The Current Politics of WC

02 Feb, 2017 John D'Alusio

                               

I have been absent from these pages for some time. However, given the current state of affairs in the Republic, I thought it was time to weigh in.

I think everyone will admit that 2016 was an ‘interesting” period. You can characterize the immediate past year as a time of ferocity, violence, spiritual agony, and a globe immersed in chaos. A tormented era when the status quo crumbled under the impact of new movements, when a wave of political revolts swept through Europe and the US, evoking anxiety and panic from the established order.

Simultaneously, these events provided hope for many marginalized people who demonstrated a yearning for reform and supported an inchoate populist strain that gained momentum and endeavored to re-introduce sanity into the international and national social/political conversation. The great rhythm of political history was sharply impacted.

More specifically as it relates to our world, the always present shadow of the Federal Government hovering over the WC arena was an area of insipient malaise. After all, the Feds have run the United States Longshoremen and Harbor Workers Act (USL&H, that was based on the NY WC Act), since 1927.  Federal aggrandizement was the order of the day, but Congressional action would have had to be executed to achieve total Federal suzerainty over state WC laws. The first step in that direction was a thrust for a single payor system for medical treatment. But that was where it ended.

As is evident, the single payor system did not come to pass.  The vehicle that was apparently going to be the avatar of that development (the Affordable Care Act) began to implode under its own weight. The present Administration has signaled that it supports less intrusive Federal government in the lives of the citizenry. Therefore, it is logical to postulate that the state edifice of WC law will be left to itself (for now). 

I believe that the Federal Government would not bring any “efficiency” to the WC system. It is my observation that in every instance where the Federal Government assumes more power, the outcome is anything but efficient. It has been famously said, “If the Federal Government was in charge of the Sahara Desert, it would run out of sand in three years.” (If so, they would simply print more sand.) 

Yes, having separate and distinct WC laws for each state is messy. There are different burdens of proof, myriad benefit rate discrepancies, various levels of judicial backlogs, etc. However, at its base level, WC laws are the product of local jurisdictions with the aspiration of treating the injured workers within its state borders fairly and equitably.    

WC is simply a microcosm of the larger national picture. For decade upon decade, indemnity was the cost driver in WC. In the 80’s the balance swung from 55% indemnity/45% medical to the opposite. Of course, this was simply mimicking the broader increased costs of medical treatment throughout the country in all areas. I know it seems to us in the industry that WC is a major portion of overall national healthcare expenditures. Yet it only represents approximately 3% of the total medical cost payments on an annual basis.

Medical cost control continues to be the salient objective of every insurance carrier underwriter, self-insured employer, and state fund in the country. Federal control of state WC would do nothing to successfully address this prime mover. All one needs to do is to examine their efforts to control the costs of Medicare to see that there is no alembic residing in DC for this issue in state WC.

No, the best way forward is on the state level for each jurisdiction. Hopefully, there will be some recognition that quality of care is more important than discounting medical bills. The need for control of the overall care regimen is also self-evident. Equally obvious is that concentrating on intense efforts to return injured employees to modified duty as soon as possible consistent with sound medical evidence will yield more success than an adversarial approach. The important point is that the individual states have the wherewithal to improve their WC systems of delivery and outcome.

Partisan politics on a state level is just as treacherous as on the Federal level. Enlightened self-interest on behalf of the workers in each jurisdiction is not as clear as it should be because each person’s opinion is largely based on the prism through which the system is viewed. But it is far more likely that state control of WC is in the best interest of the system.

Given the results of the election, the states will have no imminent threat of Federal take-over. Hopefully they will use this surcease wisely. 

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About the Author:

John D'AlusioJohn D'Alusio has over 30 years experience in P/C insurance with executive management positions in administration, field operations, and claim technical areas. Mr. D'Alusio has had many articles published in industry periodicals, and is also a contributing author to the LexisNexis published, “Complete Guide to Medicare Secondary Payer Compliance.”  He writes a monthly column for Risk & Insurance Magazine and is a quarterly columnist for AMComp Magazine.

His Risk & Insurance column is located at:

http://www.riskandinsurance.com/workerscomp.jsp 

 

 


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