Will workers' comp scandals overshadow pervasive human costs?
The recent Four Corners1 expose on workers' compensation highlighted the costs of poor case management practices in Victoria and NSW. The human costs were touched on, through the stories of impacted workers, however the major focus of the show was on financial costs and insurer management.
Most of the fallout has been on management of the New South Wales nominal insurer (icare) and the responsible Minister. There has been widespread reporting on these issues, which have led to high-level resignations - see here, here, here and here.
Amidst these attention-grabbing scandals, it is vital the focus on the human impact is not lost.
There is a need to stop trying to rely on short term ‘fixes’ and support people.
Evidence-based claims practices that support people also help them get back to work and save money in the long run.
The show reported on two major scheme reviews undertaken in 2019.
The NSW review2 found claim management problems had resulted in a substantial deterioration in RTW and as a consequence substantial cost increases. Reasons for this included poor file management and understanding of the skills required for legislative compliance, high staff turnover (rated at 23% annually*), difficulties with recruitment, poor early triage causing major delays in commencement of personal contact, a clunky and opaque IT system and a poorly constructed incentive program for RTW.
The 2016 Ombudsman’s report into WorkSafe’s handling of complex claims3 was damning. Three years later, responding to at least 1500 additional complaints with a fresh investigation, her 2019 assessment4 is even more scathing. Worksafe Victoria has continued to allow decisions and practices that are “not only unjust, unreasonable and wrong” but “immoral and unethical”. Meaningful change has not occurred. The bad practices identified in the 2016 report have simply gone underground.
“Agents are still unreasonably terminating complex claims: cherry picking evidence, doctor shopping, relying on Independent Medical Examiners (IMEs) over treating doctors even when evidence is unclear, contradictory or inconclusive – or ignoring it if it didn’t support termination.”
From claims rejection and termination targets to automatic triage processes that don’t take into account the whole person (and therefore miss significant opportunities to make a difference), the two jurisdictions’ insurers have sought to apply short term targets and solutions for claims management.
As Professor Alex Collie of the Insurance Work and Health Group at Monash University has said, in its treatment of workers the work injury compensation system "isn't fit for purpose."
Much of this comes down to the quality of claims management.
Claims management is a difficult and emotionally demanding job that requires many skills – communication, time management, problem-solving and conflict resolution, the ability to influence a wide range of people and a clear RTW focus.
To be effective claims managers need to be set up to do their job. They need the resources, time, flexibility and the skills to deal with people at a difficult time.
Yet claims managers in Victoria and NSW describe process driven systems, lack of time, and difficulties interacting with other frustrated scheme participants.
If we want to see improvements in recovery and return to work outcomes for people injured at work, we need claims managers to do better. And that means we need the systems they work within to allow them and in fact support them to support injured workers.
Most people who become claims managers want to do a good job and assist others. Negative practices in both schemes compromise these common, shared values.
Who makes the decisions about the systems within the two jurisdictions under the spotlight? What expertise do they have in return to work? Where is the expertise in RTW in senior management and at the Board level?
We have the evidence on effective approaches. But to make a difference we need scheme leaders to use the evidence. We need those at the top to put the evidence into practice. This means the basic requirements for effective case management need to be in place. Time, investment, and commitment to the long term are all required. The moral and financial payoffs will be substantial.
- Four Corners. The financial scandal and human cost of Australia's failing workers compensation schemes.
- Dore J. Independent reviewer report on the Nominal Insurer of the NSW workers compensation scheme.: State Insurance Regulatory Authority; December 2019.
- Victorian Ombudsman. Investigation into the management of complex workers compensation claims and WorkSafe oversight 2016.
- Victorian Ombudsman. WorkSafe 2: Follow-up investigation into the management of complex workers compensation claim 2019.
* I've adjusted the turnover figure here to reflect this notice of correction: icare and EML have advised that some information icare provided to SIRA and Ms Dore that was used in her report was incorrect, and they have requested SIRA publish a note that the EML staff turnover rate referenced on page 68 of the report was 22.7 per cent per year rather than the stated 22.7 per cent per month based on the information provided by icare during the review.
Published 11 August, 2020 | Updated 11 August, 2020