Recently, workers' compensation prognosticator Peter Rousmaniere published The New Democratic House Likely to Confront Work Comp. He contends that workers' compensation will soon be "under the most intense Congressional scrutiny in decades." That conclusion is predicated in some part by the October 20, 2015 letter penned by "ten Democrats" who "showed their irritation" with the overall workers' compensation concept. They expressed that they were “concerned about a pattern of detrimental changes to state Workers' Compensation laws and the resulting cost shift to public programs like Social Security disability…”
Note that this argument is of a shifting of cost from a system financed by employer insurance premiums to a system financed by employer and employee-paid taxes. Or, it could mean shifting of cost to health insurance, which some contend is majorly subsidized by employers. In any event, the "costs" are likely to be monetized and whether the expense is a payroll tax or insurance premium, it will be passed to the consumer in the price of goods and services. Or, contrarily, when no treatment is provided, the cost is shifted first to the worker, and then to the economy in general through diminished productivity.
Note that this argument is of a shifting of cost from a system financed by employer insurance premiums to a system financed by employer and employee-paid taxes. Or, it could mean shifting of cost to health insurance, which some contend is majorly subsidized by employers. In any event, the "costs" are likely to be monetized and whether the expense is a payroll tax or insurance premium, it will be passed to the consumer in the price of goods and services. Or, contrarily, when no treatment is provided, the cost is shifted first to the worker, and then to the economy in general through diminished productivity.
Mr. Rousmaniere reminded of the 2015 correspondents' reference to "a 2015 study by OSHA," concluding that workers' compensation costs are allegedly not borne by American industry: Adding Inequality to Injury: The Cost of Failing to Protect Workers on the Job. The correspondents assert that this report concludes “employers now cover only about 20% of the overall cost of a workplace injury. Furthermore, that "the workers themselves, their families, (with) their private health insurance covering nearly 63% of the cost and tax payer-supported safety net programs covering the remaining (approximately 17%).” He further cites research by ProPublica and a series of articles it produced in 2015 (to both acclaim and criticism).
The fallacy here is that any cost is borne by employers. All costs incurred by employers are passed to their customers (us) in the prices we pay. Costs incurred by employees, not covered by an employer, are generally passed to taxpayers (us) in the taxes we pay.
The fallacy here is that any cost is borne by employers. All costs incurred by employers are passed to their customers (us) in the prices we pay. Costs incurred by employees, not covered by an employer, are generally passed to taxpayers (us) in the taxes we pay.
The 2015 OSHA Report concedes that after 35 years of concerted effort, OSHA has come nowhere near enforcing its mandates regarding documenting work injuries. It notes "that many, and perhaps the majority, of work-related injuries are not recorded by employers." Of course, the enforcement for monitoring such recordation is OSHA and its 2,100 inspectors. It is notable that the Office of Personnel Management lists OSHA with only 1,876 total employees. In 2019, OSHA's budget is projected at approximately $549 million (about $261,429 per employee at 2,100).
OSHA is pointing fingers at state laws, and concluding they are either inefficient or ineffective (20%). In publishing its conclusions regarding what is being reported and being paid, it is refreshing for a bureaucracy to note its own shortcomings. According to the OSHA Factbook, those 2,100 inspectors conducted 39,000 inspections in 2007, or about 19 inspections per inspector. OSHA's goal for 2019 is to conduct fewer inspections, but with more employees, according to Safety and Health Magazine. Nineteen inspections per inspector per year, or one about every three weeks.
The Factbook also notes that in those 39,000 inspections, "two-thirds of work sites were not in compliance with OSHA standards," and that "this demonstrates the success of OSHA’s programs which focus on employers and employees with the most injuries, illnesses, and fatalities." Read that again, that 2/3 of worksites are not in compliance "demonstrates success." The Factbook also notes that there are "over 8 million work sites . . . nationwide." If two-thirds of those work sites are not OSHA compliant (consistent with the findings in 2007 of the extremely small sample of sites that were actually visited), that means potentially about 5.3 million non-compliant work sites. Some will argue this does not "demonstrate success."
It is worthy of note that "over" and "under" inclusion, the phantom of "cost shifting" is often raised in workers' compensation. There are those who believe the industry is avoiding responsibility for a population of injuries appropriately attributable to the workplace ("under"). There are also those who believe that industry is, at least at times, burdened with injuries that are not demonstrably attributed to work ("over"). The truth of the matter may be that determining injury causation, absent some clear trauma like a fall or collision, may devolve to some choosing between competing expert opinions. That may be true in a particular dispute or in a broader category of particular maladies or injuries. It is possible that those decisions are not entirely objective or even capable of being so.
There is also a suggestion that costs are shifted to workers' compensation indirectly. For example, Why Does Surgery Cost Double in Workers' Compensation? (April 2014). There is evidence in the statistics to support a conclusion that financial reimbursement rates for procedures have the potential to drive conclusions about whether a particular malady is or is not work-related. See Cost Shifting Evolves into Case Shifting? (April 2016). That is to say that individual financial incentives in particular instances may drive the inclusion analysis. And if that is real, could it be that finances drive inclusion analysis overall? Some have suggested that system dysfunction and conflict fuel the demand for expertise and effort, thus some population both embraces and desire system dysfunction.
At the end of the day one truism has to be faced. Injury and illness are bad. They both hurt, diminish function, and affect performance. I am not saying people cannot learn to deal with pain, overcome impairment and dysfunction, or otherwise persevere. We have all seen examples of inspirational people who do all of those things. But, that they persevere and succeed neither means that it was easy, painless, or quick. We must applaud their achievement but also recognize the price they have paid. When all is said and done, when an injury occurs, Someone Has to Pay. Unfortunately, there is a population that does not achieve the functional restoration that inspires us in some.
And on the subject, the concept of "payment" deserves some explanation. When we discuss the "real" cost of work injuries, we have to remember that "paying" may mean an economic exchange where money and goods or services change hands. But, paying may also include that residual bodily dysfunction, that pain, that disability. While workers' compensation focuses on how those affect the ability to work, it ignores that these all impact the human being more broadly, 24/7/365. That is true whether a work injury impacts personal life or a personal injury impacts professional life.
As I contemplated Mr. Rousmaniere's contention regarding involving the feds in workers' compensation, I also happened across an intriguing British Broadcasting Company (BBC) article: Whatever Happened to Berlin's Deserted Ghost Airport? See, when the Berlin Wall fell in 1989, the leaders there concluded a new airport was to replace the two (one east and one west) existing airports. They planned, financed, and began construction with their eyes on opening in 2012 at a total cost of about €2 billion (€ means euro, the currency of the European Union). That would be about $2.25 billion (according to The Currency Converter).
Well, 2012 came and went. In 2018, the current estimate is that €7.3 billion will be spent before it opens, maybe eight years overdue in 2020. One airline executive was quoted predicting the terminal will never open. He contends that it will yet be torn down and begun anew. That is eight years behind schedule and over three and one-half times the estimated cost. Notably, the project has been managed by a government corporation, a "committee," rather than a "general contractor." The "committee" decided on this construction model "despite not having experience with an undertaking of that scale." A project on a scale it had never attempted, and "staffed with politicians."
The airport stands empty in late 2018. It is a punchline of sorts. Officials there recently replaced all "750 of the monitors showing flight information." Despite there having never been any flights, no one turned these off, and they simply wore out. For years, this equipment has drawn electricity, and heated circuits, and accomplished nothing in the vacant halls and galleries. The replacement cost was about €500,000. In addition, "4,000 doors were wrongly numbered; escalators were too short." The design of the terminal also did not allow for enough "check-in desks" for passengers.
Astoundingly, as of now, "approximately 300 to 500 people work regularly in the main terminal building," but no planes ever come or go. It is a mind-boggling mess. This is a bureaucracy functioning for its own interest, accomplishing nothing beyond the consumption of resources.
Astoundingly, as of now, "approximately 300 to 500 people work regularly in the main terminal building," but no planes ever come or go. It is a mind-boggling mess. This is a bureaucracy functioning for its own interest, accomplishing nothing beyond the consumption of resources.
As an aside, one wonders if Europeans have been forced to do online flight check-in like we have, complete with cell phone-based boarding passes? I was recently in an airport and noticed the "check-in desks" seem a bit underused perhaps. While they diligently work to enlarge the new airport's check-in facilities, one wonders if they are answering an ever-decreasing problem or need. Are they fixing today's and tomorrow's issues or addressing yesterday's? Perhaps there is a government sub-committee for setting priorities?
An "airport committee spokesman" faulted the decision to "push forward with fixing" problems, suggesting instead that managers should have decided in 2012 to "totally gut the building and dismantle all the complicated facilities.” the spokesman contends that solution would have been faster and cheaper. The BBC questions whether the airport is a victim of the "sunk cost fallacy."
If you are in the sales or marketing game, you may have been trained on the "sunk cost fallacy." The more a buyer becomes invested in a purchase or the purchase process, the more likely they will stick around to close the sale. This is because the alternative is going to the next vendor and starting that acquisition cost expenditure (time, money, or both) all over with new issues, questions, and more. There are some who masterfully use this process, driving the investment of time and energy. In the end, a fair amount of sales are accomplished by exhausting the target, uh, I mean customer.
An "airport committee spokesman" faulted the decision to "push forward with fixing" problems, suggesting instead that managers should have decided in 2012 to "totally gut the building and dismantle all the complicated facilities.” the spokesman contends that solution would have been faster and cheaper. The BBC questions whether the airport is a victim of the "sunk cost fallacy."
If you are in the sales or marketing game, you may have been trained on the "sunk cost fallacy." The more a buyer becomes invested in a purchase or the purchase process, the more likely they will stick around to close the sale. This is because the alternative is going to the next vendor and starting that acquisition cost expenditure (time, money, or both) all over with new issues, questions, and more. There are some who masterfully use this process, driving the investment of time and energy. In the end, a fair amount of sales are accomplished by exhausting the target, uh, I mean customer.
The BBC notes that there is a value in speed and responsiveness. There seems to be some sentiment that the efforts toward opening have been sincere. However, it cites that over the course of the many delays, additional faults have come to light. Furthermore, as a political entity, that project leadership "has changed hands nearly as many times as the opening date has been pushed back." With every leadership change can come the shifting of priorities, the challenge of driving home long and short-term needs, and the seemingly endless process of describing and documenting both mission and approach.
And all of that might leave the reader lost (I can see the comments now "What does this have to do with workers' compensation? No worries, I hear that sometimes from even seemingly engaged industry people). I would suggest that the "sunk cost fallacy" might be a point of consideration if the federal government elects to wade into the complexity that is American workers' compensation. It might bear consideration even without the feds, as states consider workers' compensation. Certainly, there has been extensive effort and money invested in these various systems, state and federal. Over the decades, more than one band-aid has been applied here and there. But, if this "facility" that is workers' compensation is not functioning optimally, is another band-aid (or box of them) the answer?
Certainly, there are emotional and intellectual ties that bind us to a particular program, approach, or organization. But, if it is time to look at workers' compensation from a broad and national perspective, it might be appropriate for that examination to include the potential of bulldozing this terminal and starting over. And while they are at it, perhaps the OSHA terminal is due for a similar evaluation based upon its demonstrated success with only an extremely small sampling of American workplaces despite its significant budget?
Perhaps it is time for some hard conversations about socialism, regulation, compensation, causation, compromise, recovery, residual function, ability, disability, impairment, remediation, cure, and more? Perhaps it is time to consider not where we are, or even where we have been, but to return to an analysis of what is right for all (pronounced "both," as there are only two real parties to workers' compensation, the employer and the employee) involved.
That is not to say that federalization is the answer. The spectacular under-performance that is OSHA, with its average of 19 workplace visits per inspector per year, more than demonstrates the potential that a national, federal system or process can be as inefficient and ineffective as any other entity. The stories we are provided about the Veteran's Administration are equally cautionary. Bigger and more centralized have certainly not proven to be incontrovertible successes. But, perhaps if there are to be standards or even recommendations from a broad perspective, it is time to start with a clean slate, discuss the challenges of injury and illness, and formulate some core conclusions about work, employers, employees, and the reality of injury and illness.
All that said, it is doubtful to many that meaningful change is on the horizon in Washington. Our national workers' compensation consensus seems confident that special interests and narrow foci will persevere and prevail, and that band-aids will be the chosen course. There is a perception that many parties engage in the regulatory and legislative processes in the spirit of the sunk cost paradigm, striving to exhaust their opponents into capitulation. In that regard, perhaps workers' compensation is as mainstream as any other American regulatory process?
Perhaps it is time for some hard conversations about socialism, regulation, compensation, causation, compromise, recovery, residual function, ability, disability, impairment, remediation, cure, and more? Perhaps it is time to consider not where we are, or even where we have been, but to return to an analysis of what is right for all (pronounced "both," as there are only two real parties to workers' compensation, the employer and the employee) involved.
That is not to say that federalization is the answer. The spectacular under-performance that is OSHA, with its average of 19 workplace visits per inspector per year, more than demonstrates the potential that a national, federal system or process can be as inefficient and ineffective as any other entity. The stories we are provided about the Veteran's Administration are equally cautionary. Bigger and more centralized have certainly not proven to be incontrovertible successes. But, perhaps if there are to be standards or even recommendations from a broad perspective, it is time to start with a clean slate, discuss the challenges of injury and illness, and formulate some core conclusions about work, employers, employees, and the reality of injury and illness.
All that said, it is doubtful to many that meaningful change is on the horizon in Washington. Our national workers' compensation consensus seems confident that special interests and narrow foci will persevere and prevail, and that band-aids will be the chosen course. There is a perception that many parties engage in the regulatory and legislative processes in the spirit of the sunk cost paradigm, striving to exhaust their opponents into capitulation. In that regard, perhaps workers' compensation is as mainstream as any other American regulatory process?
