When I lecture to physicians, I tell them that many things which they see medically as measurable science is described legally in fictional terms. I think this case illustrates that point.workers compensation, work comp, injured worker 

Compensable Consequence: Dogs versus Drugs

An injury that occurred when an injured worker's dog pulled away from him, causing his shoulder surgery to fail, is compensable, because it was a direct and natural consequence of the original work injury, the Tennessee Supreme Court, Special Workers' Compensation Appeals Panel ruled in Kirby v. Memphis Jewish Nursing Home, W2010-02261-WC-R3-WC, 12/01/2011.

David Kirby was employed as a heating, ventilation and air conditioning technician for the Memphis Jewish Nursing Home. He injured his shoulder on Sept. 24, 2008, when he slipped on some stairs while climbing down from a roof.

Kirby underwent surgery to repair a torn labrum and biceps tendon. He underwent physical therapy after the surgery and was progressing well until late September 2009, when he returned home and found one of his dogs off the leash and loose. Kirby grabbed the dog's collar, but the dog tried to run away, pulling on his shoulder. Kirby felt pain immediately and visited his doctor.

The dog's pull had caused Kirby's tendon to tear again, creating what orthopedists call a "Popeye" deformity to the biceps. Kirby and his doctor decided it was best not to perform any additional surgery. Kirby applied for workers' compensation benefits.

I find the Kirby case analogous to drug overdose cases that I had been highlighting recently.

A couple of days ago a reader challenged my opinion that a court was correct in finding compensable a worker's death due to drug overdose.

Change the facts in the above case a little to read that every time the worker felt pain due to his shoulder injury he popped another Oxycontin - and finally ingested enough to overdose.

How is taking medication prescribed by a treating physician - albeit outside of prescribed dosage - different than exceeding the physical limits of a freshly repaired body part?

One could argue that taking too much medication is voluntary - but then again grabbing a dog's collar is also voluntary. One could argue that taking too much medication is known to cause death and/or further disability - but then again it is reasonably foreseeable (one of those terms you learn as a first year law student) that grabbing a dog's collar after surgical correction could also lead to further injury of the shoulder.

In the Kirby case, the employer argued that Kirby's negligence had caused the second injury, breaking the chain of causation.

The appellate court's opinion noted that Kirby's physician had encouraged Kirby to "push past his limits" in order to improve his range of motion. The doctor had not advised Kirby to avoid walking his dog and had testified that failure is one of the risks of shoulder surgery. The court determined that the second injury was, therefore, a direct and natural consequence of the original injury.

In drug overdose cases, particularly the couple that I have observed in the past few posts, the employer argues that taking too much medication is outside the employer's control and is purely voluntary on the part of the employee.

Where do you draw the line on control? The employee's physicians had provided prescriptions for narcotics for pain. The physicians, per the prescriptions, had placed a limit on the quantity of drugs to be taken. One of the risks of these drugs is death if taken in excessive quantities or mixed with other drugs or alcohol. I'm reasonably sure that there are warnings on the labels of these drugs per FDA regulation.

I think it is helpful to think of workers' compensation as the first real universal health care system, albeit applicable only to people that are employed. You get hurt at work, your medical is covered. If one thinks of workers' compensation in those terms then compensable consequence cases are easier to understand.

In the Kirby case, a not yet completely healed should injury was still the responsibility of the employer even though the re-injury was due to a non-employment event because the universal health care rationale of workers' compensation dictates that result.

In drug overdose cases, a not yet completely healed worker is still the responsibility of the employer even though excess pharmaceutical intake is a non-employment event because the universal health care rationale dictates that result.

I don't like this result, but I have a hard time arguing against it until we change our culture of surgery and drugs as the cure of all that ills us.workers compensation, work comp, injured worker