Thursday, January 7, 2016

A Time for Leadership - Now

Eighteen months ago the Workers' Compensation Research Institute (WCRI) was in the midst of a search for a new CEO. Someone to be the face and the leader of an organization with the potential to be a great influence on the nation's worker's compensation systems. In 2015, the National Council on Compensation Insurance (NCCI) was likewise poised to pass its baton to a new CEO. These two organizations have the potential to impact workers' compensation a great deal. 

These leadership changes caused me to think about who studies American workers' compensation. Where do I regularly turn for information and perspective?

The WCRI and NCCI naturally come to mind. There are a handful (arguably) of collegiate academics interested in workers' compensation; there is the National Academy of Social Insurance (NASI); and there is the Insurance Information Institute (III)(as an aside, If you ever get the chance to hear its CEO Bob Hartwig speak, take it. Everyone may not always agree with him, but he is a great speaker). 

There are a handful of bloggers (in the traditional sense) that are making a national impact. Among them (disclaimer, these are listed alhabetically, by last name (sorry Bob), not in order of importance or impact: bloggers can be a bit competitive and I do not want to upset any of them) Joan Collier, David DePaolo, Michael Gavin, Jon Gelman, Joe Paduda, Mark Walls and Bob Wilson. Some companies are blogging, notable is Safety National's blog focused on the discussions and prognostications emanating from the various educational conferences. 

There are national LinkeIn groups provided by WorkCompCentral.com (DePaolo) and WorkersCompensation.com (Wilson) (alphabetical again), as well as interest groups like the Work Comp Analysis Group and Workers' Compensation Claims Professionals (WCCP).  

A handful of people and organizations consistently make meaningful contributions to the collective workers' compensation knowledge on Twitter. Let's face it, no matter how you feel about Twitter generally, you have to admit that it is a challenge to express substantive thoughts in 140 characters or less. A few have managed to use the platform to effectively inform about workers' compensation. Some of our usual suspects like Jon Gelman (@jongelman), Mark Walls (@wcanalysisgroup), Bob Wilson (@workcompking), WorkCompCentral (@workcompcentral), Work Comp News Network (@wcconnections), and a handful of other contributors like Tammy Boyd (@tamiami3401), and Rafael Gonzalez (@gonzalezrafael) come to mind.

But the most prolific workers' compensation industry users of Twitter seem to be Kimberly George, and then somewhat more singularly-focused corporate contributors like PropertyCasualty360 (@PC_360), Insurance Journal (@journal), and Sedgwick (@sedgwick). Not that their message is not worth reading, but each seems to be focused more on one part of the "elephant" (see below). 

There are only a couple of consistent news sources regarding workers' compensation. And to some extent, again, it is "the usual suspects" as Captain Renault noted in Casablanca. WCI360, WorkCompCentral, WorkersCompensation.com and WCI360.com provide news coverage of the industry. WorkCompWire provides links and announcements about the industry. It leads to news, but is less likely to directly provide, original content of its own.  

And that is about it on a national scale. Certainly, there are a great many more bloggers, associations, and interests with narrower foci, to a jurisdiction or a specific market segment. There are a great many other LinkedIn groups also, which address geographic or market subsets of the whole. 

There are organizations such as the National Association of Workers' Compensation Judiciary (NAWCJ.org), the Southern Association of Workers' Compensation Administrators (SAWCA.com), and the Workers' Compensation Institute (WCI360.com). These build collegiality and educate. Through them comes focus and discussion, but among them only the WCI consistently produces commentary or news related to workers' compensation. There are also, of course, state and local conferences, newsletters and groups with more specific foci.

But workers' compensation simply does not traditionally attract a great deal of national attention. In the national news 2015 was unique with Propublica writing extensively about workers' compensation from a national perspective. But, the first time many people heard of Propublica was when those articles began to be posted last spring. Whatever its impact, Propublica is simply not Associated Press, CNN, Fox News, MSNBC or Reuters. Certainly, local or state news sources pick up stories about fraud or rate increases in workers' compensation, but coverage is frankly minimal. 

Why should this topic receive more news focus? 

Workers' compensation in America is a significant business. Last year I wrote Where did it Come From, Where is it Going, and How “Huge” is it Anyway? Lex and Verum, Number LVII June 2014. There I noted the now famous quote of  Judge E.R. Mills, of the Florida First District Court of Appeal: "workers' compensation is a very important field of the law, if not the most important. It touches more lives than any other field of the law. It involves the payments of huge sums of money. The welfare of human beings, the success of business, and the pocketbooks of consumers are affected daily by it."

I then proposed some measures by which we might quantify "huge" in the context of understanding this foundational element of our national economy. I noted "as of 1995, 91% of the wages paid in this country were covered by some workers’ compensation system." The volume of medical and indemnity benefits benefits provided to injured workers in 2011 was $60.21 billion. The same year, the "net premium written for workers’ compensation was $37.5 billion."

Significant? The net written premium of America's workers' compensation industry is approximately equal to the gross domestic product (GDP) of Lithuania, and the 2011 benefit payouts were approximately equal to the GDP of Luxembourg, Alaska, or North Dakota. America's workers' compensation benefit payouts, if a "country" would be in the top 100 GDP in the world. 

Workers' compensation in terms of written insurance premium is bigger than the combined cash intake of the National Football League (NFL), Major league baseball (MLB), the National Basketball Association (NBA), NASCAR, and The National Hockey League (NHL). The benefit payout is about twice as large as all of these combined. Workers' compensation is simply huge, and as Judge Mills noted, "it touches more lives than any other field of the law."

Workers' compensation is academically (in a collegiate setting) studied by few. It is a huge industry. When I discuss it with various professionals, I am often reminded of the old story of the Blind Man and The Elephant. How professionals perceive the strengths and weaknesses of worker' comp, its success and its failure, seems to often be related to the particular part of comp with which that person is most familiar, in terms of some element, component, service, or jurisdiction. It is rare to find people who perceive the whole elephant, or who even want to. 

When the WRCI sought a new CEO last year, they conducted a well-publicized, national search of great scope. They sought input and advice from a vast spectrum of the industry. Candidates were nominated and recommended by industry leaders from a vast spectrum of backgrounds and perspectives. WCRI approached their challenge publicly and transparently. It concluded that process, we welcomed him, and the industry looks forward to meeting John Ruser.

The WCRI methodology for it search was broad, public, open, and worthy of compliment. By comparison, the NCCI search was less public. It began with an announcement, there were many months of public silence, questions and conjecture. And then in October a new CEO, William E. Donnell, was announced. The quiet and secretive nature of the search caused industry discussion and doubt. The marketplace will likewise look forward to meeting Mr. Donnell. 

Both of these new leaders will have difficult shoes to fill. Each organization will face challenges through the leadership transition and from the changes coming to this industry. Will each be persona like WCRI's former leader Richard Victor and the III CEO Robert Hartwig, on stage presenting, publishing, inspiring? Or, will they be behind-the-scene managers and leave the spotlight to others? Will the market and industry influence of these entities wax or wane? Time will tell. 

History can be a cruel critic or a gushing sycophant. Our decisions and the course we chart are analyzed through the prism of today's perceptions and truth. Those same decisions will be analyzed again and again through future prisms and truths which we cannot predict or even currently understand. When this market looks back on 2015, as these two unique and market-critical entities handed the reigns to new leaders, we will see how the market perceives the choices that were made, and the processes that led to them. 

Workers' compensation is huge. From a variety of perspectives, it is changing too much or not changing enough. It is too generous or too stingy. The processes are too formal and complex, or too casual and loose. It is the Blind Man and The Elephant. If this industry is to succeed, then the time for leaders is now. Leaders that perceive and seek to better understand more than the particular piece of elephant to which they happen to be closest. Hard questions are out there, and the answers will come to us more readily through leadership, thought, and discussion. 

Who will lead this industry, the safety net of American employers and employees alike? Will it be you? Will you write and post with your perceptions of whatever portion of this market you understand well? Will you strive to understand more than your piece of the elephant? Will you speak at conferences? Will you be critical and ask hard questions about what is right? With a handful of news sources, a handful of academics, a handful of organizations, a handful of bloggers and outlets, will you add your perspective and leadership to the cause? 

In Casablanca, leading to one of the great movie lines of all time, Rick Blaine asks "who are you really, and what were you before? What did you do and what did you think, huh?" This is a telling series of questions that we might all ask ourselves periodically. Ilsa replies as perhaps too many have over the years: "we said no questions." Rick's reply is what I would suggest to anyone who might be a leader for this industry; it says it all: "here's looking at you, kid."

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