NEW SOLUTIONS: A Journal of Environmental and Occupational Health Policy

How workers are compensated for the permanent consequences of their workplace injuries remains a hotly contested subject. The spreading misuse of the AMA Guides as the sole determinate of permanent disability has intensified the debate. This commentary highlights critical issues surrounding the AMA Guides. Finally, a restatement of the principles recommended for the assessment of permanent disability is set forth.

Faced with lower profits and rapidly increasing premium costs in the 1980s, insurers and employer organizations cleverly parlayed the public perception of worker fraud and abuse in the workers' compensation system (that they helped to create) into massive legislative changes. Over the last decade, state legislators and governors, Republican and Democrat alike, have jumped on this bandwagon, one that workers and their allies have dubbed the workers' compensation “deform” movement. Alleging a “game plan” and a calculated campaign on the part of insurers and employers, the author looks at the major components of changes that were made, examines the elements of workers' compensation over which employers and insurers have gained control, and discusses Newt Gingrich's efforts to capitalize on employer and insurer fervor over the system. This campaign whistled through the country until it goaded the labor movement, injured workers, the trial bar, and others in Ohio in 1997 to organize themselves to stand up to employers by defeating the deform law through a ballot initiative. The article details that battle and suggests that similar voices can be achieved through a return to grassroots organizing and mobilization.

Pressure is mounting for clinicians to rely solely on “objective” measures when evaluating workers with possible work-related disease. These measures are intended to largely supplant the worker's history as sources of information regarding diagnosis, work relatedness, and extent of disability. While seeming to promote more accurate and neutral evaluation methods, the underlying agenda is to reduce business costs by denying work-related illness and disability. Promoting the view of occupational health as the province of technical experts, the campaign for the “objective” finding silences workers as unqualified to comment. The methods proposed to enhance objectivity also suffer from significant specific shortcomings. To resist efforts to fetishize the objective finding, clinicians need to recognize the subjective elements of objective methods as well as the objective value of subjective data. This requires recognition of the central role of workers and histories in the clinical evaluation process.

Economists use the term moral hazard to describe the tendency for insurance plans to encourage behavior that increases the risk of insured loss. Numerous economic studies have examined moral hazard effects in workers' compensation. Many of these have focused on the supposed propensity of workers to exercise less caution or to file more claims in response to increases in workers' compensation benefit levels. Although many authorities insist that moral hazard is a value-neutral concept, there are often pejorative connotations associated with contemporary discussions of moral hazard that intentionally or unintentionally disparage the motives of workers and undermine public support for workers' compensation programs. This article critically examines that literature and explores the conceptual underpinnings of economists' claims that employee moral hazard is rampant in workers' compensation. We examine the historical roots of moral hazard and its role in recent economic analyses of workers' compensation, consider the practical and ethical implications of that discourse, and offer suggestions for a truly value-neutral approach that would describe the system more fairly and accurately.

In contrast to theories of “moral hazard,” it appears that workers under-report cases to Workers' Compensation. In a population-based phone survey of work-related MSDs, it was found that cases were more likely to be reported if they were called work-related by a doctor, had surgery, or took time off from work. Higher rates of filing were found for lower education, having a union at the workplace, working in manufacturing, and for blue-collar occupations. Fear of the consequences of filing was significantly related to filing, but was not a strong association. A lack of perceived management support and lower decision latitude was associated with a higher rate of filing. Perceived knowledge of the Workers' Compensation system was not associated with filing. In general, a broader perspective of looking not just at reported claims but also unreported work-related illnesses is important for understanding both the magnitude of the problem as well as the impact of changes in Workers' Compensation laws.

An injured worker, from her experience in the system, describes the flaws in the Workers' Compensation system. She employs information gathered from injured worker organizations around the country, the Workplace Injury Studies Institute, and the findings from a 1996 study by the RAND Institute for Civil Justice. She looks at fraud in the Comp systems, and the roles of medical providers, attorneys, and insurers. She also describes the climate of suspicion around claimants in the process: how it feels to be an injured worker, and to be followed and videotaped by a hireling of an insurance company, and how she watched a fellow claimant led out of a Comp board proceeding in handcuffs.