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Takeaways from DOL’s State Workers’ Compensation Report

After discussing yesterday’s meeting at the Dept. of Labor with several colleagues and reviewing notes, here are my key takeaways.

  • lots of talk about benefit adequacy
  • lots of concern about work comp not covering real costs of disability
  • much reminiscing about the National Commission of 1972
  • evident concern about states reducing benefits to work com patients
  • very little substantive discussion about the three key issues in comp:
    • medical care and the quality thereof
    • secondary disability and the causes thereof
    • the rapidly evolving labor world and implications for work comp

With the exception of Washington L&I’s Gary Franklin MD MPH, speakers’ views were from 30,000 feet, from high atop an academic mountain that offers little insight into what actually happens – and why – in the workers’ comp world.  Outside of Dr Franklin, no one currently actively involved in workers’ comp spoke. 

Several times there were statements that seemed more appropriate for a faculty lounge conversation than a “bully pulpit” event…

  • Dr John Burton noted that NASI’s figures on employer costs don’t line up with BLS’ numbers, and doesn’t know why. (Seems to be an important topic to get right before going before a national audience to discuss costs v benefits of the WC system)
  • Emily Spieler’s description of work comp claimants as “existing in a Kafka-esque” system, alarmingly complex (no argument there) and stigmatizing (a broad over-generalization)
  • A VERY brief chat about the Gig Economy, and a LOT of talk about a 1972 Commission report focused on an economy that disappeared decades ago.

Much of the discussion centered around or addressed concerns that occupationally-caused disability costs are often paid by workers, taxpayers, and social safety nets – in other words, employers and insurers are getting a free ride because benefits for lost wages are wholly inadequate.  As a result, workers are forced into poverty, relying on Social Security Disability Income, food stamps, and other mechanisms to survive when workers’ comp wage replacement or settlement benefits are inadequate.

That may well be true, and as I’ve noted before, fair wage replacement should be table stakes in work comp.

That said, the panel ignored the real problem – why is that person “disabled”?

There was little context, little depth, little attempt to dig into that very real  issue. What causes disability?  Secretary Perez and others noted the critical importance of preventing accidents and illnesses, but said NOTHING about preventing secondary and unnecessary disability.

It’s almost as if the speakers buy into the “if you get hurt, you are disabled” trope.

To be fair, I very much doubt they do.  But no one spoke meaningfully about what causes disability, the primary cost driver in the system.  Glenn Pransky MD PhD should have been on the panel; his absence was an unfortunate and glaring oversight. As the nation’s leading authority on disability in workers’ compensation, Glenn absolutely should have been involved (disclosure, I consider Glenn a friend and colleague).

Equally unfortunate was the absence of any substantive consideration of the role of medical care in the work comp system.   In the very few minutes Franklin had, he focused on an otherwise-ignored topic – the primary importance of medical care to workers comp patients and the system as a whole.  

Perhaps most notable were Dr Franklin’s statements about the generally poor quality of medical care delivered to work comp patients; paraphrasing here, he said “workers’ comp medical care is about the worst in the country”, citing rampant overuse of opioids and lumbar fusion as two examples.  Dr Franklin also noted a disappointing lack of medical leadership in many payer organizations.

Does your TPA or insurer have a full-time Medical Director who sets medical policy?

Most striking was his statement that work comp patients in Washington were dying due to opioids, a system-inflicted tragedy L&I attacked immediately – and successfully. There was no follow-up, no discussion of lessons learned, not even an acknowledgement that this is horrific, a catastrophe caused by lousy medical care that is absolutely happening in the other 49 states.

Nope, the panel talked about the need for a new Commission, more research, more study.

We do NOT need any more academic studies to prove lousy medical care is disabling and killing workers. Enabled by weak state laws and regulations that don’t require care is driven by evidence-based medical guidelines enforced by strong utilization review, crappy medical providers and crappy medical care are harming patients, extending disability, addicting patients every day.

There’s no question wage adequacy is an important topic that must be addressed, and done so fairly and intelligently.

There’s also no question that the world has changed dramatically since the first National Commission in the early 1970s, and one can’t evaluate today’s work comp system – nor build one that will work for the next fifty years – by doing the same things we did in 1972.

What does this mean for you?

If you don’t tell your story, others will make up stories about you.

6 thoughts on “Takeaways from DOL’s State Workers’ Compensation Report”

  1. Thanks for sharing the discussion. Agree poor medical care is a significant problem and must be addressed. The vast majority of “disability” is needless and preventable. This is a core issue with many contributing factors that apparently have not yet been addressed in this meeting.

  2. Joe, It is truly amazing that since the late 1980’s workers’ compensation has evolved from a compensability dispute process to a medical dispute process. States were ill equipped to deal with the legal questions but have not properly equipped to deal with the medical dispute resolution process. Much like carriers and TPAs few states have actually equipped the administrators with medical directors or medical resources. As long as the world views compensation as a legal dispute issue and not medical restoration it will continue to focus on the wrong critical issues.

  3. The corporations & insurers got what they wanted with and by state and federal bureaucrats and with the DOL, Secretary DOL, Tim Perez, sealing the deal for employers, while injured workers got the usual and same….nothing!
    So why would anybody in the insurance industry, like the ALA, rally, even remark to even fight the nothingness out of Timothy Perez’s empty oral speech? Just more bureaucratic hot air FOR the pro employers.. A win win for employers and a lose lose for injured workers

  4. What a tragedy to lose the opportunity to talk meaningfully about the drivers of needless disability and the full costs of the system, and the real negative consequences to the injured worker. I suspect the problem is that the system will have to change at its core, because the real drivers – poor quality care, needless disablement that creates long term worklessness instead of functional restoration, and refusing to acknowledge behavioral factors that need to be addressed effectively even though they are “part of the claim” – don’t fit into our normal buckets.

    I agree with you, fixing compensation is important, but it won’t change the system until we start thinking about it differently. I know I’m preaching to the choir. But it does motivate me to think in practical terms about what we can do to demonstrate efficacy, and shift the discussion in the directions you suggest. Thanks for writing this, Joe!

    Les Kertay, PhD, ABPP

  5. Well said, Joe! I attended the meeting and, overall, it was very disappointing. Based on the inefficiencies in the federal workers’ compensation system, I doubt that USDOL is equipped to “fix” any part of the state systems but, having a national meeting to release a report that did nothing more than announce that more research is required was a waste of time.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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