I was honored last year to be invited to read and contribute to a paper about misalignments in workers' compensation systems. The product of that collaboration is now online for consideration, debate, and discussion: The Hidden Cost of Misplaced Incentives.
The project was intriguing and involved icons of the community. I was humbled to be momentarily in their midst: William Zachry, Dr. Steven Feinberg, and David North.
William Zachry has 47 years of experience in risk management, including as risk manager for Safeway. Dr. Steven Feinberg brings over 50 years of medical experience in physiatry, pain management, and workers' compensation. David North has over 30 years of experience in insurance and financial services and was the President and CEO of Sedgwick for many years. To say this is a stellar collection of talent is a gross understatement.
Somehow, I was included in this collective effort that brought together over 170 years of experience in this community. The result was discussed at the National Workers' Compensation Conference in 2026 (Mr. Zachry, Dr. Feinberg, and Raja Sundaram).
It will also be discussed at the 2026 Montana Governor's Workers' Compensation Conference in 2026 (Mr. Zachry and Mr. North).
Despite these two platforms and opportunities, this subject deserves broader dissemination and discussion. The challenges identified and discussed need to be a reference or consideration whenever workers' compensation is discussed, particularly in analyzing ideas for change.
This paper is important. It details how "systems are undermined" and how that produces "predictable but unintended consequences." Those are structural issues within the systems (there are about 60 systems in the U.S. that provide work injury protections and benefits). The critical question proposed for consideration is whether incentives are working as designed and expected. Then, if not, what could be the better path?
Peppered throughout the paper are discussions of process, such as how incentives were designed, intended, or not. There is also discussion of just a few predispositions that impact human decisions and perceptions. For more on predisposition, see Unseen Influence (July 2025), discussing my free book: Unseen Influence: Unconscious Predisposition in Dispute Resolution (2025).
The Incentives paper is built on a foundation that was intended as a touchstone ("an established standard or principle by which something is judged," Cambridge Dictionary). That foundation is the "Ideal Workers' Compensation System."
The Ideal System considers the original grand bargain, the commitments, rights, and benefits. It presupposes that systems should be true to foundational ideals. How should the workers' and employers' rights and responsibilities be identified, defined, and delimited?
There are plenty of descriptions and discussions. The key focus is the delineation and discussion of "known misplaced financial incentives. " The concrete examples are definitional, illustrative, and informative.
Some might view the list as exhaustive (or exhausting), but there is every potential for the reader to know of others that are similar to, implicated by, or intertwined with these examples. Nonetheless, the underlying analysis remains static. How are systems, practices, traditions, and more aligned with the purpose of workers' compensation?
For some this will be a novel analysis. For others, perhaps it merely reinforces intuition, perceptions, and suspicions. It may drive debate and discussion, and the reader's conclusions may bring their own experience and perspective to bear. Regardless, there is merit in considering this touchstone and starting conversations.
