A Going and Coming Lesson

The Education Department at WorkCompCentral is in the middle of a pilot program to place young lawyers into the work comp industry.

Working with Pepperdine University School of Law (my alma mater of course) we have a handful of graduates who have taken the bar exam and awaiting results whom we are educating on the intricacies of work comp, and having them mentored by both defense and applicant firms so they can get a feel for the practice experience.

Then, assuming they pass the bar, we will try to place them with a firm seeking young professionals with adequate "experience" so that the firm can put that graduate to immediate work. 

Going or coming?

Of course, there is also mentoring and follow up that WorkCompCentral provides too - and just the other day I had one of the graduates in my office Monday for her two hour slot, and I grilled her on AOE/COE, and more particularly the "exceptions" and the "exceptions to the exceptions."

So I challenged Cynthia on AOE/COE, and in particular the Going and Coming Rule...

It just so happened that on Monday the Idaho Supreme Court released an opinion on an excellent sample case!

In Kelly v. Blue Ribbon Linen Supply, No. 42658, 11/02/2015, published, Barbara Kelly, a Blue Ribbon Linen Supply employee, suffered a foot injury in September 2013 when a cart rolled over her foot. Blue Ribbon paid her medical and time-loss benefits for her injury.

In November 2013, Blue Ribbon's insurance carrier directed Kelly to attend a medical evaluation with Dr. Robert Friedman in Post Falls.

It is approximately 125 miles each way from Kelly's workplace in Lewiston to Post Falls.

Kelly attended the evaluation, and on her way home, she got into a car accident.

She was not at fault for the crash, which involved a head-on collision with a Ford F150 that had crossed the centerline of US 95.

Kelly suffered severe physical injuries to her lower extremities, and her doctor restricted her from any weight-bearing on her legs, which necessitated her admission to a skilled nursing facility while she recovered.

Blue Ribbon disputed the compensability of Kelly's injuries from the car accident, and the Industrial Commission found her injures were not compensable because they were the product of an intervening cause rather than Kelly's employment or original injury.

The Supreme Court found otherwise: Kelly's trip to the doctor was made at the request of her employer's insurance carrier, for the benefit of the carrier, and she had a statutorily-imposed duty to go to the examination.

"In our view, Kelly's situation is analogous to two situations where compensation is available to the worker: the special errand and traveling employee exceptions to the coming and going rule," the court said.

"When an employee's work requires him to travel away from the employer's place of business or his normal place of work, the employee is covered by worker's compensation," the court explained.

In this case, the court posited, "Kelly was essentially required by her employer to travel away from her normal place of business, Lewiston, for an IME in Post Falls."

So there you go Cynthia - an adept lesson in the going and coming rule, and exceptions.

Welcome to the world of workers' compensation!

*******shameless plug*******

If you or your firm is interested in our program, please contact David Weiss or Floydell Carter for more information. We need new people in work comp, and this is our first step towards getting more folks interested in the industry as a career. There is no cost to the graduate (they don't have any money anyhow!) and the cost to the employing firm is $3,500 - what we would charge for that educational package.

Avoid Disability

There are laws against disability discrimination.

The Americans with Disabilities Act came into existence back in 1990 among great fan fare. The business world said the ADA was going to make America uncompetitive and destroy the economy. Disability advocates said the law was necessary to even the playing field.

Many state work comp laws penalize discrimination against the work injured/disabled.

Without an overt, obvious and egregious act of discrimination, though, proving discrimination and enforcing the rules is very difficult.

A recently published study unfortunately confirms that disability discrimination is still very wide spread, and demonstrates much of what I've ranted about in the past: workers' compensation has nothing to do with return to work, and while much of the return to work equation rests with the injured employee's desires, active discrimination on the part of employers plays a big roll too.

The study was a a field experiment that sent job applications in response to 6,016 advertised accounting positions from well-qualified fictional applicants, with one-third of cover letters disclosing that the applicant has a spinal cord injury, one-third disclosing the presence of Asperger’s Syndrome, and one-third not mentioning disability.

These specific disabilities were chosen because they would not be expected to limit productivity in accounting, helping rule out productivity-based explanations for any differences in employer responses.

Half of the resumes portrayed a novice accountant, and half portrayed an experienced one.

The fictional applicants with disabilities received 26% fewer expressions of employer interest than those without disabilities, with little difference between the two types of disability.

Novice accountant applicants with no disability referenced received a quarter more "acceptance" than experienced applicants with a disability reference.

Here's a stark reality - while workers' compensation has nothing to do with return to work, it spits out people with "disabilities" even if they don't have any of consequence to job performance.

And people with disabilities can't get jobs.

Perhaps I've taken the wrong view. Workers' compensation has everything to do with return to work, but not in the sense that vocational vendors have been pushing.

Rather, workers' compensation's role in return to work is negative - people exiting the workers' compensation system with some disability will find closed doors, even at their pre-injury place of employment.

For injured workers, again, the lesson is clear: get out of the work comp system as quickly as possible, and work hard to avoid "disability."

The paper is by Rutgers and Syracuse University researchers: Ameri, Mason and Schur, Lisa and Adya, Meera and Bentley, Scott and McKay, Patrick and Kruse, Douglas L., "The Disability Employment Puzzle: A Field Experiment on Employer Hiring Behavior" (September 2015). NBER Working Paper No. w21560. Available at SSRN: http://ssrn.com/abstract=2663198. Thanks to Dr. Jennifer Christian for bringing this study to my attention.

Displacement of The Bargain

I expected vitriol in response to my posts on the realities of workers' compensation, justice and wealth re-allocation ("Ain't No Justice" and "You Don't Belong Here"). I didn't expect to see frustrations expressed so violently.

Most of these comments have been removed by their authors from my blog. They are disturbing, and I hope are NOT indications of homicidal ideation, but they certainly should not be dismissed as rantings of unhealthy thoughts.

Many of comments reflect a lack of understanding of what workers' compensation can, or can't accomplish, but more so, are evidence of increasing class stratification and social resentment, and while workers' compensation isn't the cause of that greater social ill, it is reflective of that.

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YOUR (sic) right the only way the injured get justice is if they take the law into their own hands and hold those suits to account for the wrongs.

THEIR (sic) is no justice one has to seek that from their oppressor with out the courts.

THE ONLY WAY FOR THE injured to get justice is to take the law into your own hands.

LOOK at Nevada, that adjuster got what he had coming and more will follow.

NO JUSTICE in COMP means NO JUSTICE for the whores who try to eff us over...

I will have JUSTICE against those who conspired to harm me, law of the land or not.... those who harmed me will pay for their crimes in the end..

THE ONLY way for the injured to get justice is to extract it on their own from their oppressors.

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The abused and oppressed will rise up and fight back weather the systems condones it or not. WERE (sic) PITTING one class against another, then allowing the suits, to hide and walk away from their crimes. An injured worker will rise up and seek revenge with or with out the system.

THE power players need to beware, for their days of effing over injured workers are coming to an end.

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IT is all about justice and principle. You see if I had an attorney, I would not have been allowed to fight on just principle, for that's not worth a lawyers time, but for an injured worker, Principle is worth all our time, 24.x7. That is how our claims becomes or (sic) lives, fighting for this root injustice, thats suits seem to just demises with ease. .

Justice, is what its all about for the VICTIMIZED.

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Employers have gotten away with a lot. Especially in the health and safety laws that employers laugh at. Employers do not have to abide by the rules and many injured/ill/disabled are purposely harmed and some after the injury by vile "medical staff". Where is the justice when a claim is denied from the onset and that insurance whores (doctors) who will knowingly write a false report as instructed by the insurer. The greatest injustice here is that the Worker comp courts do not listen to the injured when there is more than obvious malfeasance & fraud by the employer & the insurer. So who represents us against the fraud & corruption against the court. Now that is an injustice that can be fought but everyone that could help, turns their heads for a meager percentage. Judges do not acknowledge fraud even though they are supposed to. The same goes for the District attorneys, they don't because the same employers pay their salaries as is done in CA. AND therein lies another injustice with those who are supposed to protect us against deliberate harm or fraud do not because they are bought and paid for by the same employers who don't care if their employees are exposed to harmful work environments. AND then there is the injustice of our law makers who keep writing up laws that hurt the injured workers from the onset. So yes there are injustices that can be fought for, only IF those who represent us get the courage to do so. No one should wind up in the poorhouse with ongoing injuries or illnesses all to protect the employer/corporations. Now that's the biggest injustice that should be gone after and isn't.

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One other injustice is that when claims aren't paid to the injured/ill/disabled worker that that money does go directly back into the employer/insurer for profit at the end of the day, month, year. To profit off of injured/ill/disabled workers by not paying out claims is also vile. It is very much a parasitic system, all and just for CEO's & others to live high on the hog on the corporations producing injured/ill/disabled workers. This is a repeat of the 1900's Gilded age. Where the working class is just used & beaten up, all just for profit. tsk tsk, that history has repeated itself is really so sad and reprehensible, lets hope nothing else of history follows.

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ONE of the injured will rise up and show this COUNTRY what JUSTICE really is.... the comp workers in NEVEDA learned the hard way. NOW we need to teach all the other players as well. YOU DO NOT LIE In our care then live to brag about it. A WAR that the elite pure breed have started but US LABORERS will finish, by dancing on the elite whores graves.

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ITS a CLASS WAR Period. AND THE Victims will rise up and kill their abusers in the end. Count on it.

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The Nevada case that is referenced by the commenters above involved a claimant seeking permanent total disability indemnity for a 2003 injury sustained when he tripped over a baggage cart at the Bellagio in Las Vegas.

Leonard Sullivan is scheduled to stand trial November 16 for the October 13, 2014, shooting of Michael Kogler, a hearing rep for Alverson, Taylor, Mortensen & Sanders. Kogler survived the shooting.

Sullivan filed a civil rights complaint against Kogler, a former hearing rep for MGM, as well as his nurse case manager, claims adjuster and MGM. The complaint was dismissed.

Some people can't or won't be helped. They have their mission and will seek to accomplish it to the end, like Sullivan.

But most people just want to move on, though they don't really know how to do it, and the workers' compensation system isn't designed to help with that process.

In fact, it is The Process of workers' compensation that gets in the way. In its evolution, workers' compensation has become more about making sure the right boxes are checked on a form, ensuring that some paper is filed correctly, worrying about this procedure or that procedure.

The concern with the details of procedure has displaced delivery of the bargain.

Work comp is about providing some form of medical treatment and indemnity in accordance with rules dictated by legislatures and meted by rules. The disconnect, I believe, is expectations.

Expectations of the injured worker, expectations of the employer, the doctor, the claims payer, attorneys, judges, shareholders....

Each of these constituents has different, opposing expectations.

As a consequence of attempting to manage these opposing expectations, checks and balances have been implemented over time that have ended up taking precedence over the actual act of delivery of benefits.

The retorts above also demonstrate the most dangerous aspect of getting hurt at work and falling into the workers' compensation system: isolation.

The community of injured workers who complain and express harmful thoughts exists because of the isolation of injured workers. At least in their community there is understanding and relation based on a common denominator: workers' compensation.

At home, alone (at least psychologically), without any real support system - a recipe for disaster.

Sometimes a case manager will be assigned to interface, but typically the role of the case manager is cost containment. The title, "case manager" denotes that role. These hard working, compassionate people have a lot of forms and reports to generate, and that takes time away from their real jobs: listening and understanding.

We know that "relationships matter." In fact, there's good argument that relationships take precedence over nearly any other element of human existence.

Yet we do a terrible job in workers' compensation of establishing and maintaining, or repairing, relationships with the people the system is supposed to service. And this leads to unreasonable expectations.

I don't have an answer other than getting a lot of people together, all of the different constituencies in this complex world we call workers' compensation, and starting a dialogue.

The answer isn't more laws, or regulations, or penalties, or hearings, or fines. Nothing will get solved today, and maybe not tomorrow, unless there is trust.

Trust doesn't happen over night and requires the one thing that most people are terrible at: listening.

What the injured workers above "hear" from workers' compensation is that they aren't wanted, and that they are discounted as human beings. 

My guess is that each of these folks were discarded early on in their cases, and by "discarded" I mean were not counted as human beings with issues from the very beginning. Maybe those issues were/are personal, but they deeply influence the workers' compensation case and can't be discounted simply because they are "co-morbidities."

Listening takes time and patience, things we're short on because we're so concerned with the process.

Fairness To Self

Monday I espoused that workers' compensation had nothing to do with return to work because the ultimate decision lied with the worker, and his or her motivations.

I followed up a couple days later with a rant that there's nothing "fair" about workers' compensation.

The Supreme Court in Kentucky in April confirmed both of those tenets in ruling that the state's laws did not permit an offset against temporary total disability indemnity benefits if an employer provided an injured worker with a job during the recovery phase and while on TTD, even if that was unfair.

The result has been that many employers have stopped with their return to work programs.

The Supreme Court in its opinion in Quad/Graphics v. Mario Holguin said the employer made a good public policy argument for allowing employers to suspend TTD if they return an injured worker to employment on light duty before full recovery.

The employer, Quad/Graphics, (in reality, likely their insurance company, but it is not identified in the court's opinion) had argued that if it does not receive an offset, the plaintiff was getting “an unfair and unnecessary windfall.” Without an offset, employers “will stop placing its injured employees on light-duty work and the result will force employees to live off of reduced TTD benefits.”

The court found there is no law in Kentucky's statute books that allows employers to offset any benefits except in very narrow circumstances and not in any case where the worker is doing a job he was not employed to do.

According to WorkCompCentral's story this morning, many employers in Kentucky now, including some municipalities, have been dropping return-to-work policies entirely, confirming Quad/Graphics' argument.

Following release of the judgment, the Kentucky League of Cities told its 380 members to “discontinue any modified-duty work program you may have to avoid paying injured workers both for modified duty and workers' compensation indemnity benefits.”

The Quad/Graphics case is an unpublished opinion, which means it does not have binding authority as general law - the ruling is only applicable to that specific case. Still, the court basically affirms: there's nothing about return to work in workers' compensation and fairness is up to the legislature - everything else is an accommodation only:

"Workers' compensation is a statutory creation," the court concluded citing earlier case law for the quote. "Thus, the proper forum for the argument is the legislative."

Does return to work make sense? Sure it does. The employee derives the benefit of belonging, having more to do than contemplate his or her work comp case, and interact socially at a meaningful level. The employer ultimately saves money by reducing disability in the long run (because back to work will shorten disability duration - there are many studies confirming this), getting back to normal production faster and improving moral.

Employers that whine it's not fair do what is being reported - wah... They are short sighted and fail "the right thing" test.

But they prove as well that return to work is not a part of work comp, it is only an accommodation. And they further prove that there's nothing fair about work comp except what the legislature says is fair.

An employer waiting for sanctification from the legislature, though, isn't fair to itself...

You Don't Belong Here

Richard was an FBI agent.

He's a resident at Mom's memory care facility. I've known him since Mom started there.

Richard is in his mid-to-late 60s. He's over six feet tall, but hunches over on his walker so he looks more like five foot ten. He always wears an FBI hat, has at least 2 hand held radios (and gets very upset if one is missing) and, as one would expect from an FBI agent, always has a serious demeanor.

Vascular dementia is Richard's disease. According to the Alzhiemer's Association website, "Vascular dementia is a decline in thinking skills caused by conditions that block or reduce blood flow to the brain, depriving brain cells of vital oxygen and nutrients."

His wife told me that Richard was fine, a normal operating brain, when he went to bed one night. He woke up the next day severely incapacitated.

Vascular dementia can work like that, sort of like a stroke. One day you're all good, the next morning you have significant cognitive impairment, though more often than not changes are progressive, and yes, age is a factor.

Richard's dementia has attacked, in particular, his speech. He can still speak, but it is in whispered tones and he mumbles. I have to work very hard to understand what he is saying.

He also had an issue with his right arm. At first his wife thought it was a symptom of his vascular dementia, but Richard's physician determined that it was a pinched nerve because Richard was sleeping on it. A pillow between the arm and body at night resolved that, and now Richard's right arm is completely functional again.

After his right arm regained function, his wife asked Richard to write his name as a test of the progression of his disease. He didn't just sign his name, he composed a note:

"I love this place. But I don't belong here." [signature - which his wife said was true to his normal sign].

This brought tears to Richard's wife as she showed me the note. I welled up too. There is no other place for Richard to go...

Many in the California workers' compensation system, be they claimants or vendors, might love the space, but feel they don't belong and the courts are saying, essentially, love it or leave it.

Yesterday California's 1st District Court of Appeal upheld the constitutionality of independent medical review, concluding what has always been the overriding theme in workers' compensation legislative changes throughout history: the legislature can do whatever it wants.

"We conclude that [Frances Stevens'] state constitutional challenges fail because the Legislature has plenary powers over the workers’ compensation system under article XIV, section 4 of the state Constitution (Section 4)," the court said. "And we conclude that her federal due process challenge fails because California’s scheme for evaluating workers’ treatment requests is fundamentally fair and affords workers sufficient opportunities to present evidence and be heard."

U.S. District Judge Jesus G. Bernal said in a Sept. 21 ruling in the RICO case brought by first responders against Corvel and York Risk Service that, "prior to final adjudication, workers' compensation claimants do not have a sufficient property interest in their benefits to establish the injury to property required for a RICO cause of action."

Workers' compensation is seen as a right by most of the population. Get hurt at work, or at least allege an injury, and it is the right of the claimant, and those riding his or her coattails, to benefits.

The court decisions are making it clear though that there isn't any right to workers' compensation benefits, and that what the legislature giveth, the legislature can taketh away.

Yesterday I said that workers' compensation is not about justice; that the system is simply a wealth re-appropriation system with dispute resolution built in to put finality to transactions that have some level of disagreement.

I think these recent court decisions firmly support that statement. The courts have warned that workers' compensation isn't worth fighting about; disputes don't belong in the courts because workers' compensation isn't about justice.

Work comp can't be about justice is because it is not a right bestowed by a constitutional grant. The only "right" is that the legislature has constitutional authority to do what it wants regarding work comp.

Sure, there may be some disagreement about exactly how much should be paid at a given time, or whether or not an "injury" falls within the ambit of work comp, or whether a particular procedure is authorized or covered ... but if the legislature says how to do something, or who gets what specifically, then that's the way it is and there's not a whole lot anyone can do about it other than get the legislature to change the rules.

There were times when Labor ruled the California legislature, and the work comp system expanded. Now Business rules the California legislature and work comp is contracting.

The fight isn't in the courts. The courts want nothing to do with work comp because there are no rights involved. One has a right to life, liberty and pursuit of happiness, sure, but those aren't guaranteed. It's up to individuals to sew their own guarantee though.

Which is why I concluded yesterday, "injured workers should get into and out of workers' compensation as rapidly as possible. Whatever it takes to exit the system with some modicum of health for the future, and whatever indemnity the law provides, is the goal."

The legislature has spoken, the courts have affirmed: Don't fall in love with the place. You don't belong here. 

And, unfortunately, there is no other place to go.

Ain't No Justice

I'm probably going to get slammed by injured workers for this post, but that's okay because there's a truth that needs to be said.

There's a reality to workers' compensation that most injured workers who get wrapped up into the system, particularly in litigation, don't appreciate, much less understand:

Workers' compensation has nothing to do with justice.

Nothing.

If you are looking to correct wrongs done to you, or another, via the workers' compensation dispute resolution system, regardless of state or jurisdiction, you're wasting time, money, and your own health.

Here's the bottom line: Workers' compensation is simply a wealth reallocation system. That's all it is.

It was not, and never was intended to, right a wrong, bring people to justice, or provide any sort of revenge.

Justice has no place in workers’ comp. Work comp is only moves money from one pocket to another, with some deductions along the way to pay for that service.

Money comes in from a business in the form of premium. A percent is skimmed right off the top by the procuring broker or agent. Then some is allocated for investment by the insurance or holding company. Some is set aside to pay the cost of claims and the office building and staff. Other amounts are paid to various vendors. At the end of the day there may be some left to return to investors, or to pay employer dividends.

The only reason there’s a dispute resolution process in work comp is because whenever money is involved someone wants more than they are entitled to or what others think they should get, and there has to be a process to manage the dispute and put finality into a transaction.

There’s nothing “fair” about workers’ compensation. Fairness is a legislative matter. 

Legislatures determine what is "fair," and if legislatures go too far out of the "fairness" balance, then a court will intervene. There are state supreme courts reviewing the fairness equation right now, but the standard for review will be the standard espoused by the US Supreme Court in 1917 when America's highest court held compulsory work comp was constitutional.

So long as comp provided a "reasonably just substitute" to a tort claim, the US Supreme Court ruled in New York Central Railroad Co. v. White (1917), then it could be the sole means a worker had for recovering against an employer.

There's a lot of factors going into the determination of "reasonably just substitute" - not just how much money a claimant gets, or the timeliness or thoroughness of medical treatment, etc.

Certainly there are court challenges pending in various states arguing that work comp is no longer fair, that the Grand Bargain has been compromised to such an extent that it doesn't meet the Supreme Court's standard of a "reasonably just substitute," but that's not in the NOW, i.e. the present reality. Any future supreme court ruling about workers' compensation constitutionality won't help the claimant TODAY.

You or I may not make it to tomorrow. We need to deal with today...

As in any wealth reallocation system there are winners and losers. And there is plenty of friction in the system that gets in the way of an injured worker receiving benefits - there's no argument about that. 

Injured workers all too often get the short end of the stick. We have chronicled that many times in this blog and in the news.

But, there was a time not too long ago that the business sector felt they were getting the short end of the stick too, that they weren't being treated fairly and they couldn't get justice either.

Here's the real deal: Employers and their workers are in the same boat - without work to do, there is no employer, nor workers who may get injured. Likewise, without workers, there's no way business can get done.

Each needs the other. Sometimes that relationship is more balanced than at other times.

It’s not intended to be “fair.” It is simply reallocation of wealth - plain and simple. 

Everyone in the workers' compensation industry makes money off the misery of injured workers and their families.

We all profit off the injured worker in some context or other. Some, I’ll certainly agree, push the boundaries of ethics, morality, and legality.

To be clear, I'm not against an injured worker having legal representation. Most systems are complex. The concepts and terms are confusing, unfamiliar, and there are many traps for the unwary.

But a lawyer on your case is not about seeking justice. For the claimant, a lawyer's job is to maximize case value because that's how they get paid. The more the case is worth in terms of dollars, the better the pay day. For the claims payer the lawyer's job is about minimizing the expense.

And there's nothing wrong with that because, as I said, workers' compensation is about wealth reallocation and the injured worker's attorney does the job by reallocating as much as possible within the rules of the game to the injured worker. The defense lawyer checks the balance.

Sometimes wrongs occur in cases, and the lawyer will seek redress for those wrongs - again within the rules of the game. And those rules generally provide for some remuneration to compensate for those wrongs (we call such remuneration, "penalties"). The motive, again, is case value maximization - not to teach a lesson (though sometimes a lesson may in fact be taught).

An injured worker seeking justice through the workers' compensation dispute resolution system jeopardizes health, sanity, and life itself wasting years that could be spent living while trying to buck a system designed as an administrative process.

The bottom line - injured workers should get into and out of workers' compensation as rapidly as possible. Whatever it takes to exit the system with some modicum of health for the future, and whatever indemnity the law provides, is the goal.

Living the claim takes years off a life for naught. Workers' compensation litigation is a terrible place to live.

Threat to Market?

Disclaimer - I'm no economist. I leave that stuff up to Bob Hartwig and his team over at Insurance Information Institute.

I just know what I know, and the older I get the more I don't know.

Still, in the world of workers' compensation there are some basic, simple facts that we tend to forget as we get swallowed up in the mire of data that either supports or contradicts our theories and actions.

The single most basic fact about workers' compensation is that it doesn't exist unless there are businesses that employ workers, and there are workers at those businesses.

Bottom line - without work there's no work comp, nor an industry to support it.

This fact was last made painfully aware to us in the Great Recession, when premium dollars dried up, and 2010 saw one of the single biggest jumps in claim frequency in many, many years, producing a couple years of negative combined ratios, followed by years (and continuing) of abysmal investment returns.

Workers' compensation is particularly hurt in troubling economic times when the top tier of the risk categories are impacted: construction, manufacturing, trucking - high risk lines with corresponding high rates and, ergo, high premiums.

And just when we think things are getting better, the global economy gets challenged, which challenges the domestic economy, because in this new world everything is connected.

The Wall Street Journal yesterday ran a story about the ongoing recession (didn't we escape that a couple years ago?) - not an overall recession, but the hard times befalling the industrial sector.

“The industrial environment’s in a recession. I don’t care what anybody says,” Daniel Florness, chief financial officer of Fastenal Co., the WSJ reported he told investors and analysts earlier this month. Fastenal is a NASDAQ traded company and its stock has been trending downward over the past year.

The reason the stock has been slipping is because its customer base isn't buying the nuts, bolts and other factory and construction supplies the company makes. According to the story, Florness said that a third of Fastenal's top 100 customers have cut their spending by more than 10% and nearly a fifth by more than 25%.

That story is repeated by other big, industrial stocks. Caterpillar Inc. last week reduced its profit forecast, citing weak demand for its heavy equipment, and 3M Co., whose products range from kitchen sponges to adhesives used in automobiles, said it would lay off 1,500 employees, or 1.7% of its total, as sales growth sagged for a wide range of wares, according to WSJ.

What's going on?

Energy prices (i.e. oil) has favored fuel consumers, but has killed domestic production and the need for drilling equipment and supplies. China's troubles, including its own interest rate cuts, have stemmed that country's needs for US goods, and other emerging markets such as Brazil aren't able to take up the slack.

According to the WSJ story, profit and revenue are falling in tandem for the first time in six years (six years ago we were in the throes of The Great Recession), with a third of S&P 500 companies reporting so far. Sales are also on pace to fall 4%—the third straight quarterly decline (and we're going into retail's customarily biggest season). The last time sales and profits fell in the same quarter was in the third period of 2009 says the Journal.

Last year, outgoing NCCI president/CEO Stephen Klingel in his State of the Line address opined that the industry was stable and that the future looked promising, but he couched that forecast with some skepticism about the future, and that skepticism seems foretelling. Pricing is being challenged, rates are going down (okay, except in California), investment returns are stagnant ... but claims frequency and severity is ameliorating too.

True - there are sectors that are defying the global troubles: tech, health care, autos, air travel; and most economists don't see a meltdown or overall damage to the economy.

But even construction, which is a high rate, high premium sector for work comp may be a challenge because, believe it or not, the home-building industry is saying they can't find labor to keep up with demand, and the most recent reports show that new home sales are actually cooling off.

It seems the financial world of workers' compensation is challenged. Low interest rates on renewing bonds squeeze investment gains (if at all); high margin risk categories aren't generating the payroll to fortify premium sales; foreign investment in US assets is waning; and the strong dollar abroad is pinching the export/import markets.

Oh, and good heavens, there are economists that are now saying Americans are saving too much!

On top of all this, we are in the midst of radical changes to when, where, how and who does work (and who pays for that work).

Forbes ran a story the other day opining that, "in the 21st-century corporation, whether it’s acknowledged or not, employees own most of the assets because they are most of the assets."

That's a radical concept - it's not the machines, the land, the buildings, the inventory that's important to the 21st Century business, but the people that make that business happen.

And people is what workers' compensation is all about - it takes people to hire people to do the work that people want done to produce the goods and services that people will buy....

So wait! Maybe work comp isn't doomed - the concept of how that insurance is bought, used and/or applied is just changing.

We think of insurance as a capital intensive business, particularly workers' compensation insurance where laws dictate minimum capitalization and liquidity to meet claims needs.

Many industries in the past used to be thought of as capital intensive, which created barriers to entry: transportation, lodging, information...

What we are seeing though, is that technology is enabling the redistribution of risk, and therefore capital requirements are not so intensive any longer: Uber, AirBnB, Facebook and Google - each of these new generation businesses have in common a basic business fundamental of redistributing the risks of operation making the revenue/profit per employee (i.e. asset) much, much higher than traditional models.

The old capital intensive requirement is a part of what we like to call "friction" but as this "new economy" is showing, that friction is being reduced dramatically. Work that used to require factories, offices, commuting, and risk, is now delegated to the most competitive workers throughout the world - what is now called the "gig economy".

So maybe work comp carriers don't need that much capital other than what the law says. Maybe the industry's traditional financial thinking is looking too much at the past, rather than recasting for the future.

There's a lot more to this story than I can give credence because there are so many moving parts.

Workers' compensation is over 100 years old; and while you can't teach an old dog new tricks, you can build upon the foundation.

I think that's what is happening - and we're seeing this happen before our eyes at a pace that is relatively slow so that the disruption is not as abrupt as in other industries. Berkshire Hathaway, Insureon, Intuit, and others, are all moving towards digitization of the workers' compensation insurance market.

At the end of the day it's understanding the risk requirements, which dictates the capital requirements. Knowing what the risk requirement is at a minute, detailed level means allocation of capital to meet that risk can also occur at a minute, detailed level - i.e. greater efficiency means less capital in the traditional sense.

Short term, the traditional stalwarts of work comp will be challenged. Over time, though, as efficiencies work their way into the economy those efficiencies will be translated to the work comp insurance line. I think we're going to see some exciting, new, and radical changes in the next decade as our "old world" industry becomes imbued with new world understanding.