Thursday, October 26, 2017

People are Talking about Comp (1)

People are talking about workers' compensation. I think that there is more discussion today than there has been in many years, not just about the "nuts and bolts," or how systems work either. There is discussion of the theoretical underpinnings, the economic evolution of man and machine, the scientific advancement of medicine and more. Over the last eighteen months, I have been privileged to hear a great many conversations about the topic.

In a 11-post series (this is the first), I will overview what I believe I have heard. For clarity, the reception and perception are each key factors in any conversation. None of the discussions here will be credited to any person, in the interest of their privacy. And, these writings represent merely my interpretations or perceptions of various thoughts expressed (some might well tell me that I have misunderstood them, and I am as respectful of their right to that feeling as I am to my own right to interpret what I think they said), or at least "received/perceived." 

For several years prior to the 2016 elections, attention was focused on the nation’s workers’ compensation systems. That is plural, "systems." With striking similarities the fifty states and various territories operate regulatory systems based upon mutual renunciation of common law rights and responsibilities. Each state has a workers’ compensation system. In addition, there are jurisdictional systems in the U.S. Virgin Islands, Puerto Rico, and Guam. Additionally, the U.S. government operates multiple tort-abrogation programs including the Federal Employees Liability Act (FELA), the Federal Workers’ Compensation program, the Longshore and Harborworkers’ program, and the Defense Base program. Workers' compensation is a huge social program. These are often collectively described with the inclusive "Work Comp."

In the United States there are monopolistic systems in which the state itself is the “payer” and in which employer responsibility for potential loss is collected through government levy or taxation. There are free-market states in which the vast majority of coverage for accidents is provided by commercial insurance. Employer responsibility is collected in these through insurance premiums, which are set in various manners dependent upon each jurisdiction’s statutory and regulatory construct. Between these two “poles” are a variety of models that mix capitalistic and socialistic elements. Arguably there are as many formats as there are jurisdictions because though there are similarities, each is likely somewhat dissimilar in model, market allocation, premium calculation or other details.

Workers’ compensation systems fundamentally are specific exceptions to our general tort systems in the various jurisdictions. The law of torts allows people to recover damages when someone intentionally or negligently harms them. But Work Comp is a variety of statutory constructs, obviating or limiting tort systems. This is a substance difference, in Work Comp there are "benefits" whereas in the tort system there are "damages," a more generalized and many submit generous recovery.

Work Comp also provides procedural substitution, delegating authority to executive branch agencies for regulation and adjudication. Decisions about "benefits" tend to come from administrative judges rather than constitutional judges. There is no “typical” Work Comp governance model. Various regulatory structures are used. These include agencies run by a director, by a commission, and by a board. Some include a dispute resolution/adjudication component, while others rely upon state administrative law judges housed in a separate agency.

The oldest American workers’ compensation systems recently celebrated centennials, with the first constitutionally successful systems enacted in 1911. The twenty-first century has brought criticisms of workers’ compensation, and that introspection may be a natural side-effect of becoming a centenarian. That is what you call someone that is 100. There is an old children's joke: "what do you call someone 100 years old?" the punchline is "an antique," but that seems a bit unkind. Is Work Comp an antique in need of refinishing or a elder to be respected? Can it be some of each? Various perspectives bring various criticisms of the current status and the systems generally; for example, some believe that programs are too ambiguous and others complain of specificity.

In 2016, a perception emerged that workers’ compensation could be improved through a greater understanding of its strengths and weaknesses. There was discussion of the last efforts at system comprehension or overall consistency in 1972. 

The Occupational Health and Safety Act of 1971 effected significant changes on workers’ compensation. There was discussion at that time of potential “federalization” of workers’ compensation. In examining the strengths and weaknesses of workers’ compensation, the 1971 Act created a national workers’ compensation commission. 

The commission criticized the wide diversity in state programs. In its final report, the commission made multiple recommendations regarding standards for the state’s workers’ compensation systems. Despite the legislative impetus of the commission and report, the impact of that effort has been minimal. Though it continues as a topic of discussion in the 21st Century, the commission report has become a historical perspective. Both the report and those that contributed to it have been criticized. Some note that participant perspective was less than diverse, while others note the participants themselves were less than diverse. There has also been criticism of the prevalence of academics on that commission, and perceptions of their lack of "real world" experience and knowledge. 

But 2016 and 1972 are not unique. Workers’ compensation has long been debated. Various state systems have been “reformed” in the last hundred years, but primarily in the last 50. States have endeavored to refine and better define their systems. Critics have argued that judicial interpretation has enlarged the scope of systems (erosion of employer rights and accretion of employee rights) and that legislatures have corrected these. Others argue the opposite, that legislatures have eroded employee rights and there has been resulting accretion of employer rights. Without question, what began as pages of statutory and regulatory process has grown over that century into volumes in many instances.

In the spirit of introspection in 2016, whether inspired by the election cycle, the centennial celebrations, or otherwise, discussions began. In the course of a great many hours, various perspectives were heard. There are advocates for abolishing Work Comp (those who find it the "antique," quaint, interesting, but superseded by passage of time and progress. There are advocates for "strengthening" Work Comp (those who revere its purpose). The "strengthening" advocates fall into two groups however. 

It is important to remember that there are limited amounts of liberty or "rights." My neighbor and I each have property rights, and she may feel the need to have the Rolling Stones play at her birthday party in her back yard. I, however, would prefer a quiet weekend. Her right to use her property as she wishes may impact my rights. Thus, there is a conflict. The law seeks to bring us both satisfaction, albeit less than complete. Perhaps she can have the performance, but at some decibel limitation, and/or time limitation (duration, time of day, etc.). 

Often, when the rights of individuals conflict, neither party is "happy" with the ultimate outcome, but through some collective deliberation forming law or policy, we each arrive in some compromise posture, short of what we desire and yet perhaps better than the worst alternative (from our individual perspective). Work Comp is like that. It is a mutual renunciation of rights, that means both the employer and employee have given up rights in exchange for the bargain. Each has also gained something. That is a hallmark of compromise. But, returning to the "strengthening" advocates, one must realize that "strengthening" Work Comp for employees may weaken it for employers, and vice-versa. So, "strengthening" itself is perhaps also a matter of perspective?

There is no real consensus about the status of Work Comp. There are those who have perceptions, advocate ideas, and generate discussion. But, it seems that consensus is elusive. From the various discussions however, multiple topics have arisen. They will be addressed in the next ten Thursday posts on this blog. It is likely that there are interrelationships between and among those issues. They may seem discrete; whether they are or not is left to the reader. 

It is hoped that this series will accomplish three primary goals: first, formal documentation of various frank discussions of 2016; second, recognition of the various personalities and perspectives that contributed to the conversation; and finally, stimulation of further conversation regarding America’s workers’ compensation strengths and weaknesses.

Other posts in this series:


(2) Benefit adequacy, Regulatory complexity, Delays in treatment even if compensable

(3) System failures, Incentive is different in WC and group health, Systems are persistently adversarial

(4) Staffing and training of the workers’ compensation professions, Permanent partial compensation, Opt out movement

(5) Injured workers beliefs - not informed or uninformed assumption, Treatment protocols, a benefit or a burden, Perceptions and education

(6) Vocational rehabilitation, Ability versus disability, Methodology of claims handling

(7) Medical ignorance, The critical point in a claim, People who are acting inappropriately

(8) Misclassification, Unrealistic expectation of full recovery and youth, Federalization

(9) A new national commission?, Employee participation in the conversation, Occupational disease

(10) Lawyers in the system, Competition between states, Roles and delineation

(11) Single payer, Outliers, Conclusions