Maybe Australia is looking in the wrong direction on harmonising workers’ compensation

South Australia has pledged to increase competition in its local workers’ compensation scheme in the hope of improving (some say fixing) it.  Most other Australian States have a competitive structure with private insurers.  In a couple of years, those insurers will be battling it out to achieve national coverage as the Federal Government moves to harmonise the State systems.

New data from Canada shows that perhaps Australia needs to take a deep breath and nationalise workers’ compensation for the good of the injured workers and business.

A February 2010 report from the Institute for Work & Health has concluded that

“The public administration of workers’ compensation in the Canadian systems provides a strong economic benefit to employers, arising from the lower administrative costs of a single public agency compared with the costs arising in a competitive insurance market. There is very little evidence that competitive insurance markets are more efficient in the provision of health-care services or in providing wage replacement benefits to injured workers.”

One could argue that the research is a comparison between California and Canada, a State compared with a country, and that this is unfair.  If it is taken as a comparison between a private system and a free-market model, the research has broader relevance.

The two systems have differences which are listed in the report but each system has very similar principles.

The dollar comparisons in the report are very telling with one of particular interest: administrative expenses per covered employee in Canada are $93.  California’s are $478.

It seems that Australia needs to ask the hard question which is not one insurer or multiple insurers, but government-run or private.

Kevin Jones

7 thoughts on “Maybe Australia is looking in the wrong direction on harmonising workers’ compensation”

  1. Until a system or process is investigated then none of us will actually know what is possible. The failed insulation scheme has taught all of us a very valuable lesson in what not to do -and that is just as important as what needs to be done.

    The upside of a National WorkCover system would mean that injured workers who are working anywhere in Australia would be able to return to their home because there would no longer be the requirment of a State-based system for the injured worker remain within the local of the State.

    One injured worker I have had came from regional Victoria to take on an apprenticeship here in Adelaide. Post injury when it was quite clear that the injured worker would never be able to return to the employer let alone the style of pre-injury employment, however the injured worker was not able to return to Victoria to the long-term care of his family. Instead his parents travelled on a regular basis to be in Adelaide with their son.

    The strain that that put on the wider family was almost intolerable.

    It would have made much more sense to allow the injured worker to have healed as best he could at his home in Victoria.

    I am not sure what the best way to \”test\” a National system, but I do know that any test should not be at the risk or the end expense for injured workers.

  2. Thank you for the question Kevin, the answer is no I do not support a National WorkCover system. Although I do not have many injured workers who are on ComCare, I have struggled with the ComCare system in that it requires speaking with people who have no \”local knowledge\” so the service is fractured to say the least.

    I simply can not see how service to injured workers would or could be improved should there be a National system.

    Case managers now in State system have no idea as to provide services for injured workers. Case in point an injured worker here in South Australia was left without any rehab for 9 of the 11 years she has been on WorkCover. When the current claims agent came in to being this injured worker hoped that finally there would be re-training offered by the case manager; only to be told that the distance from Adelaide for the injured worker to be given any quality rehab would simply make it far too difficult. The best suggestion was that the injured worker sell the family home and move to the greater CBD area.

    When I was told this by the injured worker I first thought that mayhaps the injured worker lived somewhere north of Coober Pedy or almost to the Western Australian border.
    I had to say sorry to the caller when the caller told me the family home was in the Barossa Valley between two large townships.

    Given that is the experience of a State based system, I can not support the concept of a National WorkCover system. I can just imagine the challenge of trying to explain to a case manager in Sydney where Nangwarry is, let alone trying to explain that Nangwarry is not serviced by public transport or that the nearest major hospital is at Mount Gambier 25kms away or that major specialist are in Adelaide just a short 350kms away.

    Then there is the impossibility to work out who has the best State-based system, and where would a National system be housed, the list of concerns are endless.

    1. Many thanks for your response, Rosemary.

      I still think it is an option that needs to be investigated however I also acknowledge that the Australian Government is under heavy political attack from the failure of its insulation scheme. The Opposition is applying the argument \”If the government cannot manage a scheme for installing insulation in domestic homes, how can it be trusted to manage a national healthcare system?\” or in our case, a national Workcover system.

      The option should still be considered, in my opinion

  3. Just one observation re relativities: Canada is one of the G8 and it\’s sometimes been said that on it\’s own California would be about 8th-largest economy in the world based on GDP, so perhaps they\’re not a bad comparison.

  4. Rosemary

    Thanks very much for your comment and I agree that injured workers are the reason for the workers\’ compensation system and, I would also say, that a major aim is to rehabilitate workers to have a meaningful working life.

    Do you think that the data from Canada and from your experience, that a better workers\’ compensation system could be gained through the Federal Government taking over the system?

  5. It is odd to read that there is a better way of working with injured workers, I have been saying that for more years than I care to think about. Even today I sat in Minister Caica\’s office here in Adelaide and spoke about the frustration I have lived with over the last almost 8 years. All to no avail as Minister Caica is a Minister in caretaker mode.

    The interesting thing was 9 years ago Work Injured Resource Connection was on the verge of becoming the first community-based association to gain \”industrial status\” within the WorkCover system, a programme was being pulled together, and then it stopped. The only thing that I can put the \”stop\” down to is a change of government.
    The support my work was given was removed and I was out in \”WorkCover no-man\’s land\”.

    Today Minister Caica said that he had been informed that no way was possible to gain the way forward that had been being worked towards under the previous menagment of SA WorkCover Corporation.
    Minister Caica tried to assure me that he had tried, he spoke with his advisors, never once did he call me to a meeting, nor ask for any information that I may have had to support what I know is possible.
    It seems that as with the previous industrial relations Minister, Minister Caica prefers the information of his advisors rather than information that has been researched by people outside of the WorkCover sanctum.

    Nothing will change in WorkCover until it is accepted that injured workers are not highly qualified professionals who understand every section of the legislation, they are ordinary every day people who suddenly find themselves in a great deal of pain and confusion with no map to guide them. They are quite literally at the mercy of a case manager who has no understanding of just where they live, what work they do or how they function in a family unit. As a B-double driver said to me, \”the girlie thought I drove a tonka toy delivery van.\”

    For the WorkCover industry to understand just what business they are in they have to go to where the injured workers are, they have to talk with injured workers and they have to know the same levels of fear to understand the depths of despair.
    Instead the industry puts on endless conferences and seminars and workshops and breakfast all preaching to each other and then standing in a circle like processionary caterpillars and patting each other on the back telling each other what a wonderful job they have done.

    What a wonderful thing it would be if just once the WorkCover industry admitted that they don\’t have any answers at all, and that they have to go back to the start and understand that the only reason they are in place is because some one went to work and was injured. WorkCover is not about anything else, it is about injured workers.

    In a recent interview I was asked is SA WorkCover too far gone to be saved. My answer was no, and saving WorkCover would be exceedingly simple, it is just a matter of my research being put into place.
    However it is clear to me, and to many others, that whilst those who make a great deal of money off the backs of injured workers the system is in no hurry to change.
    It is far more important for the owner of a rehab company to buy a new Mercedes than to be concerned that the injured workers assigned to the rehab firm have any form of credible outcome.

    But I am kept on the outside, the few rehab companies who would work with me are fearful that if the claims agent found out, the referrals they rely on would simply dry up.
    Far better that the rehab companies deny any working knowledge of my work than to come out and say that they want to work with me, even though working with me helps the injured workers maintain their dignity and helps resolve issues that the rehabs have no way of dealing with.

    SA WorkCover can be saved, it is worth saving and it is worth fighting for.
    If SA WorkCover does not understand that I am not the enemy then there is little I can do except stand on the outside offering to save as many injured workers as it is possible for me to do.

  6. I think it would be a good idea to ask injured worker forums (not unions) in Canada and California about their take on their respective systems. You have to live with it to know it and I don\’t necessarily believe reports written for unspecified purposes without canvassing employers (not their representative bodies)or workers really counts for the human side of the equation.

    I take note of the conclusion of the report and believe the federalisation of the system run by a statutory body at arms length from politics, using every means possible to remove conflicts of interests, such as the favoured few Independent Medical Experts used by EML in South Australia who rely on the majority of their income from the Workcover or Motor accident commission and inevitably provide very narrowly based reports aimed and diminishing the seriousness of injuries, usually in large part, refuted by treating medical professionals but relied upon by case managers to remove benefits or assistance to injured workers.

    Referrals to IME\’s should be handled by application to the Medical panel who will allocate the request to an appropriately qualified practitioner and the referral from whomever must meet a certain standard that is not seen to be overtly trying to influence the IME. It may be a small thing to many but the effect of IME\’s is a very telling matter to injured workers with the average IME taking approx 30 minutes and seemingly means more to the case manager than all of the consultations undertaken by the injured worker in his/her journey back to health.

    From the workers point of view the system is broken and there is a feeding frenzy by all of the fringe players at the injured workers expense. A complete shambles.

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