As you awaken this morning, ready to enjoy this post and start your day, I am headed west. I have often been asked if I am "from" Mississippi, and I am not; no more than I am "from" anywhere. However, I have many ties to Mississippi and a great affinity for the state and its people. Returning always brings a measure of nostalgia, and today I will address the Mississippi Workers' Compensation Conference, illuminating or obfuscating the current "significant issues" in workers' compensation.
It is a worn path I travel today, literally and figuratively. For both I-10 and the significant issues are routes I have trod before. This blog has been a vehicle for attempts at understanding and appreciating this thing we call workers' compensation. This post is for those who cannot join us in Biloxi, and perhaps as a handy re-reference for those who do.
I will remind us that change is inevitable. The world is changing around us, a topic that has been a repeated theme here. See, Baseball, Hot Dogs, Apple Pie, and Chevrolet (July 2013) or How will Attorneys (or any of us) Adapt? (April 2015). And, workers' compensation is perennially in a process of change (change is constant). Some is legally driven, some scientifically.
Historically, the indemnity (lost wage or impairment benefit) was the predominant portion of the claim expenditure. But that has reversed in recent years, with medical expense now the more pervasive portion in many studies and reports. This is coming from both scientific advances and the effects of medical inflation. Since 1948, the U.S. inflation rate has averaged about 3.5%, while the medical care rate has been significantly higher, averaging 5.3%. The cost of medical care is increasing more rapidly than inflation generally.
Certainly, the government has been criticized for the inclusion and exclusion of goods in the market basket that defines inflation. Despite that criticism, inflation generally will drive wages and prices, but the medical segment is expanding more rapidly. This is impacting all payer systems, group health, workers' compensation, and even Medicare/Medicaid.
Some contend that tort liability, or the risk of it, contributes significantly to the overall medical costs. That is, doctors practice "defensive medicine," being very cautious so as to avoid the sting of malpractice. Others contend that the diminishing supply of medical professionals is naturally creating a greater demand and an expansion of price that is wholly consistent with economic theory. And, there are those who believe that medical costs are being driven by interference with market forces; they say that government interference and regulation are stifling innovation, competition, and improvement as well as constricting supply. Each of these has the potential to be part of our explanation.
Despite the reality of increasing medical care costs, there has not been a corresponding acceptance of increasing workers' compensation premiums. The income side of the equation is avoided as it is seen as a tax and a cost. Thus, the regulatory process has engaged in an effort to manage medical costs through fee schedules, treatment guidelines, medication formularies, telemedicine, and more. Workers' compensation is not alone, states find themselves struggling to accommodate the increasing contributions required to maintain Medicare status quo as Baby Boomers require more care, and the cost continues to rise.
We have recently begun to realize that spending more does not necessarily mean better results. We have seen massive investments in education that have not yielded the predicted student improvement. Likewise, our ever-increasing medical expenditures have not yielded medical improvement. The U.S. spends over 50 percent more on health care than most other developed countries, but we are not the healthiest, do not enjoy the lowest infant mortality, do not enjoy the longest life expectancy. In fact, U.S. life expectancy decreased in recent years for the first time in decades.
We are faced with a rapidly growing population, yet a much smaller increase in those seeking to practice in the medical professions. We face shortages. And lower supply will inevitably lead to higher prices. We are stuck in a pay-for-procedure paradigm in which we have lost sight of people's reaction to care (improvement, restoration of function) and instead remain focused on performing more tests or procedures as that drives income. Rather than address that flaw, we struggle to minimize the cost of those superfluous procedures.
With the commitments made, we face a reality that will demand better answers. The paradigm must be changed.
Constitutional Challenges have become a new normal for workers' compensation. In Florida, Castellanos v. Next Door (Fla 04.28.16), and Westphall v. City of St. Petersburg (Fla. June 2016) have demonstrated a willingness of the Supreme Court to apply imaginative outcomes to workers' compensation disputes. However, the same Court has displayed restraint in Florida Workers' Advocates v. Florida (December 2015), and Stahl v. Hialeah Hospital (April 2016).
There is a discussion of why the Supreme Court accepted some for review and denied others. In that discussion, there is often raised the specter of Brock v. Waste Pro. That one challenged the state law prohibition on fraud, and review was denied by both the Florida and United States Supreme Courts. Is it the character of certain disputes, limited Court resources, or constrained Court interest?
In the end, limitations on benefits were declared unconstitutional as were caps on attorney fees and limitations on the right to contract with attorneys. Along the way, we have seen the Florida First District Court struggle with its role, en banc decision-making, and confusion over "natural justice."
In Pennsylvania, the appellate courts have similarly struggled in their roles regarding delegation. In Protz v. Workers' Compensation Appeals Board (Derry Area School District), the Commonwealth Court (September 2015) and Pennsylvania Supreme Court (June 2017) reached similar conclusions, but with different effects. Each waded into Constitutional waters when statutory interpretation was available as an alternative. Scholars will question the wisdom of this approach, with an analysis of the New Mexico approach providing contrast.
In Alabama and Florida, there have been broad declarations of system unconstitutionality. Florida's litigation that began as Padgett and evolved into Florida Workers' Advocates made broad proclamations regarding system sufficiency. The Florida Third District reversed, concluding that the case was procedurally flawed.
Alabama's trial courts similarly made broad findings regarding constitutionality. The fundamental issue had to do with weekly caps on benefits which have been in place for many years, without adjustment for inflation. In Clower v. CVS Caremark, the trial judge identified this as constitutional infirmity and noted the absence of a "savings clause." A savings clause or severability clause in a statute says that if a portion is stricken the remainder of the statute is saved by severing only the problematic portion. Alabama lacked one, and thus the conclusion regarding weekly caps implicated the whole statute.
The trial judge magnanimously stayed his order to allow the state legislature to change the law regarding benefit caps. That was later extended to a longer stay. The Alabama workers' compensation community is thus only now contemplating how to write a whole new statute. All the issues and ideas are on the table there for discussion.
Utah's Supreme Court struck administrative limitations on attorney fees recently. in Injured Workers’ Association of Utah v. State (UT May 2016), the Court concluded that such limitations violated the Separation of Powers. The Court concluded that only the court could regulate the reasonableness of attorney fees in Utah. A similar outcome to the Miles and Castellanos decisions, but reached through a different route.
Kentucky has been harder to understand. Beyond imagination, that state's Supreme Court has recently been willing to abandon previous analysis and decisions. This was seen in Livingood v. Transfreight and Consol of Kentucky v. Goodgame (October 2015). Some see these cases as adjustments to existing law, and others see broad and inexplicable departures. In Parker v. Webster County Coal (April 2017), the Court found constitutional infirmity in a theory not even advanced by the parties. The parties likely did not challenge based on equal protection as the Court had previously explicitly rejected that argument. There are those who feel nothing changed in the interim other than the personalities on the Court.
The decisional challenge is not so much in the courts interpreting the law. The challenge is in the courts refusing to remain true to the rules of construction, the rules of interpretation, the rules of judicial restraint, and the courts' own previous decisions. Stare decisis is struggling in American workers' compensation. That is aggravated by a tendency of various courts to preclude the application of stare decisis - either not "publishing" decisions or restricting their applicability.
That is not to say these are the only challenges, there are regulatory issues as well. Of course, the primary driver is medical cost escalation, which is driving states to regulate. The alternative is raising premiums. Premiums are like taxes, the higher they are the higher product and service prices will be. They are, in themselves arguably inflationary.
As medical costs rise, there is increasing competition for access to limited resources. Thus states are turning to control mechanisms such as formularies, treatment guides, and impairment guides. The application of these standards will lead to increased litigation in some jurisdictions as injured workers resist the spirit of constraint. An individual naturally has more interest in their personal well-being than in the "greater good" of any system.
Pain will continue to vex and challenge. Pain is real. And people will continue to experience pain. Certainly, pain is personal and subjective. It cannot be measured or tested. Following some now dubious conclusions regarding patients in end-stage cancer studies, a great many of our trusted medical professionals jumped aboard the Opioid train in the 1980s and 1990s. We have seen the outcome of their enthusiasm, paid in ruined and lost lives.
In 2016, we think the final numbers will demonstrate 64,000 deaths by overdose. America, it seems, has a problem. In the entire history of American involvement in Vietnam, we lost 58,220 lives. We mourn them, honor them, thank them, and put their names on a wall. But we lost more Americans to Opioids and overdoses in just one year. And the numbers seem to be increasing.
The same year, we lost 37,461 to motor vehicle accidents, and another 10,000 or so to gun deaths (a mere 374 to rifles). Though we see activism and excitement to address the gun deaths, there seems less enthusiasm about the overdose. Only in 2017 and 2018 have we seen states begin to find the overdose issue critical. Certainly, the states went after pill mills earlier, and supply was diminished. But overdose remained and increased with illicit drug deaths. Supply is only one part of this complex equation.
Pain is real. I return to that again and again. That means that the solution to overdose and the solution to pain must remain co-joined. There must be alternatives for pain, whether in the form of alternative medications, yoga, bio-feedback, psychosocial conditioning, or otherwise. There must be compassion for the condition and perceptions of pain, even among acceptance of the inappropriateness of over-medicating with addictive and deleterious substances.
There is a perception of the Pandora's Paradox here. We have a population of people in pain, acute or chronic. And, as a system, we must address dealing with that pain. Within this is the realization that pain is a perception of our brains. The human body experiences pain, but our brains interpret that bodily perception. Thus, there is arguably a psychological component to many or perhaps most traumatic injuries. Yet, as a system, workers' compensation has been reluctant to engage in psychology.
There has been resistance because of the subjective nature of mental health. There is no x-ray, conduction study, or similar for the diagnosis of either the existence or extent of psychological condition. How we cope or perceive is personal and subjective. Thus, there is a perception that disputes regarding psychological injury or condition devolve to wearing matches between hired experts.
Thus, the Pandora reference. Some believe that the condition must be addressed psychologically or at least psycho-socially. Others fear that starting down that path leads to greater disability allegations and dysfunction. Without addressing the emotional aspect of pain and dysfunction it is possible we can never improve it, but there is also the potential that by addressing it practitioners would (seemingly) create dysfunction. Thus, the paradox.
This will be broader than injury. How emotionally facilitative is the employer, the work, and the environment pre-injury? How do we feel we are treated by the employment situation? If we are satisfied, motivated, and valued, that will likely drive our return to work following an injury. If we are a commodity, a "cog in the wheel," a nameless and unthanked component, we are likely less motivated to return and contribute. The human spirit itself is at work in these emotions and feelings.
And, employers can affect this, both before and after an injury or illness. Is the employer engaged and communicative or withdrawn and sullen? Is the return-to-work program real, productive, and compassionate? Are perceptions and reality of the workplace discussed and collaborative? In essence, are the employers and their agents interested in the people and their contribution, or merely in the production (the "bottom line")?
From this recent analysis and focus, we see advocacy models. We see partnerships in which insurers and employers are collaborating to effectuate the deployment of medical resources early, facilitating of return to work, and engagement of workers. That process will continue to evolve. It has been a long time since this process leveraged technology to build communication and engage the worker. There is a profound sense produced by work absence and isolation. Employers can and should engage in the recovery process, communicate with workers, and make them part of the return-to-work team.
Medical marijuana will be a challenge. There are a great many who react even to the phrase. They contend that if it is medicinal, it is cannabis, not marijuana. Proponents proclaim the efficacy and safety of this substance. One lawyer has even sued to force a state to allow patients to smoke marijuana. The same legal system that has (and is) held tobacco producers liable for promoting smoking is revolting against state regulators that preclude the smoking of marijuana. If smoking is unhealthy, and damaging, how can smoking one substance be safer or better than another?
As the market considers marijuana, which many see as an eventuality or reality of treatment, the proponents are loud. They espouse that this is a non-addictive, natural, and harmless treatment. They urge the market to accept. But, there is a population whose only experience with it is the Jeff Spicolis that they knew in high school. Whether the marijuana made them dull or whether the dull used the marijuana, the collective perception is real.
There are also those for whom the opioid crisis is too recent. They recall being "duped" by the experts. The promises of the panacea of opioids seemed too good to be true, and in the end, it was. There are those who feel there is today not enough real research on the potential downsides of marijuana/cannabis. They fear that the "truth" may include burdens that will not become apparent for decades and that the scourge of the 2030s could be the mistakes made in too rapidly accepting marijuana hype and promise today.
But today, marijuana remains a Schedule I drug. The federal government has determined it has "no currently accepted medical use and a high potential for abuse." Despite that, we have seen little willingness of the federal government to enforce laws. There are those who see this as part of a larger evolution through which America ceases to be a nation of laws. States openly defy federal law on marijuana and immigration. We now see municipalities and political subdivisions electing to similarly defy state law. The result is a patchwork of perceptions, laws, and practices that make predictability and transparency elusive.
Remembering the discussion above of psycho-social issues post-accident, employers will increasingly have to focus on emotional engagement and well-being even before work injury. The workplace consumes the predominant portion of our time each week. There are increasingly publicized issues with interpersonal relationships, bullying, discrimination, and more.
Employers will have to grasp that the work environment is critical to the engagement and perception of those who work there. Perceptions and conclusions of employees will influence their satisfaction and participation. That will affect bottom line in the near term, and the culture that is created will impact return to work and engagement post-injury.
The current challenge is sexual harassment. That is not because it is a current issue, but because it is currently receiving attention in Hollywood, politics, and more. But, the fact is that this is not new. The fact is that workplaces have included sexual tension as long as sexual tension has existed. The same is true for bullying and a variety of other human issues. Employers will have to accept and deal with the fact that when a person is hired, the "whole person" and all that human baggage is included. The whole person will influence productivity, cooperation with co-workers, and that "bottom line."
It is perhaps because people are complex that we see the evolution of technology. Robotics and artificial intelligence will replace humans. We see an amazing increase in both of these paradigms as the bottom line of the workplace drives efficiency. Robots and artificial intelligence are more efficient than humans. And, they do not come with emotional baggage, they never call in sick, they are consistent, persistent, and efficient. They are not human.
There is the rub, they are not human. We inherently crave personal relationships though. As humans, we prefer a human touch us, listen to our hearts, and diagnose us. Would any of us be happy with a robotic doctor? The robo-doc may be smart, effective, and efficient, but it will never be human, compassionate, and caring (some have criticized me for this, claiming human doctors often are none of these; cynics). Are we any more likely to be satisfied with an animatronic voice acting as the claims adjuster on our work injury? But, perhaps instead of replacing claims adjusters and doctors, these technologies can free them from the mundane and facilitate them having more time for the human interactions we crave?
The American economy will change. As it does, the world economy will be drug along behind. Driverless cars will decrease or eliminate accidents. There will be less need for auto body shops, chiropractors, orthopedic surgeons, and personal injury attorneys. There will be less demand for those billboards, radio stations, and bus benches that advertise those services. The world will change and that includes the world of work.
There is some discussion that the "current immigration policy" will challenge us. There is a perception that somehow enforcing the law is a lamentable situation. If the law is not helpful or is damaging, then perhaps there should be a discussion of changing the law. However, the suggestion that executives state or federal should ignore the law merely contributes to the demise of the rule of law upon which this nation was founded and upon which foundation so much has been built.
The workforce is aging. This is driven by a variety of factors. First, we are living longer, and some perceive retirement (fishing each day) as less than interesting. This is leading some to remain in the workforce longer. We have a social security system that is not appropriately structured financially. Too little is collected and too much is dispensed. Some of that was predictable or even obvious, but our politicians of the past ignored the reality of the future (our present) for their own present.
Some of the challenges were less predictable. The life expectancy and health improvements that science has delivered have been astounding. Even with recent regressions, people are living longer. That means retirement to death has become a greater time period than predicted, feeding the "too much is dispensed" side of the equation. Congress has noted this, and for many, the "new normal" will not be a full retirement at 65, but at 67. That age progression is likely to increase.
The policies of the government created a housing bubble and then collapse. The effect has visited many. They find their retirement savings, investments, and plans inadequate. Thus, they remain in the workforce longer. Their reaction is logical and in some instances unavoidable. For whatever combination of causes, people are remaining in the workforce longer. Regardless of our personal perceptions of invincibility, the fact is that our bodies tend to become less resilient with age, and this increasing workforce age will likely lead to more injuries, extended recoveries and difficult return-to-work.
We have heard a great deal about the Millennial generation. There is a tendency to lament their motivations, work ethic, and focus. The reality is that every generation has doubted the wherewithal of the next. It is time to accept the Millennial generation because their ascendancy is inescapable. Despite older Americans remaining in or rejoining the workforce, the Millennials will become the predominant generation in the American workforce in 2019
I have heard lamentations and complaints. Some employers have told me they avoid hiring millennials. But, they are the future. They bring challenges and weaknesses (as we all do), and yet they will bring strengths and advantages. The challenge is not in finding how to conduct business without them, but in accepting that they are critical and have to be integrated. That will mean change, but change is inevitable.
The U.S. Census Bureau defines Millennials as born from 1982 to 2000. These are the people who "come of age" in the new millennium. They are defined by who and what they are. And, that is in large part our doing not theirs. I recently enjoyed hearing a manager respond to criticism with "Hey, I am not the one that bought them all those participation trophies." There is merit in that perhaps? As they were raised and educated, they are who they are. As they ascend, we will have to make modifications to assimilate them.
There is some doubt about the cohesive nature of the entirety of this group, however. The Pew organization has expressed doubt. It suggests that the Millennial generation ended instead in 1996. It identifies a different value set, motivational drivers, and attitudes in those born after 1996. It suggests that the "next" generation of Americans is evolving and developing, and it notes that this group's values may be more closely aligned with its Baby Boomer predecessors than with its Millennial peers. That does not mean the "next" generation is better or worse, but reminds us that change is constant.
I will enjoy this opportunity to interact with the Mississippi marketplace, and am thankful for the opportunity. I am likewise hopeful that this overview of the Significant Issues will be of value.
