Having celebrated Independence Day and still feeling patriotic, we wanted to take the opportunity to review the history of workers’ compensation.
The earliest forms of workers’ comp date back to the mid 1600s when Captain Henry Morgan (yes, related to the rum family) implemented a compensation and reward program for wounded or maimed people. Reimbursement was structured similarly to what we see today in that it related to body parts. In this program, the right arm was worth “600 pieces of eight,” while the left arm was worth only 500. The right leg was valued at “500 pieces of eight,” and the left leg at 400. Obviously, the captain believed that right extremities were more valuable than left extremities.
Next, Prussia passed the Employers Liability law of 1871. In this program, employees received compensation AND medical benefits much like they do in current workers’ comp programs.
Early attempts to create a similar program in the United States failed (between 1898 and 1908). According to most reports, Congress passed the first U.S. workers’ comp laws in 1906 and 1908. In 1911, Wisconsin became the first state to enact a comprehensive workers’ comp law. Mississippi was the last state to join in enacting a state law, in 1948.
The intent of all programs is to ensure that employees receive the necessary medical treatment and are compensated when they are unable to work. Over the last fifteen years, states have implemented commercial rules, such as ODG, MD Guidelines, ACOEM, as well as state-developed guidelines to ensure that medical treatment requested is in accordance with standards of care. This helps ensure that employees are not experiencing risky or experimental treatment or treatment that is inappropriate for their injury.
Utilization review and medical guidelines in workers’ comp programs help ensure that treatment requested is medically appropriate for the injury and that doctors consider established treatment protocols. Utilization review takes multiple factors into consideration, such as patient age, date of injury, mechanism of injury, co-morbidities, prior treatment and results, as well as medical factors (e.g., combinations of treatments or drugs).
Guidelines ensure that conservative care (which may allow the condition to improve) has occurred prior to escalating to surgical procedures or other higher risk, high cost treatments. While a number of states mandate utilization review, several others do not. (URNation.org provides detailed information on this subject.)
Most recently, we’ve seen a huge increase in pharmaceutical treatment. It is well known that at the time of injury, there are often medications dispensed related to inflammation, spasms, infection and pain, which may all be appropriate. However, many requested drugs may have negative long term effects either via drug interactions, addiction or organ damage. The guidelines are intended to present data that either supports the use of the medication or indicates that the medication may be detrimental. Unfortunately, with the increase in drug use, we’ve also seen an increase in deaths associated with drugs.
As we look to the future, the question becomes, “What will the future of workers’ comp look like?” We believe the following may contribute to major changes:
- ColoradoCare – Will this ballot initiative change the landscape of workers’ comp, and to what degree?
- Opt Out – Texas instituted this option decades ago (allowing employers to opt out of standard workers’ comp programs), and the idea is gaining traction in other states. Most recently, Oklahoma has experienced many legal actions testing the validity of opting out.
- Drugs – Compound drug use is anticipated to increase, as are experimental drugs, in the workers’ comp industry.
- Aging workforce – Will we see more workers’ comp injuries that may be related to aging?
- Millenial workforce – If jobs have less structure, with flexible work hours and nontraditional work locations, will we see more injuries in which it is difficult to validate work relatedness?
- Technology – With advances in technology, what will medical treatment look like? 3D is one consideration that may impact the future from a technology perspective. What are others?
As we reflect on our nation’s birthday, let’s be thankful that many forward-thinking leaders created workers’ comp programs to help ensure that workers injured on the job receive the benefits they need. It is our hope that industry stakeholders continue to strive for system improvements, such as ensuring that treatment is based on medical necessity and results in the best outcomes possible.
We also want to thank all of those who serve, in whatever capacity, to protect our freedom and our rights.