international directions in compensation scheme management cam mustard achrf 2012

7/17/2019 International Directions in Compensation Scheme Management Cam Mustard ACHRF 2012

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Dr Cameron Mustard

President, Senior Scientist, Institute for Work & Health

2nd Australasian Compensation Health Research Forum

November 8-9, 2012, Auckland New Zealand

International directions in compensation schememanagement



Institute for Work & HealthWho we are and what we do

Independent, non-profit research institute

in a Canadian province of 6 million workers

Multi-partite Board of Directors: labour, employer, research, and

government insurance agency

Established in 1990

Research on the effectiveness of prevention, treatment and return-to-work

in work-related disorders

Commitment to knowledge transfer and exchange

2



Outline

1. Overview of some trends in the burden of work disability

2. The impact of the global financial crisis

3. Directions in compensation scheme management

3



4

Common ChallengesDemographics Aging workforce, linguistic plurality

Nature of Work Globalization, Industrial restructuring

Disability Type Slow onset, non-traumatic injury and disease

Emerging multi-cause conditions (cancer, stress, soft tissue)

Challenges in prevention, recognition, attribution and treatment

Provision of Care Timely access to care, cost of medical innovations

Integrating prevention and disability management of soft-tissue injuries

Developing evidence-based approaches to return to work

Customer Service Developing service culture, retaining skilled staff

Internal change management

Meeting needs of small business

Technology Technology and data solutions to simplify claims processing, track

trends, access information and services

Accountability Development and tracking of performance measures



5

Work disability prevention & return to work:the past ten years

Increasing adoption of disability management return-to-work

programs in medium and large employers, generally supported by

organized labour

Active case management services amongst insurers of

employment-based long-term disability plans

Adoption of case management by workers’ compensation boards:

•coordination of workplace accommodation

•resolution of delays and obstacles in clinical careSignificant information technology investments to support case

management services



Black C. Working for

a healthier tomorrow.

Secretary of State for

Health, Secretary of

State for Work &

Pensions. The

Stationary Office.

March 2008.

What keeps people out of work?A portrait from the United Kingdom



Work disability due to back pain, Netherlands, 2002-2007

Lambeek LC, Van Tulder MW, Swinkels ICS, Koppes LLJ, Anema JR, Van Mechelen W. The trend intotal cost of back pain in the Netherland in the period 2002 to 2007. Spine; 2011;36 (13): 1050-1058.

T o t a l d a y s o f s i c k l e a v e

( m i l l i o n s )

N

u m b e r o f w o r k e r s o n s i c

k l e a v e

7



Trend in total cost of back pain in the Netherlands, 2002-2007

Lambeek LC, Van Tulder MW, Swinkels ICS, Koppes LLJ, Anema JR, Van Mechelen W. The trend intotal cost of back pain in the Netherland in the period 2002 to 2007. Spine 2011;36 (13): 1050-1058.

8



Trend in total cost of back pain in the Netherlands, 2002-2007During the period 2002-2007, sick leave among workers with back pain

decreased by 25%, and the number of people receiving a disability

pension because of back pain decreased by 26%.

Total cost of back pain in the Netherlands decreased from €4.3 billion in2002 to €3.5 billion between in 2007. Indirect costs made up 87-89% of

total costs.

Findings from this study suggest that the decreasing indirect costs of

back pain in the Netherlands are the result of social security and health-

care system reforms:• changing the reimbursement of interventions within the Dutch public

health insurance system ,

• requiring practitioners to respect evidence-based practice guidelines

9



Trends in sickness absence, Great Britain, 2000-2009

Linaker C et al. The burden of

sickness absence from

musculoskeletal causes in Great

Britain. Occupational Medicine. 2011

Doi:10.1093/occmed/kqr06110



The burden of sickness absence from musculoskeletalcauses in Great Britain

Estimates based on information provided by surveillance schemes

and publicly available datasets on sickness absence due to

musculoskeletal disorders

Self-reported work-related illness survey module of the Labour Force

Survey, initiated in 1990.

Screening question: within the past 12 months, have you suffered

from any illness, disability or other physical or mental problem that

was caused or made worse by your job

Survey responses provide a (lower limit) estimate of the burden of

sickness absence attributed to MSDs

Linaker C, Harris EC, Cooper C, Coggan D, Palmer KT. The burden of sickness absence from

musculoskeletal causes in Great Britain. Occupational Medicine. 2011. doi.10.1093/occmed/kpr061



The burden of sickness absence from musculoskeletalcauses in Great Britain

9.26 million working days were lost from work-ascribed MSDs in

2008-2009; back pain contributed 3.5 million lost days, neck or

upper limb contributed 3.7 million lost days

A decline of 22% in lost work days relative to 2001-02, with greatest

reductions attributed to back pain (36%) and smallest reductions

attributed to arm or neck pain (5%)

The UK Health & Safety Executive estimates that 9.5 million lost

work days attributed to work-related MSDs represent a cost to

society of £8 billion

Linaker C, Harris EC, Cooper C, Coggan D, Palmer KT. The burden of sickness absence from

musculoskeletal causes in Great Britain. Occupational Medicine. 2011. doi.10.1093/occmed/kpr061



An increasing proportion of working-age adultsare receiving disability income security benefits

Decades of advances in medical treatments and rehabilitation care

would be expected to reduce the numbers of persons who have

impairments that prevent work participation

Less and less employment requires physically exertive work

These medical and labour market trends would be expected to

reduce the incidence of disability income security beneficiaries.

The opposite has occurred.

Larkin F, Sheikh MA. Brighter prospects: transforming social assistance in Ontario. Commission for the

review of social assistance in Ontario. Report to the Minister of Community and Social Services,

October 2012. http://www.socialassistancereview.ca/final-report



Long-Term Disability

Plans, 5.9Employment Insurance

Sickness Benefit

$1B

Canada Pension Plan

Disability

$4.1B

Veterans' Benefits Disability

$2B

Workers' Compensation

$5.4B

Tax Measures

$2B

Social Assistance

$8.1B

Employment-based

Long-term Disability Plans

$8.1B

Disability Benefit Expenditures in Canada: $28.2 B



An increasing proportion of working-age adultsare receiving disability income security benefits

Working-age disabi l i ty pol icy today

is one of the biggest socia l

and labou r market chal lenges

for pol icy makers

OECD. (2010a). Sickness, disability and work: breaking the barriers. A synthesis of findings across

OECD countries. Paris, OECD publishing.



2. The impact of the global financial crisis

16



17

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

Claims Registered (Monthly) Claims Registered (12-Month Rolling Average) 12-Month Rolling Person Years

BritishColumbia2004-2010

15% reduction

in registered claimsFeb 2009 to

Feb 2010

2% reduction in

insured payroll



18

There is good evidence that thefrequency of workers’ compensation

claims per hour worked declines in

recessions and increase in times of

economic recovery. Some possible

explanations are that during recessions:

• there are fewer inexperienced workers• the least safe equipment

is taken out of use

• the pace of work is slower

• workers fearing job loss

may defer filing claims

• hazardous industries experiencethe largest decline in employment



19

2008-09

- 18%

Trend in compensation claims, Ontario, 2000-2011Impact of the global financial crisis



20

2008-09

Claims

-5%Hours

+1%

Construction Health Care2008-09

Claims

-22%Hours

-11%

Trend in compensation claims, Ontario, 2000-2011Impact of the global financial crisis



3. Directions in compensation scheme management

• Investments in prevention

• Accommodation of disability at work• The challenge of long-duration claims

• Measuring scheme performance: case study of benefit adequacy

21



22

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Ontario Germany Quebec UK BC NZ Vic

4.8%6.0% NA 4.5% 7.8% 3.3%

Total prevention expenditures per 100 employed, 2007-2008and prevention expenditures as a percent of premium revenue

7.1%

Prevention

expenditures as a

percent of premium

revenue

Total prevention expenditures per 100 employed



Expenditures on economic incentivesPer 100 employed, 2007-2008, NA: Not available



24

Accommodation of disability at work



25

Overall, the beneficial effects of work outweigh therisk of work to health, and are greater than the

harmful effects of long-term unemployment, or

prolonged sickness absence. Work is generally good

for health and well-being. This is true for healthy

people of working age, for many disabled people, for

most people with common health problems and for

social security beneficiaries. Work is generally

therapeutic and can reverse the adverse effects of

unemployment.

Waddell G, Burton AK. Is work good for your health and well-being? September 2006. London,

The Stationery Office [ISBN 0 11 7036943]



26

Accommodation of disability at work, Ontario

In a sample of 1,500 workers disabled by a musculoskeletal

injury in 1994, 25% of workers reported receiving an offer of

work accommodation from their employer in the first 30days following injury

In a sample of 600 workers disabled by a musculoskeletal

injury in 2005, 60% of workers reported receiving an offer of

work accommodation from their employer in the first 30days following injury



0

50,000

100,000

150,000

200,000

250,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Lost-time claims

No-lost-time claims

Annualchange

0.03

Annualchange

-3.7

Trends in lost-time and no-lost-time claims,Ontario, 1991-2006

Smith P, Chen C, Hogg-Johnson S,

Mustard CA, Tompa E. Trends in the

health care use and expenditures

associated with no-lost-time claims inOntario: 1991 to 2006. Journal of

Occupational and Environmental

Medicine 2010; 53:211-217.

27



Trends in lost-time and no-lost-time claims,Ontario, 1991-2006

Accepted lost-time claims fell much more rapidly than no-lost-time

claims: a decrease of 46% compared to a decrease of 9%

Three potential explanations:• improved protection of workers from the risk of serious injury

• better accommodation of disability arising from work injuries

• changes in the injury reporting practices of firms

Manual coding of approximately 10,000 no-lost-time claims did not

identify a trend over time of increasing severity of no-lost-time claims.

More information on the use of modified duty practices in Ontario

workplaces would aid understanding of disability management

outcomes.

28



29

2005

2006

Days of modified duty,

as a proportion of total disability days

34 long-term care facilities

Total disability days =

Days of compensated wage replacement

plus modified duty days

Modified duty practices:institutional long-term care600 facilities, 75,000 workers, Ontario 2005-2006



30

The challenge of long-duration claims



British ColumbiaWork-related injury

OntarioWork-related injury

QuebecWork-related injury

New Zealand All Accident Schemes

Wage-Loss Claims off Compensation at 90 days, 180 days and 365 days

Percentage of Wage-Loss Claims off Compensation

60

65

70

75

80

85

90

95

100

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

365 Days180 Days

90 Days



32

Survey of Case Management Services for Long Term andComplex Workers’ Compensation Claims

May 2009, Seven jurisdictions:

New Zealand, Switzerland, Germany, Washington State (USA),

British Columbia (Canada), Ontario (Canada), Victoria (Australia)Survey conducted between February and April 2009, initial phone

meetings were held with key informants to clarify purpose and intent of

survey. Respondents were invited to provide additional information and

documentation to supplement survey

Draft survey results were distributed for review and comment to all

participating jurisdictions



33

Survey Results: Summary Observations

Early Identi f ic at ion - A strong focus on early identification of potentially long term

/ complex claims.

Broadening Cri ter ia – A majority of jurisdictions are looking at a combination of

factors when identifying long-term/complex claims that require case management

services, including medical, occupational and psycho-social factors.

Early Interventio n – Most jurisdictions are proactively using case management

and / or rehabilitation intervention as early as possible in the claim process.

Inter-profess ion al Teams – There is a trend towards case managers playing a

central role in inter-professional, collaborative case management teams.

Tai lored s upp ort – Many jurisdictions are developing tailored plans and services

to meet individual client needs and provide strong support for pre-injuryemployers.

Strengthened Overs ight – Those jurisdictions that outsource services are

strengthening oversight of external service providers, including enhanced quality

monitoring and complementary internal skills and resources.



34

Measuring scheme performance:

Case study of benefit adequacy





Sickness Benefit

$1B

Canada Pension Plan

Disability

$4.1B


$2B


$5.4B

Tax Measures

$2B

Social Assistance

$8.1B

Employment-based


$8.1B

Disability Benefit Expenditures in Canada: $28.2 B



From the societal vantage point… Do we have adequate metrics for the performance of disability

income security programs?

Can all programs report adequately on:

•on benefit duration,

•beneficiary health status and use of health services•benefit adequacy and labour market earnings

•return to employment and effectiveness of re-employment

services



Labour market participation of persons with disability. Office for

Disability Issues, Human Resources and Skills Development

Canada, June 2009.

2.4 million working age adults with

disabilities in 2006From 2001 to 2006, the proportion of

working age adults with disability rose

from 9.9% to 11.5%

Increasing rates of disability reflect:

- aging of the population

-recognition of behavioural disorders aslearning-related disabilities

-reduction in societal stigma concerning

reporting disability

People with disabilities represent11.5% of the working age population in Canada,and the proportion is rising

4.7%6.1%

9.6%

15.1%22.8%

Numbers of persons, 000





Sickness Benefit

$1B

Canada Pension Plan

Disability

$4.1B


$2B


$5.4B

Tax Measures

$2B

Social Assistance

$8.1B

Employment-based


$8.1B

Do we have adequate information on the performance ofdisability income security programs?

Good

Weak

Weak

Fair

Fair

Fair

Fair



39

Adequacy of workers’ compensation benefits in Ontario

Objective: assess the adequacy of benefits provided to disabled

workers in Ontario who were awarded a permanent impairment

benefit by the Ontario Workplace Safety & Insurance Board

Methods: comparison of the earnings of claimants for nine yearsafter injury with similar, but non-injured, workers (“control groups”).

For claimants, we estimated the earnings replacement rate: the

combination of post-injury earnings and workers’ compensation

benefits compared to control group labour market earnings.

Results: Average after-tax earnings replacement rates were 99%,exceeding the study assessment target of 90%.

This is a very significant achievement in the administration of a

complex disability income replacement program.



40

Examining the adequacy of workers' compensation benefits. Issue Briefing, January 2011. Institute for Work &

Health. http://www.iwh.on.ca/briefings/benefits-adequacy

Labour market earnings and earnings plus benefits as a

percent of non-injured control group earningsPermanent impairment beneficiaries (11-20% impairment)

Percent



Summary

41

Working-age disability policy today

is one of the biggest social and labour market

challenges for policy makers

OECD. (2010a). Sickness, disability and work: breaking the barriers. A synthesis of findings across

OECD countries. Paris, OECD publishing.



Thank You!

Please contact me directly for further

information

Web site: www.iwh.on.ca

E-mail: [email protected]

Dr. Cameron Mustard

42

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