Home » Institute Insights
March 7, 2017 – HOW TO ACCURATELY REPORT FAKE NEWS ABOUT WC
It’s just a matter of time until fake news infiltrates public policy debates in workers’ compensation. Here is some unsolicited advice to bloggers and WC media about how to report on fake news that is both accurate and avoids being manipulated by the purveyors of fake news.
Fake news serves two purposes. First, it may be used to distract from an emerging scandal or embarrassing setback. Second, it may be used to undermine the legitimacy of proven facts. To be successful, the purveyors of fake news need credible media outlets to report the fake news. The mere act of reporting fake news gives it certain amount of legitimacy. And the way that the fake news is reported on determines how much legitimacy is conferred by the reporting.
Although national media outlets have begun to evolve their approach, they still convey enough legitimacy to the fake news for the purveyors to celebrate and to implicitly encourage more fake news. The initial media reporting reflected the “newsworthiness” of improbable and often bizarre statements made by individuals in leadership positions (when we have expected those in such positions to avoid repeating or fostering fake news). If such a person were to state that President Reagan was really born in Argentina the media would report that person X alleged that President Reagan was born in Argentina followed by a panel of ”experts” debating the veracity of that statement. That approach confers some legitimacy on the allegation. Why would a major media outlet repeat the claim and focus its “experts” on it for 15-30 minutes if it were patently absurd?
Recently, some media outlets have attempted a pivot; reporting the allegation and then saying that no evidence was offered in support, or saying that evidence contradicts the allegation. But they continue to lead the story with the allegation. In doing so, they continue to confer undeserved legitimacy on the allegation about where Reagan was born. As long as the media confer legitimacy on fake news, the purveyors will continue to issue fake news.
Instead, the media should lead (headline) with the true facts and then report what person X alleged. Studies of cognition find that the item mentioned first is what is most likely to be (1) seen as most important and (2) be remembered and repeated.
As to workers’ compensation, consider the following hypothetical examples of fake news.
* A press conference is held or a press release is issued by payers in Indiana saying that WC costs in Indiana are the highest in the US and rising 25% per year.
* Or a press conference by worker advocates in Illinois saying that injured workers in Illinois receive the lowest benefits in the country.
Following the current model of CNN or other mainstream media, one might be tempted to report “Indiana WC costs are the highest in the nation and getting worse each year, according to payers in Indiana.” Or “Illinois injured workers get the lowest benefits in the US, say Illinois worker advocates.” Both are true statements because each headline reports correctly that someone offered the fake news. But the phrasing gives the appearance that what they said (the fake news) is legitimate. That phrasing by the media effectively legitimizes the fake news.
How to frame it accurately without legitimizing fake news? Lead with the evidence, and then report what the advocacy groups have said. That legitimizes the evidence, not the fake news.
In the examples above, the following is a better approach:
Evidence shows that Indiana WC costs are among the lowest in the nation. Surprisingly, payers claim (without supporting evidence) that Indiana has the highest WC costs in the US.
Studies show that Illinois injured workers get among the highest benefits in the US. However, worker advocates say that Illinois workers get among the lowest benefits in the US – but offer no evidence.
When the media leads a story with the fake news and then reports that no evidence was offered, they are effectively legitimizing the fake news and encouraging the fake news purveyors to release more fake news. Using the approach illustrated above has the potential to discourage fake news or at least blunt its influence.
The downside for the media is that leading with the fake news (as absurd as it may be) may well produce better ratings and more clicks. A conundrum – unless we remember that we are either part of the problem or part of the solution. It’s a choice!
August 24 – Beware the Case-Shifting Monster
Two recent studies by the Workers Compensation Research Institute (WCRI) found consistent evidence that providers shift cases from commercial insurers to workers’ compensation (WC) payers. This occurs when providers understand that they would be paid materially more under workers’ compensation than by commercial insurers. In particular, the providers were more likely to call soft tissue injuries work-related and shift liability to the WC payer.
Some comments received by the authors expressed skepticism that providers were sufficiently motivated by financial rewards or sufficiently sophisticated to engage in such practices.
On August 23, 2016, the Centers for Medicare & Medicaid Services (CMS) will publish a request for comments driven by a similar concern about providers who shift cases to higher reimbursement insurance plans. In particular, CMS has received information about “health care providers and provider-affiliated organizations steering people eligible for or receiving Medicare and/or Medicaid benefits to an individual market plan for the purpose of obtaining higher payment rates.”
This phenomenon is consistent with the WCRI findings that some providers shift cases among different payers/systems in order to increase reimbursements.
Implications for Workers’ Compensation:
 Will The Affordable Care Act Shift Claims To Workers’ Compensation Payors? Richard A. Victor, Olesya Fomenko, and Jonathan Gruber. September 2015. (Workers Compensation Research Institute) WC-15-26. Do Higher Fee Schedules Increase the Number of Workers’ Compensation Cases? Olesya Fomenko and Jonathan Gruber. April 2016. (Workers Compensation Research Institute) WC-16-21.
 Request for Information: Inappropriate Steering of Individuals Eligible for or Receiving Medicare and Medicaid Benefits to Individual Market Plans. https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-20034.pdf
July 25 – Reimagining opt out: A thought experiment
Over the past several years, we have seen a national debate picking up about the desirability of legislation to permit employers to opt out of state workers’ compensation (WC) systems in favor of employer-designed, ERISA-authorized benefit plans. Proponents of opt out cite very large cost savings for employers and lower friction costs, and argue that opt out plans stimulate faster return to work, faster reporting of injuries, better care for workers, no waiting periods for workers, and other benefits. Opponents argue that these plans may provide inadequate benefits, especially for more serious injuries, or that the plans strip workers of important protections against what they consider unfair design or administration of the plans, and provide inadequate remedies and appeals processes when disputes arise.
Is there a win-win (worker and employer) version of opt out? If so, what might it look like?
Consider the following thought experiment:
For a given state (or employer), representatives of workers and employers are locked in the basement of the state governor’s residence and told they have to agree on a plan design – and cannot leave or see their families until a plan is agreed upon. Further, the meeting starts one week before Thanksgiving – hence, there is a looming deadline of value. Imagine the strong motivation this type of scenario could stir up to find areas of agreement (well, except for maybe in participants whose children are teenagers)!
They are also told that the plan design must reduce WC costs to employers by at least 20 percent on average, and half of the savings will go to raise benefits for injured workers.
What might the terms of the agreed opt out plan contain?
July 8, 2016 – The 80/20 rule
I am always impressed with how often the 80/20 rule of thumb turns out to be a good description for a phenomenon. Why am I surprised? A rule of thumb, by definition, is just an assumption to use when precise information is lacking, not the result of any law of physics or economics. The 80/20 rule was postulated by management consultant Joseph Juran in 1941. Juran was a leader in the development of quality control processes. His rule of thumb was that 80% of a problem is caused by 20% of the causes. Juran dubbed his rule of thumb the “Pareto Principle,” naming it after Vilfredo Pareto – an Italian economist who, in 1896, found that approximately 80% of the land on Italy was owned by 20% of the people.
That said, a surprising number of phenomena are observed to fit this rule of thumb. Coincidence? Maybe. My point is that there are no natural laws that mandate the truth of the 80/20 rule of thumb. But we refer to the 80/20 rule so often that sometimes we treat it as a truism.
Why is this relevant to analysis of workers’ compensation (WC)? A recent post in one of LinkedIn’s interest groups invoked the 80/20 rule, “80% of the system is working appropriately, but 20% needs addressing.”
The post continues to argue that the 20% is a normal amount of dysfunction and it is futile to try to reduce the amount of dysfunction. “I submit that it is mandatory that we realize this 20% is a societal-social-human element which no part of the WC vendor arsenal can nor should be expected to fix. We need to stop addressing the 20% as it is has any outcome potential for normal cure, RTW and resolution.”
I heartily disagree because the evidence does not support such a fatalistic view. First, as I demonstrated in my post “Are WC Systems Broken?” WC systems typically deliver good outcomes to injured workers in far more than 80% of cases. Second, there is significant interstate variation in the costs and outcomes of these systems. Since some states do better than others, it is very likely that underperforming states can improve. Wouldn’t it be wiser to consider the 80/20 rule and focus more effort on the 20% of the WC system in need of improvement rather than ignoring it, in theory, as the percentage that can’t be fixed?
Good news! We have more control over the costs and outcomes than described in that post. We often have the information to guide improvements. We must continue to support states in which improvements can be made and work together to find and implement appropriate solutions as part of the political change process. What is your view?
June 8, 2016 – ARE WORKERS’ COMPENSATION SYSTEMS “BROKEN”?
As national conversations occur about the direction of workers’ compensation (WC) systems, I sometimes hear comments that assert or presume “WC systems are broken.” Rarely are public programs either all black or all white. The material below summarizes relevant information from a variety of published Workers Compensation Research Institute (WCRI) studies about how most workers fare in WC systems. How workers fare is critical to assessing the performance of WC systems, and the effectiveness of these systems affects the competitiveness of American business.
The data from WCRI illustrates that the majority of workers in the workers’ compensation system:
While the systems may serve most workers reasonably well, the data also shows that there are injured workers with certain attributes that make them less likely to receive these good outcomes. A subsequent post will highlight the evidence on who these workers are. Discussions that focus on system changes that improve outcomes for these injured workers have high impact potential.
Return to work and recovery of earnings capacity
The overwhelming majority of injured workers return to work and do so to their pre-injury employer at the same or higher pay:
Most workers receive their first indemnity payment without dispute or substantial delay:
Satisfaction and access to medical care
By an overwhelming majority, most workers were satisfied with medical care received (workers with more than 7 days of lost time):
 Compscope™ Benchmarks, 15th edition: The Databook (April 2015), Table 2.12. Data for claims with 2013 injuries valued in 2014.
 Comparing Outcomes For Injured Workers In Michigan, (June 2009), Belton S. and Liu T., Workers Compensation Research Institute Table SA.24.
 Ibid., Table SA.20
 Ibid., Table SA.20
 Compscope™ Benchmarks, 15th edition: The Databook (April 2015), Table 2.1.
 Comparing Outcomes For Injured Workers In Michigan, (June 2009), Belton S. and Liu T., Workers Compensation Research Institute Table SA.52. Date for claims from various years, Table SA.52.
 Ibid., Table SA.40
 Ibid., Table, SA.34