Wednesday, August 12, 2015

If Workers Compensation Were Nationalized

In 1972, the Report of the National Commission on State Workmen's Compensation Laws was published. This link leads to a page that provides access to the various portions of the report, There are those who advocate a return to the table for reconsideration of the subject of workers' compensation, from a national perspective. 

There are those who are critical of the workers' compensation system. More aptly put, they are critical of the various and diverse assortment of workers' compensation systems across North America. Distinctions and perceived failings have been highlighted this year by ProPublica and OSHA; some have been critical of those recent stories, suggesting they are curiously timed, coincidental, and lack a broad perspective. Others applaud the fact that comp is getting some attention. 

Some in the market advocate reform while others seem not as eager. When the subject is discussed, reverence of the reform seems to wax and wane depending on what "reform" might mean. It is a term that is open to interpretation. Does that mean an "opt-out," more benefits, larger benefits, changes in evidence, alteration of decision making, etc.? It seems to me you cannot decide if you support "reform" until that is defined. 

I had the opportunity years ago to give a speech about workers' compensation adjudication. In it, I noted that two critical elements of an adjudication system are transparency and predictability. Given a significant volume of information regarding possible and potential outcomes of disputes, parties may be empowered to resolve many of their differences through negotiation or an alternative process such as mediation. This is an adaptation of an old quote whose source I have not found "know the law, know the facts, but more importantly know the judge."

After the speech, I was asked by a member of the audience about enforcement of uniformity. That is, how could the Florida adjudication system be changed so that outcomes would be more similar or even identical regardless of which judge the case happened to be assigned. The inquirer wanted to know why I could not mandate particular outcomes, essentially telling judges how they would rule in particular instances or situations. 

I cautioned that this outcome might not be as desirable as one might think. Without judicial discretion, all outcomes might well be identical. Depending on personal perspective regarding the outcome, that could mean identically favorable or identically unfavorable. In other words, the decisions might all be the same, but that might mean you individually either love them all or hate them all. So uniformity might not be that desirable.

By the same token, if decisions are reduced to some formulaic calculus with unwavering predictability, then why would judges be needed? If we simply need a series of values assigned, formulas defined, calculations performed, then it is likely that the good folks at IBM could build a machine to replace judges. Nearly two decades ago, their machine "Deep Blue" defeated the world's chess champion. Jon Gelman recently wrote a piece where he suggested that Judges could be replaced by ATM machines; similar prognostication?

If the United States instituted a national workers' compensation process, what would it look like? Before one advocated for or against such a process of nationalization, would it be important to know what it would look like? There are those that argue that a federal system, or at least federally mandated minimum standards, is the only solution for the variations that are workers' comp in America. But do you wonder what that federal system would look like? Would it look like what you perceive as the best or the worst of the current state systems (regardless of how you arrive at your personal perspective of what is best or worst)? 

In other words, is it rational to advocate for uniformity before you know whether the result is likely to be uniformly desirable or uniformly undesirable from your particular perspective? Plato purportedly once said "I am trying to think, don't confuse me with facts." And those who advocate change without any expressed perspective, any enunciation of what change means, remind me of that quote. 

Recently, Barry Thompson advocated in his blog that we begin a nationalization process by shifting all medical care provision in work injuries from state workers' compensation to Medicare. A national solution that he contends solves a world of ills associated with delivery of medical care. Certainly a concrete proposal. One advantage he missed is that this would bring the delivery of medical care within the federal whistleblower statute. Under this tool, individuals can pursue fraud lawsuits against doctors, hospitals, chiropractors, etc. Some doctors and other providers have learned difficult lessons from that statute. 

The subject of nationalization is not limited to discussion up here in the United States. It has recently been the subject of some discussion down under in Australia. A recent article in the Sydney Morning Herald, comments on proposed changes to the Australian "national workers' compensation scheme." These changes are attributed to Prime Minister Tony Abbott, and are under consideration in the Australian Senate. 

One side of the Australian debate says that the amendments to the program will "cut unnecessary red tape" in the process. The other side says that the changes are "little more than a favor to big business."  Dr. Joanna Howe, a "law lecturer at the University of Adelaide" says that "this legislation represents the worst type of law-making - ad-hoc, evidentially flawed and kowtowing to a powerful interest group, in this case, big business." She is the author of a report that was published recently by the McKell Institute, a non-profit that studies "critical areas of public policy." 

Dr. Howe contends that the plan to expand the availability of self-insurance to big business could lead to massive abandonment of the Australian states' workers compensation programs. She says that "only multi-state employers can move to the national scheme, reducing the premium pool of the state and territory schemes." She explains that these smaller programs will then only include the smaller employers and that premiums would have to be increased for those entities. Does this sound familiar? There are those who have made similar criticisms to the "opt-out" debate right here in America. 

If a national process or even standards are advocated, would it be important to know the details? Is a volume of study and consideration critical to considering such a change, as is ongoing in Australia, or is everyone willing to concede that nationalization or national standards, regardless of what they may end up being, are a positive outcome in their own right because they would be consistent? Is consistency enough?

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