C O R P O R A T I O N How Can Workers’ Compensation Systems Promote Occupational Safety and Health? Stakeholders Views on Policy and Research Priorities Michael Dworsky, Nicholas Broten For more information on this publication, visit www.rand.org/t/RR2566 Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2018 RAND Corporation R® is a registered trademark. Limited Print and Electronic Distribution Rights This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions. The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest. RAND’s publications do not necessarily reflect the opinions of its research clients and sponsors. Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org Preface Workers’ compensation is a state-level social insurance program that provides financial, medical, and rehabilitation benefits to workers who sustain job-related injuries or illnesses. Workers, employers, and other stakeholders involved in workers’ compensation systems have long voiced concerns about the extent to which workers’ compensation promotes occupational safety and health (OSH) and the well-being of injured workers; government reports and journalistic accounts in recent years have both highlighted perennial issues and documented emerging concerns. Key topic areas highlighted in these accounts include prevention of injury and disability; system coverage, benefit adequacy, and cost spillovers; claim management processes; and occupational health care. Despite the awareness of these issues across stakeholder groups, it is not clear how much consensus there is about which of these challenges to OSH in the workers’ compensation system are most pressing, whether there is sufficient evidence to identify best practices, or what structural barriers have prevented policymakers from resolving these challenges. The National Institute for Occupational Safety and Health (NIOSH) requested that RAND explore the beliefs and priorities of key workers’ compensation stakeholder groups about system challenges and research priorities that, if addressed, would be most useful for reforming workers’ compensation systems to promote OSH and the well-being of workers. RAND conducted a literature scan to identify published criticisms of current workers’ compensation systems, focusing on the implications of workers’ compensation for worker safety, health, and economic well-being. After producing a compendium of such perspectives, RAND then convened a series of stakeholder conversations with selected representatives from five stakeholder groups. This report describes stakeholder views and attempts to synthesize these perspectives to offer suggestions for research and policy-analysis priorities likely to make workers’ compensation policy more effective at promoting the health and well-being of workers. The research reported here was conducted in the RAND Justice Policy Program, which spans both criminal and civil justice system issues with such topics as public safety, effective policing, police–community relations, drug policy and enforcement, corrections policy, use of technology in law enforcement, tort reform, catastrophe and mass-injury compensation, court resourcing, and insurance regulation. Program research is supported by government agencies, foundations, and the private sector. RAND Justice, Infrastructure, and Environment (JIE) conducts research and analysis in civil and criminal justice, infrastructure development and financing, environmental policy, transportation planning and technology, immigration and border protection, public and occupational safety, energy policy, science and innovation policy, space, telecommunications, and trends and implications of artificial intelligence and other computational technologies. iii Questions or comments about this report should be sent to the project leader, Michael Dworsky ([email protected]). For more information about RAND Justice Policy, see www.rand.org/jie/justice-policy or contact the director at [email protected]. iv Contents Preface ............................................................................................................................................ iii Tables ............................................................................................................................................ vii Summary ...................................................................................................................................... viii Findings ..................................................................................................................................... ix Published Critiques Identified Numerous Problems with Current Workers’ Compensation Policy ....................................................................................................... ix Stakeholders Identified Many Shortcomings of Workers’ Compensation Policy as Important Challenges to Worker Outcomes ..................................................................... x Policy Priorities and Research Needs Suggest a Two-Pronged Research Agenda for Improving Workers’ Compensation Policy ........................................................................ xii Acknowledgments........................................................................................................................ xiv Abbreviations ................................................................................................................................ xv Chapter One. Introduction .............................................................................................................. 1 Chapter Two. Objectives and Recent Critiques of Workers’ Compensation Policy ...................... 3 Goals of Workers’ Compensation Systems ................................................................................ 3 Early Development and the Grand Bargain ............................................................................ 3 The National Commission on State Workmen’s Compensation Laws ................................... 4 Recent Published Perspectives ................................................................................................ 5 Workers’ Compensation Today .............................................................................................. 8 Chapter Three. Stakeholder Views of System Challenges ........................................................... 10 Overview of Challenges Identified as Major Priorities ............................................................ 11 Limitations ................................................................................................................................ 12 Prevention of Injury and Disability .......................................................................................... 13 Incentives Based on Workers’ Compensation Costs or Injury Rates Have Unintended Consequences .............................................................................................. 13 Safety Interventions Were Viewed as More Promising Than Incentive Programs and Less Likely to Create Incentives for Underreporting...................................................... 14 Inadequate Investment in Disability Prevention After Injury ............................................... 15 System Coverage, Benefit Adequacy, and Cost Spillovers ...................................................... 15 Coverage of Alternative Work Arrangements ...................................................................... 15 Coverage of Conditions: Work-Relatedness and Causation ................................................. 16 Inadequate Benefits and Cost Spillovers to Other Social and Health Insurance Programs .. 17 Claim Management Processes .................................................................................................. 18 Too Litigious and Difficult to Navigate for Workers, Small Employers.............................. 18 Focus on Compliance Leads to Complexity and Distracts from Other Objectives .............. 19 v Data Management and Claim Tracking Problems Within Employers .................................. 19 Occupational Health Care ......................................................................................................... 19 Lack of Integration with Other Health Care ......................................................................... 20 Poor-Quality Care ................................................................................................................. 21 Payment Reform and Quality Improvement ............................................................................. 22 Political Economy and Workers’ Compensation Reform ......................................................... 23 Chapter Four. Policy Options and Research Needs