The following article is the sixth and final article in a series on national trends in workers' compensation. Part 1 reviewed the "The Social Contract," Part 2 discussed the Unicover debacle, part 3 reviewed deregulation of the market in California, the fourth part of the series looked at the stock market and funny money schemes that assisted in creating the workers' compensation financial delusion and the fifth installment looked at the convergence of these market conditions with the politics of the era to create the "perfect workers' compensation storm." This final installment examines what the impact of this short history will have on the future of workers' compesation over the next five to ten years.

The basis of this article series is a presentation that was given to the California Association of Rehabilitation and Reemployment Professionals at their annual conference in San Diego October 15, 2005. The presentation has also been adapted as a professional continuing education course at WorkCompSchool.com in a multi-media format including video, audio and supplementary reading materials, and has been approved for, or is pending approval for (depending on the accrediting agency) 2 hours of CE units.

DON'T JUST READ THIS ARTICLE, GET CONTINUING EDUCATION UNITS BY TAKING THE COURSE AT WORKCOMPSCHOOL.COM.

If you're in the industry you can count that the next few years will be tougher on vested interests than ever before. Doctors will make less, vendors will also make less. Injured worker attorneys will need to find new sources of revenue - though they have a great built in marketing machine to do that, and defense attorneys, while busy now, will see their business dwindle once everyone understands the new rules. The California work comp reform was written to systematically remove vested interests from the system - that was one of the stated purposes. However, there are two things that will work against this in the long term: the cyclical nature of the industry and a political backlash that will take several years to develop as the business community starts to understand just what it was really handed when doctors are difficult to find and FEHA lawsuits cause smaller employers to go out of business.

What this all means to the workers' compensation professional, whether you are an attorney, vocational rehabilitation specialist, claims adjuster, physician or other vendor, is a complete shift in how we deal with injured workers. First off, as you already know, vocational rehabilitation is dead in California, at least for the time being. There obviously is no need for vocational rehabilitation services. However, I do see an increasing need for vocational counseling and more importantly return to work expertise and FEHA expert testimony. The reform agenda did not do away with the need to put injured workers' back in to the work force, it simply shifted the burden of doing so away from the workers' compensation system to the administrative and civil systems via the Fair Employment and Housing Act. The trend towards return to work' initiatives is simply a shifting of the burden, and places a greater responsibility on the employer through both punitive, and reward-based incentive plans. The policy shift is based on the assumption that everyone has an interest in taking charge of their own destiny, and increased self-reliance, away from dependency.

But what this emphasis shift fails to account for is that not everyone is, or can be, self reliant. Some people just flat out aren't capable. Some people have dependency issues and not that I'm better, or you're better, or they're worse - it's just the way it is. It is a fact of life. Some people just need more than others. To make matters worse, those that are most impacted by a work injury are those who are more dependent on society and social programs than people like you or me. They generally tend to be in manual labor jobs, with lower education, and lower vocational and social skill sets. So this is indeed a large scale social experiment reminiscent of the Reagan era and the demise of federally subsidized mental institutions - which placed a disproportionate burden on state and local social services that weren't and still aren't equipped to deal with the fall out.

We know where the social burden shift will occur, as the laws are already in place to make that happen. I call these laws Alternative Disability Discrimination Laws. Of course we have the standard Americans with Disabilities Act and the Family Medical Leave Act. But more troublesome are the actions that can happen under the Equal Employment Opportunities Commission and the Fair Employment and Housing Act. These different laws all come together to focus on discrimination of the disabled, and discrimination is defined differently under each of the laws. More importantly, California has several laws that are more liberal than the federal standard, and court interpretation of laws such as California's FEHA are expanding the liberal interpretation of that law. An example is the definition of "major life activity" to include reading by the 9th Circuit (Head v. Glacier Northwest Inc., (Ninth Cir., July 6, 2005) No. 03-35567), which is the federal appellate court with jurisdiction over the territory of California. FEHA continues to get expansive interpretive rulings such as the recent California Supreme Court case of Yanowitz v. L'Oreal USA, Inc. (CA Sup Ct, August 11, 2005) No. S115154, where the court held that an employer was liable for actions that the employee felt were discriminatory, even when the employee does not let the employer know that he believes they may be.

The old workers' compensation/vocational rehabilitation system focused on an injured worker's disability. The injured worker was rewarded for being disabled. The more disabled the more money the worker got, the more attention he or she got, the more benefits he or she got. The emphasis now is to put that injured worker back in to the work force as quickly as possible, and in fact this is in my opinion a laudable and positive shift in thinking. Whereas before all services provided the injured worker talked about what the injured worker could not do, now we have to focus on what the injured worker CAN do. This is a monumental shift in the thinking of what to do with injured workers and how we treat them. This also requires a complete shift in the thinking of workers' compensation professionals. The assessment that is now conducted is what can that injured worker do? Where can the injured worker do it? If not at the former employer, than where? Placement is out, assistance with the person is in. The emphasis is on self-reliance as evidenced by California's "voucher system."

Where does that leave the work comp professional? I am an optimist. Change is good. Change means opportunity, the ability to capitalize while others paralyze. But, it won't be without work. In order to take advantage the opportunities brought about by the reform movement, you will need to study and become expert in the requirements of the alternative disability discrimination laws and how they apply. You will need to understand the notice requirements in particular, and the return to work alternatives that will keep employers out of trouble. You need to create marketing campaigns designed to get to your target audience, basically employers with more than 50 workers in general, and figure out what is going to make people pay attention to your message. It is one thing to be an expert at your area and really good at what you do, and another to let people know you're available and can provide value to them.

But don't throw away all the tricks of the trade you had developed before the wave of reform grew in to law, because as you have seen, history repeats itself. California used to have a treating physician presumption because employers thought that would help control medical, and in fact it just spun it more out of control. I think the same thing will happen with vocational rehabilitation and that within 10 years we will see a form of vocational rehabilitation reinstated because of the cost benefit to businesses trying to avoid the alternative disability discrimination laws.

In the meantime, injured worker attorneys have a built in marketing resource from their work comp claims, and just need to get up to speed with the alternative disability discrimination laws. They have built in referral sources, and if voc professionals are keen on aligning themselves with plaintiffs work, then assisting applicant attorneys realize the potential of their case load will go a long ways towards marketing your future services.

Other professionals are in similar lines of business development. The key presently is to preserve cash flow of the business to stay afloat during these rough times, but the pendulum in work comp will swing, and in fact we have started seeing evidence of this already as the reality of fundamental flaws in the permanent disability rating schedule in California start to become apparent, and governmental recommendations for changing it are about to be released.

Workers' compensation is the single greatest privatized social system in the world. It is necessarily complex because it affects everyone in some fashion, and has so many disparate interests to take in to account. It is this complexity that creates opportunity. For those who have decided to stay in the business of workers' compensation following reform there will be great reward - as with any industry, dedication rewards those who persevere.

Article by David DePaolo. This article series is an adaptation of a continuing education course that starts with the hypothesis that the reform movement in California was the product of a national workers' compensation crisis, and that California was not alone in its reform agenda. This course also takes the hypothesis that the workers' compensation crisis that spawned reform had less to do with medical costs and utilization, and more to do with the confluence of a dubious reinsurance scheme, stock market losses, and blatant high end financial cheating. This course is pending 2.5 hours of continuing education units from various administrative agencies, and has been approved for 3 hours of CLER, 2 of which are approved for Certification. This course is available as an on line multi-media presentation at WorkCompSchool.com.

-------------------

The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.