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State Workers’ Comp Acts: Are They Effective?
How does a state legislature determine if its workers’ compensation laws are performing effectively? One way is to examine the costs paid by the state’s employers and gauge those costs against the post-injury outcomes achieved by injured workers. But while data related to the first issue is relatively easy to come by—carriers and employer groups maintain detailed records as to such outlays—when it comes to assessing worker outcomes, the story is much different. There is a paucity of objective information. A legislative committee can, of course, hold hearings, but more often than not, given the limitations of the evidentiary setting and the obvious interests of the various competing constituencies, all the committee members hear is a short parade of conflicting stories. “It took me six months to get an appointment with an appropriate specialist” or “two separate doctors cleared the claimant to return to work, but he continued to offer vague complaints of pain and discomfort.”
Anecdotal information, while important to the particular parties involved, is not all that useful when extrapolating to the larger setting. What legislatures, not to mention health care providers, risk managers, employers and others need is something more objective. If only someone or some organization could come up with an objective study that spoke more in macro and less in anecdotal terms? The Workers’ Compensation Research Institute (WCRI) has completed the first part of a new multi-phase study to do just that—to identify important predictors of worker outcomes for injured workers who have sustained workplace injuries. The study, to be conducted in four phases, has three objectives:
Objective #1: Identifying factors that may help public officials, payors, and health care providers to better predict which cases are more likely to have poorer outcomes for injured workers.
Objective #2: Benchmarking the performance of a large number of state systems in order for policymakers and stakeholders to identify and prioritize opportunities to improve system performance.
Objective #3: Evaluating the impact of selected reforms on worker outcomes by measuring outcomes before and after those reforms.
Phase 1 is complete. Entitled Predictors of Workers Outcomes (copies of this and other WCRI studies can be purchased at: http://www.wcrinet.org/recent_pub.html), eight states (Indiana, Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania, Virginia, and Wisconsin) have been examined. The outcomes metrics for the eight states studied so far, and the twelve to be studied in phases 2 and 3, are based on telephone interviews with an eventual total of 8,000 injured workers, using a structured survey instrument.
WCRI has released one report for each of the eight states studied. Chapters 1, 2, 3, and 5 are similar in each of the state reports. Chapter 4 provides information that is unique to the state being reported. Each state report is replete with data tables supporting WCRI’s findings.
Phase 1: Identify Important Predictors of Worker Outcomes
The core objective of phase 1 was to identify important “predictors” of worker outcomes. By predictors, WCRI means factors that demonstrate a strong statistical association with better or poorer outcomes. More accurate information about predictors of poorer or better worker outcomes may allow payors to target health care more effectively; it may allow for better return-to-work interventions for those most at risk. WCRI carefully notes that the statistical association may be causal, but it need not be. In its study, WCRI analyzed a wide range of possible predictors, some of which are based on data it indicates is not usually available within workers’ compensation data systems.
> Injury characteristics
> Unrelated health conditions
> Worker characteristics
> Attributes of the work environment
> Local labor market conditions
The major predictors found to be significant in WCRI’s statistical analysis were:
> Injury type
> Injury severity
> Marker of low trust in the work relationship
The Role of Trust Within the Workplace as a Useful Predictor
That the type and severity of injury are important predictors of workers’ compensation costs and worker outcomes comes as no surprise to anyone. For example, study data from North Carolina showed that 21 percent of workers with more severe injuries were not working at the time of the interview (3 years after the workplace injury), as compared with 9 and 12 percent of workers who were not working at the time of the interview among workers with lower and moderate severity injuries. As to injury type, for example, 31 percent of workers with neurologic spine pain reported that they were not working at the time of the interview due to the injury, compared with 8 percent of workers with fractures.
WCRI’s study points to an often-ignored factor that the data shows is also an important predictor: trust in the workplace. The variable came from a question within the survey asking the worker to agree with the statement “I was concerned that I would be fired or laid off.” Workers were given four possible answers—strongly agree, somewhat agree, somewhat disagree and strongly disagree. Workers who were strongly concerned about being fired after the injury experienced poorer return-to-work outcomes than workers without such concerns. Across all eight states, 20 percent who were concerned about being fired reported that they were not working at the time of the interview—double the rate observed for workers without such concerns.
WCRI offered some additional discussion as to how trust within the workplace may play a role in predicting the eventual outcome related to a workers’ compensation claim.
> Workers reporting a strong fear of being fired might know they have a difficult relationship with their supervisor. That difficulty might translate into fewer opportunities to return to work, or more active management of the nature of medical care and the selection of medical care providers.
> The worker may be exaggerating the possibility of termination, and that tendency to overreact might characterize the workers’ general performance on the job—perhaps resulting in fewer return-to-work opportunities and more active management of the care by the payors.
> The worker may be more likely to retrospectively report a fear of being fired if the worker has had a poor outcome. As WCRI points out, poor outcomes color the worker’s view of most events in the course of the claim. Conversely, workers who have experienced excellent outcomes tend to see events in the course of handling the claim in a much more positive fashion.
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Risk Management Tip: "It is hardly a surprise that trust is a key to controlling workers' comp costs,” says Rebecca Shafer, JD, President of Amaxx Risk Solutions and author of Your Ultimate Guide to Mastering Workers’ Comp Costs. “With good reason, employees are fearful they will lose their job and their income. This is one reason injuries go unreported.” Shafer stresses that communication is a key to fostering trust between employers and employees. “Employers must assure employees that they are a valuable member of the team and will not be discriminated against or lose their job during the recovery process,” explains Shafer. “Employers must explain clearly what is required during that period.”
According to Shafer, a good place to start is providing employees with instructions about what to do it they are injured at work. If an injury occurs, the employee will be provided with excellent quality medical care, medication, rehabilitation and rapid transitional duty return to work. As a member of the team, they will be included in workplace events if they are medically able to participate. They may be required to participate in safety meetings and in the company's transitional duty program. “Make sure to provide a direct contact number if they have questions and ensure that the adjuster is answering all of their questions in a timely manner,” recommends Shafer. “Even though the adjuster is responsible for administering benefits, the employer's care coordinator should remain the key contact for workplace issues. Contact information can be provided in wallet card format.”
Shafer believes that keeping injured employees in the communication loop goes a long way to developing a trusting relationship and making employees feel that their job is not in jeopardy. Positive informal gestures like sending a Get Well Card from co-workers and supervisors shows that the employer cares. “It is imperative that communication be continued throughout the recovery process so that employees do not get lost in the process,” says Shafer. “I recommend employers hold a brief weekly meeting with each injured employee to identify obstacles and fine-tune transitional duty assignments. Many employers pay full wages to employees who are working transitional duty so there is no loss of income."
Too Early to Draw Conclusions From Interstate Comparisons
WCRI emphasizes that while data from eight states is now complete, it is premature to draw conclusions from any interstate comparisons based only on the group of eight. For example, phase 1 data would, at first blush, lead the reader to conclude that poorer return-to-work outcomes were seen in North Carolina and Virginia. If, however, data from several other states included in separate, earlier WCRI worker outcomes studies, the outcomes in North Carolina and Virginia appear to be in the middle of the group of states. WCRI offers the caveat, therefore, that readers should delay such comparisons at this time. After the conclusion of phase 3 of the study, when data from an additional 12 states will be compiled, such comparisons should be “quite robust.”
Future Phases of the WCRI Study
WCRI indicates that it has already completed the collection of data for the second phase of the study—the examination of outcomes in Iowa, Arkansas, Connecticut, and Tennessee. Phase 3 will include data from an additional eight states. By the conclusion of phase 3, policymakers and stakeholders should be in a position to identify and prioritize opportunities to improve state performance. Those states have not, however, yet been determined. A final, ongoing phase 4 will be to collect data from new individuals in each state every three years. Particularly important to phase 4 is to revisit states that have had significant system reforms in order to measure the impact of those reforms on worker outcomes.
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