Louisiana's Ounce of Prevention; California's Pound of Cure
I am traveling this week to Louisiana, where I will be the Keynote Speaker Thursday at the 14th Annual Louisiana Workers' Compensation Educational Conference. While any conference that has both the word "Educational" in the title and me on the agenda seems to have conflicting objectives, it appears the organizers have done a good job of assembling a well balanced, informative event. My own session, "The Wild & Wacky World of Workers' Comp", will be focused on perceptions of workers' compensation, and how understanding those perceptions can improve communications and results within the industry and those we serve.
I like to do a little research on a state where I will be presenting. Nothing major - things like what time the bars close and if they have an aggressive vice squad, etc. While conducting this review, I came across something rather interesting.
I was aware that Louisiana recently announced a 5.1% rate decrease in workers' comp effective this May. This was largely in line with what NCCI had recommended. What I did not know is how significantly lower the injury rate is in that state when compared to national averages. A story that ran on this site in December announced that for 2012, the rate of incidence of injuries and illness among Louisiana's private industry was 74.3 incidents (requiring days away from work) per 10,000 full-time workers, compared to 102.3 cases nationally. According to the Federal Bureau of Labor Statistics the state ranked second in the nation, with a private industry incidence rate per 100 full-time equivalent workers dropping to 2.3 in 2012, down from 2.5 in 2011.
Louisiana Workforce Commission Executive Director Curt Eysink credited a focus on safety and prevention by Louisiana employers, as well as efforts of the Louisiana Workforce Commission. The LWC Office of Workers' Compensation Administration is focusing on industries with higher incidence rates, as well as creating a "Workplace Safety Task Force and the LAWorks Safe Award to recognize businesses that meet high standards for protecting employees and preventing injuries, illnesses and fatalities".
The net result? Injury rates have been falling consistently for 12 years. Not surprisingly, the state has seen a cumulative 35 percent drop in premium rates over the last 10 years.
It seems that Louisiana has learned that the most inexpensive accident is the one that never happens.
Let us juxtapose that, if we may, with the State of California. I am in no way an expert on that state, nor am I aware of what administrative efforts it is making on the safety and prevention front (I am sure someone will be along to set me straight). I do know that, according to the Workers' Compensation Insurance Rating Bureau, California indemnity claim frequency started increasing “sharply” in 2010, and was expected to continue its increase at least through 2013. Indemnity claim frequency there increased 3.9% in 2012 and 5.0% through the first nine months of 2013. WCIRB does note that claim levels are still below those that existed prior to the passing of SB 899 reforms.
Still, one cannot help but get the impression, as we watch that jurisdiction struggle in a state of perpetual reform, that the legislators there believe that cost is best controlled by panels, forms, reviews, checkboxes and process. In fact, they cannot even seem to fully implement one reform before they start trying to repeal parts of it and implement new. David Depaolo recently wrote an interesting analysis on the current attempt. I have taken the liberty (and without his direct permission, although I hope he is with me in spirit) to pull a large swath of that article and paste it here:
Sen. Jim Beall, D-Campbell, introduced SB 626, a bill that employer and insurance groups say will not only unwind major components of SB 863, but will introduce more chaos, more uncertainty and more unnecessary costs into the system.
The bill would remove the restriction against judicial overview of medical treatment approval or denial decisions. Currently once a medical treatment determination has been made through the Independent Medical Review process it can be overturned only under very limited circumstances.
The volume of IMR reviews and the quality of those determinations is currently the subject of debate and public meetings with the Division of Workers' Compensation starting today.
Other IMR language in SB 626 would require doctors performing independent medical review and utilization review be licensed in California.
The bill would also strike SB 863's prohibition against the use of psychiatric disorders when calculating impairment ratings and language that has been in place since 2004 prohibiting chiropractors from serving as the primary treating physician after 24 office visits by eliminating the 24-visit cap on chiropractic, occupational and physical therapy.
Finally, SB 626 would increase the number of voting members on the Commission on Health and Safety and Workers' Compensation to 10 from eight. The two new members would be appointed by the governor, with one representing injured workers and the other representing employers.
There is nothing wrong with what Depaolo wrote, yet reading through that brief example it is very easy to forget that there are actual human beings anchoring that process. Somewhere deep in that archaic matrix of claims management lies an actual injured worker, and the employer who employed them. I'll be damned if you can ever find them mentioned in any article pertaining to California workers' comp these days. Instead it is all about the process. It is a pound of cure for incidents that would better have been prevented, and proof that you simply cannot legislate a reduction in claim activity and commensurate cost.
I'll take Louisiana's ounce of prevention any day.
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Robert Wilson is President & CEO of WorkersCompensation.com, and "From Bob's Cluttered Desk" comes his (often incoherent) thoughts, ramblings, observations and rants - often on workers' comp or employment issues, but occasionally not.
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Bob is an accomplished speaker for the workers' compensation industry. He is available for conferences, corporate events, children's birthday parties and Bar Mitzvahs. You may access his Speakers Brief here.