While national healthcare reform has taken a back seat in Washington to balancing the federal budget, specific healthcare issues are rising to the surface.
One of the most important of these is workers' compensation. Over the past decade, worker coverage costs have risen at even a greater rate than overall healthcare inflation. Small businesses and higher risk industries, where workers' compensation claims are an everyday occurrence, are facing increasing costs that have become a serious threat to their economic growth.
Yet, as the cost of care has increased, the effectiveness of workers' compensation plans in returning injured employees to the job hasn't increased concurrently. Perverse economic and tax incentives that still exist make it more attractive for injured workers to remain on disability benefits than return to work. If changes in our current policies aren't made, opportunities for injured workers to take advantage of the system will persist.
That's why House Speaker Newt Gingrich (R-Ga.) appointed me to lead a task force addressing workers' compensation issues. When forming this task force it was important to ensure that all viewpoints were represented in order to create a solution that would help all parties involved.
The task force met over a period of six months to develop recommendations designed to foster employee health and safety while discouraging litigation; incorporate economic and social incentives and disincentives; give employers and employees options and alternatives, but not mandates; and decrease regulation.
Both employers and employees must maintain a significant position in the workers' compensation process. The employee should be given incentives to return to work after an injury, while at the same time the employer should be actively involved in the recovery process. The task force recommends six provisions that lay the foundation for a continuum of options that allows employers, employees and insurers to design alternative coverage plans.
These options take advantage of private-sector innovation while promoting quality care, innovation and flexibility. The following is the list of solutions documented in our proposal to the speaker.
24-hour coverage: Employers must be able to purchase coverage for employees that will combine group medical, group disability and workers' compensation disability insurance.
The ability to combine coverage will afford greater economies of scale, continuity of care and accountability across the whole healthcare spectrum.
Medical savings accounts: States must enact legislation to authorize employers to establish MSAs. Such accounts will broaden coverage options by enabling employers to purchase plans with higher deductibles and lower premiums and then reinvest the premium savings into a tax-exempt MSA to cover deductible expenses.
Employer-directed care: States must allow employers to be involved in the decision about which providers are most qualified to treat employees following an injury. In addition, they must be able to select policies and procedures to ensure that employees receive appropriate and effective care without delay. Employer-directed care allows for such employer involvement.
Exclusive remedy. Workers' compensation is intended to provide workers with no-fault coverage for illness or injury arising during the course of employment in exchange for relinquishing the right to sue their employer.
States must strengthen laws making workers' compensation the exclusive remedy for work-related conditions to counteract new legal theories advanced in recent years that permit tort recovery from employers for injuries covered under workers' compensation.
Tort reform: The high cost of litigation has been a major inflationary driver in the workers' compensation system; it has diverted resources that could otherwise be more effectively allocated toward the above goals. Much of this litigation doesn't involve meritorious claims to benefits under worker coverage plans. States must prevent such actions by holding parties economically accountable for suits that ultimately prove not to be based on legitimate claims.
Employer opt out: Many workers' compensation programs adopt a "one-size-fits-all" approach applying the same mandates to large and small employers as well as high- and low-risk employers. States should adopt a provision of law allowing employers to opt out of state-adopted workers' compensation programs. This will enable employers to meet employee coverage objectives while taking advantage of private market innovations, including those made possible through 24-hour coverage and MSAs.
These recommendations would allow employers, employees and insurers to develop optional worker coverage plans. Such legislation would bring market efficiency and innovation to the workers' compensation system.
However, the recommendations won't result in any federal legislation, according to Gingrich. Instead, they will serve as a model for state lawmakers and as a solution for industry professionals concerned with the rising costs associated with workers' compensation. The task force will continue reviewing these recommendations over the next 12 months in order to present necessary changes to the speaker.