Florida Workers' Comp

Thursday, December 7, 2017

Medical, Critical, Inappropriate (7)

People are talking about workers' compensation, perhaps more today than ever. This is the seventh in an 11-post series (links to the first six are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

Medical ignorance

Some perceive that recovery from injuries and illness is more challenging in workers’ compensation than in other settings, including those covered by health insurance. This disparity is blamed in part on medical ignorance. In some manner, this is interrelated with system failures, incentives, beliefs, perceptions, and expectations, which are all discussed in other posts.

There is a perception that relatively minor injuries and illnesses may fail to resolve in workers’ compensation. Instead, despite delivery of appropriate care and treatment, injuries escalate or lead to a cascade of tangentially interrelated maladies or complaints. Through these evolutions, work-related injuries proceed in a downward spiral toward dysfunction or disability. Some perceive that the benefit structure system of workers’ compensation contributes to this phenomenon. Some believe that attorney involvement, staffing and training, and benefit structures have the potential to contribute to poor recovery outcomes in work accident and illness.

Some perceive that the path to dysfunction or disability is intended in some population of injuries and illness. They believe that some portion of the population inappropriately seeks to enhance delivery of benefits or services. The motivations may be related to attention, compassion, financial, or otherwise. In its most blatant, or intentional form this is referred to as malingering. Regardless of motivation, the additional care, referrals, testing, and dysfunction/disability are seen as increasing costs in a micro-sense, that is in a particular claim. However, there is some sentiment that system complexity and regulation can be driven by the actions, well-intentioned or otherwise, of those who magnify symptoms, complaints, or dysfunction.

Some perceive workers’ compensation systems as losing sight of appropriate priorities. They note the focus on metrics, data, and measures. They describe decision-making based upon protocols and procedures. However, they lament a perceived trend toward the “business” of medicine and away from the “practice.” As systems and payers require more documentation and data, they perceive a detrimental effect on provider/patient relationships and deleterious effects on both care, recovery, and restoration. The suggestion is that a patient, in any medical situation, must remain the center of the medical process. The purpose of the care, i.e. this particular patient, must remain the primary focus. Communication needs to be facilitated to enable and encourage recovery and restoration.

Methodology has to be developed and deployed that will engage injured workers in their recovery. The population that are disheartened or discouraged because of injury, its severity, their progress, or their preconceived notions or expectations of recovery must be engaged and invested in their recovery despite the challenges, physical or emotional, that present. There have been successes with patient-focused, motivated recovery, and return to function and employment. Those programs should be identified and replicated for application to greater populations of injured workers.

The critical point in a claim

In an analysis similar to medical ignorance, some note that there are a multitude of challenges in the path from injury/illness to recovery. Each of these challenges has the potential to either reinforce the course to success or to derail the recovery. In some part, these challenges are mentioned in these posts. However, there is also acknowledgement that it is impractical to attempt to list each and every potential pitfall o medical care or workers' compensation generally.

However, medically, emotionally, vocationally, or otherwise, it is believed that analysis could help identify the points at which critical decisions are made by the multitude of individuals involved, such as the patient, providers, representatives, and the system itself. The goal would be better decisions at these critical points. With better understanding of when and where recovery can be potentially derailed, With recognition of when these likely occur, perhaps missteps and mistakes might be diminished, perceptions adjusted, and favorable recovery outcomes maximized.

People who are acting inappropriately

There is some frustration that the various systems are populated by some proportion of providers that are “bad actors.” Some express frustration that workers’ compensation systems invest significant effort and resources in the establishment of regulation, restriction and reporting ostensibly aimed at assuring minimal inappropriate behavior by those who provide services to or on behalf of injured workers and employers. However, there are perceptions that these efforts are ineffective and inefficient.

Some voice concern that the “bad actors” are too often not punished or not punished sufficiently. Some contend that these entities are known to the community, and that their behavior is distrusted or lamented, but that they remain engaged in the industry. There is a belief that regulatory agencies react to bad or inappropriate behavior by increasing the volume of broad regulation rather than effectively enforcing existing regulation to address these “bad actors.” Some perceive this as driving an ever-increasing volume of regulation that results in additional cost and inconvenience to the entire marketplace, while making no effective change in the deterrence of the admittedly poor behavior by the minority of “bad actors.”

A noted element of concern in this regard is the silo nature of government in which responsibilities for regulation may be divided among specialized agencies. An example cited is that each state has an agency for licensure of professions like legal, medical, and insurance professionals. However, there may also be separate agencies for the regulation of insurance companies, hospitals, outpatient centers, and ancillary professionals such as therapists or rehabilitation specialists. In addition, specific activity such as fraud, overutilization, and regulatory compliance may be delegated to still other agencies. There is a perception that the variety of agencies and seeming overlap of responsibility may contribute to the ineffectiveness of both regulation and compliance.

There is also a perception that the very nature of America’s federalist system contributes to a frustration of regulatory efforts. Examples have been cited in which professional providers of services have been charged in a particular jurisdiction. In lieu of prosecution some may voluntarily consent to cease practice in that jurisdiction. Others may be convicted in a jurisdiction, similarly resulting in loss of licensure.

However, examples are cited of these same providers relocating to other jurisdictions, obtaining new licensure, and continuing with the same behavior addressed in the former jurisdiction. Some refer to this progression by analogizing an arcade amusement “whack-a-mole.” (an arcade game in which players use a mallet to hit toy moles, which pop-up seemingly at random, and drop back into their holes. The object of the amusement is that the player’s attention can be effectively directed at only one mole at a time, and while one is being “whacked,” others are escaping attention of the player who possesses but one mallet).

There has been discussion of some methodology for clearly communicating state perceptions of “bad actors” in the various marketplaces. If a database existed, from which a state might discern a provider’s history of behavior prior to issuance of a license, that might work to prevent re-occurrence of unacceptable behavior. Some contend greater attention by federal licensure officials (Such as the Drug Enforcement Agency, which authorizes medical providers to prescribe controlled substances) might forestall some inappropriate activity. Similarly, federal officials determine who may approve providers receive reimbursements from Medicare and similar agencies could perhaps be more vigilant, regarding poor performance or behavior.

More effective and uniform enforcement of existing regulation is likely appropriate. The viability and vitality of workers’ compensation is dependent upon regulation being comprehensible and appropriately enforced. Those who consistently disregard legislation and regulation should be removed from the system and consistently punished. It is noteworthy that in 2017 California appears to be on this track regarding removal of physicians from the pool of available providers.

Tuesday, December 5, 2017

The OJCC E-filing Story Continues

Having led the way into the twenty-first century in 2005-06 with deployment of electronic filing (“eFiling,” or “eJCC”), the OJCC has continued to revise and leverage this process. In 2011-12, the OJCC began to enforce the mandatory use of electronic filing by represented parties. In 2011-12 programming was added to afford eFiling access to all users, represented or not. In 2012-13, programming was completed to allow electronic service of pleadings among and between lawyers and insurance carriers. The result is a neatly integrated electronic filing and service system that is exemplary.

In 2016-17, five hundred eighty-three thousand four hundred eighty-five (583,485) documents were e-filed with the OJCC. The filing volumes are described in this chart.

To measure the success of e-filing, parameters were developed to assign value to the inbound filings based upon postage and supplies saved by the filer. There is also an associated savings to the state because staff no longer has to open envelopes, remove and straighten documents, and then file the paper documents for future use. Using those parameters, first described in the 2006-07 OJCC Annual Report, the cumulative end-user savings to date generated by this eFiling system, by the end of fiscal 2016-17, were at least three million one hundred fifty-eight thousand nine hundred dollars ($3,158,900).

That is money in the pockets of the OJCC customers. The total savings to the state is four million nine hundred sixty-seven thousand nine hundred sixty-eight dollars ($4,967,968). The combination is over eight million dollars in savings, and the total OJCC investment to date is only approximately 1.2 million dollars. The eJCC return on investment from eFiling is about 760%.

Electronic service was added to the eJCC platform in January 2013. This feature allows significant volumes of documents to be served electronically upon opposing counsel and insurance carriers in conjunction with electronic filing. This process change has enabled an additional annual savings to practitioners and carriers in excess of one million dollars due to the ability to serve each other documents electronically. The eService savings, combined with eFiling savings is thus well in excess of ten million dollars.

This achievement is particularly gratifying in light of issues and complications experienced by other states’ systems that have expended large special fund allocations building and deploying electronic filing. According to Workcompcentral.com, these states have spent far more developing their case management and litigation platforms. Notably, their systems are for all workers’ compensation claims in their respective states, while the OJCC system is for litigated claims only.

Pennsylvania is reported to have spent $45.1 million initially, and contracted for three years of support and maintenance at $5.1 million per year. California has reportedly spent $61 million to deploy their case management and electronic filing platform. The OJCC has deployed its eFiling, eService, and case management platforms using existing budget funds. The total expenditures to date are approximately $1.2 million.

If current trends in electronic filing growth continue, the annual document volume can be expected to exceed one million documents in about ten years. The OJCC is focused on bringing electronic service to employers, and developing the resources to accommodate the expected growth in both filings and system use.

Sunday, December 3, 2017

Identity Theft Sympathy

Recently, police arrested man in Hillsborough County, alleging that he "used the stolen social security number of a child to get a job and collect $21,000 in workers compensation." The accused is 44 years old and worked for about 5 years at a local roofing company, "according to arrest documents," although the business would not confirm the employment.

A police official interviewed by ABC news encouraged parents to be vigilant in safeguarding children's personal information. He says that police "see cases of identify theft involving children on a fairly regular basis, although statistics were not immediately available." The police warn that parents and children may not learn of such theft and appropriation for years. Then, when the "child goes to apply for their first credit card or loan," the theft of her/his identity becomes apparent.

According to the Social Security Administration, a social security number (SSN) can be obtained by "thieves" in a variety of ways:

Stealing wallets, purses, and your mail (bank and credit card statements, pre-approved credit offers, new checks, and tax information);

Stealing personal information you provide to an unsecured site online, from business or personnel records at work, and personal information in your home;

Rummaging through your trash, the trash of businesses, and public trash dumps for personal data;

Posing by phone or email as someone who legitimately needs information about you, such as employers or landlords; or

Buying personal information from “inside” sources. For example, an identity thief may pay a store employee for information about you that appears on an application for goods, services, or credit.

None of these seem very likely for children, except perhaps the "rummaging through trash" example. But, the threat is said to exist. The report notes that the Federal Trade Commission has specific warnings for parents regarding detriments that are possible following the theft of a child's SSN. These are said to include "being denied certain federal benefits, receiving bills and collection notices in the mail and notices from the IRS that a tax return has already been filed with your child's SSN." It appears that people can suffer detriments when they are the victims of fraud.

And, if someone "misuses" your personal information, including SSN, the Social Security Administration "can’t resolve these problems." There is no remedy from the Federal government agency. Recently, noted in Kansas Cannot Prosecute Identity Theft, there have been those who conclude that state criminal prosecutors likewise cannot resolve these problems. Thus, the innocent victim of the theft is left to deal with the outcomes and effects perpetrated by the thief.

The Federal Trade Commission (FTC) provides advice regarding what can be done when your identity is stolen, at identitytheft.gov. The FTC recommends that you contact all the companies that have been involved by the thief, that you report the theft to the FTC, and that you obtain credit reports the thief may have affected. It recommends that you do this "right away," which may be difficult if you learn of it when your child is later applying for college, and the theft was a decade before. The FTC even recommends filing a local police report, ignoring that your state may refuse to take legal action, like Kansas.

The FTC next recommends that you close accounts, remove "bogus" charges, correct your credit report, and expend your resources to protect your credit.

But none of these seem to focus on prosecuting the thief that stole the identity to begin with. These are all actions to repair the barnyard gate, after (perhaps long after) the livestock has escaped through it. What will or can the state do to prosecute the thief?

The Washington Times reported this year that

Most illegal immigrants who pay taxes have stolen someone else’s legal identity, and the IRS doesn’t do a very good job of letting those American citizens and legal immigrants know they’re being impersonated.

This can allegedly "cause significant burden to innocent taxpayers," but the IRS is seemingly ambivalent.

In 2016, Forbes reported that Internal Revenue Service Commissioner Koskinen was questioned by Congress regarding the use of stolen SSN. The Commissioner "suggested that as long as the information is being used only to fraudulently obtain jobs, the IRS was OK with it." That is, the IRS has no interest in criminal activity in general, fraud generally, only in the criminal activity of tax fraud. So, if the taxes are being paid, no harm?

The Commissioner said "the IRS actually had an interest in helping the illegal immigrants" with the filing process, despite them using stolen identities. Apparently, a thief's tax payments are facilitated by this identity theft, and so the IRS' job is simplified if these individuals steal identities. Essentially, Forbes characterizes this as the "not my department response that abounds in big government."

That leaves the rest of us to perhaps wonder "whose department is it?" People are being penalized and damaged by identity theft. They are left on their own to discover the theft and to fix the damage done to them by thieves, at their emotional and financial expense. And, there appears to be a reluctance or at least ambivalence about taking any action to hinder or stop the thieves. But, there is Criticism of Enforcing the Law.

Those who criticize seem quick to find fault with the effects and implications that attach to stealing. There is sympathy for the person that steals the identity and is punished for breaking the law. People perceive outcomes that affect thieves, and lament that repercussions upon the thieves. But, there seems little attention on the thieves' victims, the people whose identity was stolen. Do those people deserve consideration? Do they deserve the protection of the law?

Should the sympathy lie with the thief or with the victims? Or, can there be sympathy for circumstances that lead people to poor decisions, and still sympathy for those they hurt? And, whose department is that?

Thursday, November 30, 2017

Voc Rehab, Ability, and Methodology (6)

People are talking about workers' compensation, perhaps more today than ever. This is the Sixth in an 11-post series (links to the first five are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

Vocational rehabilitation

The various workers’ compensation systems have imposed requirements for provision of rehabilitation following injury and illness. In keeping with the underlying original theme of workers’ compensation, returning the employee to function and gainful employment, rehabilitation has been employed in instances where resulting “impairment” or “disability” precludes an injured worker from returning to her or his former work following the injury or illness. Vocational rehabilitation can take various forms, including classroom training, hands-on training and on-the-job training.

Some perceive that vocational rehabilitation has represented a cost to the various systems, but without a consistent and appropriate return on investment. They lament the volume of resource that has been required in pursuit of re-employment. They perceive rehabilitation as too dependent upon individual workers' motivation, and describe examples of significant investment in such training, without a resulting successful return-to-work. In such examples, the ultimate outcome is a lifetime entitlement to indemnity benefits (permanent total disability), despite the investment of significant resources in the education and training process.

There are those that perceive this as a natural consequence of trying to the best for the worker, an effort and investment that is worthy but not always successful. Others perceive this as a predictable outcome that they see driven by misaligned system incentives which values disability and dysfunction. They contend that system service providers profit from disability and so encourage it.

Ability versus disability

Expectations and motivations may be affected by characterizations and language. The workers’ compensation systems are challenged by a variety of concerns and complaints, as discussed throughout these posts. Some perceive language choices are contributing to misperceptions and confusion both about and within systems. Others are more critical, concluding that language contributes to behavior and thus overall system performance.

A poignant example of this posited phenomenon is “disability.” Various systems define indemnity benefits with this word. Benefits are for "temporary disability" or "permanent disability." Critics say that the word “disability” focuses attention upon what a person cannot do. With the focus on the “inability,” it is perhaps too easy to lose sight of the converse, i.e. “ability,” or what the person can do. There is similar concern about the use of “impairment,” and the connotation such a description may have for most people.

This labelling is furthered by the systems; use of durational adjectives (“temporary” and “permanent”). When an injured worker is informed that she or he is “permanently disabled,” the perception of inability may override and undermine any effort to return to gainful activity. The label may prejudice the expectation and therefore the outcome.

Some members have started to subscribe to the notion that the industry name itself leads to an improper focus in the claim process. That line of thought is driven by confusion surrounding the workers’ compensation system, and the lack of understanding of those entering it through an unanticipated injury. There has been suggestion in the industry that “Workers’ Recovery” would set a better tone for injured workers, allowing them to focus on return to function and gainful contribution to society.

There is some consensus that the various systems should consider and try to appreciate the potential of words in creating expectations and beliefs. Jurisdictional systems should contemplate the use of language that is focused upon encouragement and enabling, rather than discouragement and disabling.

Methodology of claims handling

There are many processes engaged across the workers’ compensation marketplace, and required to comply with various and sometimes conflicting regulatory frameworks. There are a seemingly endless assortment of tasks required to properly process, manage, and document the sequela of a work accident or illness. Just as there is a vast spectrum of tasks and responsibilities, there is a perception that there are just as many alternative models for fulfilling those responsibilities. Different payers engage different processes in fulfilling obligations and complying with regulations.

Some perceive that the regulatory complexity drive reporting and documentation requirements that elude the expertise of payers such as insurance carriers and servicing agents. It is not that these entities cannot master a particular task or compliance requirement. The point is that it is perhaps impractical for a carrier or servicing agent to master each and every compliance requirement in each and every jurisdiction. Thus, towards a goal of specialization and simplification, a carrier might choose to acquire all expertise in-house, to acquire some and outsource other, or to outsource all. Some perceive that this drives a cycle of "cottage industries" starting, developing, consolidating.

There are at least 50 state programs and more in the various territories and the District of Columbia. Therefore, one payer might need familiarity with multiple jurisdictional requirements. Additionally, various systems may have reporting or compliance requirements under the auspices of multiple state agencies, including regulation of workers’ compensation, insurance, adjusting, medicine, legal professionals and more.

Additionally, the interconnection between workers' compensation and medical practice requires compliance and regulatory expertise regarding the federal government, yet another jurisdiction. Thus, there are a variety of subjects, and a multitude of jurisdictions and the potential permutations are vast. A payer might limit its exposure to regulatory violation or misstep by limiting the jurisdictions in which it does business, or by outsourcing certain compliance or reporting tasks to entities which specialize in certain aspects of requirements.

These complexities create cost for the payers. Some argue that decreases in compliance and regulatory costs would allow more and better focus on the fundamental goals of workers’ compensation, the care and treatment of injured workers. Some suggest that more consistency between the jurisdictions could create synergy, obviate some of the perceived need for specialized vendor involvement, and streamline the regulatory process. Others claim that such cost savings for payers would benefit those providers rather than injured workers.

Tuesday, November 28, 2017

Are More People Representing Themselves in Comp?

There have been various posts and comments on social media that contend there is a growing population of injured workers that struggle to find counsel. However, I have yet to see any empirical data that supports that injured workers cannot find counsel to assist them.

Each year, the Florida Office of Judges of Compensation Claims publishes an annual report required by section 440.45, Fla. Stat. The 2017 report has recently been published. That report addresses a variety of statutorily posed questions. In addition, the report focuses on other topics that have periodically arisen. Since the statutory amendments early this century (2003), one of those other topics has focused on how may injured workers in Florida represent themselves, or are "pro se."

This question is fundamentally “are more claimants filing their own cases?” This is a difficult question, which cannot be definitively answered by the JCC Application database as it is currently configured. This database was not designed to answer this question, and cannot be readily or inexpensively adapted to do so. Whether a particular claimant is represented or not at a given moment in time (a “snapshot”) can be determined with accuracy. However, this does not answer whether that claimant in fact filed any pro se petition(s) for benefits (PFB).

For example, a claimant might hire counsel and through that counsel file three PFBs for various benefits. The JCC Application would then reflect three “open” PFBs attributable to a "represented” claimant. If the claimant thereafter ceased to be represented, and filed one pro se PFB, the database would then reflect four “open” PFBs attributable to a pro se claimant, despite the fact that three of those were in fact filed by (former) counsel. If that same claimant then hired a new attorney, who then filed a fifth PFB, the database would then reflect five “open” PFBs attributable to a “represented” claimant, despite the fact that one of those five was in fact filed pro se. This hopefully demonstrates what data can and cannot currently be readily discerned.

The JCC Application database can report the total volume of “new cases” opened in a given fiscal year and the percentage thereof on a given day that are “represented” or that are pro se cases. Likewise, the OJCC can calculate the percentage of pro se cases, compared to the total volume of PFBs filed during the preceding year. Admittedly, neither of these is necessarily a perfect reflection of the actual population of PFBs that have been filed by injured workers on their own behalf.

However, these two calculations are the best answer the OJCC can currently provide to the question of pro se litigant volume. The fact that this answer does not precisely answer the question posed, “how many pro se litigants file petitions,” does not alter the fact that this is the best answer that the OJCC can currently provide. The inability to answer the precise question is conceded, explained, and the best possible answer is provided.

Notably, if the raw number of PFB attributable to pro se claimants remained static each June 30, the percentage would nonetheless have increased in prior years due to the persistent decrease in overall PFB filings discussed (elsewhere in the 2017 report). The same is true for the comparison to new cases, in light of those volumes decreasing early in this century. But, those reported volumes each June 30 have not remained static; they have decreased consistently.

The available data does not support the conclusion that the Florida pro se claimant population is increasing. The data supports that there is fluctuation in the pro se volume and percentages. However, the changes in recent years have not been consistent with any significant trend of increased or decreased pro se participation. Although both 2015-16 and 2016-17 demonstrate lower volumes of pro-se pending petitions, that change (5.09% to 4.38% to 4.09%) could be explained wholly by the increased PFB filing volumes.

To illustrate, the actual number of pro-se cases decreased only 106 from 2014-15 to 2015-16, but PFB filings increased 7,044 in the same period. The decrease in pro se cases from 2015-16 to 2016-17 was only 66, but PFB filings increased 3,100. Thus, while the percentage of petitions that were pro se on each June 30 is decreasing, the percentage decrease reflects both fewer overall pro se and greater overall petition filings. The same analysis would produce similar conclusions regarding the comparison of new cases to pro se cases.

The graph above depicts the ratios of “new cases” (blue) and of the Petitions (red) to the population of pro se petitions pending on June 30 of each of the last fifteen (15) fiscal years, most of this century. The time period illustrated encompasses the entire period since Florida's 2003 statutory amendments. These comparisons demonstrate decreases in pro se cases, as a percentage of either "new cases" or Petitions, though these have demonstrated minor fluctuations in pro se participation over the last seven fiscal years.

The overall trend over the fifteen year period, extending back to 2002-03, was generally to decrease until leveling more recently. The slight increase in percentages in 2012-13 appears to have been statistically insignificant in light of the decreasing figures in the last three fiscal years.

Thus, all three measures demonstrate no evidence of any increase in Florida pro se. The raw number of pending petitions that are pro se each June 30 have shown reasonably consistent decrease. The pro se percentages of both "new case" and Petition volume likewise have demonstrated persistent decrease. While this does not speak to perceptions of pro se participation nationwide, nor in any other jurisdiction, it illustrates that pro se participation in Florida is not increasing by any objective measure.

Sunday, November 26, 2017

New York Settlements and Fees

An interesting paper was published in July 2017 by the Center for Law and Social Science. It is a statistical analysis of aspects of litigation in New York. It is focused upon data found in "closing statements" prepared and filed by attorneys who receive contingent fees there. These statements have been required for decades, and they provide details about settlements, fees, costs and more. This particular study focused on a "preliminary analysis of these data for the period 2004-2013."

These "closing statements" are reportedly required in most contingency fee cases, and are filed with a state court clerk. They report generally on "settlement, judgment, or abandonment by the client." This includes the "amount of any settlement or judgment, the amount paid to the lawyer, and an itemization of the lawyer’s expenses." The information from the "closing statements" seems to perhaps bear some "content" similarity to the attorney fee data sheets that have been part of Florida workers' compensation for many years.

Summarizing their conclusions, the Center authors found:

Settlement rates in New York state courts are very high (84%).

Very few cases are resolved by dispositive motions.

Litigated cases and settled cases have almost exactly the same average recovery.

Median litigation expenses, other than attorney’s fees, are 3% of gross recovery.

Claims are disproportionately from poor neighborhoods.

Attorneys’ fees are almost always one third of net recovery, which is the maximum allowed by law.

The "overwhelming majority of closing statements" are for state court cases, primarily involving New York's court of general jurisdiction, the "New York Supreme Court." However, some involve litigation in other courts, including Federal, county, probate, and small claims. Some might therefore argue that this data set is insufficiently specific to support broad conclusions. Others might see that data diversity as a strength, perhaps minimizing the impact of any outliers.

Several points about the study were intriguing. One is the data analysis method. There is a process in which certain data from the "closing statements" is manually input to a database. Clearly, analyzing electronic data is likely to be less time-intensive than document review. However, the authors also examined the original statements, but using some modern tools. The forms were scanned to the PDF format, and then rendered to "optical character recognition," or "OCR." This allowed the authors to retrieve data from those forms using computer programs rather than human eyes. OCR is the format used by the OJCC to make appellate records similarly "searchable."

As I read the report this week, I reflected on a recent presentation at the CompLaude Gala. That presenter described the coming evolution of artificial intelligence (AI), and the methodology that computer programs will use to identify and retrieve relevant and pertinent data from large data sets. The prediction is that programs will (already are in some instances) analyze very large populations of raw data from documents and forms, and focus humans on trends, historical outcomes and future predictions. The media is full of AI predictions and prognostications, but the analysis of the "statements" for this paper seems to illustrate how it could impact the data analysis industry, and workers' compensation.

The paper authors note that the analyzed "statements" demonstrated a variety of outcomes, including instances in which the plaintiff recovered. But, there are also "many cases" from which "the plaintiff recovered nothing." These included instances in which the "the plaintiff abandoned the case," or where "the plaintiff pursued the case to trial and lost." Those cases demonstrated "no fee and no reimbursement of expenses."

The Center analysts conclude that "about 84% of all cases settled, 13% were abandoned, and less than 2% went to trial or were otherwise adjudicated." This contradicts a "conventional wisdom that 95% of cases settle." Despite the study contradicting that figure, the analysts note that this "conventional wisdom (95%) seems to be remarkably persistent," albeit unsupported.

The article acknowledges that this study's theme is not unique. Others have studied the rate at which cases settle, but have reached somewhat different conclusions. The Eisenberg and Lanvers study examined two federal courts and concluded "settlement rates in tort cases were 63.8% and 87.2%." The Center analysts contend these "overstate the settlement rate" because the parameters do not "accurately distinguish between settled and abandoned cases," but note that the Eisenberg range includes its 84% conclusion.

An interesting factor might be the limitation of this data set. One might question whether the research in this study focuses upon a subset of "cases." The Center acknowledged that "almost half" of cases in which a "closing statement" was filed did not result in the filing of lawsuit. Those cases were nonetheless reported because the payment of a contingent attorney fee required reporting. But, notably, the authors concede that a population of claims settle before a plaintiff ever hires counsel. Those cases would not involve fees, and thus would not result in a "closing statement." Possibly, the inclusion of those cases settled without an attorney might increase the empirical 84% closer to the 95% "conventional wisdom?"

It is also interesting that the authors characterized "most recoveries" evidenced in the "closing statements" as "relatively small." In fact, their research concluded that "75% of settlements are $37,500 or less." Perhaps more surprising, "75% of adjudicated cases result in judgments of $6000 or less." In addition, the study concluded "over 70% of (adjudicated) cases result in no recovery at all." Those statistics may evidence the efficiency of settlement generally and perhaps the pervasive influence of alternative dispute resolution (mediation, conciliation, etc.). Perhaps the best cases, from either perspective, result in settlement?

The Center for Law and Social Science report is an interesting read. The conclusions and analysis are worthy of consideration. The methodology of this analysis is perhaps a harbinger of the future. The process of employing OCR to identify and harvest data from large collections of documents is certainly not new, but efforts such as this seem to be illustrating both the power of such tools and the growing acceptance of their efforts and results. How might such tools be engaged in workers' compensation analysis?

Thursday, November 23, 2017

Beliefs, Protocols, Perceptions (5)

People are talking about workers' compensation, perhaps more today than ever. This is the fifth in an 11-post series (links to the others are at the end of this post), that attempts to overview various perspectives heard from system observers and participants. The point is that discussion is good, and if this series generates debate and interaction, all the better.

Injured workers beliefs - not informed or uninformed assumption

When injury or illness does occur, there are educational challenges. Some perceive that injured workers have preconceived perceptions and beliefs about what workers’ compensation is and how it operates. These notions are perceived as not accurately representing the systems. It is probable that selection of various adjectives has contributed to popular beliefs about workers’ compensation. Adjectives that describe system benefits based on “disability” as opposed to either “recovery” or a similarly encouraging outcome perhaps play a role in setting expectations or beliefs.

There are expectations in the workforce that are perhaps unrealistic. Injuries, whether work-related or not, are unlikely to enjoy complete recovery. Return to a 100% capacity is unlikely for a great many people. Each person will be different. This will be likely in both the physical ability to recover, and in the mindset and beliefs about recovery. Some may perceive opportunity for recovery and return to function, and others may be more pessimistic about their potentials. The perceptions and beliefs may be affected by the existence and perceptions of comorbidities, including other medical conditions, reactions to treatment or modalities, and age.

Some hold the belief that employer behavior and actions, before and after a work accident, may influence employee feelings and perceptions. There are noted examples of successful programs maintaining employer/employee interaction post-injury. However, these are perceived by some as “large employer” processes. There is a perception that small employers represent a large proportion of the market, and that these employers are neither focused upon the post-injury communication/engagement, nor in a business position to appreciate the need therefore until an accident or illness thrusts them into workers’ compensation.

Treatment protocols, a benefit or a burden

Treatment protocols, or “guidelines” are published parameters that define presumptively appropriate medical care for the treatment of particular conditions or injuries. Several companies publish material based upon medical research and demonstrated scientific evidence of appropriateness and efficacy. Within the broad definition of guidelines, the concept of pre-defining appropriate prescription medication formularies might also be included.

Medical treatment is science-based, and science continues to struggle with comprehensive understanding of all of our human intricacies. Studies have demonstrated that medical care outcomes in workers’ compensation are sometimes not the parallel of outcomes for similar injuries and illnesses in non-work settings. Some contend that patient incentives could play a role in these outcome disparities. Others contend that the benefit structure itself plays a role in these disparities, specifically regarding expectations and the participation of excellent providers. Still others contend that these disparities justify the control and certainty perceived by the advocates of opt-out.

Some contend that volumes of regulation provide an answer to effective and efficient delivery of medical care in workers’ compensation. They contend that published structure would both speed the process of decision-making and promote consistency. Others conversely argue that the human body is demonstrably individualized and therefore argue that medical care should be left to the medical provider addressing a particular patient. They perceive treatment guidelines as burdensome and some refer to them derisively as “cook book medicine.”

Court decisions in recent years have demonstrated that our constitutional form of government does compel a measurement of burden attached to any adoption of guidelines in workers’ compensation. Though treatment guidelines are relatively new, the process of impairment (permanent outcome or effects of injury or illness) guidelines began in the 1960s and has become an accepted methodology for the assignment of impairment ratings.

The American Medical Association (AMA) has published such guides for fifty years. Courts have concluded that legislatures can appropriately adopt a particular guide for impairment rating calculation/ determination and assignment. However, that adoption or delegation cannot be prospective, i.e. a legislature cannot today adopt an impairment guide that has not yet been published. In 2016 litigation established that an adoption of “the latest edition” of guides was inappropriate. Some courts concluded such language adopted whatever edition of the guides was “the latest” at the time of adoption. Another court concluded that such an adoption was vague and therefore unconstitutional on its face.

Thus, any adoption of treatment guidelines would likely involve some similar burden related to the investigation and adoption process, characterized as “system” burden, in a macro sense. Thereafter, as medicine advances, a state would potentially elect to update such guidelines periodically thereafter. Those efforts at determining the need for updating and the appropriate adoption of each iteration would also result in some degree of system burden, and financial expense.

There are also those who perceive such guides as imposing burden on a micro level, in each particular doctor patient relationship. They contend that diagnostics or treatment could be indicated by a guide for a condition or complaint, but the provider in that case might find same unnecessary or superfluous. Despite the perception of being unnecessary, the provider might nonetheless order such care or testing in order to satisfy the guidelines requirement. Critics contend this would add unnecessary cost, “direct” cost for services and “indirect” in delay of either other dare or return to work. Thus, there is concern that unneeded, or ill-advised, care may be rendered, or needed care may be declined upon the authority of such guidelines.

Prescription medication “formularies” are listings of regulatory pre-approved medications for treatment of workers’ compensation injury or illness. To be approved for such listing, medications have to have demonstrated qualities that may include efficacy, cost-effectiveness, and disinclination to addiction or other negative side-effect. Advocates assert that such a regulatory pre-approval process can speed the delivery of medication following an injury or illness, and that with rapid instigation of care recovery is enhanced. Critics of formularies denounce the limitation of individual decision-making by medical practitioners, and some voice the same “cook book medicine” derision applied to treatment guidelines.

Perceptions and education

There are many people integrally involved in workers’ compensation, including attorneys, employers, physicians, regulators, therapists, and vendors. There is no shortage of astute, informed, and active professionals. Recent years have led to greater professional specialization. Although there are some available news sources focused on workers’ compensation, the breadth and depth of their capacity is limited. The broader marketplace is less informed regarding developments, changes and challenges, until news spreads. Dissemination of information is often dependent upon word of mouth, email chains, and social medial.

Some believe that the systems are in need of better sources of information and education. These would perhaps counter existing misperceptions. Such education could be focused upon issues raised in this report, including: system failures, real or perceived; injured worker beliefs about workers’ compensation; Claims handling; medical ignorance; identifying inappropriate activity; expectations of full recovery; and roles of various system participants.

Admittedly, many will engage information and education only when needed. That is, it is likely that most employers and employees will continue to have minimal interest in workers’ compensation until and unless a work-injury, or allegation thereof, occurs. There is a general consensus that the systems would benefit from more input and participation by broad categories of employers and by employees. But there is doubt that such interest can be easily engaged.

There is a wealth of knowledge in the employment marketplace, which might be of great benefit and value in the structuring of benefits and procedure. Unfortunately, it is perceived that interest in workers’ compensation, and motivation to voice perceptions and ideas, tends to flow primarily from industry and system insiders, and those already affected by the systems. The involvement and engagement of the broader workplace populations is minimal and difficult to motivate or inspire.

There is perceived value in engaging the workplace in a broader context. Systems would benefit from the involvement and contributions of a greater variety of both employers and employees, addressing concerns and structure of this “safety net” before it is needed in a particular instance or situation.

Tuesday, November 21, 2017

Mediation Success - and Adding Capacity

Mediation in workers' compensation is an area in which Florida was the pioneer. In the 1990s, Florida tested and then mandated mediation in workers' compensation claims. Mediation has been very effective in managing case volumes and providing relief to the employees and employers served by workers' compensation. Ironically, there have been other states that joined the trend lately. To some, those late-adopters have appeared (or been portrayed) to be pioneers or innovators, as they accepted and copied the paradigm that has been the norm here for almost 25 years, and proclaimed the success of their "innovation."

The OJCC was initially staffed with one mediator in each Division, thus with 31 judges, there were 31 mediators. In 2012, the legislature eliminated on judge position and three mediator positions in the OJCC. This has significantly challenged the OJCC's efforts in delivering services. However, in November, the OJCC advertised a new mediator position. This was not added by the legislature, but created by reclassifying another OJCC position, by shifting existing resources to a different priority.

This new mediator position will be assigned to both Ft. Lauderdale and West Palm Beach, each of which are three judge offices that have operated for five years with only two mediators each. That handicap has resulted in both significant workload, and has required telephonic mediation assistance in those Districts, primarily in West Palm Beach. This new mediator may spend time in each District, or may be primarily based in one of the two and perform telephonic mediation in the other. In the end, the OJCC intends to be flexible in the details depending upon the mediator interested in the position.

The 2016-17 OJCC Annual Report has been published and distributed. Since 2010, the OJCC has also published a mediation and settlement report, providing further detail into Florida's alternative dispute resolution process. This post is part of a series highlighting various portions of those reports.

In 2016-17, approximately sixteen thousand (16,079) mediations were held by State mediators, at an average cost of approximately $169.39. Many private mediators charge hourly rates well in excess of these figures, commonly two hundred fifty dollars ($250.00) per hour or more. Some private mediators also charge minimums (such as a two-hour minimum) for all mediations convened. Therefore services comparable to those delivered by the OJCC mediators, from private mediators, would likely cost an average of approximately five hundred dollars ($500.00) or more.

The OJCC is compelled to mediate cases within 130 days of petition filing. Since 2008-09, 100% of state mediators averaged less than 130 days. This measure is in stark contrast to the compliance demonstrated before that year. The credit for that compliance is due in large part to the efforts of the first OJCC Deputy Chief Judge, Scott Stephens, and his institution of a computer-driven process that automatically set petitions for mediation.

Though the statute thus seems to afford 130 days for a mediation, the "window" available is actually only 60 days or less. The State mediation cannot be noticed until 40 days after the petition is filed. And, the parties have to have advance notice to accommodate such calendar commitments. It has become practice to strive to provide parties with 30 days’ notice of mediation. Thus, that combined 70 days of delay and notice must be deducted from the 130, leaving the 60 day "window" in most instances.

That there is a virtually unavoidable delay of 70 days legislatively built in to the process is thus interesting. But, this is more interesting still when we note that the overall statewide average from petition filing to first mediation was 88 days in 2016-17. That essentially means that the "discretionary time" (excluding the 70 days "built in") was essentially 18 days! EIGHTEEN DAYS! That evidences a significant commitment and performance across the cadre of professionals that serve as State of Florida mediators.

For reasons highlighted in the Annual Report, there are constraints on the ability of State mediators to either “double book" or to place “arbitrary time limits” on mediation. Neither of those has ever been a practice in actuality, but there have been perceptions of both in the past. Those mis-perceptions were generally related to mediators trying to keep their calendars full despite the tendency of parties to cancel State mediations, often with little or no notice. A great benefit to our efficiency would be effected if parties did discovery earlier, spoke with each other more, and did not cancel mediations at the last minute.

The purpose of mediation is consistent in any dispute, workers' compensation is merely a subset, or type of dispute. The purpose is resolution of differences in a participant-driven environment of discussion and compromise. It is in the best interest of every employee and employer that there is such opportunity for discussion regarding claims and defenses. Such participant-driven processes empower the very individuals for whom workers’ compensation was created.

The maximum number of mediation appointments that can be offered by the OJCC to Florida’s employers and employees is likely currently around 109,004. However a more practical volume is likely around 70,532. The 28 full-time OJCC mediators could likely schedule 11 potential appointments (8:00, 8:45, 9:30, 10:15, 11:00, 11:45, 12:30, 1:15, 2:00, 2:45, 3:30, 4:150.). multiplied by the 28 mediators equates to 308 per day statewide, multiplied by 229 working days, equals 70,532. That is notably very close to the current PFB filing volume. Recognizing that many mediations cover multiple petitions, the congruity between that maximum volume and the current filing rates is notable.

Of course, this post led with the advertisement of a new mediator position. That addition of a 29th mediator will positively impact this availability in 2017-18. That one addition, accomplished without legislative intervention or additional agency funding, increases the total likely capacity from 70,532 to 73,051. This addition will help ease mediator calendar congestion for Florida's employees and employers.

However, with the apparent trend toward increased petition volumes, this addition is unlikely to be sufficient as a long-term solution. The long-term solution is legislative restoration of the (now) two remaining mediator positions (and replacing the staff position that has been used to "create" the recent 29th). The reinstatement of those two remaining positions would increase the likely capacity to 78,089 and provide significant relief to congested calendars, a benefit to the very Floridians this system was built to service.

Sunday, November 19, 2017

The Coming Automation

The National Council on Compensation Insurance (NCCI) recently released two articles detailing an analysis of the The Impact of Automation on Employment – Part I, and Part II. They are researched, documented, and sourced. They lead us to the perhaps obvious conclusion that technology will change our conception and perception of work. There is room for the discussion of the "how" and the "how much," but it appears the "if" question has been answered.

In the first Part, there is a brief review of the automation advances in the early 20th Century. Obviously, those further changed America from an agrarian to manufacturing society. NCCI concludes that signs today point to a potential for a similarly significant shift resulting from "advances in artificial intelligence and robotics." These will "potentially transform future jobs and the structure of the labor force."

The driving force is obvious. Automation "has steadily decreased costs for decades." The decrease of cost for product inputs allows for competitive pricing of end-products. That pricing advantage renders products more appealing to consumers. The equation is neither complex nor surprising. The labor involved in manufacturing is a major component of production cost, and automation has proven an effective method of decreasing that segment of cost.

What is purportedly new in this millennium, however, is the spread of this technology leveraging into non-manufacturing environs. NCCI concludes that "technical advances in computing power, artificial intelligence, and robotics have created the potential for automation to penetrate deeply into occupations beyond manufacturing." That technology may be further leveraged is perhaps an absolute truth, beyond argument.

However, there are those among us that remember typewriters, thesauruses, dictionaries and more. We lived through the new age of electric typewriters, correcting typewriters, memory typewriters, and the birth of electronic word processors. We lived through what we retrospectively see as slow, frustrating, and difficult programs like Word Star and Visicalc, (early) Word Perfect and SuperCalc. We recognize that anyone concluding that technology has as yet not affected "occupations beyond manufacturing" may have a short memory. By the second part, NCCI seems to acknowledge that, despite its opening hypothesis which seems to ignore it.

Knowing that tech has already touched the typing pool, secretaries, receptionists and a raft of other occupations does not change the conclusion that more change is coming. It also does not foreclose the NCCI conclusion that our future may change "more dramatically than in the past." The NCCI conclusions are based upon studies, and identify the occupations which are likely perhaps to be the next typing pools.

One critical study, that has been mentioned in this blog before is a Ball State University (BSU) study. Of course, anyone knows that for the study of business there are a few truly elite Universities, and possibly Ball State is peerless (bias alert, the blogger earned a business degree from BSU in the Dark Ages, classes were held in a cave back then). The BSU study noted "that 87% of the job losses in manufacturing from 2000 to 2010 were due to automation, while 13% were due to globalization and trade." There are many pundits who are quick to blame job loss on NAFTA and globalization, but it has been technology that has recently affected the greatest impact, by far.

It is noteworthy that automation's deleterious effect on jobs, has been parallel to a similarly impressive positive impact on output. The BSU study concludes that "in 2016 the United States produced almost 72% more goods than in 1990, but with only about 70% of the workers." Inescapably, technology, automation, and robotics have impacted both the labor and consumer markets. Moore's Law suggests to us that the speed of change will increase. Previous posts on this include Salim Ismail and a Life Changing Seminar (coincidentally an NCCI seminar) and The Running Man from Pensacola.

The current predictions center on technology replacing occupations. Noted examples are "kiosks and tablets" in restaurants, "robots to process packages in warehouses," and "self-driving trucks." Each of these presents serious implications for the service industry. These are predominantly in the theme of replacing those who perform rote and routine tasks. But, the trend is now toward artificial intelligence and software that detects and then predicts patterns and performance. This intelligence will allow automation of non-routine tasks. This will displace humans even more.

NCCI also cites studies from the Kinsey Institute and the University of Oxford (neither is a Ball State, but each nonetheless has some credibility). Kinsey started with occupational data from 800 occupations and focused on 2,000 occupational functions therefrom. It then ranked these functions for susceptibility of technology replacement. The outcomes are chilling for some functions. But, there are also occupations identified that are less susceptible of automation, such as "managing and developing people." There are functions at which humans excel and which the study does not support a strong susceptibility of computer or technology takeover. The lesson from McKinsey is that extent of technology displacement of humans will largely depend on the occupation.

That does not mean that some occupations will completely disappear while others will be totally unaffected. The suggestion is that technology will affect all occupations. That is, some portion of each will be either affected or displaced by technology. Even in occupations that are minimally susceptible to technology, there will be innovation that assists professionals therein, rendering them more efficient and effective. Thus, though those occupations will not disappear, the opportunities may be diminished in actual number or at least in growth potential.

The Oxford study was similary focused on the occupations defined by the U.S. Department of Labor. It identifies tens of occupations that are "either entirely automatable or entirely nonautomatable." The analysis from Oxford is focused upon what it calls the "three bottlenecks to automation" which are: "perception and manipulation, creative intelligence, and social intelligence." Once these analyses were performed on the two extremes (those "automatable or entirely nonautomatable"), the results were then projected onto all of the occupations listed by the government.

The Oxford Study provides an overall prediction that:

47% of total US employment is in occupations at high risk for automation (probabilities greater than 70%), while 19% of employment is in occupations at medium risk (probabilities between 30% and 70%), and 33% of employment is in occupations at low risk for automation (probabilities less than 30%).

NCCI concludes that each study foretells serious implications, with some occupations at greater risk than others. There is some consensus that automation change is imminent, and that it will occur sooner in the occupations with the highest risk, as the increased susceptibility to change is likely to drive both the cost incentive and the social acceptability. The impact on various localities will thus also be different because of the prevalence of those various occupations.

In the second part of this NCCI series, the analysts attempt to apply the perspectives and conclusions above to the broad spectrum of existing occupations and vocations. This is a complicated analysis because some automation will merely render current human occupations more efficient. Those changes could affect the price of such services, which likewise could create demand beyond current levels. In that paradigm, it is possible that some occupational sectors could experience growth as a result of this technological revolution. Likewise, the technology revolution could lead to occupations as yet not considered.

The alternative effect is as likely however, depending upon occupation. That is, that the expansion of technological innovation in some occupations may render human participation minimal or nonexistent. Between these two extremes, there are likely to be a spectrum of intermediate effects and outcomes. The overall effect is predicted to be marked improvement in economic output, a significant period of growth over the next decade.

NCCI predicts that overall employment will increase "about 9 million" across all segments of the economy, comparing 2014 to 2024. It is notable that compiling and analyzing data consumes time. It is apparently because of this that the baseline chosen is 2014, rather than 2017 as that latest data is likely not yet available. But note that the decade thus selected for study, 2014-2024 is almost one third over. Thus, the analyses are both likely predictive and retrospective to some degree.

NCCI predicts the most significant employment growth in "health care and social assistance." These are occupations in which technology are likely to produce efficiencies for humans, but not to replace them. This growth is also based upon the perceived increasing need for such services, likely due to an aging population and the increasingly complex nature of services. That good news is contrasted against manufacturing, with a predicted employment decline of 1.6 million. NCCI attributes this to "both to declining employment" already perceived, and the "relatively high exposure to automation penetration."

The prediction is that "automation penetration" might overall result in elimination of about "6.4 million without decreasing output." That will be less pervasive in the occupations that are difficult to automate, those that involve "creative and interpersonal skills or unpredictable physical tasks." These will include health care, teaching, and other social-interaction dependent functions. However, the effects will be more intense in examples like "data collection and processing as well as routine physical tasks." A chilling prediction is noted of exceptional loss of banking and financial analysis jobs in the next 5 years.

NCCI contends in the second part that the effects of technology are upon us. It concludes that it "has already led to increasing 'job polarization.'" The impact thus far has largely affected the "the middle of the wage distribution," primarily "physical labor in manufacturing" and "white-collar clerical jobs." These white-collar jobs being "displaced by better software and computing power," see the typing pool discussion above.

NCCI notes a perceived gender proportionality in this analysis. Data is cited regarding the perceptions of gender participation in various employment segments. While that data is intriguing, it is perhaps flawed in its reliance upon perceptions of gender. Many continue to see gender as somehow an absolute that can be defined and analyzed. There is a growing trend, or at least there is media promotion of such trend, toward a belief that gender is a mental rather than physical state. That set of progressive hypotheses and beliefs might render any supposed gender analysis unsupportable due to its assumptions being based upon physical perceptions of gender.

There is a notable set of predictions that implicate workers compensation. This is notable in both the frequency of injury and the resulting insurance rates that are charged for risk. NCCI concludes that automation could significantly impact physical occupations (in which there are risks from pushing, pulling, lifting, climbing, falling, etc.). With less humans performing such tasks, there is therefore less risk of injury from such risks. NCCI sees potential for "making work within sectors safer" and "decreasing frequency of injuries."

There will be a variety of cost/benefit analyses performed across the spectrum of economic function, including employment. Business will contend with choices between the cost of capital investment versus labor. While automation suggests a cost savings over time, as a result of both the decreased direct (wages/benefits) and indirect (workers' compensation) labor costs, those decreases will affect the company bottom line only over time. In comparison, the investment in such automation (capital investment in facilities, equipment, software) will require more immediate, up-front, investment.

It seems likely that automation (robotics, artificial intelligence, and more) will inevitably continue to permeate and penetrate the world of goods and services around us. The questions will seemingly be about how long that penetration will require, which will seemingly be influenced by social factors such as market acceptance, financial factors such as capital cost versus existing labor paradigms, and remembering Moore's Law, the speed at which innovation improves and thus decreases in price.

An example would perhaps illuminate. McDonalds has achieved market dominance through a series of decisions. Their franchise model, standardization, and promotion have each been featured in various academic studies of success. Currently, McDonalds is installing self-serve kiosks, which will facilitate ordering. According to Forbes, these will cost each restaurant between $120,000 and $160,000. With the new year, Florida's minimum wage will be $8.25 per hour. There is at least a perception that most counter help is initially paid this rate.

A franchisee cost/benefit analysis might include the Forbes conclusions that 70% of McDonalds business is in the "drive-thru" in which kiosks are less viable (today). Thus, the kiosk investment might decrease only 30% of a store's workforce. The analysis might also include conclusions about how many kiosks are required to replace how many workers at $8.25 per hour. An investment of $160,000 would require 19,394 hours at $8.25 per hour to recoup. That is, if the investment replaced only one wage earner, then that investment would pay for itself in 19.394 hours (about 485 work weeks, over 9 years, at 40 hours each).

Of course, one kiosk might well replace more than one worker. And perhaps this $160,000 costs is for replacing multiple workers. The investment cost cited might replace two hourly employees (recouped in 242 weeks) or three (161 weeks) or four (121 weeks). Those predictions and facts (how much must be invested, and how long will be required to recoup that investment) will, in part, drive the analysis of implementing automation. And, in a manufacturing environment, a similar cost/benefit analysis might be the end of the decision process.

In the McDonalds environment, there will also be social issues for consideration. How will the customer react to the change from human interaction to automation? To some extent, we have already witnessed this. At one time, checking-in for a flight at the airport required interaction with a desk agent. About ten years ago, that evolved to using a kiosk but with desk agent assistance. That has since evolved to check-in over the Internet or with the kiosk, and little if any desk agent interaction. The overall effect has been a marked decrease in the number of desk agents.

Similarly, various restaurants have installed Ziosk tablets in the last five years. These provide entertainment (games), but also allow the customers to pay their bill. They then evolved to allow customers to interact with staff for things like re-ordering (drink refill). Then, they expanded capabilities to allow customers to place their initial food order. And now, some report, they are even able to both watch and listen to customers. Thus, we have witnessed technology arrive, and then evolve in our experiences, and in meeting our needs.

The point of these examples is that the social issue may be less persuasive than expected. While humans are persistently resistant to change (I initially and stubbornly refused to use airport kiosks and grocery store self-check outs), we are also very likely to adapt. As the self-check outs became more ubiquitous, some stores decreased the available lanes with human interaction. The lines for those check-outs were thus longer, the self-check outs shorter, and I evolved, and began to use the self-check. Currently, I gravitate to those self-check because they are quicker. With those proofs, the McDonalds' franchisee analysis of kiosks versus employees may well be more simple economics, and less "social acceptance" driven.

The NCCI analyses are well worth the read. While there are skeptics who believe that automation will not markedly impact the work force and workers' compensation, there is significant evidence to the contrary. The Impact of Automation on Employment – Part I, and Part II are worthy of consideration. The job you save might just be your own.

WC.com