How Workers’ Comp Helps People to Recover: NCCI CEO Commentary

By Bill Donnell | June 24, 2019

  • June 24, 2019 at 5:23 pm
    Vince DeVargas says:
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    I remember when I started in the insurance business almost 60 years ago that my first job was as a Worker Comp underwriter trainee. As I learned what exactly WC was I was taken in my own naive way by the wonderful thing WC is. I learned over the years about the development of WC in Bismark’s Germany, and the wonders of vocational rehab. I was so very proud to be part of that system. As the years wore on I also became hardened by the abuses in and of the system. Someone very close to me was injured on the job and was sent to voc rehab. Good idea except that he was trained for a new trade in which there was already a huge surplus of trained workers and so even though the school got the full $16,000 dollars of rehab money my injured friend NEVER was able to find a job in that new trade. Not too many years ago I got pulled into the every 10 year advocacy work to “reform” the system. The players, those being the insurers, the employers, the employees, the medical providers, the lawyers, the unions, the various industry associations, all pulling in different directions. It was a 20 billion dollar a year system with about 12 billion dollars of waste and self interest. It took almost two years of effort to arrive at “reforms” that took about 5 billion dollars of waste out of the system. But here we are 20 years later and it’s all gone back to the system of huge waste and corruption. I am glad for this story about one man who was able to return to wholeness thanks to the system I was once so proud be a part of. What is lost in all of this is the fact that there are not dozens of “players” in the WC system. There are the employers who pay for the system and the injured employees who potentially benefit from the system. Every other “player” is peripheral. I think it is important that everyone recognize their real place in the system.

    • June 25, 2019 at 7:29 am
      OpPolaResearch Bear says:
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      What is needed to improve the WC system, albeit temporarily as business cycles will persist, is lowered barriers to entry by insurers. Currently, too much of the WC market is concentrated in a few large insurers. Let no one think I am suggesting removing regulations, but rather, regulations should be reviewed for ways to prevent barriers to entry and high costs. I fully support rigid regulation of financial solvency and claim adjustment practices. What is also needed is a clearinghouse of info on insurer’s prices and claim practices; i.e. increased competition via increased knowledge will yield increased efficiency and less waste.

      As a side point, I’m surprised that Germany led the way in WC insurance; I thought it was the US in the early 1910’s.

  • June 25, 2019 at 12:21 pm
    Agent says:
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    Op, the WC laws of the various states have a lot to do with how claims are handled and if there are abuses in the system. Years ago, Texas had a very bad situation with people milking the system, lawyer involvement with most claims. Reached critical mass and no one would write coverage so a Pool was created which was also bad. Finally, the law was changed to return WC back to what it was intended to do, treat injured employees fairly and get them back to work. Texas Mutual was created to be a market and to take the Pool business. They have done a magnificent job and they made the line profitable and return dividends to policyholders.



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