In a new report to
mark the 25th anniversary of the Cambridge, Mass.-based
Workers
Compensation Research Institute,
heavyweights from the academic, insurance and public-policy realms
took a look back at how the workers' compensation industry has
changed since the early 1980s and examined how current challenges
and coming crises may play a role in shaping its future.
The report is
titled
" Workers'
Compensation: Where Have We Come From? Where Are We Going?"
Peter Barth,
professor of economics emeritus at the University of Connecticut,
for instance, noted a number of historical trends that have
occurred, ranging from the widespread adoption of competitive
pricing in the insurance market to the growth in scientific
research-based literature that has expanded the knowledge of various
workplace hazards.
More interesting,
however, is Barth's breakdown of the most significant areas without
change in workers' comp, most notably the stagnation of effective
return-to-work strategies.
"We are not much
more advanced than we were in 1983 in finding a best-practices
approach to re-employing those who are re-entering the labor force
after sustaining an occupational injury or disease," he said. "A few
states have experimented with programs, but the results are not
encouraging."
This issue should
be of great concern going forward into the 21st century, Barth
believes. As the baby boomer generation grows older and many extend
their working years due to the collapse in retirement savings, the
aging workforce will likely result in "longer periods of disability,
more difficulty in becoming re-employed following work-caused
disability and costlier medical expenses."
Robert Steggert,
vice president of casualty claims at Marriott International Inc.,
agreed. In discussing cost trends and drivers from an employer's
perspective, Steggert said that future leaders must figure out how
to deal with the aging workforce and "seamlessly move injured
workers to secure retirements without being litigation being the
predominant path."
Aging workers
aren't Steggert's only concern. He said that it is imperative that
workers' comp leaders address how to best integrate a growing global
workforce presence in the United States.
"And how will
fundamental healthcare delivery and workers' compensation systems
alike deal with this imported labor, legal or not?" he asked.
THE NEXT 25 YEARS
While a majority of
the experts remained cautiously optimistic about the next 25 years,
many say changes in healthcare and increased regulation represent
the greatest potential drivers of change.
"The mess in
capital markets has been accompanied by very loud calls for
policymakers to increase and improve the degree of regulation
there," Barth said.
The economic
collapse wasn't limited to banks and investment companies, Barth
noted, adding that AIG played a major role in the implosion of the
capital markets.
"It seems
reasonable to me that some call for increased regulation will
directly impact the insurance industry," he said.
Federal regulators
might even supplant the existing state authorities, warned Barth.
"Imagine federal
rules applying to reserving and underwriting practices, and to
investments?" he wrote.
The reform of the
healthcare system makes it hard to predict what the future holds for
workers' comp. Although the current effort by the Obama
administration has proposed folding workers' comp healthcare into
the overall healthcare system, as was once proposed in 1993, that
doesn't mean it won't come up for debate down the road, said Barth.
If and when
universal healthcare coverage comes to America, Steggert questioned,
will the workers' comp system become threatened or extinct?
"How will workers'
compensation systems deal with indemnity benefit delivery and be
win-win while minimizing litigation if and when healthcare becomes
'free choice' in the universal healthcare era?" he asked.
The Workers
Compensation Research Institute is a nonpartisan, not-for-profit
organization that conducts public policy research on workers'
compensation.
