We can agree that much has changed about the world of workers' compensation, yet the question of effect remains open. On one hand, many employers have substantially improved their "results" in this realm, particularly over the last five to ten years. "Rates per" have fallen dramatically in many cases. Still, I continue to wonder what the real drivers are for this improvement and, moreover, to what extent intentionally driven "real change" was the source. In other words, how much of this improvement has been helped along in a material way by economic conditions, including rising unemployment, heightened focus on safety and loss prevention, competition among medical providers, more attention to outcomes versus compliance, etc.?
Don't get me wrong, most of the change in workers' comp has been good, especially if it produces fewer and/or less-severe injuries, but the question of "real change" hangs in the balance. After all, there are still far too many on-the-job injuries and fundamentally unsafe workplaces to rest on our laurels. In fact, I like the idea of zero tolerance for accidental injuries. A few employers over the years, having made this not just a mantra, but a measured, incentivized priority, have at least temporarily achieved long periods of accident-free work. Is this objective, commonly found in higher hazard industries, truly achievable or simply a vision that is more of a "one off" than possible for the many?
Some would say that as long as humans are involved, there will be errors. Yet, every time any one of us boards a plane and puts our life in the hands of the pilots, we hope and pray for an error-free journey, at least free of errors that could kill or maim us. Is it, then, risk level or the potential for serious injury or death that motivates a greater commitment to accident-free work? Perhaps severity is the biggest motivation for some, but I believe the reliable answer remains elusive.
If we can agree that innovation by definition is about doing things in completely new and different ways (courtesy of Steve Jobs' opinion) and not incremental or continuous improvement (though this is also not a bad thing), then I would argue little real innovation has occurred in the workers' compensation realm over time. Since innovation typically involves investment, commitment of resources and risk taking, all are real hurdles to true achievement. That begs the question: is innovation in workers' comp really necessary for success and, by extension, is it unlikely to be realized as a result of (among other things) the regulatory climate that envelops this exposure? Since this is a blog, I will resist answering the question and ask you to weigh in with your opinion. This should be good...
Chris Mandel, SVP, Strategic Solutions