Building a Workers' Compensation System That Works
State workers’ compensation systems are beginning to suffer from the impact of the national economic downturn. Economically induced factors are compounding the underlying issues that previously generated a growing level of critical stagnation. The combination of this dynamic now threatens the very core of the workers' compensation system and endangers its extinction.
Prior to the accelerated national economic downturn, the patchwork of State and Federal compensation programs were besieged by an assault of complex legal issues emerging during the last decade. These included: the reimbursement of collateral medical source issues, ie. CMS and MSP (Medicare Secondary Payer Act) ; greater difficulty in litigating complex scientific issues; a costly and inefficient medical benefits delivery system and a transition of “fault” into the administrative system.
As the national economy began to fail there was a surge of new administrative issues challenging the programs. These include: higher unemployment; self-imposed limitations on administrative cost by the States; and the increase of potential insolvency by the insurance industry. The filing of claims in NJ over the first 3 weeks of 2009 have already reflected a 27.5% decrease which is projected over the last reported year, 2007. Judicial salaries have been frozen and new State employees have been taken out of the State pension system. State budgetary freezes have caused a reduction of the hiring of critically needed new personnel such as the appointment of Deputy Attorney Generals to represent State funds, ie. Second Injury Funds. Hearing calendars have been reduced because of lack of personnel to appear.
Banking and investment house scandals continue. Insurance carriers have been threatened by insolvency including the giant AIG which has continued to require the infusion of “bail out” capital to float. Liberty Mutual has announced the plan to sell certain of its markets including the Wausau line of business.
As President Barack Obama reported, “The economic news has not been good.” The hope of a new beginning that prevailed at the recent inauguration signals creative opportunities for the reinvented and modernization of the entire workers’ compensation system. The implementation of technology and video conferencing initiated in Social Security hearings may be required to be utilized to lower expenses and increase efficiency. It is cheaper for the government to move electronic images rather than personnel. Technology advanced hearing systems and claims processing will be required to reduce costs and increase efficiency. Instead of hiring more personnel and establishing more offices, technologically advanced centralized hearing centers will be utilized. These will result in a lower carbon footprint and lower administrative costs.
Workers’ Compensation is not only an economic issue, it is also a human issue. Medical delivery and its associated costs remain problematic in the present workers’ compensation system. A single payer national medical insurance system program is a viable solution. Immediate delivery of medical benefits to injured workers will result in an administrative cost saving and allow for the introduction of medical monitoring, prevention programs and research grants to treat and cure industrial disease. The new system will require greater transparency and accountability.
The failing national economy is a catalyst for change. The ailing workers’ compensation program must obtain the course of treatment that it requires to rebound into a healthy and robust system once again.