Peter Rousmaniere helps organizations and individuals as they negotiate through the troubling waters of hazards, uncertainty, risk and insurance....
Alan S. Pierce has served as chairperson of the American Bar Association Worker’s Compensation Section and the Massachusetts Bar...
In this edition of Workers’ Comp Matters, host Alan Pierce welcomes Peter Rousmaniere to discuss his prolific career as a workers’ comp consultant and journalist. They survey the ways systems, insurance, and workplace risks have changed over the last 30 years and discuss their thoughts on the decline of labor unions. With a wealth of knowledge in this area of the law, Peter also offers his predictions for future trends.
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Workers Comp Matters
Peter Rousmaniere: Reflections from a Career in Workers’ Comp
Intro: This is Workers Comp Matters, hosted by attorney Alan S. Pierce, the only Legal Talk Network program that focuses entirely on the people and the law in workers’ compensation cases. Nationally recognized trial attorney, expert, and author, Alan S. Pierce, is a leader committed to making a difference when Workers Comp Matters.
Alan S. Pierce: Welcome to Workers Comp Matters on the Legal Talk Network. My name is Alan Pierce. I am an attorney with Pierce, Pierce & Napolitano in Salem, Massachusetts and we are delighted to bring you another edition of Workers Comp Matters with a returning guest Peter Rousmaniere.
Before we get to Peter and essentially a review of his career as a journalist and author and writer on workers’ comp issues, I want to just have you visit our sponsor PInow. If you need to find a local qualified private investigator anywhere in the United States, visit pinow.com to learn more.
Peter Rousmaniere is a colleague, a friend. He is someone who has been involved in the field of workers’ compensation, not as an attorney and not as a claim representative or claims handler or risk manager; he has been a journalist and consultant in the field of risk management with a special focus on work injury risk.
He originally started his career as an entrepreneur; however, his working evolved into consulting and writing and he works primarily as a freelance journalist. He is a graduate of Harvard. He earned his BA and MBA at Harvard and after an early career in general management consulting, he joined a workers’ compensation consultancy in 1986 and there he assisted employers to better respond to work-related injuries and he went on to develop one of the first ventures to improve quality of medical treatment for injured workers.
He has been a regular workers’ compensation columnist for leading risk management and workers’ compensation publications since 2003 through the present, and during these years he has written over 250 columns, dozens of in-depth articles, special reports on work injury. He addresses things such as immigration trends, automation, the Internet aging and the aging workforce, health care and workforce demographics.
He has been a recipient of numerous national awards and most recently he has been writing for workerscompensation.com.
He lives in Vermont and he has announced that after a very long and prolific career he is retiring, and while that gives me a bit of professional sadness, I expect that we probably haven’t heard the last from Peter Rousmaniere. He has a deep interest in this field.
So Peter, welcome to another edition of Workers Comp Matters. I am really very excited to be able to talk to you and perhaps have you give us an overview of your lengthy career and the observations you have made and maybe a few predictions for the future.
Peter Rousmaniere: Okay, thank you, and thank you for having me Alan. I really appreciate it. We can start off this conversation by looking at where we are now compared to where we were let’s say 30 years ago. 30 years ago medical issues were a lot simpler, they have gotten a lot more complicated.
Alan S. Pierce: All right, so let’s — I think beginning with 30 years ago is probably a good place to start, because that puts us right into the mid to late 1980s and that was a time, for those of you who have studied workers’ comp or been practicing in that era or have listened to other editions of Workers Comp Matters, we know that the era beginning in the 1980s followed the recommendations of the National Commission of Workers’ Compensation Laws that issued its report in 1972 calling for major changes.
And because it takes time to effectuate change in the workers’ comp system, especially among the 50 states, and this has to be done state by state and legislatively, it really wasn’t until the 1980s that we saw a particular sea change from the way workers’ compensation claims were handled, what was covered, what the benefit levels were and what’s happened since then.
So let’s delve back to the 1980s, what have been the major themes that you might want to talk about that we have dealt with over the last 30 years and from there we can probably go to where we are now and where we are heading.
Peter Rousmaniere: On medical issues, Alan, we have an underlying issue of the aging of the population and of the worker population and the increasing morbidities. I would imagine about 1985 that the average age of the injured worker was probably around 37 to 38; it is now 47 years old, 47. So you are having more workers with more comorbidities of different kinds; diabetes, obesity, smoking has always been there.
You also have at least two major innovations in medical care. One is the great proliferation of surgery; back surgery, shoulder surgery, knee surgery.
And the second major innovation was the introduction of painkillers in the late 1990s. And it’s been a hard process for both the injured worker, the attorneys involved, the insurers and the employers to understand what is best surgery, what is the best use of pain management medication and how to deal with comorbidities.
Alan S. Pierce: And when you talk about the aging workforce, whether you do or don’t have diabetes or were or were not a smoker, I think you can say for almost everybody certainly in their 40s and 50s and 60s, we all have some degree of underlying degenerative joint disease, arthritis, even if it’s asymptomatic, we are all burdened with that. And from what we have seen is when injured workers who have an underlying condition such as arthritis and they injure the knee or the back or the neck or the shoulder, you then run into the issue on an aging worker is how much of the resultant disability or need for treatment is due to the arthritis or due to the acute injury, which may have passed the acute phase.
And as a result there has been some issues regarding the definition of causation and maybe you may want to touch on that a bit.
Peter Rousmaniere: Well, I look at causation from the outside, I am not a warrior in the process, which would be an attorney trying to figure things out with a judge. I have enormous respect for attorneys insofar as they are trying to deal with this causation issue, but it is a serious problem and it gets into the question, which is another underlying question, which is the isolation of workers’ compensation outside all the other benefit programs for health care and for disability.
Because we are treating, we have to treat the whole person in workers’ comp, even though legally we are dealing with issues such as causation and apportionment, but sooner or later we have to deal with the whole person, and this is going to be a problem going forward I think as the workforce even gets older and we have more arthritis, very good example, diabetes is other, we have more of a common set of risk issues that deal with work injuries or recovery from work injuries and also management of productivity outside the injury, the work injury area.
Alan S. Pierce: I agree with you, I agree with you, and again, from a legal perspective, in terms of causation a lot of legislators and legislatures have amended their particular state’s workers’ comp law to move away from the older doctrine of aggravation of an underlying condition to put — the work injury must be the major cause or predominant cause or the substantial contributing cause to an injury, which makes those aging workers who have underlying arthritis or underlying disease processes have a greater burden of proof to show ongoing relationship.
So I agree with you that we are seeing a lot more surgeries, we are dealing with problems of pain management and the complexities that go along with dealing with injuries in an aging workforce.
One of the other things I think you touched upon in some of your writings is the fact that there has been a reduction in injury frequency. There has been a decline in work injury and work injury risk and I guess that’s a good thing. We certainly don’t want to see a situation where we are going back to the old days, where we were dealing with unsafe workplaces. We are seeing some progress having been made, but perhaps you might want to touch on the reduction of injuries and workers’ comp claims generally.
Peter Rousmaniere: There is a question as to whether there actually has been a reduction in injury frequency, which according to both the Bureau of Labor Statistics and data from the insurance industry, there is something like a frequency reduction of 3% a year going for about 25 years.
Is it actually some would argue due to more employer intimidation and employer fear of filing a claim? The fact is that in Western Europe there have been substantial reductions in frequency over the last 25 or 30 years. So I think it’s a general issue dealing with a greater improvement in automation and work processes.
This is affecting the workers’ comp insurers, because they were making huge profits over the last five years in particular. And part of the reason for that is that they are pricing their insurance given a certain level of injury frequency, but they are getting this dividend every year of the 3% reduction in injuries; that undoubtedly adds to their profits.
Alan S. Pierce: I am certainly not an apologist for the insurance industry, but the insurance industry is one-half of the equation in a workers’ comp claim. Is that something that eventually will even out because insurance premiums and insurance rates are usually set by prior three-year, five-year experience?
So as we move down the road of a declining injury frequency, might we not see then a decline in the rates and the leveling off of the profits, because one thing I have observed in my 40-plus years of practice is, is that everything is cyclical in workers’ comp, the cycles might take longer to run through, but eventually things change.
Peter Rousmaniere: I don’t think we are going to see the cycles that we have had in the past for insurance pricing, and that is because the insurers have become much more professional and disciplined in the management. There is a great difference between an insurer in the 80s and 90s and an insurer now.
I used to say rather 00:11:26 that the insurance industry is the revenge of a C student, but actually there are some very smart people in there and the system is a lot better.
What we are experiencing is a year after year reduction in injury risk and I can consider that will be the case in the foreseeable future. There is nothing that suggests that it’s going to change. And it means that the cost of insurance of workers’ comp to employers is going down. This triggers an issue which I think a lot of your listeners are interested in is that, have we gotten to the point where we ought to pay a lot more attention to improving benefits, wherein benefits need to be improved. It’s something I have been writing about a lot over the last five years that there are problems with benefits, the solution of which is actually to increase benefits.
Alan S. Pierce: Yeah. In fact, I think we did a show maybe a year or two ago called Benefit Adequacy and you made the case that there has been a general uniform decline in benefits across all jurisdictions, primarily beginning in the 1990s, attributed in large part to an increase of benefits in the 1980s and the inability of the system to have absorbed all of that sudden change quickly. And that this decline in benefits is not limited to the durations or percentages of a weekly pay, but you focused on and you might want to add to this, the other losses associated with a short-term or a long-term claim, the increase of what you call a deductible or a waiting period to start to collect your benefits, as well as the loss of other fringe benefits, seniority, health insurance, and the fact that even if you go out at 60% or 66% of your pre-injury wage, actually with the economic loss to the family it’s much more than that.
So perhaps you may want to touch on that again for us.
Peter Rousmaniere: Alan, I think we need a lot more research and I think the research can be done by several people who have access to data. One is state workers’ comp agencies can examine what is the actual financial impact of work injury on an injured worker, both in terms of temporary disability and permanent.
The other group is the claimant bar community, which is in intimate contact with hundreds of thousands of injured workers every year. And claimant bar members can — I think are in a position to document better what is the nature of the financial impact on their clients.
Alan S. Pierce: And when you mentioned that the claimant bar is the single group that has access, at least to the stories of our members, I think this goes hand in hand with the fact that, I can’t think of any other group that can speak up for the injured worker community. It used to be as workers’ comp developed and evolved through the 20th Century, we had a much more active, powerful collective bargaining and union position in terms of representing workers and I think we have all seen in the last generation the number of workers that work under a collective bargaining agreement or a part of a labor union and we don’t have that type of clout in the local state legislatures coming from organized labor, because so much fewer of the workforce are union.
And as a result the claimant lawyers really are put in the unique position of, not only having to represent the interests of our clients in a particular claim, but try to band together to effectuate positive change or to keep negative change from occurring.
Peter Rousmaniere: Alan, you have nailed it. I think the public wants a system of workers’ comp, they spend very little time thinking about it, but when they do think about it, they want a system that says, is the injured worker taken care of, is the cost relatively good, and is the overall system fair. It’s a very non-legal, philosophical question, is the system fair? And with the decline of unions we have seen — I think that’s been part of a decline I believe and this may be rather controversial in the ability of state legislators and governor’s offices to manage this very important protection.
I want to give you an example, which is maybe a little controversial, which is one of the areas that laws have been very weak on is mental health coverage. For example, posttraumatic stress disorder coverage or so-called mental-mental claims. Well, there has been a surging in the last five years of presumption laws supporting or recognizing PTSD, but if you look at the laws, they really are designed for the firefighters or for a broader group of law enforcement people; they are completely missing school teachers.
And one of the great ironies over the last few years in welfare reform is that the State of Connecticut, which was the scene of the most horrific attack on a school system in the country, passed the law allowing — authorizing presumption for PTSD for firefighters, but completely ignored the school teachers.
And I think that if we have a stronger union representation in the Shade house, we would not have this unevenness of benefits accruing in terms of a very small segment of employees; it would be a benefit that would cover all employees.
Alan S. Pierce: I agree, and you are correct, the so-called compensation for mental-mental or mental stimulus, mental diagnosis is absent in some states or very limited, certainly treated differently as well. And yes, we are seeing at least some recognition that first responders, people like — it all came out of 9/11, it came out of unfortunately the school shootings and some of the others that people that are legitimately psychiatrically harmed in the workplace, but for the passage of this legislation go without any type of recourse.
I think at this point we are going to take a brief break and when we come back we will continue our discussion, perhaps looking where we are now and where we may be going into the future with our guest Peter Rousmaniere. We will be right back.
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Alan S. Pierce: Welcome back to Workers Comp Matters and my guest Peter Rousmaniere.
Peter, we were talking about the decline of the power of labor unions to help effectuate change in the state legislatures and with the executive offices around the country. That doesn’t mean that they are not a helpful ally. I mean we rely on our brothers and sisters in the labor movement all the time. They are supportive of legislation that will benefit their membership and our clientele, but the numbers don’t lie. There has been a significant decline in those employees that are covered by the power and the abilities of collective groups such as a labor union to effectuate change.
This has led to, among other things, a phrase that has sort of come into general usage, at least among those of us who focus on injured workers, and that is the phrase race to the bottom. Give us an example of what that phrase means to you?
Peter Rousmaniere: Well, the bottom and the top is traditionally or conventionally measured by looking at the biannual ranking of workers’ comp cost by the State of Oregon. And so anyone at any time can take that ranking and say we in the state of such and such and we want to go lower. Nobody is saying we want to go higher.
So there is a predisposition —
Alan S. Pierce: And they want to go lower because they are competing.
Peter Rousmaniere: Right. Now, there is a question as to why do you keep on going lower when the costs are pretty low to begin with. And one of the issues here is that we do not have very good information, as clear information on the toll of uninjured workers of injury. The toll is a lot higher than the cost of workers’ comp, so that the legislature may be delighted that their costs of workers’ comp go down incrementally compared to other states. That’s for the employer.
But the cost to the worker is still quite high and may actually be getting higher and higher. So we need to know that. We still do not have, 30 years after a major crisis in workers’ comp in late 1980s, we still do not have verifiable reliable information on the duration of disability.
We still do not have what the long-term impact of a work injury is. The studies that have been done indicate that a work injury that may last a year and is supposedly resolved during a workers’ comp system let’s say through a settlement or return to work actually may have much longer negative impacts, it may go out for five to ten years because of the destructive effect of that injury. We don’t know that. We need to know that.
Alan S. Pierce: Where do we begin to address this? Is this by anecdotal evidence? Is there — do you see the need, for example, another National Commission? Do you see some other mechanism to address this in ways that haven’t been addressed thus far?
Peter Rousmaniere: That’s a really good question. I have an answer which may be too simple for the taste of most people, but what we need is we need a few governors. We need a few governors. We may need some chairman of Senate committees in the state legislature. We may need research office, some of which are doing some very good work, but what we really need is a governor, we need several governors to say we are going to have a workers’ comp system, a work injury protection system which is viable for the 21st Century and which is going to deal with the issues such as give workers temporary — independent contractors, it’s going to deal with an up-to-date model of what an injury is, for example, mental stress.
It will deal with the growing, paradoxically growing amount of worker protections outside work injuries, such as parental leave and disability leave. We need some vision at the state level and that’s going to come from the governor’s office.
Alan S. Pierce: Yeah, and along that line we can’t overlook the role that increased medical costs are playing as a driver of cost. You mentioned that insurance companies are making record profits, and again, I can only go by what I read as a layman, but that seems — I don’t think anybody is really disagreeing that right now workers’ comp is a relatively profitable, if not the most profitable, line of insurance.
But we have a medical crisis, a medical care crisis that goes far beyond workers’ comp. I mean our federal government can’t deal with the Affordable Care Act and whether to tear it down and replace it. We don’t know where that’s going. And certainly the growing costs of medication, of tests, of surgeries, that’s money that is being paid out of the system, not necessarily going into the pockets of injured workers. And for that matter is also leading to a lot of litigation.
Is a case going to be brought within the workers’ comp system or could it be brought and paid for through health insurance or Medicare or some other means? So we have the whole issue of shifting the costs away from workers’ comp to other medical providers, simply because of the difficulties of accessing workers’ comp.
So how do you see the uncertainty of just health care as impacting workers’ comp going forward?
Peter Rousmaniere: In the last five years or so, even maybe ten years, there has been a great moderation in medical cost inflation. What has happened in the personal health insurance is the deductibles have gone up a lot. So even though you may find let’s say a 3% growth in total medical costs, you may have a 10% or 15% increasing cost to the household, because they have a higher deductible.
And in workers’ comp, as you pointed, it’s 100% paid by the employer or by the insurer. The insurers have, I think this is quite commendable, they have invested a lot of time in understanding surgery, understanding opioids, this will be an area of considerable controversy, because it is an area of controversy within the medical community.
You take the medical doctors alone, put them in the room and they will fight over each other about surgeries and about opioids. So we cannot expect everything to be the peaceable kingdom within the workers’ comp system, that test is going to be a ongoing area of dispute and the best we can do I think is hope for better research, better demonstrations and best practice. And outfits like the Workers Comp Research Institute in Cambridge, which is an example of a number of outfits, that do some very good work in research.
Alan S. Pierce: Yeah. No, we have done several shows with different researchers from WCRI, and you are right, it may be data that is difficult to get, because the data in these cases has to come primarily from the workers’ compensation payers of the insurers, and some of this data, some of these costs that may not be captured by data have to come in some other way, whether it’s anecdotally or through looking at workers’ comp from a different lens.
So where do you see us having this conversation five or ten years from now? Hopefully we will both be well and vital and still interested five or ten years from now, but if we were having this conversation let’s say a decade from now, would we still be talking about workers’ comp or do you think we would be looking at some other mechanism or form of dealing with the effects of work-related injuries?
Peter Rousmaniere: Five or ten years from now I think we are going to be seeing perhaps some fundamental changes in the structure of workers’ comp within the context of total worker protections.
Let’s take the area of event contractors, gig workers. There is no point in trying to solve the problem with gig workers of coverage in workers’ comp without solving it for unemployment compensation. And for the large and increasing number of worker benefits that are being legislated now over the last five or ten years; family protection — family leave protection being another one — being one of them for example.
So there may be in effect a new kind of grand bargain that will be introduced in the 2020s, which is going to bring together all the major kinds of employee protections and say we want this to happen. We want these protections to happen. We are going to have to redefine employment in a certain way. We are going to have to redefine the way in which you are eligible for coverage in a certain way, and that should be done altogether with all these benefits and systems together.
And I think it can happen in Congress. There could conceivably be a new federal commission that will look at this, but I also go back to the states and the states have been the laboratory of worker protections going back through the years. And so I am looking forward to a state that will take all these exposures of workers and say, let’s 00:29:10 reason them altogether so that the public will find that the system is fair and is working and is relatively economical.
And I think if we didn’t have — if we had a Democrat — I think if we had either a more moderate Republican president or Democratic president, there is an opportunity to do that. I think there are a dozen or more states that can undertake this tomorrow and it would be in fact a new brand market.
Alan S. Pierce: Yeah, yeah, you are right. The workforce is — the definition of who an employee is or isn’t has changed markedly and it’s going to continue to change as these alternative forms of, I don’t even want to say employment, of work relationships continue to evolve and the definition of — the traditional employer-employee definition doesn’t fit. It’s like trying to put an oval peg in a round hole.
It looks and feels like an employment situation, but it isn’t in many ways, and of course workers’ comp depends on there being an employer-employee relationship. So what we are starting to see with the gig economy to deal with these injuries is you have got hybrids that are coming up. There is new lines of insurance that are starting to be marketed, that perhaps a Lyft or an Uber driver can purchase to protect himself or herself in the workplace. It may give them some limited indemnity benefit and some medical coverage, but not within the workers’ comp system.
And so we will have either no coverage or parallel coverage of a different sort than workers’ comp, and as our employment model or work model continues to change and more people are under the other umbrella, then you have two or three competing systems and perhaps no system.
Peter Rousmaniere: Let me take that up, right now you have the UAW strike, and one of the issues in the UAW strike is the enormous differential between certain kinds of employees. The American workforce system does not work well when you have different classes of workers doing the same job or doing similar jobs.
And we have this in manufacturing, for example in automobile workers, and you have this in a way of building protections, private sector protections, say for Uber drivers, which are different from workers’ comp.
Now, you may need to change the workers’ comp protections, that should be — everything should be on the table, but we do want in our country to have a fairly uniform, wall-to-wall agreement on what work relationships are. I like that term, work relationships. What is a work relationship? The way we define it, are we covering only 80% of our workers or 99% of our workers.
The American public wants 99%, and we work well with 99%. We are always aspiring in America to be a classless society. We have not gotten there. We are not getting there now. We will never get there entirely, but that’s the aspiration. And I think you are the beginners.
I mean one of the things, I am delighted with my — all the experiences I have had with attorneys in workers’ comp has been one of great deal of learning on my part. Your colleagues, both defense and claimant, understand how the real world works hundreds of thousands of times a year, and with that knowledge, if we can deploy that as part of building a grand bargain, going through, as I said, a government — through a state initiative or a federal initiative, I think that’s going to be essential.
And so five or ten years from now, I would look forward to seeing a new grand bargain being built around a definition of work relationships, which cover all protections, it’s affordable to the employer, protects the worker, and that can only be both with attorneys getting involved.
Alan S. Pierce: Well, you have thrown the gauntlet over to us and it’s a challenge that hopefully my colleagues, and believe me, my colleagues, or a lot of my colleagues have recognized this and we are doing what we can in that regard and I understand that.
Peter, I want to, on behalf of everybody that has listened to you, read you, met you, listened to your presentations in person, I want to thank you on behalf of everybody in the industry for devoting your career and having the wisdom to kind of see beyond the trees and the whole forest. And we are going to miss you, hopefully we will still hear from you and you will feel free to weigh in as much as you want to, or can, but again, I can’t let this opportunity go by without thanking you for many years of inspiring and provoking thoughts and ideas.
So are there any last words you might want to have to say about your career, if you can sum it up in a sentence or two?
Peter Rousmaniere: Well, I would say that I have learned several things in writing, I have learned several things in writing, and one is that the reader is really smarter than me, so I have to pay close attention. I can’t take the reader for granted.
And the other thing is I write for what Ralph Waldo Emerson called The Unseen Friend, and so I have an enormous number of unseen friends; some of them I actually know, many which I do not know, and I am deeply appreciative of the decades I have been able to write to them. And I think I will show up, I am not sure where, in workers’ comp in the future, but I thank you very much Alan, personally, we have been great colleagues over the years and I look forward to talking in the future.
Alan S. Pierce: Oh, absolutely. So Peter, thank you very much, and to those of you who listen to Workers Comp Matters, thank you for listening.
Tune in to our next show and go out and make it a day that matters. Bye-bye.
Outro: Thanks for listening to Workers Comp Matters today on the Legal Talk Network, hosted by attorney Alan S. Pierce, where we try to make a difference in workers’ comp legal cases for people injured at work. Be sure to listen to other Workers Comp Matters shows on the Legal Talk Network, your only choice for legal talk.
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