By Simon Booth
The Victorian government’s Independent Review into the Victorian Workers’ Compensation System is due to be published in April. Aegis RMS made a submission addressing its concerns about the scheme. This article is part of that submission.
“Despite substantial growth in the international body of evidence about what works and what doesn’t in returning injured people to work, as a nation Australia is no better at this in 2013 than we were 15 years ago. Our practises are broadly the same. Our policies have not really changed. We have failed to innovate.”
– Alex Collie “What is behind our failure to return more people to work.” (2013)
The consistent flaw with the workers’ compensation schemes throughout Australia is their failure to identify and effectively address the individual factors that drive claims. Despite resounding evidence that our return to work performance continues to decline and that as a nation we are failing to innovate in this area, we see schemes continuing down a path of rigid and highly structured approaches to claims management focussed on a one size fits all philosophy which consistently fails to take factors specific to the claimant into consideration.
The Government funded schemes in Australia being unable to effectively influence claimants, Treating Doctors, physiotherapists and psychologists etc, have sought to exert control on the scheme by controlling the processes and procedures. This has created schemes that, contrary to the intent expressed, treat claimants like a commodity to be controlled, not a person to be helped.
Process driven claims models work well for property:
- You have a car accident.
- The damage is assessed
- The damage is repaired
- Your car is returned
- Claim closed
The above process does not work when the claim relates to a person. Even the simplest of injuries may have considerable barriers that relate to the claimant’s unique and individual situation. A car has no ulterior motives and its owner obtains no benefit by it not being repaired or replaced as quickly as possible.
The ongoing deterioration in performance of these schemes through a failure to effectively identify, manage and resolve the individual barriers relating to claimants has led schemes to attempt to save money through the development of strict and unwieldy approaches to claims management.
This has led to devastating deterioration in return to work rates and a potentially crippling increase in claims expenses to the scheme.
In fact, those of us in the industry often feel that the changes made by the regulators are made less with an educated approach to improve return to work outcomes and decrease employer premiums, than they are an effort to justify their role in the scheme.
This, as we have seen in NSW, can have a devastating effect on the injured workers and the viability of the scheme. This results in employers being forced to cover underwriting losses that are a direct result of the regulators meddling with the scheme and not the result of the employers’ approach to return to work.
*Data generated from SIRA’s Open Data Analytics Tool 15 November 2019
A process-driven one-size-fits-all approach will never be agile enough to adjust to the human factors that continuously confound workers’ compensation claims, as was identified during the recent review of the NSW scheme.
We need a system flexible enough to respond to the individual factors that affect claim duration, whilst operating within the spirit of the overarching legislation.
“The new system is highly dependent on an algorithm which determines claim severity and therefore treatment. Such an automated process will miss the subtleties of individual circumstances for which case management skills are needed.”
– Janet Dore, Independent reviewer report on the Nominal Insurer of the NSW workers’ compensation scheme (2019)
With over twenty years’ experience in Workers’ Compensation, Simon Booth is a vocal advocate for employers in a scheme that often leaves them feeling powerless and frustrated. Simon and his team work with employers across Australia, helping them take back control of their Workers’ Compensation programs.
Disclaimer: This article provides general advice and should not be considered legal advice or an insurance consultation. You should seek appropriate counsel for your own situation. In addition, this post is directed at people in Australia. If you are outside Australia, please be aware that the circumstances in your own country may be different.
