The president of the Insurance Information Institute, Robert Hartwig, is the latest industry participant to offer a rebuttal to a series of critical articles about the workers compensation system.
In the letter, Hartwig, who is also a former employee of the National Council on Compensation Insurance, notes that workers comp insurers pay out $40 billion in benefits annually to injured workers and families of workers killed on their jobs—claims that number in the hundreds of thousands.
Among other things, the public radio report says that years of benefit cuts and tighter limits on medical care have resulted in “hundreds of thousands of injured workers” being denied adequate care and compensation. It contends that the costs to support these workers are being shifted onto taxpayers. The authors figure the government picks up a tab of $30 billion through Social Security Disability Insurance, Medicare and Medicaid.
“The very title of the ProPublica/NPR [report] is at best misleading and at worst erroneous,” Hartwig writes in his letter, characterizing the reference to “demolition” of the comp system “hyperbole of the highest order.”
It is an “indisputable fact that the workplace has become safer—much safer—in no small part due to the relentless loss control efforts of insurers and employers in partnership with state and federal government,” he writes. For example, Hartwig notes that the incidence rate of fatal occupational injuries plunged by 36 percent over the past two decades. That’s not just the result of fewer hazardous occupations. A bigger driver comes in the form of “incentives that insurers and workers comp systems have in place, such as charging employers with higher injury rates more (and those with lower injury rates less) and offering discounts to employers that implement accident-reducing technologies and training.”
Later in the letter, Hartwig takes aim at the ProPublica/NPR analysis of workers comp benefit cuts in 33 states, and the assertion that businesses and insurers pushed benefit reforms “on the false pretense” that costs were out of control.
They were truly out of control “by any reasonable standard,” Hartwig writes. Between 1991 and 2009, the average annual increase in the medical costs of a workers comp claim was 7.7 percent, he says, citing NCCI figures for claims severe enough to cause injured employees to miss work. That’s nearly twice the 3.9 percent increase in healthcare costs in general and more than triple the average annual increase in the Consumer Price Index of 2.5 percent over the same time frame, he says.
Hartwig also argues that there is flawed logic in a ProPublica/NPR conclusion suggesting that a drop in overall workers comp costs between 1991 and 2014 analyzed against a sharp rise in health insurance and pension/retirement costs over the same rose period are evidence of a cheapening of workers comp benefits. “The authors miss a fundamental point—the workplace has become demonstrably and materially safer over the past quarter century. The incidence rate of injury and deaths on the job fell—translating into lower costs,” he writes.
Hartwig also cites errors with ProPublica/NPR’s characterization of profitability in the line.
Separately, at the Workers Compensation Research Institute annual conference in Boston earlier this month, WCRI Executive Director characterized the ProPublica/NPR article series as being built on “emotional anecdotes.” Such anecdotes do not prove the system is failing and should be considered along with reports that show the system serves a “huge number of injured workers,” Victor said.
For more on the WCRI response, see related article, “Public Radio Report Puts Spotlight on Workers Compensation’s ‘Grand Bargain.’“
The full text of Dr. Hartwig’s letter is available on the Workers Compensation Institute’s website here.