I had the opportunity to
meet with some of the leaders of workers’ compensation last week. Giants of the
industry, it was humbling to be in their presence. The annual conference
of the Workers’ Compensation Research Institute (WCRI) ran for two days in what can
only be described as frigid temperatures.
Upon arrival, I ran
into Bob Wilson, of workerscompensation.com. I had the chance to chat workers’
compensation with Jim McConnaughhay and Steve Rissman of WCI fame. I ran into
Rafael Gonzalez from Helios; he has forgotten more about Social Security and Medicare than I will ever know.
I saw Joe Paduda whose insight into management of medical delivery is renowned. I was fortunate to have
opportunities to speak with David DePaolo and Peter Rousmaniere of
WorkCompCentral.com, and David Dietz, the former medical director for Liberty
Mutual. I got to speak to risk managers
for major retailers, and icons of the hospitality and tourism industries. There
were industry icons from the insurance market also, including Mark Walls from
Safety National and Tom Glasson from AIG. These people eat, breath and live workers’
compensation. For them it is a passion, and it has been for a long time.
I was privileged to
meet in a small group with a handful of the state officials in attendance. William Monnin-Browder is
the Executive Director of the Massachusetts Workers’ Compensation Advisory Council. Frank McKay is the Chair of the Georgia State Board of Workers’Compensation. Michelle McGovern is again an ALJ adjudicator for the Iowa Division of Workers' Compensation, following service
as acting Director these past six months. Linda Hamilton is the Chair of the Indiana Board, and a member of the WCRI Board. Laurie Lamy is a regional
director of the WCRI. Despite his many commitments, Rick Victor joined us
also for a spirited discussion of the distinctions and similarities of
workers’ compensation across the country.
It is not an exageration to say that there were thousands of years of workers' compensation experience at this gathering. An incredible breadth and depth of experiences and perspectives.
This was a major
gathering. WCRI has been in the data business for about thirty years. An
anomaly in modern business, WCRI has had the same hand on the helm for its
entire existence. Richard Victor was just a few years out of graduate school,
working for the Rand Corporation in California, when he agreed to take on the
challenge of this inspired think-tank. Thirty years later, here he was
foreshadowing the transition to new leadership. More on that in a future post.
The Institute took a
few minutes on Thursday to recap the history of WCRI and the contributions that
Rick has made. Rick then took the stage to explain that despite the parade of
accolades, there are a great many people responsible for what WCRI is and the
promise that it holds.
I had been recruited to
speak on a panel Friday morning. I knew that going in. Until the agenda was
published though, I did not realize I would be the last speaker of the
conference. It is always a little intimidating to speak first or last. There
are pressures for both, though they are stressful for different reasons. When
you are up last, you always wonder if anyone will stick around for the landing.
Beyond that nervousness, there is the added stress when you look up from the
lectern and realize that they did.
As if that was not
enough on these narrow little shoulders, I was slated to speak immediately
after Charles Davoli. He has been around workers’ compensation since the 1970s,
a legend in his own right. Mr. Davoli represents injured workers in Louisiana, has
been a mediator for the last few years, and just wrapped-up service as
president of the Workers’ Injury Law and Advocacy Group, or “WILG.” Floridians will be
familiar with the Florida Workers’ Advocates; WILG is a similar organization
with a national focus. Mr. Davoli is also a member of the WCRI Board.
After days of intense
information and bountiful data, Mr. Davoli discussed the “Race to the Bottom” with
us. He makes an interesting case that the Padgett litigation (formally Florida
Workers’ Advocates v. State of Florida) is a symptom of a greater problem.
He contends that the "Grand Compromise" is no longer so grand.
Mr. Davoli decries the claims of "erosion" and describes instead a "corrosion" of the benefits on the injured workers’ side of the equation that is workers’ compensation. He essentally questions “how low can you go?” That catch-phrase echoed repeatedly through the
assemblage. Keep in mind that this is an industry audience, heavy on the nuts
and bolts side of the business; actuaries, managers, directors. Not the
friendliest audience for a speech on the inequity of modern workers’
compensation.
Mr. Davoli persevered and
narrated his perspective nonetheless. It was informative. Though the WCRI had
cancelled the panel presentation that would have addressed the proverbial
“opt-out,” that was a subject that had nonetheless been mentioned and discussed. Mr. Davoli returned to it and made a case that such opt-outs represent a further corrosion of the “benefit of the bargain” for the injured workers’ of America.
For the last few years
I have spent an inordinate amount of time studying the opt-out. I have had some
spirited discussions with others who find intellectual stimulation in this
thing we call comp. I contend that there is really little difference between
the perceptively revolutionary Oklahoma opt-out and the “carve-outs” that have
become part of our market in the last twenty years.
When I was asked in
2013, what the difference is between an “opt-out” and a “carve-out,” I put it
as succinctly as I could. I have maintained my conclusion since, though some
great minds like the inscrutable Hon. David Torrey have done their best to
convince me that I have missed the boat. What is the difference? Well, from
where I sit, it is less than ten words. That is
tongue-in-cheek, and could even be interpreted as a bit sarcastic. But, for
Florida to have an “Oklahoma Opt-Out,” I really think that might be
accomplished by amending one subsection, Fla. Stat. §440.211, altering a few words.
collective bargaining agreement contract of employment
filed with the department between an individually self-insured employer or
other employer upon consent of the employer’s carrier and any employee or
a recognized or certified exclusive bargaining representative establishing any
of the following shall be valid and binding:
440.211 Authorization of collective bargaining agreement.—
(1) Subject
to the limitation stated in subsection (2), a provision that is mutually agreed
upon in any
Mr. Davoli also noted an
incongruity in the law that likely will need to be addressed. It is not known
whether or how this thing called the Affordable Care Act will proceed. Some
suggest that we may know more with the determination of the current Supreme
Court challenge. Others suggest that the debate and challenges have really just begun. It is a
politically charged topic, and others around the country have already done a
better job of addressing the pros and cons, far better than I could.
The implication for
workers’ compensation is worth noting though. Mr. Davoli pointed out that with the
advent of mandatory health insurance; there will be a great many employers who
are providing two insurance programs for their employees. He says that an employee who falls down the stairs at home will enter and follow the path of group health,
while a similar employee that falls down the stairs at work will follow the
path of workers’ compensation.
He concedes that this
dichotomy has existed for a long time for many employers, but contends that the
ACA will make it the reality for many more employers. He suggests that in this new paradigm, employers may
come to question why they pay two premiums, manage two processes, and have this
dichotomy. He also raises the point that treating employees differently in this
context may present equal protection issues. Interesting and stimulating conversation.
I have never practiced
law against Charles Davoli, and I hope that I never do. He was passionate, prepared, persuasive
and focused.
I had a long ride home
to Florida. As an aside, I suggested to the assemblage that this meeting could have been held in Florida. We have winter in Florida; we just don’t tend to feel it in
a bone-chilling, breath-taking way like they do up north.
On the ride home, I thought about the
ProPublica articles of the first week of March 2015. I thought about what was
discussed at the conference, and particularly I reflected on my time with Mr.
Davoli, and some of the other workers' compensation giants with whom I was privileged to spend some
time.
I wondered, what is the
destination of this thing we call comp? Are we on the road to perdition, or the
pathway to the stars? Is it all that it can be, or is it a concept which has
outlived its relevance? I have invested a great deal of time in the subject. I cannot answer the question, but I think I got the perspectives of the nation's worker's compensation thinkers last week.
I
have been privileged to speak and associate with many of those that I consider to be
the Twenty-First Century giants of the subject. I wonder what those giants
would conclude if they were pulled together for the kind of discussion that
emanated from the Workers’ Compensation Commission in 1972? I would love to be
a fly on the wall for that conversation.
The strength of this
conversation and conference might arguably be the speakers, with their
statistics, historical foundations, and prognostications. But, the audience and
attendees were every bit as imperative to the environment. It is rare that you
hear a question poised to a blue-ribbon panel, that yields the simple response “that
is good question,” and little beyond that. This is not to denigrate or minimize the
panels, they were each excellent. This is to merely point out that the brains
in the audience were frankly brilliant; asking penetrating, compelling and educating questions.
In my estimation it is
a great sign that we can still ask questions that do not have ready answers.
These kind of questions remove us from our respective comfort zones, challenge our presumptions
and assumptions, and hopefully make us think about this industry. Henry Ford is
credited with saying that “failure is simply the opportunity begin again, this time more intelligently." As states have reformed and remade, as
states look to the opt-out, the fee-schedule, the prescription formulary and
beyond, perhaps everyone is a little smarter than the last time?
