The Future of
Workers’ Compensation: Opportunities and Challenges.
The last two
decades have been ones of both challenge and opportunity for
workers’ compensation systems. Many jurisdictions implemented
reforms to try to stem rapidly rising costs or improve worker
outcomes, insurers faced unanticipated losses, employers called for
reasonable, predictable costs and workers sought to ensure or
maintain adequate benefits. Change, experimentation and lessons
learned characterized these twenty years.
upheaval and new directions taken, however, the fundamental goals of
workers’ compensation systems remained constant: (1) to provide
prompt and adequate benefits to injured workers, (2) to ensure
workers have timely access to quality medical care, (3) to
accomplish the previous goals at reasonable costs to employers, (4)
to operate an effective benefit delivery system, and (5) to finance
all with well-functioning insurance mechanisms.
At WCRI’s 2003
Annual Issues & Research Conference, prominent workers’ compensation
researchers, practitioners and policymakers assembled to assess how
well systems currently perform against their goals and to predict
the critical issues that will shape workers’ compensation systems in
the next decade.
- Dr. H.
Allan Hunt, Assistant Executive Director, W.E. Upjohn Institute
for Employment Research, assessed the adequacy and equity of
workers’ compensation benefits paid to injured workers,
outlining the complex issues that arise when trying to measure
- Dr. Jay
Himmelstein, Director of the University of Massachusetts Center
for Health Policy and Research, synthesized a growing body of
literature and experience that seeks to measure access to
quality medical care for injured workers.
Manley, Research Coordinator, Oregon Department of Consumer and
Business Services, discussed the Oregon study that ranks state
workers’ compensation premium rates and identified issues to
consider when defining system “affordability.”
D. Dobleman, Director of Global Risk Management, Levi Strauss &
Co., outlined key criteria for evaluating and measuring whether
or not the systems meet the objective of reasonable costs to
employers from the point of view of a large apparel
- Duncan S.
Ballantyne, Senior Analyst, Workers Compensation Research
Institute, outlined a model for an effective workers’
compensation benefit delivery system – one that has the
potential to deliver timely and accurate benefits to workers and
to reduce significantly benefit delivery expenses.
- Stephen J.
Klingel, President and Chief Executive Officer, NCCI Holdings,
Inc., presented a broad analysis of the efficiency of the
workers’ compensation insurance market as it exists today by
examining its key functions: risk transfer, risk sharing or risk
pooling, administration and safety incentives.
Richard A. Victor, Executive Director, Workers Compensation
Research Institute, identified the “seven habits of highly
effective workers’ compensation systems.” He explained how
systems that embrace these habits will be successful in coping
with critical challenges of globalization and the aging labor
Hockman, Senior Vice President, Towers Perrin Reinsurance, gave
an overview of the evolution of the insurance market over the
last two decades and offered a forward look at the future shape
of insurance markets – their function, concentration and
Edwards, a former insurance regulator who now administers
several self-insured trusts in Maine, focused on the question,
“Will the politics of workers’ compensation facilitate or
- Richard P.
Gannon, Administrative Director, California Division of Workers’
Compensation, discussed the importance of predictability in
workers’ compensation systems – for employers, workers and state
Wilcox, Public Employee Director, New York State AFL-CIO,
pointed out deficiencies in the current workers’ compensation
system from the workers’ perspective, noting that it is time for
employers and workers to work together to improve state systems.
He suggested several new innovative approaches.
Muedder, Senior Vice President, Emerging Issues, ACE USA, summed
up some “take-aways” from the forum from an insurance
presenters at this forum identified many challenges facing workers’
compensation systems, it was also clear that opportunities for
improvement exist. Research can help find the answers by detecting
system cost drivers, evaluating the effectiveness of policy changes
and measuring outcomes for injured workers. By building a body of
knowledge about the characteristics of successful systems, decisions
can be made and strategies put into practice that will enable
systems to better serve injured workers and to make American
business more competitive.
The Future of Workers’ Compensation: Opportunities and Challenges.
Victor, Editor. April 2004. WC-04-03.