Economic Downturn
Puts Pressure on Return-to-Work Programs
The recent recession and record unemployment rates have increased
pressure on the workers' compensation insurance system to help
return injured employees back to work while effectively managing
costs.
That was one of the messages shared by presenters at the
Workers Compensation Research
Institute's 26th Annual Issues and Research
Conference discussing how the economy is affecting workers'
compensation.
Injured worker claims are down but so is funding for return-to-work
programs, anti-fraud efforts, new regulations and overall monitoring
of state workers' compensation systems, attendees were told.
Several states, such as California and Colorado, are attempting to
use monies from their state funds or state workers' compensation
insurer of last resort to help balance their state budgets.
There is very little legislation on the horizon to address fraud,
said William Zachry of Safeway Inc.
Colorado
has seen an increasing number of fee disputes, said Kathryn Mueller,
professor at the University of Colorado's School of Public Health &
Division of Emergency Medicine, and also a conference presenter.
The economic downturn and increased unemployment have led to a
reduction in claims, but also has led to a drop in funding for
return-to-work services, according to John Shilts of the Oregon
Department of Consumer and Business Services.
State agencies also have had to become more vigilant in monitoring
employers to ensure that they are meeting their claims payment
obligations, Shilts said.
In
the claims area, because of staff layoffs and unemployment, claims
organizations have been under pressure to become more efficient at
claims handling.
Colorado workers' compensation insurer Pinnacol Assurance, for
instance, said it had not filled positions that have become vacant
since 2008. Nevertheless, the company noted claims handling
organizations still have to focus on prompt decision making and
prompt payment, good communication, empathy, and adherence to rules
and regulations — even if there are fewer people to handle that part
of the business.
People might feel like they're at the end of their rope, yet the
current environment "isn't a case of there is nowhere to go."
Instead, the speakers suggested parties in the workers' compensation
system look at the current environment as a "new frontier." More
attention needs to be paid to return-to-work programs, the speakers
suggested.
There also are areas where costs in the workers' compensation system
could be cut without decreasing patient care, attendees were told.
For instance, costs of claims are always higher if claims processing
or payment, or getting the injured worker treatment, is delayed,
research indicates.
Data also seem to indicate that prescription drug costs could be
lowered, especially by
reducing the use of narcotics
to treat patients. Dr. Gideon Letz, medical director for
California's State Compensation Insurance Fund, said that narcotics
are often overused to treat pain, instead of treating the patients'
underlying medical problems.
Employers and employees can evaluate whether litigation is necessary
when there are disputes in claims. Employers should evaluate any
trends in employees who seek out an attorney's help in settling
claims, the speakers suggested.
"Integrated medical care systems directed at returning the patient
to work and functionally oriented [medical care] guidelines can
decrease costs and improve outcomes," the University of Colorado's
Mueller said. So before tweaking the workers' compensation insurance
system too much to compensate for the recession, system participants
should evaluate the short-term and long-term effects of such
changes, she cautioned.
The WCRI noted research has not yet been conducted on the effect of
the recession on the workers' compensation system across different
industries. Nor have there been studies on how aging employees, when
they are forced to stay in the workforce longer due to the economic
downturn, affect claims. Also, no one knows how unemployed workers,
when they return to jobs in new fields where they have less
expertise, contribute to claims.
Nevertheless, given the shrunken economy, "successful businesses
will have to do more with less, and successful workers' compensation
systems will have to eliminate unnecessary costs paid by employers
that do not improve worker outcomes," summarized Dr. Richard Victor,
WCRI executive director.
The Workers Compensation Research Institute's 26th Annual
Issues and Research Conference was conducted via video in several
regional locations this week. For more information, visit
www.wcrinet.org.
