Royal Commission on Workers' Compensation in BC
March 2 Morning Session
Names: Joe Pinto & Keith Sullivan
Title: Director, Central Services & Senior Advisor, Policy & Practice
Affiliation: Workers' Compensation Board
Staff Present: TR, GG, OE, GS, SN, PL
Notetaker: Steven Noble
Date: Monday, March 2, 1998
GENERAL COMMENTS
COMPENSATION AND BENEFIT LEVELS
Calculation of Average Earnings
Stacking and Integration
Gross vs. Net
Waiting Period
Overpayments
Retroactivity of Benefits (widows, etc.)
Application of Section 33
Are revisions to Section 33 necessary
Necessity/timing of rate review
Is a waiting period (or additional waiting period) necessary-Section 5(2)
Should benefits be paid on net as opposed to gross earnings?
Stacking vs. integration of other benefits/income
Retroactivity/overpayments – Q and A only
Ron Buchhorn, Heather Greene, Janice Woodland, Maryanne Schulz
PRESENTATION
Before I begin to present to you on this topic I'd like to introduce my colleagues who are here to assist and answer any questions this morning. [See names listed above in general comments above].
Without further ado we'll launch into the topic of Compensation benefits levels. The level of benefits and in particular how earnings are to be calculated are topics that generate considerable debate and generated considerable debate at the inception of workers' compensation legislation in Canada. That debate has continued through the decades whereas the first 6 – 7 decades saw governance and compensation boards respond to increased pressures or pressures for increased benefits – the last decade and a half have seen reversals of this trend in several provinces. In BC the key issues that you have identified are as follows:
The application of Section 33 – both the Board's policy – interpretation of Section 33 and its application in individual cases has been questioned from time to time. There is the question of Section 33, itself; whether it is still is useful in its current format; whether perhaps revisions are necessary.
The question of late reviews and whether they are necessary and if so what timing should be applied to them.
Now those three topics relate to average earnings and earnings capacity and my colleague Keith Sullivan will be presenting on those three this morning shortly after I introduce the rest of the issues.
The other topics that you've asked us to speak to is the question of a waiting period or some might argue an additional waiting necessary. As you may know Section 5.2 of our legislation requires that legislation begin on the first working day after the date of injury. And so, therefore in BC there is no requirement for the Board or the employer to pay for the date of injury and if the worker has received pay for the date of injury it is because the employer has chosen to not because of a mandatory requirement. We've been requested to also speak to this is should be compensation benefits be paid on net as opposed to gross earnings. The BC model is currently gross and we'll take a look at comparisons to other provinces and what they've got in this arena.
There is also the question about stacking versus integration of other benefits and income and I won't speak anymore about this topic right now; we'll get to it later on this morning.
You also on your list of questions you sent us identified retroactivity and over payments and you weren't clear as to what aspects of those you wanted to discuss but they are in a sense unrelated to benefit levels so given the time we've been allocated we decided to defer those to questions and answers and not make formal presentations on them.
The 70,000 – to keep it in a little bit of context – the 70,000 short term disability claims last year and about that – between 70-80,000 over the last several years – these are short term disability claims first paid. The issue of benefit levels is of course of critical importance to each of these claims and to the employers that pay for those claims. The issue of how the Board sets average earnings is as I was saying critically important to workers – how much a worker gets in terms of short term disability will depend on the interpretation that the Board gives that policy to Section 33 and it also depends on the application of those policies by individual adjudicators on individual claims.
The Board has been paying out as you can see about $250 million a year in short term disability over the last several years. And from an employer perspective the issue of average issues and rate setting and the rate of compensation are also all of equal importance because this is one of the biggest chunks of benefits payments within the Workers' Compensation system. Now for those workers and the number is much smaller who go on to long term disability –a higher rate is determined – the compensation rate or average earnings is also of critical importance. Just to explain the slide and all the different colours – until 1991 the purple bars – the Board lumped all of its long-term disability benefits together. In 1992 in accordance with the requirements of the association of Workers' Compensation Board's we split the yellow which is the long-term disability benefits from the survivor benefits – so the purple bars represent both; these bars separate them.
Now again the setting of the rate – the setting of the average earnings is of critical importance to individual workers– whether they get a pension or particularly if they get a loss of earnings pension – is dependent on the rate that the Board sets. But also it affects their entitlement for vocational rehabilitation and the Board may or may not provide vocational rehabilitation if the rate on a claim is relatively low. So it is critically important to workers individually and to employers as a whole again this is the other big chunk of cost of the compensation system. Average earnings doesn't dictate all of temporary disability costs or permanent disability costs but it can influence total costs in the system. Finally just to put into perspective the volumes that the Board – I picked 1996 to give you a sense of the number rates or the estimated number of rates that adjudication staff set. We start off with 70,000 claims as I was pointing out earlier. So every one of those 70,000 claims requires an adjudication staff person to set a rate. What we call set a rate. That's the initial rate. If the claims go on 8 weeks or more – and about 15% do – then there is a second rate review required. Or what we call a rate review. So roughly that works out to about 10,500 on the basis of 70,000 in 1996. And then if the claim goes on to permanent disability – and more claims go on to permanent disability than I show here but according to the information we have from our folks in disability awards we have about 1 in 5 get a comprehensive second look so that's where we came up with 2100 from. So in total there's potential appealable decisions just on rate issues alone. That is about 80,000+ a year. And that number would be relatively consistent over the last 4 or 5 years. This is separate from appealable issues on whether the claims have been accepted and how long the claim should have gone for, whether a pension was given, etc. I think Mr. Buchhorn alluded to a sort of large volume of potential appealable decisions in the system. Now when my colleague Keith Sullivan presented me with these numbers we were interested in giving you a sense of the number of appeals that there are around average earnings. We sent Mr. Sullivan back two or three times to check this out because I guess intuitively we all sensed that there are more disputes – more appeals files around average earnings. This isn't the appeals filed in 1996 - what this is is the findings issued by the Review Board in 1997 – you might note that the Review Board runs somewhere between 6 months to a year behind. So we are using this as a proxy of the findings that might have emanated from 1996 – but we don't purport this to be an accurate proxy and I am sure the Royal Commission will be doing its own research and speaking to the folks at the Review Board. These numbers simply come out of the data we enter into our system when the file is returned from the Review Board. But the numbers, in total, are very small relative to the potential volume of decisions that the Board makes – 270 – yet we hear a lot about concerns about the way the Board sets rates. The explanation could be several-fold – I guess a possible of explanations that there are many workers dissatisfied with their rates and actually go on to appeal; another possible explanation is that the Review Board in this particular year only produced a few decisions that involved rates. A possibility that in fact this is more or less the volume of decisions that the Review Board produces on an annual basis and there is a host of others but I guess all of the people who have seen this number are surprised at its relative small size. What we do see from this small size though is that there are proportionately more dissatisfaction relative to that total and again proportionately more dissatisfaction of the permanent rate setting relative to that total – but again very very small numbers. This is also interesting –now out of these what was the percentage of decisions that the Review Board upheld. You recall from presentations that you saw in week one that the Board has normally upheld it about 65% of the time. But you'll notice that in each of these areas we run about 57-58%. So we are not upheld as often even though the numbers are relatively small at the Review Board. And the differences could be the Review Board's disagreement with the general policy approach of the Board or it could be its disagreement with the individual application of a case.
So with those opening comments I'm going to ask Mr. Keith Sullivan to take you through briefly average earnings – probably 10 minutes or so – and then I'll go back to talk about some of the other legislative topics that you've asked us to speak about.
KEITH SULLIVAN
I've been asked to speak on the subject of Average Earnings this morning. I have about 10 minutes so I'll try and put it into some perspective – it is a subject that we spend at least 4 days in our initial training period with our claims adjudicators. Going through the ins and outs of rate setting. I didn't provide a copy of Section 33 on an overhead – but it is probably the longest sentence in the Act in itself. It contains the word "or" on 13 different occasions. So it was too long to put on one or even two overheads so what I did was provided you with a copy earlier this morning on your desks.
Subsection 1 contains reference to the words "average earnings" and "capacity" – and requires the Board to best represent the actual loss of earnings.
Subsection 1 as I mentioned contains thirteen "ors" providing a lot of discretion for adjudicators to make decisions on these.
And subsections 2 and 3 deals specifically – deals with specific types of cases – two of them being volunteer fire firefighters and volunteer ambulance drivers and how to set wage rates for them. Subsection 3 deals with the situation with where a worker's earnings are reduced by reason of their age or by learning trades.
Chapter 9 in the Rehabilitation Services and Claims Manual and item 35.24 in Chapter 5 deal with the Board's policies with respect to setting wage rates. The introduction to Chapter 9 which I also handed out earlier this morning outlines the chapter as a framework of principles but ensures and makes it very clear that adjudicators are trained in basic discretion granted under section 33.1. Just reading a couple of quotes from that introduction which 65.00 in the manual. It states "it obliges the Board to select for each claim and method which most accurately represents the actual loss of earnings by reason of the injury. This does not mean that the claims adjudicators have complete freedom of choice in respect to each individual claim. The Board must ensure that the applications of section 33 is consistent between different clients."
Chapter 9, itself, has been under formal review since 1991. At that time there was a Governors' subcommittee struck and working committee formed to look at the chapter and the issues as they affected the claims adjudicators' and constituents.
The working group did develop a paper – sent it out for discussion and for feedback and the public consultation process did produce differences of opinion from many of the different stakeholders involved. Although there has been some activity in respect to average earnings since then and I'll mention to you in a few minutes basically the issue is still outstanding. As well there are no procedures in our claims adjudication handbook – the handbook was being developed at the same time as chapter nine in the manual was being reviewed. As a result it was decided to wait until the review was completed before entering anything into a handbook. So currently what our adjudicators are using to guide them is the Act, the manual and the training material as provided in that training period that I mentioned to you earlier.
Some of the average earnings issues and there are many and I suspect that there'll be many raised this morning as well – the first one I refer to is the earning capacity concept which uses past history versus forward looking. If you read through the manual especially in the 8-week rate change and the initial wage rate setting change – it refers mainly to using the past history in setting wage rates. And there is a feeling that perhaps we should be looking at earning capacity. The manual does require that the adjudication staff consider what the worker would have done if not for the injury – and the other quote I'd like to make is out of 65.20 of the manual which refers to the 8 week rate change. It's mainly for that particular section of the manual which spends a lot of time talking about the past working history, whether we should be using 1 year, 3 years, 3 months earnings prior to the injury – it does conclude by saying the claims adjudicator will also consider the probability of the worker continuing in the injury occupation. For this purpose the adjudicator will contact the employer to inquire whether the injured worker could reasonably be expected to continue in the job. The adjudicator will also question the worker as to future intentions with regard to this job and examine the previous employment history.
So the adjudicator is required to look into that aspect of setting wage rates. And there is no doubt that looking at earning history is a lot easier for adjudication staff to do than try to establish what earning capacity or forward looking into the future might be.
Another issue is income replacement benefits, for example, Unemployment Insurance Commission - we do not include Employment Insurance benefits as average earnings. Nor do we deduct the time period when people were on Employment Insurance from the timeframe we are looking at when we calculate average earnings. Fringe benefits is another issue. We do not include fringe benefits in average earnings. There was a policy change in 1996 to fringe benefits –that's item 7120 of our current manual.
There was a number of conflicting Appeal Division decisions that came out about fringe benefits –so the Panel of Administrators decided to issue a policy statement which basically clarified the definition of fringe benefits. It didn't really change existing practice at the time but it clarified the issue.
Of course rate changes and specifically 8-week rate changes is another issue in average earnings that is of considerable interest. Just to quickly explain the 8 week rate change concept that I thought I'd just go over – wage rate setting for three specific types of workers – there can be other types of workers but these are the three general types of workers: Regular, Seasonal and Casual.
A casual worker – I'll start at the bottom – a casual worker is obviously one that has no regular attachment to the work force – could work for a number of employers during the year at different rates of pay – or could work for one employer during the year, however, have different time of employment – employed for three months; off for two months; employed again, etc. They basically have a casual attachment to the workforce so we treat them as casual workers. With those types of workers we set their rate typically on the long-term attachment to the workforce right from the day one. In other words we look at the one or three years' earnings, etc. and set the rate for those workers on that rate from the date of injury forward. We do normally have to do a wage rate change with casual workers.
Seasonal workers are those types of workers that are obviously involved in a season – seasonal employment. Berry pickers are an example employment – they are usually paid at the rate of pay at the time of injury be it the hourly rate, the daily rate, the weekly rate etc for the length of the season or for the first 8 weeks – whichever comes first. Whichever ones of those comes first we do a rate review and we look at whether or not the long term earning capacity or earnings reflects the – what we set initially. With seasonal workers, too, you can't always get an hourly rate or a daily rate – you may in fact be already looking at a situation where the workers are paid by the pound as opposed to the hour, etc. You may starting out with having to take – the amount of time they have so far spent in that season – calculate the amount of money they've earned and calculate the daily rate – that may be one way of establishing a rate of pay at the time of injury to those particular types of workers. Looking at the rate change value – you are probably looking at what did they earn all year and what did they earn last year. Plus as well you are probably looking at what the season would hold – what other seasons would be available to them for example if they are a berry picker – there may be different types of farms they can go to or industries they can go to throughout the year and you just have to make a judgement as to what the best rate would be.
Regular worker – there seems to be fewer and fewer of these as we have more and more casual and part time workers but regular workers is someone who has a regular attachment to the workforce. With those particular workers we pay the claim on the rate of pay at the time of injury for the first 8 weeks. And that at 8 weeks we do a rate review as I've already explained and adjust the rate accordingly.
The division has made a recommendation that the 8-week rate change as it currently exists be changed to a 13-week proposal. The reason for this is the effect of the 8-week rate change is having on our continuum of care.
During the continuum of care the first program is the work conditioning program and the treatment during that program is interrupted usually by the 8-week rate change - it is just the timing of it. And what happens is is that rather than workers concentrating on recovery and return to work their mindset is affected by the fact that this rate change has occurred in the middle of that process. So to alleviate that we have made a recommendation that the 8-week rate change – the timing of it be changed to 13 weeks. In fact this goes back to a practice that – the 13-week rate change was held by the Board for many years in the past.
For your information 70% of the short-term disability claims that are currently paid have less than 4 weeks compensation benefits; 85% of short-term disability have less than 8 weeks; 90% have less than 13 weeks. We also did a study of about 200 cases in our continuum at the 8-week point and we found out that 40% had a rate reduction; 10% had a rate increase and the 50% resulted in no change at all. The average reduction was $58 per week and the average increase was $56 per week. The range of the increase was pretty compressed around $56 but the range in the reduction is quite extensive; it goes all the way from a few dollars per week up into the hundreds of dollars per week.
The challenge to us of course is to balance fair compensation on individual cases against the need for consistency in decision making; we also have to maintain timeliness and efficiency – we don't want a system that is so complicated that it affects our ability to make timely payments. I'd like to conclude by pointing out that the setting of average earnings not only affects wage loss compensation, it also affects pension benefits, as well as the entitlement to and the level of vocational rehabilitation benefits. I'll return this to Joe who will complete the subject this morning and then a summary.
JOE PINTO
I assume Mr. Robertson that we will have a few minutes at the back end because we started later and is that a safe assumption? [Mr. Robertson: Yes.]
So the first of the topics that is sort of our not things done in BC is the issue of whether benefits should be paid on net. Now the Board has never formally taken a position to the best of my knowledge on whether this province should pay compensation on the basis of net average earnings as opposed to paying at 75% of gross average earnings which is the current method.
Although the Act does specify that gross earnings be used it has been interpreted in that fashion since 1916. When we look across Canada – we see that most boards use some percentage of net – the discussion paper that was prepared by the Policy Bureaus is very extensive and goes into great detail on this topic. I don't propose to repeat all that this morning – but some of the highlights as to the rationale for that are – equity between workers at the same income level, so for example if somebody is making – if you have two workers both making $40,000 per year but with different dependent status they would normally take home different income on their pay cheques so one of the rationales for moving to net as we understand it is that a net system more clearly reflects actual take home. Equity between workers at different income levels – workers who pay – using the example of workers who make $40,000 versus workers who make $20,000 let's say –again there is a difference in take home pay – or a percentage in take home pay because of the percentage difference in tax and one of the arguments advanced to moving to net is that – that sort of equity ought to be maintained in the compensation take home pay. There is the issue of over-compensation and under-compensation – a gross system treats everybody as if they were – treats everybody as if they were – treats everybody at 75 – at 25% deduction as in BC. But workers at different rates at the high end arguably are taking home more than they would normally take and workers at the low end, in general, are taking home less than they normally would based on that 25% deduction that occurs in BC. Again that's – that's the arguments that have been advanced in other provinces for that – for the move to net. And finally as the Bureau points out in the paper –some provinces particularly when it came to determining out what percentage of net as opposed to net itself rationalized the reduction or the amount – 75%, 85%, 80% as part of a cost reduction solution or dealing with unfunded liabilities, etc. So those are the rationales that we detected. Now just a quick – because of some glitch in our software some of these lines don't show up – but what we have here is a comparison of all the different provinces and what they are – whether they are at net and what percentage of net so reading across this way – Alberta $45,000 – their maximum is $45,600 and they pay at 90% of net. In BC $56,900 and 75% of gross. Manitoba - $50,000 maximum – 90% of net for the first 24 months and then it moves to 80%. New Brunswick at $44,100 maximum – 80% of they call it loss of earnings but it's effectively net and then for the first 39 weeks and then at 85%. Newfoundland had a 75-80% but it's just moved to 80% for all. Northwest Territories at 90% of net. Nova Scotia - $39,300 with 75% of net for the first 26 weeks and then 85% thereafter. Ontario has just moved from 90% of net to 85% of net with $58,200 maximum. Prince Edward Island – 80-85% with $36,200 for a maximum. Quebec at $50,000 – one of the originals at 90% of net. I believe Saskatchewan was the original at 90% of net and they are $48,000 maximum. And BC is the only other jurisdiction where 75% of gross is still in place. Their maximum is $54,200.
Now just some quick comments that aren't on this – aren't on this particular overheard and I've extracted a lot of this just to give you a sense from the paper that the Bureau prepared. High wage single earners can receive as much as 110% in take-home pay and if they are retained on salary which is a feature more in the public sector than elsewhere they could be upwards of 120% in take-home pay in a gross system.
Low wage earners under the statutory – because of the statutory minimum in BC low wage earners actually aren't affected as badly with a gross system as they might otherwise be. And so they also can receive more than 100% of normal take-home pay.
By way of contrast – in the net system – a worker with one dependent and just above the statutory minimum might only receive about 87% of take-home and more dependents in a net system would likely result in a similar reduction in benefits – sorry that's – that's still in a gross system so by way of contrast – a worker with one dependent just over the statutory minimum in a gross system receives as little as 75% - 87% and the percentage could be lower with more dependents. So it just reinforces I suppose the – the argument made in other provinces that the move to net that a statutory flat deduction of 75% of gross treats people differently at different income levels and depending on their different dependent status.
According to the Bureau's analysis at 90% net most workers in this province could expect a decrease in benefits ranging from 1-15%. A smaller group of employees could expect an increase in benefits ranging from less than 1 up to 4%.
Additional comments that you might want to be aware of but again I refer you to the discussion paper for more detail - 1989 our actuarial department did a fairly high-level estimate and estimated that a move to 90% would result in a 6% overall reduction in benefits and a possible 4% reduction in assessment rates. The issue of administrative costs comes up in a net system. And very global – very very global estimate because the BC Board has not been actively moving to net – we've not done significant costing in any of these arenas. But very global estimate based on the experience of other provinces and the volume of claims they are experiencing relative to our volumes a one time cost of about $5 million to retool computer systems, forms, retraining, re-educate, pamphlets etc etc so a one time administration cost of $5 million and the Board would not want to be held to that until it had an opportunity to further analyze it and an estimate of about a $1 million additionally in administration - again very high level and again we would want to have an opportunity if there was serious consideration for this to further analyze that. So those are the comments with regard to net.
With regard to waiting period – the as I mentioned at the outset this morning in BC compensation begins day – the next working day after the date injury. Those words can be found in section 5.2 of the Act. Workers receive payments beginning the first working day after injury and that is arguably a waiting period in this province because workers do not receive payment from either the Board or their employer for the date of injury unless the employer chooses to make that payment re-emphasizing the current – re-emphasizing the comment I made at the outset. Now the history in BC which is bullet three on this – is that in 1916 the Act contained a 3 day waiting period and over subsequent amendments over the decades we saw a repayment provision in the legislation so the three day waiting period remained consistent but if a worker was disabled originally for more than 14 days and then three days the Board was required to repay the waiting period. So it remained at three days but depending on the length of disability the payment could be made back to the worker for the waiting period. In 1972 the waiting period was removed from BC's legislation other than for what I just described in terms of section 5.2. a quick snap shot again – I apologize again for our computer unable to pick up the differences. The different lines.
So Alberta has no waiting period – the employer is required to pay for the date of injury. And there is no payment required by the employer after the date of injury. BC – no waiting period other than the date of injury – the employer is not required to pay for the date of injury and there is no requirement for payment after that. Similarly in Manitoba. New Brunswick essentially along with Nova Scotia is the only provinces with waiting periods. And that refers to 3/5's of weekly benefits – this is all from the Workers' Compensation Board – BC publication but in fact it is a three day waiting period in New Brunswick . In Newfoundland there is no waiting period – Newfoundland is one of the provinces where the employer is required to pay for the date of injury – Northwest Territories similar to Manitoba and BC. Nova Scotia has a 2/5's deduction, which is equivalent of a 2-day waiting period for workers who work for a 5-day week but amounts to less or more depending on the number of days worked per week. No requirement for the date of injury or beyond. Ontario according to the Workers' Compensation Board – BC publications it shows a 5-day business delay when in fact there is no delay and the employer is required to pay for the date of injury. Prince Edward Island is essentially the same as BC – Quebec there is no waiting period and the interesting feature in Quebec is that the employer maintains payment for the first 14 days and the Board then reimburses the employer. A sense from Quebec is that this is an income continuity provision because the Board is actually required to send a cheque to the employer as opposed to the employer simply picking up that first 14 day cost. And then these two provinces are similar to BC.
Now what I'm going to show you next are – there's theories abounds I guess that the introduction of waiting periods or the elimination of waiting periods impacts claims volumes and impacts claims costs and Scott if we could take a look at the BC picture initially – 1972 was the elimination of the waiting period – the picture seems to be one of steady – relatively steady volume of claims in BC. And then an escalation of claims – coincidentally or otherwise – after the year in which the benefit – the two day period was eliminated. Now with both this chart and the chart with respect to Nova Scotia and New Brunswick who have more recently brought back waiting periods it is important to note that there were other factors that occurred in and around this time. Changes in maximum and other benefits that may also influence them – that may also influence that pattern. And also there is also the normal growth – the 1970's were a period of high growth in claims – some of which may have been due to economic factors including job growth, high injury rates, perhaps different prevention methods – those kinds of things –we haven't conducted any comprehensive analysis trying to figure out what else may have contributed to this uptake.
Now New Brunswick has had the longest experience with re-introducing their waiting period. In 1993 they brought back a waiting period. Again a pattern of some decline in claims before that and then seemingly a new plateau for claims volume after the introduction of the waiting period. New Brunswick will tell us and has told us that we have got to be careful about attributing this new plateau to the waiting period. At the same time as they introduced the waiting period they also reduced benefits to 80 & 85% of net from a previous 90% I believe in the same year – in 1993. They were also experiencing a diminishing volume of claims in any event. They believe that they changed to more of a prevention focus in this timeframe. They also believe that the mix in their economy was changing rapidly to become one more oriented to technology; less oriented to the high risk resource sector so they do acknowledge that the waiting period and the benefit reduction had an impact but they are not able to quantify whether – what portion of this impact they can ascribe to those. In Nova Scotia the 2/5's waiting period – the 2/5's deduction which is equivalent to a waiting period was accompanied – was accompanied by a 75% net for the first 26 weeks and that was introduced – both of those changes were introduced simultaneously in June of 1995. Again, Nova Scotia if you looked at that a bit more was experiencing a bit of a downward trend in claims so there was a decline in the claims base to begin with. But again seemingly a new plateau after the benefit changes but a significantly lower than the other plateau. And Nova Scotia by legislative statute I believe will be doing a review in the next year or two. And one of the things they will be required to do is explain what happened to these claims and what theories there might be around where they went.
And before – if Scott if we could just slip back to the previous slide so that I can make a couple of comments – there are theories that claims move from – that the benefit level and a waiting period – that some claims will move to other benefit systems – to perhaps Employment Insurance, to sick leave plans, there are also that workers will grin and bear it so to speak. That – and there is a concern associated with that – that perhaps they may come in to work in relatively bad shape and risk re-injury. There's theories that also abound that some of the claims are so minor and perhaps non-existent in the first place that they are now driven off by the fact that you would have to take a loss of pay so you might expect those viewpoints coming from different quarters and various stakeholder communities. But we are not able to find any definitive research that would answer those questions of where the claims go when waiting periods are introduced – waiting periods combined with reduced benefits are introduced. To answer the question of where do claims come from if one assumes that you see an increase in claims with the elimination of a waiting period – there is no sort of any definitive research. We are not aware of any research that was done in BC after the elimination of the waiting period here. That kind of comprehensive analysis that might have been helpful.
Okay so on to the last topic – the issue of whether benefits should be stacked or integrated and just to provide a bit of a definition.
Stacking – the term used – this is a local definition – there term used when in the context of workers' compensation legislation when no regard is had for other social benefits or income – so in other words workers' compensation pays and other benefits or income can be had on top of that. The term is usually but not exclusively used with reference to the same injury – the other income or benefits for the same injury.
Integration to some degree represents the opposite. Benefits are reduced or integrated with those paid by other agencies or by the employer at prescribed levels. Now in terms of other social programs – Unemployment Insurance Commission benefits are really not a factor because the Unemployment Insurance Commission legislation makes the Workers' Compensation Board the first payer. And similarly with Social Services – they make Workers' Compensation Board the first payer so they won't be for the most part unless the Workers' Compensation Board was at a very very low rate be topping up or making any additional benefits.
Really the argument around other social benefits is centred around the Canada Pension Plan and we'll show you a range of options across the country. With regard to employer salary top ups and also employer funded pension plans the issue is should workers' compensation have any regard to what's happening on the employer front. In BC this – there is integration in the sense that the Board is required to consider payments made by the employer under the terms of section 34 of the Act. And where the employer maintains salary continuance the Board is generally required to invest – to send the employer the money that it would ordinarily be sent to the worker. The Board in BC does not worry about any top up that the employer may make nor does it worry about employer funded pension plans. And I suspect they are a concern – some of the employer community which is why you asked us talk about this – those two aspects. Private insurance benefits – the general trend in most provinces – I see we are missing a quotation mark after private – but the general trend in most provinces where they have looked to integrate has basically ignored any private plans that workers may have.
The counter argument to whether these other benefits or other sources of income – whether they should be integrated as opposed to stacked is that even in the historical tradeoff and in the modifications if you will since then there is only a maximum to which workers can get benefits in this province and in every other province. So I think worker groups – their representatives will argue that one of the tradeoffs for having a maximum in place is the fact that there may be other Acts – other sources of income that may be available. There may also be an argument that has been made I think in other provinces and would be made in this province that when someone is on a workers' compensation claim they lack to access to promotional opportunities, and to other benefits like fringe benefits – as Keith pointed out we don't include those in calculating benefits – in calculating our payments.
So very quickly just to – I know we are running out of time – this is what the picture looks like and I will tell you that this picture that the Policy Bureau provided to us comes accompanied by a lot of caveats and notes and we'll make those available to the Royal Commission and to counsel if you'd like but it comes with a lot of footnotes so very quick overview – Manitoba as you can see integrates workers' benefits and allows stacking with respect to survivors' benefits – Alberta – allows stacking of both. New Brunswick requires integration of both in its legislation. Newfoundland again – integration – I won't read the rest I think they are self-explanatory and you have it in the copies of the overheads that I've provided to you. BC which is not in your overheads – workers' benefits are stacked and survivors' benefits are integrated. And that chart by the way as I pointed out was with – which is in the title is with respect to Canada Pension Plan alone.
Final comments then – the issues this morning – I think we've covered them are average earnings – is a legislation change required; is a policy change required? And arguably is a change in the Board's application in individual cases required? Should the Board -–or should this province because likely a legislative amendment would be required – should the province be moving from a gross compensation or compensation on gross earnings to net earnings? Should there be an introduction or a reintroduction of a longer waiting period perhaps? Stacking/Integration – should there be more regard – particularly in workers' benefits to things like Canada Pension Plan – I should point out by the way that Canada Pension Plan has introduced legislation that allows it to engage in discussions with the provinces. I should have mentioned this earlier – that might allow for integration of benefits but as far as we know those discussions with the individual provinces has not yet begun. Should the Board pay more attention to employer salary top ups or to other employer funded benefits? Should, as most provinces, the Board continue to ignore "private" benefits? And what about these trade offs? What about the fact that there is a maximum in this province and that workers don't get sort of a full remedy – what about the loss of other benefits and loss of other opportunities the workers might experience and they perceive as reasons why stacking of some of some sort should continue?
So those are the kinds of questions we think we've raised for the discussion this morning. In closing there is additional material available as part of our research for this presentation today that may not be in all of the discussion papers and we in Bureau would be happy to share those with you to help you explore these issues further. Thank you.
QUESTIONS
ALAN WINTER
Q: I'm going to take about a half-hour and ask several questions on the topic presentation. Obviously there are a wide variety of issues to be discussed but I don't think fully in half an hour. I'd like to start with average earnings –and just some questions or areas I want to explore. Correct me if I am wrong my understanding of the average earnings section is to determine the rate which most accurately represents the worker's actual loss of earnings – earnings at the injury– is that correct?
A: In a nutshell – so as to best represent the loss are the words that are actually used.
Q: And the intent of the 8 week review - is to determine what rate best represents the long term earnings lost by the worker?
A: Yes, I'll deflect some of this to Keith for additional – but the intent of the – as I understand it is that the Board in developing this sort of two pronged approach started with the notion that for the vast majority of claims it wanted a quick, efficient, simple way of getting the cheque out. So that's the starting point and that it would not do a detailed investigation into the worker's longer term earnings pattern with some attempt at sort of what may occur in the future. What it said is that for the short term – the earnings at the time of injury for the most part was a pretty accurate reflection. And so that accurate - accurate reflection was around for 13 weeks and then later for 8 weeks.
Q: But if I understand what you just said – the initial driving force of paying the rate – the pre-injury rate was administrative - to get that cheque out as quickly as possible?
A: It seems to have been – yes.
Q: And if I understand also listening today and reading the position paper on average earnings - when the rate review is conducted –approximately 40% have a decrease in their rate?
A: After a study of 200 cases in the continuum, yes.
Q: 10% had an increase?
A: Yes.
Q: And approximately 50% had no change?
A: Right.
Q: My understanding is that that similar number is all the way back to from the 8 week review and the 13 week review – is that accurate?
A: I believe it's fairly accurate, yes.
Q: It's ball park - that 40% figure is a ball park figure.
A: Yes.
Q: It is something that we can use for our discussion today as reasonably accurate?
A: As a ball park figure, yes.
Q: So if I understand correctly for administrative purposes the Board in fact has been overcompensating for want of a better term 40% of the claims by using the pre-injury rate as opposed to finding out the actual rate that should be used to best reflect the actual loss of earnings?
A: No, I wouldn't agree with that because the short term wage rate if I can refer to it as that is to compensate for the immediate loss – the worker's immediate loss at that particular point in time – it's estimated that that's going to last about 8 weeks. That's the figure we've put on it – is 8 weeks historically. After that point in time then we took a closer look at what the worker's long term costs would be and we go on from that point in time.
Q: So for an employee who has a serious injury – and you know in fact they have a serious injury - you know you are going to do a rate review at some time – now it's 8 weeks – 40% chance that rate is going to go down so this person - you don't agree that they have been over compensated in that first 8 week period because there are checks and balances wouldn't you agree – this person is no longer facing similar contingencies that other workers have if they have a long term injury – i.e. they are not going to be subject to lay off, reorganization, termination – they are entitled to continue to receive benefits from the Workers' Compensation Board.
A: Yes.
Q: So in the long term for that person they are receiving during that first period of time before you do the rate review more than what has been determined at the end of the day - that best reflects their loss of earnings?
A: Yes, I guess I hesitate to say that they are receiving more than – there's two philosophies in operation that Keith tried to point out – one is that closer to the injury it's more likely that what happens is that the money you are making at the time of injury is best reflected by what – is best reflected with what's likely to happen in the next few weeks. And if it's with administrative – simplicity around 70,000 claims. So I just want to qualify my response by saying that there is value in sort of a short term look whether it is an over compensation or an under compensation because I think we'll hear that it is potentially an under compensation after 8 weeks. And I guess we don't necessarily accept both of those views.
Q: Why would it be an under compensation after 8 weeks if that is when you are doing a more detailed review?
A; Do you want to save that question for your colleagues when they ask that?
Q: I might as well ask – you raised it?
A: Well, that's – that's the whole issue of I guess the nutshell of the debate of the Board's setting of average earnings is we're trying to use and by policy we are using the past as a general predictor for what the future is likely to look like in terms of earnings. We are also tempering it with simplicity and – some degree of simplicity – because I hate to – I think our staff would jump up and down if I told them that this was a simple process. It isn't. But the argument is that if you were making a lot of money at the time of injury and perhaps you've been making it in the recent past for let's say in the past three months or so I think the argument for under compensation after 8 weeks is that what's to say that that pattern would not have continued? I was making $700/week at the time of injury and I've been doing that in the recent past although I've not had a really good track record, earnings-wise, I think the argument that's made to adjudicators and to the Board is why don't you do that - why don't continue that pattern as opposed to perhaps to looking back over a longer period of time and saying well you haven't had a good track record so we don't know that you are going to make that kind of money in the future.
Q: And again this is not unique to this area of law –I mean we are talking about having objective information that you can rely on the past versus a lot more speculative subjective information about what people may think will happen in the future.
A: I'm not an expert in whether there is a loss&ldots;.
Q: Even the Workers' Compensation Board – I mean that's the problem.
A: Certainly the Board is required in other arenas look to the future and try to predict what might happen when it comes to loss of earnings for example.
Q: And the reason I am asking this question though is that we are going to talk about moving the 8 week review to 13 weeks –obviously it is a concern of moving in that direction as opposed to the other direction. My understanding is that it was 1985 that the then 13 week review was brought down to 8 weeks – is that right?
A: Yes.
Q: Do you know why that was done?
A: Basically it was for fiscal reasons.
Q: For fiscal reasons.
A: Yes.
Q: And what was the fiscal amount that was dealt with by moving it from that from 13 to 8?
A: The amount of money – I really can't give you that information – I'd have to look it up.
Q: My understanding from reading the recent discussion paper on moving it back to 13 weeks is that that would – it is anticipated that that would cost an additional $2.7 million in additional benefits. Is that your understanding?
A: Yes, that's the amount they calculated out of that same study of 200 cases.
Q: So the best number that we have to work with is that it is going to cost about $2.7 million.
A: Yes. Just one additional point – with regard to the move in 1985. I think in addition to the fiscal reasons the internal audit group had been and others have raised the issue that for some types of workers the – it's the same issue that we've just had the discussion about – that for some types of workers – 8 weeks might be a long time – or 13 weeks back then might be a long time to be paying them at the date of injury income because the date of the work may not have lasted for as long as 13 weeks so I think that was the other argument beside the fiscal reason that was raised at the time. But there isn't a lot of written material around that move.
Q: From my understand it was in fact the goal was to reduce it even further than 8 weeks – that was the intent – it never happened. Was that your understanding also?
A: I was a neophyte in the business at the time so I wasn't privy to all of the discussions but there was debate I think between some within the Board – perhaps outside about perhaps four weeks. And I think the division at the time was saying wait a second if we are going to have to do a rate at four weeks – and I am only quoting historians that were there and they do recall this – but the administration was saying if we have to start doing earlier you are going to drown us in administration. I think there was some discussion around that line.
Q: Is there an easy way of getting the rate information –for example if we use the one year bases as the norm to determine past history - Revenue Canada has that information. Correct?
A: By calendar year.
Q: By calendar year.
A: Yes; but the problem is that workers aren't always injured in January or February.
Q: I understand that but it gives you an objective number to be working off of.
A: In some instances as long as the worker's employment hasn't changed since the prior year – as long as there hasn't been a large time span between the date the tax was actually filed and the date of injury. It could give you a basic, yes.
Q: And is there any sort of arrangement with Revenue Canada at the present time to get that sort of information?
A: No.
Q: Has there been any discussions?
A: I believe there's been some discussions; we simply don't have the right to obtain that information directly; we have to go through the worker.
Q: What about the flip side – getting from Revenue Canada information about employers and their payroll? Have there been discussions on that?
A: I can't answer that. I believe that Sid Fattedad has been having discussions but I'm not aware of the details – perhaps Ron has a better sense of that. I think you heard from Sid that he was exploring the issue of obtaining earnings from Revenue Canada and certainly if some sort of protocol can be arranged we would be interested in having access to workers' earnings for the purposes of establishing wage rates so I think the discussion is going on with respect to the Board having a protocol arrangement to receive information for both workers and employers.
Q: Thank you; I want to talk a little bit about this proposal from Compensation Services Division to go from the current 8 weeks back to the 13 week review –if I understand the motivation of this it has to do basically with the Rehabilitation side – it's the work conditioning program is ongoing at the same time - is that correct?
A: Yes, the – I think as Ron and others have alluded to is that – and there will probably be an opportunity for further discussion this afternoon – a series of programs early – for want of a better word – early intervention, activity-based, outcome based programs have been introduced – work conditioning being the first of those for soft tissue and others – other types of injuries that are amenable. That typically starts at 4 weeks – typically ends about 10 weeks. And the issue that was put by various management and staff was if the rate review is occurring at the tail end of that program and shifting the focus off recovery and perhaps into dispute because you can see from the chart 40% of rates change – but even for those that aren't changing there is apprehension about a possible drop in the rate occurring in the middle of the first treatment program and the other side that the Bureau did not include in the paper and chose not to because they felt it was too early to sort of be able to say that definitively was the sense that if workers got back to work earlier as the result of these treatment programs there would be a substantial win for them but also a cost saving to employers generally so that while we didn't in the final paper that was sent out for discussion make that linkage – that was part of the thinking behind the move to 13 week recommendation or the recommendation to move to 13 weeks.
Q: Does everybody have a copy of that discussion paper because it is recent and I do have copies here if people would like copies of the discussion paper.
A: [Judge Gill]: You are not aware we have?
Q: No, that is why I'm asking; I'm not sure if the Board yet has it – or the Royal Commission has it?
A:[Judge Gill]: I'm not aware of it.
Q: Maybe I'll give it out; I'm not sure if I'm going to deal with it directly.
A: [Judge Gill]: Looks like we have it.
Q: I want to explore of a couple of reasons to move it because I'm a little bit concerned about it now that I've read the discussion paper and others – first off – the obvious answer would be moving it up to 4 weeks so it's done before they go to work conditioning –I take it listening to your discussion you would say administratively that would cause quite a few concerns for the Board?
A: Sorry, could you&ldots;.
Q: Move the rate review up to 4 weeks before work condition starts?
A: What I was saying was that was the argument at the time in the 1980's and yes there would be concerns about – the earlier the rate review occurs the more rate reviews there are and the more administration I think that's a fair comment.
Q: Okay let's deal with continuance of care first off – is that cost borne in every location of the Board – the continuance of care program?
A: It's available to workers in every part of the province, yes.
Q: So every worker that has a soft tissue injury will end up in the continuum of care program if it is not resolved in a certain period of time?
A: There are some limitations; physicians have to approve it etc. but the intention is that it is offered to every &ldots;I'll Ron answer this he's certainly much more knowledgeable. The intention is for every worker in the province to have that opportunity if they are not employed by an employer who has a bona fide disability management program in place whereby the worker would be offered a graduated return to work so the intention is that every worker would be offered this particular treatment program. We – there has been research that has indicated that if you can keep people focused on recovery and if they have a job return to the outcomes from rehabilitation programs are much greater than if they don't have that particular opportunity. I should also say that we could find no research with respect to any particular reason why the rate review had been reduced from 13 to 8 historically in this jurisdiction. The rate review had been done at 13 in other jurisdictions. It is quite common for there to be a 13-week rate review; in fact I'm not sure than any other jurisdiction has a shorter rate review than that. If I could add one other thing; aside from the continuum of care argument it is very difficult to explain to a worker as we had to do in Prince George recently who had suffered an amputation as a result of a skidder accident. That worker had every expectation that he was going to be employed as a skidder operator over the duration of the logging season. It is difficult to tell the worker and his wife and his dependents that for some arbitrary reason we were going to exercises an 8 week rate review and in his case reduce his earnings under Workers' Compensation Board from maximum to minimum because he'd had a very checkered work history prior to the injury so workers have an expectation that when they are injured that there is every expectation that they should be compensated at the level of pre-injury earnings. And it is very difficult to rationalize why we are exercising an arbitrary 8-week rate review.
Q: And again from an employer viewpoint we see it the other round in the arbitrariness – is that the rate that is being paid at the date of injury doesn't necessarily reflect the actual loss to the employee – it is just a matter of as you describe setting an arbitrary line –and really should go find the best rate that reflects that and so your focus is on the worker concern but you don't seem very aware of the employer concern.
A: If there is evidence as there may be in the construction industry or on a project job that the employment would have terminated within a specific period of time I believe the adjudicators would exercise that particular discretion. But I think those would be – infrequent compared to the situations where there is no evidence that the worker would not have continued to work at the job where the worker was injured.
Q: Now on this discussion paper that I handed out –the last two pages talk about other jurisdictions and there are some that have a 7 week review – Manitoba and Prince Edward Island – so you weren't aware of that?
A: Yes I was. But
Q: You just said before that you are not aware of any jurisdictions that does it before 13. A: Well, we don't benchmark against Prince Edward Island for obvious reasons.
Q: Well, again you said that there were none that you were aware and now you say there were – you are aware of Manitoba; you are aware of Prince Edward Island.
A: I don't have the paper in front of me so if I said all then I should rephrase that to most.
Q: And a variety of them have no formal review and I don't know that that means. Do you know what that means? What rate they set?
A: Yes, I think what that means is that the rate review if you will – the long-term rate that's borne investigation upfront – they spend I suppose the time upfront to do that.
Q: So all of the ones that say no to the review could be well before the 13 weeks because they are trying to do it upfront is your information?
A: We think so but – but I wouldn't want to confirm that because this research was done by somebody else.
Q: That's fine – but from that viewpoint that includes Saskatchewan, Quebec, Ontario, Northwest Territories, and the Yukon Territories. There are quite a few that may well do this earlier than 13 weeks.
A: Would do the long-term or don't worry about it in the short – yes.
Q: Now when I try and sit and think about this –about the motivational impact and people in work conditioning – it strikes me that we are talking about a very, very small group of people that could be adversely affected. I take it that you disagree with that?
A: Well, we are currently see about 2500 a quarter go through work conditioning, so on an annualized basis that would be about 10,000 people and if 40% are going that down that would be 4000 workers.
Q: From the way I understand it looking at if from another view point –the statistics that Mr. Pinto put up was that – I think it was 85% of new claims are finalized within 8 weeks?
A: That's right.
Q: So those wouldn't be any problem – they are out of work conditioning if they ever went into it – they don't even get the rate review so we are left with a potential of 15% of claims?
A: Correct.
Q: And of those –you said under – you said 90% are finished before 13 weeks. So in other words 10% go beyond anyways – they are going to have a rate review no matter when you do it.
A: Yes; Keith might recall the exact number that would have a rate review at 13 weeks. It was about 9, yes.
Q: And so we are talking about the 5% –the 85% that are going to be done at 8 weeks and the 90% that are going to be finished by 13 weeks. In other words 10 keep going. That's really a 5% difference in there.
A; We are talking about the 5% that could actually have the rate reduction occur – yes. But they all have to go through the process should they reach that level. And it is going through that process as well; it's just having the rate reduced that can affect their thought processes.
Q: I understand –but those are in the working conditioning I take it a significant amount of those are going to continue on disability because only 90% finish by 13 weeks and that means 10% - the rest keep going. Through whatever – your continuum of care or get their pension or whatever it is – they keep going through the system.
A: Yes, the drop off in claims is much slower the further out you get. There is a chart that I could photocopy and make available that sort of shows the drop off by week. And it's pretty much a J curve – the design of the continuum is based on the theory that if you get in there early but not too early you can get a substantial success rate without intervening too quickly or intervening too late.
Q: Isn't it possible that some people would actually be positively motivated by the fact that they are now getting a lesser rate and they want to get back to work to get their full rate?
A: Yes, but the chap that did a lot of research on that found surprisingly that there was not a huge drop off from 8 to 9 weeks – that if you look at this continuum and the drop off associated with it there is not a big drop off at 9 weeks. Now if think that 40% of those workers were getting their rates reduced at the 9 – at the 8th week- and earning less money at the 9th week – and if you work – the conventional thinking has been a lot of people will go back to work because there's quite a drop in their rate. But it doesn't show on the drop off rate – that our colleague – our colleagues had looked at.
Q: Again – we are only talking about a small amount because of the ones that are past 8 weeks i.e. the remaining 15% – 10% are going to stay on anyways they've got a more severe disability.
A: Right, but there isn't a drop of say 10 to 14% or whatever it is 85% to 90% in the 9th week and then a gradual falling off it just seems to be a consistent pattern after that.
Q: I understand what you are saying Joe but you're suggesting what I consider to be a substantial policy change based on a hypothetical motivational situation and what I'm trying to explore is hypothetically there could be a positive motivation for some people also who want to get through this program and get back to work.
A: Sure, there's all kinds of theories and I guess even we search and I am sure you are aware of it and the Royal Commission is undoubtedly aware of it that says there is a correlation between the amount of money and the length of compensation. I can't speak to that but I think there has been a litany of papers written that have about it particularly in the US and a little bit in Canada.
Q: That's right. People are getting more than maybe they should be getting and they may find it is a disincentive to go through work conditioning with a view to going back to work. That's a possibility too.
A: Yes, I leave your comment as rhetorical but I guess I'm just saying that there is research saying that there is a correlation and reduced benefits, increased benefits affects claims incidents and claims duration; that is what the research apparently shows. Why it is we don't know. If that were to be the view of the Royal Commission and I think the whole issue of secondary gain should be applied throughout the system not just applied to this particular population of worker. I think with our focus on moving these people into treatment the whole idea is to keep people focused on recovery and return to work and not to inject a negative intervention into that treatment program such that people get focused on appeals or advocacy or other particular outcomes and we waste the opportunity to effectively rehabilitate someone to the workplace so that's the assumption and I suppose you could have a different point of view than that.
Q: That's fine one more area I want to talk about and then I have to move off of this 8 week review– I've been trying to establish some of the concerns I have with the motivational aspects of moving from 8 to 13 –but the real practical concern I have now that I've read the discussion paper is in fact the topic of average earnings overall is before the Policy Bureau – is that correct?
A: Later in the year; they've scheduled to go back to average earnings. Keith gave you the history; it's been around for awhile but later in the year a more comprehensive review of average earnings will be undertaken.
Q: And they tend to do that some time in 1998 as you say? Later in the year.
A: That's the current time.
Q: But what they say in this discussion paper on page three under the heading "On interim nature of proposal" – it says - the last sentence – "Whether or not the current proposal is implemented the timing of the rate review is likely to be reconsidered in the future as part of the average earnings project." Basically what they are saying when you read this whole paper is that we are going to do it again anyways. Whether we go up, go down, whatever we do now that could well be changed some time in 1998 yet again. That is my understanding of what this says; is that your understanding?
A: The commencement of the broader review will occur in 1998; it is unlikely that it will come to resolution in 1998 but it's a possibility that the whole concept of rate review – when we go out to the stakeholders for broad consultation and we will certainly be guided by the Royal Commission's report on that point. But the – we will be looking at all the issues; everything will be on the table.
Q: So in a year or a year and a half - two years you may see the outcome of this review of average earnings which could deal with what the review date should be.
A: Yes, we can't presuppose what the Panel of Administrators might ultimately decide after – but yes that's a possibility.
Q: So you may be doing a very short term measure and when it is looked at in the context of average earnings altogether you may find that the move to 13 weeks was not the best from the viewpoint of average earnings?
A: Yes, just to repeat – I think good treatment programs seems to be working – early results are positive – the sense was that some of the success was being deterred by a squabble or an apprehension about the rate – recognizing that there is a big, broad review coming – why not reinstate the 13 week review recognizing that this province has had it essentially I think since the beginning and leave the bigger debate to a later day – if there aberrant groups that were getting undue benefit from the 13 week rate then let's look at the aberrant groups rather than move everybody to 8 weeks – I think that's a nutshell explanation.
Q: And again from the employer viewpoint –we've always asked for the cost-benefit analysis because we think that a $2.7 million increase over the short term while the average earnings is being looked at doesn't fit with the cost-benefit analysis based on the hypothetical –as this report points out – the hypothetical move may find you savings – and if you are going to find savings you are going to get them anyways for a significant amount of people in the continuum of care. Cause 50% aren't going to go down – they will continue through the program and hopefully that will have a beneficial effect.
A: Yes.
Q: Let me move on to a different topic within average earnings and that is fringe benefits – my understanding on the compensation side fringe benefits are not included in assessable payroll – in earnings – compensable earnings?
A: On the average earnings side. That's correct. 71.20 I think Keith alluded to it earlier.
Q: Would you agree - you talked about trade offs and you said loss of benefits – my experience is that most workers that suffer a work-related or a non-work-related disability but they suffer a disability do not lose their benefits they would get otherwise from work. Do you disagree with that?
A: Your experience is that most workers would not lose their fringe benefits?
Q: That's right. While they are off on Workers' Compensation Board – first off it would infringe on human rights.
A: I don't think that's true.
Q: Well, okay.
A: I don't know – I guess let me put it this way – I can't quantify whether the majority of workers lose their benefits or not but certainly we hear complaints from workers that A) they lost their job because it's a small company the employer had to move on so usually lost their jobs accompanied by a loss of everything – benefit wise.
Q: I don't disagree with you that if you lose your job you are going to lose your benefits. I can't answer whether these people have gone to human rights and looked at it from that view point because human rights would protect them from not losing their fringe benefits simply because they have a medical disability.
A: I don't know about that.
Q: What about in the collective agreement world – I mean my understanding of collective agreements is that employees continue to receive their benefits while they are off on Workers' Compensation Board?
A: Yes, I would think that would be a fair comment that most collective agreements do provide benefit continuance during disability and workers' compensation.
Q: And so if we included fringe benefits into the compensation scheme that would be an area of double payment – at least for those employers that are required either through law or collective agreement to continue to pay the benefit coverage anyways.
A: Yes. It gets down to the issue of what we're being asked to include – potentially yes.
Q: And some benefit coverages as I understand it can't even be covered when a person is off on disability for example an employer provides short term disability or long term disability there is no coverage for disability when you are off on disability – in other words you are not pay someone short term disability protection when they are already off on short term disability or Workers' Compensation Board.
A: Well, I think you are sort of pointing out some of the difficulties the Board would experience if it was asked to sort through you know the multitude of fringe benefits and say this is actually a loss to the worker. I think that is part of the concern is trying to figure out what the quantifiable loss is as opposed to the mere fact that you may not be eligible for something.
Q: Now I know this is not really your bailiwick - would you agree that common sense dictates that for fringe benefits that if it is not going to be included in compensable earnings it should not be included in assessable payrolls?
A: The best comment was that it is not my bailiwick, I guess.
Q: You think that makes sense – common sense that if it is not being paid out it should not be assessed?
A: I suppose as a general rule that says we should generally be collecting what we are – what we are collecting on what we intend to pay out but I think there are differences in wording on the collecting side which is the average earnings side – legal differences – that is what I've always been given to understand and do understand.
Q: My understanding and my experience is that for assessable purposes some fringe benefits are actually included in assessable earnings. Is that your understanding?
A: I don't know. Somebody else? No.
Q: That's all right; I'll come back to this and maybe argue with you later – Okay on the replacement income side –Employment Insurance and whether that should be included – this is not – Employment Insurance does not consider it to be income; it considers it to be a social insurance another social insurance scheme – statutory social insurance scheme –you would obviously agree that Employment Insurance is not being paid by an employer to a worker – it is paid by government?
A: Right.
Q: And it is not treated as assessable earnings – nobody is paying assessments on Employment Insurance – the worker is not asked to pay assessments on Employment Insurance earnings?
A: Nobody is.
Q: Nobody is.
A: Assessments; the Board's assessments, no.
Q: Okay, just a couple of other quick questions; I should be finished in about five minutes. You've talked a bit about the net and the gross and I appreciate that the Board is not taking a position on this. My understanding is that the rate moved to 75% of gross in 1954?
A: I believe so, yes.
Q: And you would agree that there have been significant tax changes since 1954? The impact tax has on earnings?
A: I think so. I wish I knew what they all were but I think there have been.
Q: Would you agree that there are other expenses that a disabled worker does not necessarily have to incur when they are disabled that relates to work such as automobile, transit expenses?
A: Sure.
Q: Childcare if they had it? They may not have to incur that?
A: Yep.
Q; Meals?
A: To some degree, yes.
Q: Clothing to some degree?
A: To some degree, yes.
Q: And most of the, if not all of the expenses on the medical side if it's a compensable claim are covered through the Workers' Compensation Board?
A: Related to the claim.
Q: That's right.
A: Yes; related to the injury but not to &ldots;.
Q: That's right – the issue of stacking and integration from your chart you would agree that with respect to worker benefits –the pension benefits the majority of jurisdictions actually integrate – Canada Pension Plan and the benefits? I think my reading was 8 to 4?
A: I'd accept that – the records – the record's there.
Q: Okay - the reason I'm asking is it looks like the tendency is to go to integration from the other side also –when I read the discussion paper – there's a discussion paper on benefit integration and stacking - it talks about the recent discussions that the Federal Government has been having with provinces on the Canada Pension Plan plan –and one of the focuses there again is the integration of Canada Pension Plan with workers' compensation. Is that correct?
A: Yes, the feds have talked about it – integrating services – it also talked about coordinating services – it talked about integrating benefits which is I think what you are alluding to.
Q: Yes, and the issue then becomes who should be first payer when you integrate between the two as opposed to whether there should be integration or not.
A: Yes, the legislation as we understand authorizes the minister, the federal minister to engage in discussions with the province with the view to – how integration occurs – it doesn't state whether their intention is to make themselves the second payer – it simply seems to be driving at look we both shouldn't be paying. But it doesn't point one way or the other where the feds would like to end up on those negotiations.
Q: Okay – consumer price index adjustments I have a quick question – obviously we know in BC consumer price index adjustments are done semi-annually to the wage rate being paid to a worker. Is that correct?
A: That's right.
Q: My understanding from reading one of these papers – I forget which one - is that we are the only jurisdiction does it semi-annually – everybody else if they do it – do it annually – is that your understanding?
A: Don't know that for sure. And I would point out that the worker misses the first consumer price index. The first one that comes up. There is a 6-month delay before it kicks in.
Q: Okay - overpayments just for a quick question then – there was a decision of the Appeal Division dealing with the overpayment issue –retroactive adjudication overpayment?
A: Right.
Q: And my understanding of that decision is that there are certain areas that the Board is safe to seek overpayments – if there was fraud or misrepresentation by the worker the Board has the authority to recover the overpayment. Is that your understanding?
A: Correct.
Q: Equally if there was an administrative error – somebody typed the wrong cheque –
A: Yep.
Q: Equally – they said if the Board actually had no statutory jurisdiction to do what it did – was the final example that they gave – is that your understanding?
A: That's right. I think so.
Q: The main area they said you can't do is for decisional errors.
A: Well, ..[tape interruption] I guess is another term.
Q: And that because the Appeal Division said there's no explicit statutory ability to do that – there could be but there isn't in our Act.
A: I can't remember if that is the rationale they used but it may well be.
Q: Are you aware in other provinces whether they seek overpayments on decisional errors?
A: Not intimately familiar with other provinces – on that issue.
Q: My understanding is that Ontario has, in fact a policy that they will receive – recover overpayments on decisional errors where it does not involve severe or long term financial hardship. You are not aware of that?
A: No.
JIM SAYRE
Q: I'd like to by just clarifying here when we are talking about benefit levels – would you agree with me that the premise of the Act as it now stands at least is that injured workers should be compensated fully for their actual financial losses by reason of the injury?
A: Fully. I guess you would have to clarify for me fully. Because I guess my understanding was that this Act was not intended to be a sort of a full remedy. It is the same question as&ldots;.
Q: Okay, we may be thinking of the same thing. I have some follow up questions of course – I'm thinking of the language in section 33.1 which talks about picking a wage rate which best represents the worker's actual loss by reason of the injury.
A: That is what section 33.1 says.
Q: The wage rate is intended to provide full compensation for the wage – the loss of earnings as a result of the injury – that is why it says that – right?
A: I don't recall that that it uses the term full compensation but I do recall that it uses the term actual loss so it – the best represents – the Board has got to – the way I would interpret that is that the Board's got to do the best job it can at trying to come up with what the actual loss is.
Q: It's supposed to compensation the worker for what he's lost – isn't that right?
A: Well&ldots;
Q: Isn't that what 33.1 is about and 23.1 and section 30?
A: We may be splitting hairs slightly but I don't know that it says that it is supposed to compensate him for what he's actually lost but it's - it says that the Board has got to try and best reflect the actually loss – now whether there is a distinction there or not may not be worth pursuing the argument on I'm not sure.
Q: So in your view in setting the wage rate the Board should say well okay we've got figure A here which reflects the actual loss but we are going to pay something less than A? Are we going to set the wage rate at something less than A?
A: No, we know that if we have a figure that best reflects the actual loss then we should be using it.
Q: Good – okay - that's really all I was asking – and Section 23 and 30 which talk about partial disability benefits – 23 is permanent benefits and section 30 is temporary benefits - those are also intended to ensure that the money that the worker receives reflects what he is actually losing from time to time as a result of the injury isn't it? I mean the language is complicated we don't have to go into that now but generally speaking it's supposed to – if you are currently – if you are totally disabled then you get all your wage rate and if you are 15% disabled, you get 15% of your wage rate – the theory at least behind those sections is that the worker gets compensated for what he's losing.
A: Well the combination of 29 and 30 and the combination of parts of 23 speak to quantum but also extent and duration I think.
Q: There are ways - indirect ways that the Act sometimes seeks to achieve that – as opposed to direct ways. That's the goal.
A: Yes.
Q: Okay. Now on the other hand –and I guess before we leave that subject - the 75% of gross benefit rate was also intended historically to represent what workers actually lose given the fact that benefits are non-taxable – that was supposed to represent what the worker was losing in his pocket as a result of being injured. Isn't that right? That's basically what you told us.
A: I think that was the original concept.
Q: And now there is an issue about whether through tax changes and so on whether that rate is any longer the best way of accomplishing that. On the other hand workers - injured workers get no compensation at all as it now stands for pain and suffering, loss of enjoyment of life, other things that would make up general damages if they were injured in say a non-work auto accident and suing in a court system – is that correct?
A: Correct.
Q: That's a very substantial - that can be a very substantial amount of money in the case of serious injuries that the worker loses right off the top, is that right?
A: Yes, I wouldn't be able to draw the distinction in quantum about which system pays more for the serious&ldots;
Q: Okay - just to take an example the Commission heard from one worker who suffered quite a horrendous injury to his face in a sawmill accident - now that worker had suffered disfigurement – went through numerous operations was off work for a long period of time - is there any doubt that if he had – if that same injury – that same critical injuries had occurred in an auto accident he would have been entitled to $50,000, $75,000 or $100,000 in general damages on top of whatever loss of earnings he suffered?
A: Unfortunately, I'm not an expert as to what the auto system would pay
Q: It sounds reasonable, doesn't it? From what you know of what happens in court.
A: I'll accept your word for it.
Q: All right, let's take a worker whose life style has totally changed by reason of a work injury – take a worker for example who has a very active sports life – plays physical sports, goes hiking, goes climbing, goes skiing and suffers - has –maybe buys himself – bought himself property - recreational property to facilitate those activities – suffers a very serious hip and leg injury to the point that he can't do any of those things again –the whole focus of life has been changed –the whole focus of his recreational life has been changed - the Board does not pay anything for that loss of the enjoyment of the things that that worker was able to do before the injury does it?
A: Yes, not in the form of compensation as it is traditionally known. There may be limited assistance in the area of special apparatus under medical aid or some apparatus under rehabilitation&ldots;.
Q: If he could ski with a special pair of boots the Board might compensate him by buying those boots – is that right?
A; Yes, but not &ldots;.
Q: But if he loses the ability to ski altogether the Board isn't going to compensate him for having spent all that money on the equipment and buying himself a cabin to stay in while he's skiing and whatever other losses he may have lost as the result of his life being turned upside down as the result of that injury?
A: That's right.
Q: So in a sense workers who suffer a serious injuries at least may be severely undercompensated in ways that – because the Act just doesn't contemplate those types of general damages. It's the point I'm trying to make – and you I think would agree with that, wouldn't you?
A: I – why don't you just make the point?
Q: I did. We have also talked earlier – the first week - about the maximum wage rate – for those workers who earn more than the $56,000 a year or so maximum wage rate don't get any compensation for their loss of earnings above that rate.
A: That's right.
Q: That's right? And there are many other wage rate issues - Keith Sullivan talked about some of them and I am going to be directing some questions to you, Keith, in a moment about some of the specific ones that we know of that have been raised from time to time – one that was mentioned already was the question of Unemployment Insurance Commission benefits and periods of unemployment – it's undeniable isn't it that if a worker – say a seasonal worker has a pattern of having earned $40,000 a year through the seasonal employment income and getting another $10,000 from Unemployment Insurance Commission for periods of unemployment and becomes totally disabled he's $50,000 out of pocket but his wage rate is going to be $40,000 isn't it because the Board doesn't count Unemployment Insurance Commission benefits nor does it subtract for the periods of unemployment when it calculates the average earnings. That's correct isn't it?
A: That's right; that's the current policy, yes.
Q: So workers in that category have lost – to take that example – have lost 20% of their earning capacity without compensation – or 20% of their income without compensation.
A: Yes, the distinction there I guess is earnings – the Board has not accepted that those are sort of employment or average earnings. They haven't met the definition of average earnings.
Q: Of course we are talking here –this is a Royal Commission and we are talking not about –I'm trying to keep in mind myself not to fight over old battles about individual cases and so on because the focus really should be on what the system ought to be in the future and if we can agree that the system ought to provide workers with compensation for what they've actually lost financially as a result of their injury then a lot of these other pieces can fall into place –if there is a problem in the language in section 33.1 that kept Unemployment Insurance Commission benefits from being considered but we all agree that that is a real loss that the worker suffers you can change the Act –the Royal Commission can recommend that the Act be changed. So, you know I'm not too concern about the fact about the reason for the Board's policy I just want to clarify what the practice is and what the reality is for injured workers who are in that position as of today. Now before I look at some of the specific average earnings issues and there's a number of them – probably more than we are going to have time to talk about in detail - I'd like to turn just briefly to the two issues that you brought up which represent changes for the future that seem to be on the employers' agenda – one of the them is that the Act to be changed to – instead of paying 75% of gross to be paying a certain percentage of net –it seems to me that that raises two questions – first of all the difference between calculating net earnings as opposed to calculating gross earnings and then secondly the suggestion that the worker should get something less than 100% of net –whatever net turns out to be – so go to the first question isn't it true that it would be a major additional administrative task of the Board if you had to calculate net earnings as opposed to the present system of having to calculate gross earnings?
A: Yes, I think I made the point that there would be both a one time and ongoing increase in administration costs. I gave you some very, very global estimates.
Q: If in fact we take two workers –one of them is unmarried and single and the other one married and has 5 children – obviously the second worker has lot more deductions and will have a lot more – a bigger chunk of his gross earnings will come home with him in his pay cheque than the worker with no deductions. The first worker may or may not have a pattern of paying RRSP contributions every year – that makes a big difference to how much their net earnings is doesn't it? These are all things that would have to be factored in if the Board were to go to a net approach as opposed to a gross approach.
A: Yes, the only things that most Boards concern themselves with when they move to net are the probable income tax, Canada Pension Plan, and Employment Insurance deductions. It's not a true net – it's not what your actual pay cheque is so they typically do an approximate net. And I think there's examples of that in the Bureau's discussion paper.
Q: How could the Board calculate probable Unemployment Insurance Commission or probable income tax deductions without taking into account the worker's dependents and other tax deductions from time to time.
A: Yes, they again – they approximate the net by just worrying about dependent status and then they factor in the amounts that the worker would be paying for Employment Insurance and Canada Pension Plan and leave it at that so at that point it is – and they also don't worry about changes that might occur in the future – independent status for example. It's an approximate net system.
Q: They don't worry about changes?
A: They don't worry about changes that occur for the most part in the future to dependent status – now some provinces may be more – those that are on an actual wage loss may require renewal but for the most part net systems don't chase after the worker and keep track of changes in dependency status.
Q: So take our hypothetical example – we've got a 25 year old single employee with maximum income tax withholding because he just has his own deduction and we've got a 35 year old married – or say a 25 year old to keep the ages the same – married worker - same job and same income but married with several children –the net income of the second worker is going to be a lot higher – income liability is less correct?
A: Correct.
Q: You are saying that if that single worker gets married a couple years after the accident and starts having a family and eventually ends up with 5 children – he is going to continue to receive lower benefits for the rest of his life if he has a permanent disability. As I understand it. You are saying that – you are saying that is the way the net system works.
A: As we understand most provinces don't regularly update – or don't change the benefits – particularly long term benefits to reflect that change.
Q: It is kind of unfair isn't it? The single worker would say it was unfair. Wouldn't you agree?
A: I'm sure they would.
Q: If the Act were to go to net and we are still to have as a goal paying benefits that reflect the actual loss of earnings by reason of the injury as we I think agree the goal is – presently – wouldn't it be necessary to have a provision that every time a person's deduction status changes they are entitled to have their wage rate changed and I suppose from the Board's perspective they would say well yes and what's more we have to find out if your deduction status changes in a way that increases your tax liability because we then might decrease your benefits. So instead of having one wage rate we are going to have a wage rate that changes every year. Isn't that&ldots;..It seems to me we either have that or we completely give up on the goal of representing the actual loss by reason of the injury. Because you can't have them both.
A: I don't think we should be dealing with this based on the Board's ability to administer – I think we should be looking at this in the context of what is right according to the Royal Commission's view on social policy and we should then be administering whatever the Royal Commission's recommends relative to this matter. With systems the way they are these days I'm sure that we are better equipped today than ten years ago to capture different dependents status, changes in those kinds of things – while it would be an administrative change I'm not sure that we should make a lot about the Board's ability to administer.
Q: Well I think that employers as well as workers are concerned about the consequences of such a change – obviously it adds administrative costs to the system – it adds costs to the appeal system and we have wage rate decisions that change every year as the people's dependency changes – children grow up and are no longer dependent, new children are born, families break up and people get divorces and people may go from having a wife as a claimed dependent to fully employed to having an ex-wife who is entitled to alimony or who may not be entitled to alimony and who is – and the alimony may or may not be tax deductible depending on the agreement between the spouses as recent changes to the family legislation - aren't these all factors that would make it extremely difficult for the Board to efficiently administer the workers' compensation Act without doing what Joe has described –and saying okay we're going to take a snapshot of your net earnings as of the time you're injured and that's it; we don't care if it changes.
A: Yes, the – just to repeat I think the move initially from 75% of gross to a percentage of net in most provinces was let's get better at the outset of trying to reflect the actual loss. For the most part, as I said, from my understanding is that they do not then try to replicate that exactness so that approximate exactness in ensuing years&ldots;.every large employer in the province is faced with that challenge every day and so again my point is we should be administering what the right social policy is around this issue and if Boeing who has 20,000 workers can accommodate this on a payroll system then the Board should be able to accommodate these kinds of changes in a payroll system.
Q: You sound like a proponent of net.
A: No, that's not to say that we are advocating net
Q: You are sure defending it.
A: No, I'm saying that we are here to administer what the Act requires us to administer. If the Act is changed to a net system we'll make the appropriate changes – if the wishes of the Royal Commission are that we stay gross we'll stay administering the gross system. But I think sometimes too much is made of the administration piece – I repeat every employer in this province today is faced with making those changes to benefits and everything else around reporting to Revenue Canada and making appropriate changes to pensions status and those kinds of things.
Q: I'm not sure what you are saying – employers take a T1 form from their workers and they send the money accordingly but there is no question of arguing with the employer about how much it ought to be.
A: When there are dependent changes the worker comes in, files a new form and the appropriate deductions are made so if it's possible for employers it would be possible for the Workers' Compensation Board to administer it in that way.
Q: Okay – all right – I have your point there - now let's turn to the question of what I think employers are really after which is trying to give workers less than what they've really lost as the result of an injury –first of all again a little bit of groundwork - saw mill orders some new milling equipment – it doesn't arrive on time – the mill loses some orders of $1 million – can you imagine if the mill went to court and sued the vendor of that equipment - the judge would say well your loss was $1 million – I'm going to give you 90% of a $1million –ever heard of a legal system that operated that way?
[Judge Gill interrupts]: I don't think that is an appropriate question - If you asking, Mr. Sayre, what should be the objectives of the system and whether the Board has any comments on that – how it relates to earnings capacity and measure that – I think you should restrict your questions to definable questions as opposed to something like that.
Q: Well, I was getting there – I'll jump ahead then - the point I'm making of course is that no where else in our legal system do people who have suffered a loss – or people who have suffered a loss are asked to take something less than full compensation – certainly employers don't do that when they get involved in civil litigation – I'm sure that generally speaking the way our system works is that losses are adjudicated and people get their losses. What principled rationale is there that you are aware of in these jurisdictions that can give people less than the full amount of their losses? Other than this somewhat foolish notion that if give people – if you make life hard enough for people by giving them less than they are used to living on they'll get back to work quicker? Is that the only basis for 90% of net, 95%, 99% anything less than 100%? The coercion of injured workers?
A: I'll try to cover and certainly the Bureau's discussion touches on the rationale for net and I'll try to provide a quick snap shot of rationale for net – whether it be equity issues or an issue of overcompensation, undercompensation and there's the equity between the different levels of income as opposed to workers with the same income and among others there was also the notion advanced in some of the discussion papers that some of it was a financial rescue strategy – it depends on the situation in each province at the time that they brought it in as to why they brought it in. There's also, I guess, a lot of stuff written in literature – I'm not sure how much attention was paid in each of the provinces as to the appropriate level of compensation so as to not create an incentive or disincentive to go back to work versus providing enough compensation to sort of live the sort of life style you were in before the injury. If you are asking me to pick one of those it is not for us to do today I don't think. I think again Mr. Sayre that the administration of the Board takes no position on what the appropriate benefits scheme is within the system.
Q: I understand that.
A: I think your submissions would be better reserved for when you wish to put forward your views because
Q: I'll ask my questions Mr. Buchhorn – I would appreciate it if you would answer them – if you can't answer them or if the Board takes no position that's fine.
A: We take no position.
Q: The question of staking and integration I think you've acknowledged that it really doesn't have much of a bearing on Unemployment Insurance Commission benefits because Employment Insurance makes the Workers' Compensation Board the first employer – first payer – and the GAIN benefits again unless the system is so – that the worker's claim is such that they would be entitled to more money on welfare than workers' compensation – there isn't going to be any duplication there is there? It's going to be a duplication it's just that there – GAIN is a level below no worker – no person normally speaking is allowed to sink in terms of their income and if workers' compensation is paying less than that then GAIN makes up the difference.
A: I can't speak to the intricacies of those legislations but my general point in my presentation was that for the most part it was a non-issue as to – they perceive the Workers' Compensation legislation to be – to make us the first payer and they perceive their own legislation to make workers' compensation the first payer- I think that is the most common.
Q: Isn't it also the current proposal of under Canada Pension Plan? My awareness – as far as I know that the most recent discussion papers on Canada Pension Plan benefits suggest that the workers' compensation should again be the first payer and the Canada Pension Plan Disability should only kick in to the extent that&ldots;.
A: As I was saying in my opening comments my understanding of what Canada Pension Plan is proposing and I don't purport to be an expert on this but what they are proposing and what their actual language calls for is for the minister to be authorized to be engaged in discussions with the provinces with the view to some kind of integration with the benefits. As I was saying I think earlier I didn't see there that the discussion necessarily would take the form of the province or in this case the workers' compensation system taking on the responsibility for first payment status while Canada Pension Plan falls to the back as second payer. It's not clear in that legislation as I read it but I don't know if there is anybody else - Heather do you have anything – I know you tried to look at that a bit? I think when the original discussion papers were issued back in 1995 and 1996 the discussion was that there would be a deduction for Canada Pension Plan to represent the payment by workers' compensation. As far as I understand it the current legislation just as Joe has said was to leave the negotiation open between the provinces and the Federal Government. We've been told that there is currently policy development taking place in Ottawa as to how they will broach the provinces in this respect.
Q: It is a very complicated formula amendment formula for Canada Pension Plan – it requires that the majority of provinces with the majority of the population agreed to any change in the Act so it is your understanding then that any change by the BC Board would be effective only to the extent that it was concurred by the Federal Government and reflected in comparable changes to the Canada Pension Plan Act?
A: I'm not sure if I understood your question. And I am probably far out of my league in sort of amending constitutional arrangements between or fiscal arrangements between the provinces but to repeat what I do understand or what I think I understand in reading what Canada Pension Plan has put together and what the association of Workers' Compensation Boards in monitoring this situation is that legislation has reached a stage whether it has the concurrence of the provinces I don't know but it has reached the stage where the Minister is now authorized to engage in discussions and I don't think it even specifically names a provincial governor – it just sort of says the appropriate authority with the view to integration of benefits. That's as much as I can tell you on it.
Q: It is a complicated area in that BC has no control over it, is that right?
A: I &ldots;
Q: Did you hear my question?
A: I sort of caught the tail end of it but yes I think your question was it's a complicated area that BC doesn't have complete control of and I would agree.
Q: Turning to waiting periods –in the jurisdictions that have waiting periods is there anything that – is it normal practice – perhaps I should put it this way – is there anything that prevents the employer and worker from agreeing that during the waiting period the employer will cover the salary – for those first three days or whatever it might be?
A: Yes, I think in at least one of those two provinces the intent is that if the employer pays the Board won't pay.
Q: Yes.
A: So it is clearly intended to be a true waiting period – in other words it can't be filled by the employer through some arrangement with the worker or with the union.
Q: You say one province does it that way?
A: I think Nova Scotia, for sure. I don't know about New Brunswick .
Q: But there would be no reason that if this Royal Commission were to see fit to recommend a waiting period why they couldn't leave it – at least make it open for the employer to pay for the three days directly or better yet – from an injured worker's point of view – make it mandatory that the employer cover it directly. It is not inconsistent with having a waiting period is it?
A: The Royal Commission certainly could do whatever it felt saw fit to do and I guess it is not inconsistent with the idea that the Workers' Compensation Board not paying the first day or two or three or whatever.
Q: In jurisdictions that have a waiting period – is it still mandatory to require all injuries that result in any time off work at least – I guess other injuries as well – the 3 day waiting period doesn't mean that the Board is never told of injuries that last two days? Does it?
A: No - I think it is a requirement in both those provinces that the injuries be reported, medical aid get paid and that sort of thing.
Q: Wouldn't that be a concern if it resulted in – those statistics you showed us they concerned me because it looked like there were thousands of claims that prior to the institution of the waiting period that were no longer being made. Now did that just mean that there were thousands of claims in which the Board didn't have to pay any money because the worker got back to work in three days? Or did that mean there were thousands and thousands of minor work injuries that were not being reported at all to the Board?
A: Yes, I think the unfortunate part is that nobody can answer those kinds of questions definitively. There's – as I said there's a lot of theories about what happened to those claims and in particular to the reporting of the injury. The injury&ldots;..
Q: The figures you showed us did they – were they figures for the claims reported or for monies paid out?
A: I was just going to get to the point. I don't think the claims reported dropped in the same proportion as the short term disability claims paid. So in other words and perhaps the Bureau could double check that for us – but my understanding is that there was a much more significant drop in short term disability claims paid as there were in claims reported.
Q: Theoretically going to a waiting period shouldn't affect the claims reported at all should it? All claims should still be reported?
A: I bet that's the intent in those provinces that have a waiting period.
Q: So something has gone wrong in those provinces based on the figures you showed us?
A: If the research shows that – you know – following normal trends and - and barring any other explanation for where they went or the economy suddenly took a dive, etc. – that kind of thing – substantial decline in the reporting of accidents I guess would require more investigation.
Q: I'd like to address some questions primarily to you Keith, although anybody is free to jump in and answer - regarding the setting of wage rates –the – first of all you mentioned that were a very, or relatively or surprisingly small number of appeals at least being decided by the Review Board given the number of wage rate decisions that are being made each year – could that be a reflection of the fact that it is made at the very outset of the claim? I mean it seems to me and I'd like to hear your comments on this that if we put together what you are recommending by going from 8 to 13 weeks and the reason for it – being that it has a negative effect on the worker's relationship with the Board and therefore could harm the chances of getting the continuum of care process working. That it is reasonable to assume that up until the time when the Board cuts the wage rate the worker is not involved in a conflict situation with the Board?
A: That's true, yes.
Q: And it is that 40% of cases in which the rate is dropped that may start a conflict relationship as opposed to a cooperative relationship – and that's precisely why you want to delay that period – at least until this active continuum of care process is over?
A: That's true.
Q: Would you agree with me that the purpose – as you talked about the tension and this has been debated for many many years between the focus of the present language of Section 33.1 and some of the other sections which refer as much as anything to average earnings as opposed to earning capacity – and the goal of the process which is to measure what the worker is going to lose in the future as a result of the injury. That – that - you would agree with me that that is the goal of the process?
A: It's to measure the average earnings over earnings capacity, yes.
Q: Yes, but specifically to figure out not what the worker earned in the past because he hasn't lost what he earned in the past – it is to figure out what the worker is going to earn in the future as a result of being injured at work through the – and the Act says you should do that by reference to average earnings.
A: And the measure that we usually use for that is the earnings pattern that has been established to that point in time – it being the best reflection of what the future loss is going to be.
Q: And that has the affect of some of the instances that you mentioned such as the Unemployment Insurance Commission period of unemployment question of putting the Board in a quandary because the past may not – the way the Board interprets that jurisdiction at least – the past may not properly reflect what the worker is going to earn in the future. There may be changes in the worker's earning pattern that aren't going to be reflected in the past.
A: There is always potential for change to happen in the worker's future that we can't foresee. We just try to best estimate it by what has usually happened in the past – of course there are always exceptions that we can look at and we do have to do – we have to look at whether or not for example if a worker is going to be staying with a particular employer – that may be a change right there – the worker's attachment to the workforce which would cause us to look more at the future than just what the earning pattern was – has been to that point in time.
Q: How much time do I have left? If Mr. Steeves wants his full share then you have 5 minutes Mr. Sayre. Okay, then I'm going to have to defer most of my specific questions on average earnings –our group has specifically identified about 20 separate issues in which we feel that workers are being under compensated by the way the Board calculates average earnings. Many of those questions are before the average earnings-working group and as you described that process was never resolved because it there was never consensus among the stakeholders. What I'm going to go to now is a suggestion for you and I'd like your comments on this. Instead of any – first of all it seems to me that any automatic review at any number of weeks – whether it is – whether it is 8 weeks, 13 weeks, 26 weeks or one week - it inherently contradicts the purpose of the assessment unless we assume that the worker – that every worker's job pattern is going to change at the end of that number of weeks and that's absurd. There are workers who would have worked at their pre-injury employment for a full year and there are workers who might have only worked for a few days after the injury and you can't and yet both of them are subject to the same review. Wouldn't the Act and maybe the Board can better achieve the goal of compensating the worker for what he has actually lost by reason of the injury if it provided that all wage rates would start off at the date of injury earnings because that obviously was what the worker was earning at the time that he was injured. And then instead of an automatic review there – the ability of the Board to reconsider these earnings for wage rates if there is substantial evidence that the wage rate no longer reflects the ongoing losses due to the injury. And I was intrigued when I discussed the question with Mr. Winter the question of the provinces – some of the provinces where they have no specific policy - isn't it possible that that is exactly what they do? Accept the rate at date of injury earnings and then change it only if there is a good reason to change it?
A: There's two possibilities and our leader in the Policy Development Bureau has volunteered to clarify what happens in each province. One is that they do an extensive inquiry into past earnings. The other possibility – and therefore don't do another review – and the other is they take earnings at the time of injury and leave them in place unless one party or the other objects. And there may be a mix of both approaches in those other provinces.
Q: Wouldn't that just generally speaking though be a good answer to the question that Mr. Buchhorn raised of – the example he raised of the skidder operator who asked the Board why are you arbitrarily reduced my wage rate when I would have worked the whole season? Because the Board's answer would be we don't arbitrarily reduce rates at any particular period of time - what we do is make sure you are getting what you are losing – we try to make sure you are getting what you are losing – and will only change your wage rate if you are getting more than you are losing or more than you are losing. Wouldn't that conceptually be a better way of approaching wage rates?
A: I guess what you are proposing and I think the Board would want to have a look at it and then perhaps comment but it sounds to me what you are describing is a sort of presumption in favour of earnings at time of injury with an onus for the Board to then disprove that, is that?
Q: I would be a little reluctant to put labels like presumption on it because they have legal connotations that may or may not be appropriate. What I am saying is that you start with that because that is where the worker starts – the day after the injury that's what he has lost. Whether you change that relatively quickly into the claim or never depends on depends on the type of employment it is it seems to me and other factors with - that could persuade the Board to make a decision based on evidence that this no longer reflects what you are no longer losing by reason of your injury. If you are a seasonal worker you have regular lay off periods – if we paid you the full day injury rate without any reductions that would give you more money than anyone else working in that industry. Now that would be an example of the worker being over compensated under that system. On the other hand a work who had been unemployed for 9 months before the injury and then got into a job a couple of weeks before he was hurt would not be affected by the fact that for most of the year prior to the injury he had no earnings. The question would still be is this a permanent job – is there any reason to think that you would have chosen to leave it before the job ended and if there wasn't then the worker gets full compensation for what he's lost. I would like your comments on that – it seems to me that that better addresses - more precisely focuses on what the Board is trying to accomplish even under the present Act – which is compensating workers for what they really lost.
A: Yes, I think we would want to take some time to think about that kind of proposal and obviously the response to your question would probably come from the Panel of Administrators and not from the people sitting at this table.
JOHN STEEVES
Q: Mr. Chairman, I'm not sure I mentioned this the first week but I've been developing a binder with tabs in it and adding documents from time to time and you would have had some binders – some new documents with tabs in it in plastic – that's it yes thank you. This morning I am referring to tabs 17 and 22 –and I think Mr. Pinto I didn't mention tab 22 to you - that's the briefing paper – now just to get us started Mr. Pinto and by partial way of summary – and Mr. Sullivan - I wonder if we could track through average earnings and the kinds of things that it doesn't cover –now first of all average earnings don't include vacation entitlement and statutory holiday pay unless it is covered by a collective agreement, correct?
A: I think it does include vacation days except it carries it as vacation time.
Q: Yes, and it doesn't include benefits unless it's covered by a collective agreement, correct?
A: Benefits?
Q: Yes. We've already covered this.
A: I don't understand what you mean when you say unless it is covered by a collective agreement?
Q: Average earnings do not include the cost of employees' benefits unless it is pursuant to a collective agreement?
A; I'd accept that generally, yes.
Q: Yes and the - also we know and Mr. Buchhorn has some experience in this matter that those provisions in the collective agreement are bargained and there is a cost to them from an employee's point of view and from the employer's point of view – that is workers give up something for those benefits?
A: Okay, I would accept that. I'm not sure Mr. Steeves that I'm given much credit for my knowledge in that area.
Q: I'm glad to flatter you Mr. Buchhorn. Another thing that is not included in average earnings is future promotions. That is if a worker is injured today as a labourer and without the injury could have gone on to become a tradesman and a supervisor and made more money – that is not included in average earnings, correct?
A: Correct, unless it fell within subsection 3 of section 33.
Q: Yes, yes. I will come to that. And another thing that is not included is contributions to social insurance plans such as Canada Pension Plan and Unemployment Insurance Commission, correct?
A: Right.
Q: And Mr. Winter touched on this –in his questioning and I want to touch on it a bit different point of view – we call it unpriced labour that is if someone has a back injury they cut their lawn at home anymore and they have to either let the lawn grow or pay someone to mow the lawn for them.
A: That could happen yes.
Q: Yes and repairing the car, doing the gardening, doing the laundry, doing the housework and that sort of thing?
A: Yes, except for real serious claims involving significant permanent functional impairment there are provisions within
Q: Yes, but not during wage loss?
A: Well, there are some temporary benefits that can be paid if it is a serious disability.
Q: Very serious, yes – the other thing that is not included would be a – and I have in mind here a comparison between consumer price index increases and economic increases that is if I was – Mr. Bates and I were both working as a faller and I was injured today and I was unemployable and I was 100% pension over the remainder of my career it's – we could expect – and Mr. Bates wasn't – we could expect that over say 10-20 years Mr. Bates would be making more money than I would be making?
A: Potentially, sure. There is also the consumer price index factor that is involved there when a person is on benefits as well.
Q: What I'm saying is that the economic factor in negotiated wages is a higher percentage than the consumer price index factor?
A: I don't know; it could be.
Q: All right – and the other thing that's not included and this was raised with Mr. Sayre is that the heads of damages and civil litigation – pain and suffering – and he didn't mention this but also loss of capacity - that is not included is it?
A: No.
Q: And the other thing that is not included is the difference between the – earnings over the statutory maximum – currently what is it - $56,800 now?
A: They are not included; that's correct.
Q: All right – could you turn to tab 17 of that binder –now this is 2 documents one is a form 7 from a salesman and you'll see the income it is listed on the first page there and in box 20 is $60,000 – the second document is an earnings information and what the Board added was contributions to RRSP's and so his total income was $70,300 –
A: Yes.
Q: So this man was injured in a car accident –and he's – the most he could make in compensation was 75% of the maximum $56,800 –correct?
A: yes.
Q: So he was losing about 75% of the difference between the maximum and $70,000, correct?
A: Well we don't pay to the maximum that's correct.
Q: Yes. And that would be true for wage loss? Correct?
A: Yes.
Q: For Pension?
A: Yes.
Q: For rehabilitation?
A: Yes.
Q: In fact for all benefits?
A: Yes, we are restricted to the maximum.
Q: Yes. Now could you turn to tab 22 – this is the Board's briefing paper on compensation rates and it is just excerpts from it –on page 18 and you'll see at the bottom there's a chart about average earnings in the various provinces, do you see that?
A: Yes.
Q: And you'll see that BC's average earnings, 1995, from Statistics Canada are $30,924 –so you see that?
A: Yes.
Q: Now that's the second highest in the country. Just under Ontario.
A: Looks like it yes.
Q: And do - so on a gross basis and percentages we could expect that because of the average compensation rates in BC would be higher than every other province except Ontario. Do you accept that?
A: I think there are even higher than Ontario – the take home.
Q: Yes. Yes.
A: Including Ontario.
Q: Because of the difference between gross and net? What I'm saying is the difference between the average – between say BC and say Alberta. Under the same system; if you were under the same system that the average wage loss payments would be higher in BC because of the average earnings in BC are higher.
A: I think I get you and I think the answer is yes.
Q: And do you know the average earnings there will that include self-employment earnings – that is does that – is that employment income or does it include doctors, lawyers, judges, independent contractors, and so on.
A: I don't know the answer to that.
Q: All right.
A: Does anybody know? No. We'll find out if you need it.
Q: All right now on the second page – the next page –is actually page 54 – is the table 5A from the Board's briefing paper –this is a comparison of gross income – 75% of gross yearly net income – 75% of gross compensation – and for single worker with no dependents correct? –Now just taking that average on the previous page – it says $30,000 if you were to distribute the claims on this – on this table 5A you would see most of the claims in the $29000-31000 range? Are you with me on that?
A: Yes.
Q: So that is where most of the claims in BC would be grouped?
A: I don't think that is necessarily how averages work but – but it's simply means that's the average wage. I don't think it necessarily follows that they would all be grouped in that region but it is quite possible.
Q: Well where would they be grouped?
A: Conceivably all over the map; isn't that how averages work?
Q: Where would the most claims be? If you were to distribute them on table 5A?
A: I would suspect that you would look at most claims being grouped somewhere between $20,000 and 40,000. But I don't know that as a general thesis an average necessarily mostly clusters around the middle. That was my point.
Q: Okay – and with the average between 29-40 where would the peak be? Bearing in mind the average earnings in BC are $30,000?
A: Closer to $30,000 I guess.
Q: Okay, thank you. Now the next page is page 55 – and this is a married worker with a non-working spouse or a single worker with one child 1996 – and these are the only two tables in the Board's briefing paper that is we don't have a table for a family in the nuclear sense – that is a couple and a child or a couple and two childs – do you know why we don't have that?
A: Somebody from the Bureau? Yes, I thought it would have been nice to have taken the tables further but I guess it was a function of time but I think it would – you would expect that the numbers when you move to families – I think I made that point – that net has a further impact with more dependents.
Q: Yes, in fact the numbers in the right column would change - generally speaking be less wouldn't they?
A: In the right column?
Q: Yes, the 75% gross compensation as a percentage of net income? Because of the deductions those percentages would be less?
A: That's right.
Q: The more dependents the more deductions.
A: Yes.
Q: All right. I wonder if we could spend just a few minutes on the table before that which is page 55 – sorry that same table, page 55–now first of all the statutory maximum is $54,800 – is that what you said Mr. Sullivan? $55,800?
A: It is $56,900 in 1998.
Q: Okay so let's call it $56,000. From $57,000 onwards those people are getting less than 75% of their gross salaries, correct? Mr. Buchhorn's nodding yes; Mr. Sullivan is thinking about it.
A: Yes, I think so yes.
Q: Okay; so that numbers of 102% and so on those should be reduced shouldn't they?
A: When you say should be reduced; they will keep reducing the higher you get.
Q: Yes. But they should be in terms of the gross compensation in terms as a percent of net income for someone earning $59,000 it is less than 99% because of the statutory maximum.
A: Not sure that I either understand or can answer but
Q: Well, this chart assumes that there is no statutory maximum, doesn't it?
A: Correct.
Q: So just take $65000 there – I'm not really going to make 75% of $65,000 – I am going to make 75% of $56,000, correct?
A: I haven't checked the math but what I think it is trying to do is reflect the fact that up to the maximum you get 75% and at that point if you are beyond maximum – if you are beyond the maximum it is trying to equate with your normal take home pay.
Q: Are you saying that the statutory maximum is built into this table?
A: I think in terms of the 75% of gross compensation it is. Is it not? Not for 1998 – for those figures – I think it would have been 1996 maximums so it would have been somewhat less. What my point is Mr. Steeves is that the left-hand column stops the compensation benefit at the statutory maximum. As you'll notice you go down to the higher end.
Q: Yes.
A: But it continues yearly net income as if compensation had not occurred.
Q: Yes. All right.
A: So that was the point.
Q: Yes, now just to go back –this is a single worker with one child or a married worker with a non-working spouse - we don't have a family and it is the numbers on the far right column that would go down as deductions and dependents go up, correct? We've already gone through this.
A: Yes.
Q: So that presumably –just taking a high case - a couple, non-working spouse, four children – it could be well into 100% in the far right hand column?
A: Correct. Could be.
Q: Yes. Yes I'm not asking for a specific&ldots;.the recent federal budget has eliminated the surcharge on lower income wage earners, are you aware of that?
A: I'm vaguely familiar with that.
Q: Okay, so these tax rates – assuming the budget is passed – these tax rates – this table would be inaccurate at that point, correct?
A: Yes, I think this was based on 1996 or 1995 taxation rules – I'm not quite sure if I – any changes will affect this &ldots;
Q: Right, right. And isn't that the problem in going to net –if we go to net on the basis of taxes today then taxes 5 years from now or 10 years from now are not included in the calculation?
A: The setting of the rate – the calculation of the probable taxes, etc. are done on a one time basis as I was saying for most provinces, again I don't think there is any attempt on that claim to then reflect changes in tax status any more than there is to reflect changes in dependent status. Other provinces that are on a sort of proactive wage loss system may be doing it but we don't know that.
Q: So if the average effective wage – or tax rate is 25% now and this Commission makes a recommendation on the – based on that and the effective tax rate changes to 20% in the future – the recommendation would be out of date in a sense?
A: It would not be out of date with respect to new claims. And depending on what the statute told us to do. If the statute told us to track – let's say the Royal Commission recommended a new statute and the new statute said you'll have to track ongoing changes then presumably it would not be as out of date.
Q: Oh yes but that would be a recommendation that it's to say that 85% of net and giving the Board discretion to change that in the future is what you are talking about?
A: No I was talking about requiring the Board in case of a worker for example has an ongoing benefit over the next several years or perhaps for a lifetime requiring the Board to track – if the Board required us to track and reflect changes in benefit status and actual status – if that kind of legislation required us to do that we would be current – each year we would be recalculating the benefits to reflect your changes in all these – you personal status, your tax payments, and those kinds.
Q: Right. Now with respect to waiting periods – you indicated that we already have one depending on how early or late in the day of injury the accident occurs but if we are to have for example a three day waiting period those numbers in the right column would change as well wouldn't they – they would go down.
A: Your compensation would go down and therefore the numbers would go down.
Q: Yes – now you mentioned with respect of going to net that other jurisdictions had A: gone to net and one of the reasons was a concern over funding of the system, correct? And in BC we are not fully funded we are close we are relatively healthy – I think that's the general view – so that would remove that reason, would it not?
A: Yes just to clarify what I think I said was I think the percentages has been driven particularly by status of the shape that provinces were in. I'm not sure if I made that point earlier.
Q: Yes – yes – now the - one of the things that is in the literature – I think to your credit not mentioned it – as a strong reason going to a percentage of net –well first of all a percentage of net – let's see the highest that we see in the figures – 90% of net – that means that the worker would receive less than their net salary by definition, correct?
A: Yes, and again, an approximate net because actual net is often lower than the approximate net the Board uses.
Q: Yes yes and that would mean going to net would result in workers who are injured through no fault of their own would take home less money, correct? And that would be added to the other list that we talked to in the beginning – talked about in the beginning –all the other reasons why workers make less money on compensation?
A: It gets tricky – because what you actually take home which bears only an approximate resemblance to what these Boards use as net. And typically I think at the higher end 90% of net is probably still higher than take home pay. But again your general point is probably.
Q: And the point I was started with –about another reason for having that situation which is another situation where workers get less on compensation than before when they were working – is that it is somehow an incentive to get workers back to work, you've heard of that?
A: Yes, I think in compensation literature this goes back to the original times as well there's always the thinking that they should get a little less seems to have been the thinking.
Q: Right and given all the current ways that workers make less money on compensation – where is the incentive to stay on compensation?
A: I'm not sure that I've got an answer for that.
Q: Okay, and if we are to talk about a compensating workers for their pre-injury loss we have 75% of gross now but the one way to do that – another way to do that would be to have 100% of gross taxable, correct?
A: 100% of gross taxable – what's?
Q: Definition.
A: Well, what's 100% of gross taxable – you mean to have 100% of gross and then have it taxable?
Q: Yes.
A: I must say I haven't given that a lot of thought.
Q: All right – another way to approach it would be to have 100% of net?
A: Those are options.
Q: Yes – I want to talk a little bit about past versus future –now this probably comes up with the new and the old - the young worker versus the old worker –and there is two provisions in the Act and the Board policy. Section 31 provides for – in the manual it's 67.21, and it's a classs average. Correct?
A: Correct.
Q: So that means that if there is a – in the language of the manual occasionally the Board comes up to the future – that's it's intended purpose, correct?
A: yes.
Q: Do you have any information about how often that's used – that is how often a classs average is made on earnings in say the last five years and if not do you know that information?
A: I don't think we know off the top – I think we could generate the number requested be made to the statistics department.
Q: Okay, the other change that the Board can make to average earnings is under Section 33.3 and that's for learners, correct? That's the policy in 67.10 and that's only for the future that is you set a wage rate now for wage loss and you set – another wage rate for pension and once that's set sometime in the future – if the worker can demonstrate higher earnings or higher loss of earnings you can use 33.3 – that's how it works, correct?
A: Yes.
Q: Again - can you let us know any numbers you have where that has been used?
A: We can look into it, yes. I'm not sure it is available but we'll look into it.
Q: Okay, yes. With respect to Canada Pension Plan and I gather that's the only thing we are talking about in terms of stacking – the – are you aware of the entitlement criteria for Canada Pension Plan disability – that is a severe and prolonged disability and be unemployable?
A: Yes, I don't think there's been any modifications but as a general rule that is the criteria.
Q: All right and are you aware that that entitlement for Canada Pension Plan is for all disabilities not just work related – did you know that?
A: That's right.
Q: So if I had a non-compensable heart condition and I have a compensable back injury I can combine those two for the purposes of entitlement under Canada Pension Plan?
A: Correct.
Q: And so when there is a talk of a set off between Canada Pension Plan and workers' compensation has there been thought on how to separate those two out –that is why should there be a set off – why should the Board for example be the first payer under Canada Pension Plan when some of the disabilities as being paid for under Canada Pension Plan is non-compensable?
A: I think as I was pointing out with the caveats and footnotes and other things in different provinces some Boards I think give some regard to whether it's for the same injury but for the most part I don't think that's true. We are not intimately familiar with what each Board's doing and in some cases Boards are only offsetting if you will half of the Canada Pension Plan.
Q: Yes and a related issue is if there is an offsetting of the entire amount of Canada Pension Plan as against workers' compensation doesn't that remove the deterrence effect of claims on employers – that is there employer cost is reduced by the amount of Canada Pension Plan payments?
A: By that do you mean the reporting of the injury or the facts of the claim?
Q: The employer has a lot of claims and a lot of costs they'll make you play safer so if you reduce the costs by the amount of Canada Pension Plan that reduces the deterrence effect?
A: Conceivably. It shouldn't reduce the number of claims but conceivably would reduce the costs.
Q: Yes, well, employers are worried about costs – we've heard a lot about that. Mr. Sullivan I think this was your slide – you were talking about average earnings – at 8 weeks – there were 40% results in rate reduction? Do you recall that? At the 8 week review? Do you have any information about a gender – differences in that 40% - would you know whether women are getting a greater rate reduction than men?
A: I 'm sorry I don't' have that kind of information – I'm not even sure if it's captured.
Q: Could you just have a look at that? And all these requests you should go through Mr. Bates for that.
A: Mr. Steeves just while you are looking for your next point up it was pointed to me by those at the end of the table that we do have a distribution of earnings on page 28 – you asked the question about where the range of income levels will lie.
Q: Page 28 of?
A: The briefing paper. The Compensation Rate Paper. I think it tends to support your general point.
Q: Yes, thanks. With respect to the rate review – what I heard you saying and I heard Mr. Buchhorn saying something different – what I heard you say that made sense to me was that the Board looks at cost –in deciding if it should be 8 weeks or 4 weeks – and by the way the most efficient way in terms of cost would be to do it at the date of injury, right? To determine the final wage rate to do a full investigation at the time of the initial application that would be the best way to take care of the cost question – correct?
A: No, the administrative costs – you would then be doing the full investigation of 70,000 claims.
Q: Thank you that's my point. So what I heard you saying is that you look at costs in terms of deciding whether it should be four weeks or 8 weeks or 13 weeks – you look at administrative costs as you just said and you also talked about fairness. And you juggle those matters and you run a public institution and your job is to juggle them and make a reasoned judgement about what is the best way and as I understand it you decided that the best way of juggling those is the 13 week review – or that is the recommendation at least?
A: Well that was the history. The history of the origin of the 13 week review is finding that tradeoff between some administrative simplicity at the front end and then not letting it go so long that you are looking into the longer term picture for the longer term. Just while you are looking – the point – the important thing – just to emphasize the discussion papers solely focuses on timing – this current interim proposal focuses on timing – not all the broader issues of whether we should do it at the outset and all those kinds of things – those will get discussed later on.
Q: One final point – just going back to this table up here – now this is a list of income and so on and it is based on a tax rate –from this table we don't know what the effective average tax rate is for –do we for these specific levels of income? That is this is a table based on tax rates only it is not based on numbers of workers?
A: Yes, I'm not even sure if I am equipped to answer what effective tax rate means but I think the answer to your question is yes.
COMMISSION
Q: I just had a couple of questions to balance the discussion – Mr. Sayre's had pointed out the workers don't get in the workers' compensation system that they would get in a civil action for damages and tort. I guess the obvious the obvious counterpart to that is that many workers who would have no damages in tort or negligence for damages –those workers still get workers' compensation, don't' they?
A: Yes, and I think there's fairly lengthy discussion of that in that Tysoe Royal Commission Report. That trade off.
Q: And the second question is – that although skirted the incentive/disincentive rationale for percentages of net – is there not any consensus amongst the majority of Canadian jurisdictions that use a percentage of net that it is based on a theory that you do need to give incentive to get people to return to work –it seems to be the most common method of calculating average earnings and I'm just wondering you are dealing with other Boards across the country if that is not a well recognized rationale for that percentage of net?
A: Yes, I think that's fair to say that we in this province among the administrators sense that – that compensation is in theory designed just below, just a bit less than what you would get while you were at work. Whether that is enunciated in this province but I think it has been in previous Royal Commissions and I think that is a view that is fairly common across the country.
Q: But there is also the direct financial necessity in some instances as to the percentage of net?
A: The direct financial necessity you are referring to being the financial necessity of the system?
Q: Yes, of an individual board in a province – it may be a way to cut costs and so it may not be related to incentive but it may just be related to finances?
A: Fiscal position, the economic position, the rights in the province are all factors in how these things – the assessment rates are all factors in how all governments decide what percentage to set.
Q: The use of a percentage seems to be common in private short term disability and long term disability plans – do you have any familiarity with the comparison between what private industry does in terms of percentage for short term disability and long term disability as opposed to what boards do?
A: Not really; I don't know – Ron may
Q: I am just wondering if it is used as a model in terms of the policy?
A: It is not used as a model and I think the decisions that employers and trade unions where they collectively bargain these schemes or absent a trade union much of the decision focuses on the ability to pay. So it is not uncommon to see those schemes negotiated based on some trade off relative to the ability to pay but certainly it is not common to see waiting periods – 66 2/3% coverages, caps on benefits, etc. so we don't use that as a benchmark; we tend to use other jurisdictions relative to work related injuries as benchmarks.
Q: Generally speaking in private schemes –short term disability or long term disability are the premiums - do the premiums get more expensive as the percentage of income goes up?
A: Yes.
Q: Just one question for clarification - when the waiting provision was changed in 1972 – do you have – it may have been before your time but does someone know what the reasons were behind that change?
A: In reading some material on it it seems to me that this was not a recommendation I believe that came out of the Royal Commission in 1968 – I think the judge – the Chief Justice – the Justice recommended retention and in addition to that I'm not sure what the rationale was. It was a legislated decision but why they decided to do it – I don't know that – does anybody in our midst know? I don't see any hands being held up. We will research that and see if we can find any old material in the archives.
Q: Tell me how Mr. Pinto – you said 90% of net is more than regular pay. How could that be?
A: What I was trying to point out Mr. Stoney is that sometimes your take home pay cheque might include a whole bunch of other deductions – union dues, if you are making contributions to some of your company benefit plans, etc. so you might only be taking home say 60% of gross and if you are a high end earner. Now 90% of net formula in other provinces only deducts from your gross compensation the estimated income tax, the estimated Canada Pension Plan, and the estimated Unemployment Insurance Commission payments. So they then to net – after they have deducted those three things they give you a cheque for 90% of that. That's how it works in essence. But in the real world some workers are actually taking home less because of all the other deductions they pay into. That was the point I was making. Not all but some.
Q: Do you know what the rationale is for not covering Unemployment Insurance Commission earnings in BC?
A; I think it goes to what the Board thinks the meaning of the words average earnings are and I guess it comes down to the issue of earnings. Unemployment Insurance Commission is a benefit – it's a social benefit not an earning. So that's why I think in a nutshell why the Board has never considered it as income. As employment income.
Q: But if a worker works all of the work that is available to them every day it is provided and lives in a community where there isn't access to alternate employment –I'm thinking of logging because that's something I know about – and they are forced on to employment insurance for probably 2-3 months every year and it becomes part of their income and society and their employer accepts that in order to keep them in that community so they don't have to transport them back and forth every two weeks or something – doesn't that become part of their regular income stream and something that they would come to expect to have insured against loss if they got hurt at work?
A: I think it would probably be a reasonable expectation. And I'm not suggesting that workers' compensation should not be considering that – I'm telling you the Board hasn't taken a position and the Board doesn't believe – I don't' think it believes that legally those kinds of income fit within the definition of average earnings which we believe to be employment earnings.
Q: Arising out of that Mr. Pinto - do you have any handle comparatively on other provincial jurisdictions –whether any of them take payments under Unemployment Insurance Commission into account in the average earning calculations?
A: I don't know exactly but I think some do and some don't. And I think it may be a matter of differences in legislation.
Q: Any idea of the mix – is it majority do or majority don't? We'll look into that ourselves.
A: I don't know that. Anybody else on the Bureau?
Q: I'm not sure whether on that same point this was covered or not – but to save me going through my notes - has Employment Insurance ever been covered as part of the benefits for calculation of average earnings for workers in this jurisdiction?
A: I don't think so.
Q: Insofar as it is not included in the calculation of average earnings –I've heard some criticism that if that is to be the case – then the period during which Employment Insurance benefits were received – that that period – that that interval should not be included in the calculation over which the other income from employment is to be calculated – that if you are not taking into account the Employment Insurance earnings then you shouldn't take into account the period of time in which they were earned – do you any views on the rationale for not taking Employment Insurance as part of average earnings but including that period of time over which they were earned?
A: The Board as a whole hasn't taken a position but you will recall there was a paper produced by a working group – I think in part it recommended that included – or it included as an alternative I think inclusion – that was then circulated and there was no consensus and there was probably no consensus internally but that is a – that is an issue of concern from individual workers – that we hear about – how can you sort of shaft me at both ends – to put it in that kind of a context – the kind of context we hear it in.
Q: Dealing with the issue of overpayments – and specifically those arising out of administrative or clerical errors – does the Board have any idea the extent to which payments in that category are made?
A: The Board declares about $1 million historically on average on a benefit total – it's a million per year on a benefit total of between $500 to $700 million. $700-$800 million being more recent.
Q: I ask that because we've heard a number of stories anecdotally that where people have been paid because of clerical error when the Board was notified of the circumstances which had it taken into consideration would not have resulted in the over payment and – so that is the rationale for my question –are you able to tell me whether there has been any changes or any trends in any particular direction with respect to clerical over payments?
A: A couple of points – first of all the million dollars a year includes all over payments not just the clerical. The Board's position on the clerical historically and this is before the Appeal Division's decision and some changes to policy is that it was equivalent of if a bank put money into your account inadvertently – we view is that we get it back. Trends – I can't say whether we've had more administrative recently or less administratively but certainly the focus is on trying to build enough control checks and balances in the system to minimize the clerical kinds of errors – 5000 versus 500. We should be able to get some internal audit numbers for you relative to a cohort of claims that the internal audit department would look at so we can make that available to you.
Q: That would be helpful; and lastly, is there a policy with respect to the collection of over payments made on the basis of clerical or administrative error – is there any room – is there a hardship policy or anything like that or just maybe if you could you tell us what the Board's policy is in that area?
A: There is a hardship policy and I can't quote; Keith can probably look it up – it's in the policy manual – but it gives the Vice President I think it is the ability to waive large overpayments over $1000 in hardship cases. I think it doesn't go to whether it's Board error or not Board error – simply that there is a hardship policy. The adjudicator believes certain factors exist they can recommend and the Vice President can approve waiver. That's the nutshell.
Royal Commission on Workers Compensation in BC
March 2 Morning Session
Name(s): Doctor Blair
Title: Director, Medical Services
Affiliation: WCB
Location of Meeting: WCB, Richmond
Date: March 2, 1998
Commissioner staff: GG, GS, OE, TR, D , JS
Notetaker: Judy Stott
General Comments
Health Care Issues
Resource People:
Ron Buchhorn, Vice-President, Rehabilitation & Compensation Services Divisions
Linda Hart, Client Service Manager, Training and Special Projects
Linc Johnson, Director, Operations, Rehabilitation Centre
Margaret Perry, Client Service Manager, Health Care Services
Heather Greene, Policy Director, Policy Bureau
Issues:
Introductory Overview
Continuum of Care for soft tissue injuries – good example of care planning, quality care improvement and outcome improvement
Worker's Choice
Role of the WCB Medical Advisor
Alternative Care
Provider Network
Access to treatment and delay issues
Administrative/Operational Issues :
Richard Hurst, Executive Director, Health Care Services
Introductory Overview
Costs
Fee for Service Agreements
Opportunities
Presentation
Doctor Blair
Medical and Rehabilitation Services
Introduction
Role includes overseeing and providing service to injured workers, the vast majority of direct services are now provided by independent communities around the province
The Board maintains working relationships through the service contracts and informal agreements with private providers, clinics and health care institutions
Leslie R. Peterson Rehabilitation Centre is where most of our direct treatment service occurs
Historically the centre provided most of the rehabilitation services for the compensation Board for the province
However with the development of community services widely in the province the centre's direct role has decreased
The new role of the centre is both a leading and network of service providers and also a provider of some services
It is also a resource for the WCB in terms of research, development and in teaching
As the organization relies on external providers there is a need to effectively monitor and lead the provision of services throughout the province
Medical services within the organization have a specific purpose in supporting effective claims management but we also see an additional and very important role to enhance quality of care and to lead the evolution to evidence based medicine
We have a unique opportunity province wide because we are a link to the provider community
Our network of medical advisors is well positioned and informed to promote the use of case management and a planned approach to care aimed at improving clinical outcomes
We also have an opportunity to improve much broader outcomes for injured workers and for all WCB stakeholders such as
More effective disability management
Lower overall compensation costs
Continuum of care for soft tissue injuries
Effective management of recovery, return to work and reducing chronicity
Continuum of care is designed to accomplish the following
To effectively manage the process of recovery
To follow the best evidence available in terms of treatment effectiveness
To maintain the length of employment
To track our results and monitor our outcome
Provided a slide on soft tissue recovery – referred to internally as the J curve and what it basically describes is the issues we face with soft tissue injuries in this province
Injuries constitute about 40,000 short term disability claims annually in BC so it is slightly more than ½ of the short term disability claims per year
The upper most line which starts off purple and becomes yellow down below is the typical decay curve on this kind of injury
The scale across the bottom is in weeks and the top is the 40,000 claims per year
Within the first month more than ½ - about 20,000 - 22,000 will recover spontaneously through the variety of treatment options available in community
Recovery rate represents effectively the outcomes of all the different options available and it would range from what you might call optimum treatment in many instances all the way through to individuals who have had very little treatment of perhaps had treatment that interferes with their recovery
I saw a similar graph from Ontario this morning and I think it was pretty much the same lines
Think this is pretty universal in terms of these kinds of injuries
Objective of this continuum of care is to recognize that this process can be improved upon by putting together a series of programs, which effectively pick up these injuries at about the point where there the acute stage is coming to an end
The literature recognizes, and this is from many authors, that an acute stage in these injuries occurs in first 3 to 4 weeks
After that point a sub-acute stage follows after for about 4 to 12 weeks and a more chronic process may begin indefinitely after about the12 week mark
The older literature pegged the chronic point as being at 6 months but I understand now that it is probably occurring much sooner than that in many injuries
Continuum of care is a plan to
Organize and provide the necessary range of services in a seamless way
To identify claimants most suited to the program and enable them to participate
Under the early intervention programs system – EIPS – staff identify those workers suffering from soft tissue injury and they will contact worker at 3 or 4 week mark and review with them a brief list of questions, which are designed to determine if their only injury is a soft tissue injury, that there is no other confounding factor present, to determine whether they are about to return to work, if there is a plan for eminent return to work or to get a general sense of whether they would be amenable to be a part of this program
All else being equal and with the concurrence of the attending physician or provider they are recommended to enter a work conditioning program at about the 4 week point, ideally, and this has a potential for 6 weeks of therapy based treatment, which will encourage recovery from the soft tissue injury
This is recognizing again here that we are generally past the acute stage
Should the individual not succeed in reaching a return to work status within the 6-week program they are then eligible to be seen by, assessed and perhaps enter an occupational rehabilitation program, which would pick up after that
The occupational rehabilitation would theoretically start around the 10 week point and should continue for another 6 weeks
Should all else fail and they are not ready to return to work at that point then pain programs are made available at approximately the 16 week point
When this plan was first put together a target of 75% return to work was seen to be optimum and the current experience, in fact, is better than that
It is in the order of 82 or 83%
In theory that will reduce the number of workers even needing to go to occupational rehabilitation by a further 1200 cases based on an annual basis and a projection of those figures
Our success with the work conditioning program so far is such that not only have they exceeded the target of 75% return to work but the average length of stay in those programs is about 18 to 20 days
So that does not mean that people have to stay in the program if they are doing well
Care plans are about setting expectations for injured workers, employers and for treatment providers about what is an optimum and what the literature supports doing
If the attending physician does not feel that work conditioning, for example, is suitable medical rehabilitation programs are useful alternative suggestion and sometimes the most effective way to deal with that particular claim
See submission for the network of work conditioning programs developed around the province over the past year or two
Nearly all the small and medium size and certainly the larger communities are all served by at least one or more providers throughout BC
Some of these provider's contracts are within institutions like local hospitals but more often they are with individual clinics or providers depending on the circumstance and the nature of the work load in the community
Since the inception of the continuum it has been possible through teaching examples, encouragement and some coaching to steadily improve the results
Two weeks ago a best of the best conference in our rehabilitation centre brought the external providers together to discuss recent advances, to share results and acknowledge the leaders within that group
Worth noting that many of these same providers, 2 years ago, were of the impression that 50% return to work rate was best that could be achieved under this sort of a system
The number of work conditioning providers in the province initially started out at a relatively low level and we are now at a point where there is 64 to 68 providers with contracts around the province
Based on the current volume of soft tissue injuries as we refine our system for selection an optimum capacity, which will probably be slightly larger than this will be reached
Extrapolating these figures – see submission - to an annual level the current network can accommodate 10 – 12,000 injured workers
Future delivery model
In broad terms this slide (see submission) describes key attributes of our evolving delivery model both in terms of service and effectiveness and some of the working relationships that we envisage in the future
Medical and nurse advisor roles
The intention of the role revision that is going on is
To enhance the early clinical input to claims management
To facilitate case planning and management as we move into case management
To assist with the monitoring of progress and providing clinical knowledge to this process of a handling a claim
In addition to the clinical role described here we will develop a greater internal and external role as educators, communicators on clinical issues and experts on work place injury and disability management
This relates back to my earlier comments about the networks we have in place and its potential for optimizing care around the province
The medical role was discussed briefly about 2 weeks ago
It should be noted that for the foreseeable future there will continue to be a need for some of the traditional role where the attending physician needs an additional assessment or support perhaps for a return to work situation or whether the attending physician needs support on whether or not to wait for a specialist's consult, institute rehabilitation or both
The most significant change in these roles and a benefit is in having an early overview and when needed input on each complex claim rather than taking the delayed role and waiting for the problems to surface
There is also a potential role on claims, which are identified by our own outcomes monitoring where improvement could be sought in the care and where there is evidence supporting change and practice available in the literature
The nurse advisor role was also mentioned a couple of weeks ago in the presentation and as you heard the Board has moved over the past 6 to 9 months to develop a nurse advisor role
As an organization I believe that we have a history of late clinical input, which has worked against the interest of all if the truth be known
There is clearly an opportunity to provide earlier assistance and guidance, to support the use of established clinical practice guidelines and to assist the external providers to improve outcomes
To have effective clinical input to a large number of claims will require a sufficient number of staff with the appropriate levels of clinical knowledge
Much of the clinical information needed in the claim's process can be efficiently provided by skilled nurse advisors
Their professional status and clinical judgement as applied in virtually all other parts of health care can also be a resource for the WCB
Worker's Choice Issues and Provider Networks
With respect to worker's choice, the legislation in 21(7) "without limiting the power of the Board under this section&ldots;selection by either the physician or qualified practitioner&ldots;by the injured worker" – this is clearly been in act for many years
Current legislation is as depicted and paraphrased and it basically sets out that physicians or qualified practitioners include physicians, dentists podiatrists, chiropractors and naturopaths. For practical purposes there are very few podiatrists and naturopaths involved in care
I am aware that you have received representations from groups wishing to expand their role or to participate as primary providers in the system
The ongoing process to identify and define the scope of practice of various providers in BC through the regulated health professions legislation will clearly provide some guidance, however, the WCB legislation may need some modification in the future as a result of that deliberation
The process sets out a mechanism for establishing, identifying, and setting up new health professions within the province following an organized approach
At this point the health professions counsel is also going through an exercise to, if you will, revisit or perhaps redefine the scope of practice of the individual regulated health professions under this legislation
May be useful in the future to have "qualified" defined as member of a regulated health profession so that will clear the issue of some of the providers that we now occasionally have to deal with who are not qualified and yet have convinced someone that they are qualified
The legislative process, presumably, would settle that issue once and for all
Other part of that is for those seeking to expand their mandate qualified to manage may need to be differentiated somewhat from qualified to participate
For example, at this point massage practitioners and physical therapy practitioners do provide care to injured workers but they do that in a delegated way with responsibility relating back to the primary provider, who is usually a physician but in theory could be one of the other recognized providers
On the scope of practice issues medical advisors occasionally face uncertainty in terms of advising on certain treatments and certain providers
At this point, the clearest example might be with regard to acupuncture where physicians who are licensed under the College of Physicians and Surgeons and have met the training qualifications can from a legal perspective provide acupuncture services
In a few instances the Board has approved those services
On the other side of the spectrum there is a lot of uncertainty around the newly established BC College of Acupuncture, in fact, I am not aware that it has granted any licenses yet although it has been in existence for a year and perhaps even 2 years
We may reach a situation there where there are individuals licensed to practice acupuncture who have a clinical background such as medicine and, in fact, within a different college's jurisdiction. There may be some who have another clinical background, non-medical and there may be some who have no other particular background other than acupuncture training
I am not trying to pick on acupuncture but I think it identifies some of the complexities of identifying who is a qualified practitioner and under what part of the legislation would they be considered
Provider networks
Are about improving quality of care
We have a functioning provider network supporting our continuum and I mentioned the three basic programs that are involved there
There are some specific objectives described within those programs
The preferred provider network is an opportunity to stipulate the nature and quality of service more explicitly based on evidence of effectiveness and also it allows us to establish our own expectations both in the interest of workers, employers and providers
At this point there is also a process underway to initiate a provider network for medical rehabilitation, which will further expand our capability to provide access for injured workers in other parts of the province
The advantage from our perspective and from any providers' perspective is that the provider network allows development or establishment of specific programs or standards of care, which would otherwise be difficult to achieve amongst diverse provider groups
The earlier slide that I mentioned referring to work conditioning programs showed an example where the provider group themselves did not have all that accurate an expectation of what could be accomplished with an appropriate planned approach to care
Potential disadvantages – provider resistance from those who don't agree with planned a approach to care
There is also an issue in some parts of the province where there may not be a sufficient number of providers to enable us to establish a network that is very comprehensive and there may also be situations in some parts of the province where certain speciality fields are not well represented so we are back to the age old problem of geography and expertise in BC
There are also possibly some legislative issues in that it could be seen as an incursion on the worker choice and also, in some instances, there could be an issue with who the qualified practitioners are that should participate in the provider network
Delayed Access to Treatment and Alternative Care
There are significant delays to provide optimum service – surgical waitlists and access to consultation are one of longest waits
It is a variable and unpredictable process around the province
Some institutions and consults have a quite timely turn around and some others don't
For example, when I was at Burnaby Hospital we put changes in place around our operating rooms that effectively reduced the wait by 50% over a year to a year and a half's time
One of the other institutions in the lower mainland took a different tack and closed down some of their operating facilities, which effectively doubled their operating room wait
Organizations themselves – hospitals, institutions and now the health regions have some of their own priorities and issues with respect to where they allocate resources and what type of services they provide in their communities
At this point I think that it is fair to say that in some parts of the province injured workers are suffering significant delay and probably diminished outcomes due to lack of access to timely care
Visiting specialist clinic and our expedited consult service were both established as attempts to deal with this delay on injured workers
Discussions with hospitals to expand surgical access are progressing very slowly partly because of the situation with orthopaedic surgeons at the moment
I don't see it as asking whether there should be a one tier or two tier system but whether the current system is meeting needs of injured workers very well and in some parts of BC could be improved upon
Direct access to MRI was provided some years ago and at this point the initiatives and diagnostics have been a bit more effective than elsewhere
Currently the WCB funds about 100 expedited MRI scans per month through various facilities in the province – the vast majority of which are public facilities like hospitals – and we depend on a travelling MRI in the interior
Richard Hurst
Overall role of services of health care and some key benefits
Worker's Compensation Act provides for the delivery of health care to injured workers with occupational injuries and diseases
Subject to authority set out in Section 21 regarding supervision and control of treatment the WCB allows free choice of physicians or other qualified practitioners who will provide treatment
Other health care providers may provide treatment under a physician's supervision
A wide range of medical, hospital and diagnostic services are available to injured workers
The Board also provides the necessary equipment and prosthetics to alleviate the effects of injury
Health care services is a business unit within the compensation and rehabilitation services division
There are currently 35 employees in the lower mainland location and 15 employees in various offices located throughout the province
Health care payment officers and client service representatives account for most staff positions
There is a construction supervisor to deal with home modifications and a vocational rehabilitation consultant to look after the special requirements of the very seriously disabled
Health care transactions number approximately 2 million annually and amounted to $150 million in 1997
Historically billings and reports have been submitted in paper form by mail and fax
Customer service has been hampered by a paper base system with outdated processes requiring significant manual intervention
Fundamental changes must be made to the health care delivery model to support rehabilitation and case management
Business processes need to be redesigned and new systems introduced to improve service
Future vision has been developed under Program 2000 – copy has been provided to commission
Section 21 of Act provides that health care shall at all times be subject to the direction, supervision and control of the Board
WCB has taken the general approach that a worker's doctor or other treating practitioner is responsible for treatment
WCB functions as an adviser to ensure that health care providers are aware of alternate treatments available
More recently the WCB has become more active in promoting various options through the continuum of care model and the development of protocol
The Board has established a number of guidelines in relation to the treatment given to a worker
For example, after 8 weeks of treatment by a physical therapist, naturopath or chiropractor a case manager has to determine if more treatment is authorized
These and other decisions of the Board practices are dictated by evidence based principles
One goal of the Board is to promote recoveries so choices by patients or their health care provider that delay recovery or create unwarranted risk of further injury are subject to control
Where ever possible this is accomplished through consultation with the treating physician and the injured worker
In addition to the services mentioned earlier health care is also responsible for administering the following benefits
Clothing allowance is a one time annual allowance that ranges between $235-700 for the purchase of clothing by limb amputees or those who are required to wear a leg brace
Home maker services are temporary services provided time to time when, for example, it is necessary for a worker to travel to a place of treatment and there are no other arrangements made available to look after the family
Independence and maintenance allowance is about $200/month that is payable to the seriously injured to offset the cost of maintaining a home
Personal care or nursing allowance has about 5 different allowances ranging from about $350 to 1500 monthly where there is a personal need for such services
Subsistence allowance is provided to offset the out of pocket costs for treatment incurred away from the normal place of residence
Transportation costs are similar where an injured worker may have to travel out of their community to obtain the necessary services
Home and vehicle modifications are also available to make sure that homes are accessible for the seriously disabled and to make sure that they have a vehicle, which they can drive with the appropriate modifications
Costs
WCB health care costs have risen sharply in recent years
Approximately $150 million was spent in 1997 acquiring various goods and services related to injured clients
This is not a problem unique to WCB – all Boards across Canada and many other health care institutions are experiencing increased costs over the last 7 to 8 years
Some of these are related to different patterns in utilization, certainly cost shifting between other health care providers
Green line on the slide represents the cost of health care services and the distribution that you see is pretty consistent with the distribution of other expenditures such as short term disability, long term disability, etc.
Actual health care costs for 1991 –see slide- were just over $100 million and rose in 1997 to just over $150 million
There are 3 key areas driving cost
1.Physician fees
2.Surgical fees and I will explain that because it is a bit of a catch basin
3.Cost of hospital
Physician fees started to rise around 92 – 93 and there was a slight decline in 97
Board took strategy in 91 – 92 of paying physicians for forms in order to get more detail, which was to help make the initial adjudication and to manage ongoing cases more effectively
Of about $30 million spent annually on physicians around 2/3 is related to services and 1/3 is related to form fees and special services
Surgical fees have risen quite sharply from 93-94
Surgical costs are a bit of a catch basin as it includes audiology services, external treatment programs, prosthetics, home services
Taken initiative to break up those costs but for consistency kept it as surgical services
In 1997 in particular there is a significant increase in costs and that is related to providing cost to programs under the continuum of care
That is a deliberate strategy around the investment in the continuum of care and that has pretty much driven the cost
You can see that it is relatively flat in 95-96 – see slide – and that includes pain programs and the like
Cost of hospital rose in the mid 90s and there was a significant increases in the cost of emergency care, daily rates that hospitals charge
For example, Vancouver General Hospital is about $850 – 900/day and Board pays service
Average length of stay is less than it was several years ago so that cost has been offset by shorter stays
Fee for Service Agreements
Probably the most important agreement we have is with physicians and there are about 6000 physicians in BC who do business with the WCB and represented by the BCMA
Actual fees are absolutely consistent with the medical services plan
We do pay, as I mentioned earlier, a fee for forms and special services
In addition we pay a 6% premium – paid on services performed at the rates equivalent to the medical services plan not on the unique fees or form fees
4% of the 6% is related to comparable contribution that the medical services plan makes for an education fund, an insurance fund and for that sort of thing
2% is for unique services and it comes about as a result of a recent agreement concluded with the BCMA that requires them to use tele-plan for all billings and requires us to work towards developing electronic forms or a dictation service for sending in reports
There are around 700 chiropractors in BC and they are represented by the BC Chiropractic Association
The service fees are about the same as the medical services plan and we do pay a fee for forms as well
There are about 1700 physical therapists represented by the Physical Therapy Association
More recently around 500 massage therapists included in that 1700 have now formed their own association
Continuum of care
I have lumped together those providers that provide services under the continuum
All providers under the continuum are under a memorandum of agreement or contract of service
All providers' premises are inspected before they see WCB clients
We have the right to audit and we have the right to periodically inspect the premises
We expect that they are registered in good standing with their association, with the WCB
Of primary importance is the protection of privacy for workers so all providers have a fairly strict clause in the agreement around the protection of privacy
Work conditioning – there about 65 approved providers throughout BC – activity based exercise program, cornerstone of continuum and it's outcome focused
Through work conditioning we measure their performance and the program may last up to 4 weeks and average length of stay is 19 days
Occupational rehabilitation – about 30 approved providers - is outcome oriented interdisciplinary program for more complex injuries so it may incorporate work simulation and psychological support as well
We pay daily fees for the occupational rehabilitation program
ASTD work site re-integration – about 35 providers throughout BC providing work site re-integration – primary focus is work site evaluations, looking at work site processes
It provides the claims adjudicator with important information about the work environment and about work processes and they are of significant value in preparing the return to work plans
Medical rehabilitation/pain programs – a small number of select providers to deal with complex cases involving chronic pain or significant medical or diagnostic issues
Project 2000 – challenges and opportunities
There are major difficulties with current processes and systems within health care services
Controls are exercised at the end of the payment cycle resulting in backlogs and inefficiencies
While significant improvements in processing doctors' billings have occurred through a business partnership with MSP tele-plan there have been changes to original business assumptions that impacted the pick-up rate
Part of the corporate strategy is to transform the delivery of health care services to injured workers
A new business model is being designed to streamline businesses transactions and focus on service to injured workers
Our key business purpose is to
First and foremost, supervise and administer directly and indirectly the utilization and quality of health care services provided to injured workers
We wanted to ensure that we established and maintain professional business relationships with health care providers
To provide support and advice with respect to health care services to WCB line departments, in particular, case management
To procure and pay health care related goods and services
Challenges
Shifting focus from manual payment system to quality client service delivery
Present system is 1970 technology
We need to apply systems technology to gain operating effectiveness
I want to ensure the effective stewardship of the services we provide
Key objective
To raise the level of satisfaction of external and internal clients
To optimize health care procurement and payment processes
To raise work quality and to raise the respect of the health care community
Guiding principles
Protocol driven processes
Stream line business transactions
Processes leveraging on best practices and latest technology
The use of major assets without necessarily the burden of ownership
Use of common purchasing and payment system
Support for worker centred information and injury based costing
Health care services current projects in progress
Improved functionality to the MSP tele-plan
Tele-plan system has been available for about 18 months and we are in the process of working with MSP and the BCMA through a joint technology committee to improve the functionality of tele-plan
Injury coding is in progress
An infrastructure for claims decision making
Payment processing, case management and statistical reports
Electronic submission of forms 8 and 11 is part of the corporate electronic strategy
This is of particular importance because once we have this in place it means that we can manage, electronically, 400,000 reports annually that come from physicians
Health care services in planning
An automated claims registration and adjudication process for health care only claims
That has linkage to the electronic forms so it would mean that for those cases that could be managed by an expert system within certain protocols could be dealt with very expeditiously
In pilot
Pharmaceutical pilot with CUNC and a third party provider from Ontario who has considerable experience in this area and it involves 200 long term disability clients
What we have done within certain protocols is use this group to pilot the purchase of pharmaceuticals required as a result of a compensable injury
First and foremost it is service driven
Secondly it is very efficient
And thirdly it is cost effective
We spend about $3 million annually on pharmaceutical prescription drugs and we receive probably somewhere between 150,000 and 200,000 individual prescriptions
These are the typical little chits that you see from the drug store
They are, of course, very difficult to manage with respect to payment through a labour intensive system
That would mean that the vast majority of those could be accommodated through an online direct payment system
We are using a rather broad protocol now and how to have that refined very shortly
In addition to the long term clients as a pilot group we hope to extend it to others as well
Next steps
Project 2000 strategic steps have been approved
There will be consultation and investigation regarding the business process redesign
A comprehensive review of policies which may be impacted by the new direction
A development of detailed business model
Presentations to the senior executive committee and panel of administrators in September of 1998 to implement the redesigned business model and associated enabling technology
Questions and Answers
JOHN STEEVES
Q: Could we start with a general discussion of how WCB health care fits into the provincial system. For example, use of hospitals, doctors and do you have any information about the relative significance of workers' injuries and diseases in the overall health care system?
A: If numbers are of any assistance and just off the top of my head, the Board funds about $50 – 60 million of health care services directly with physicians and hospitals. Perhaps it is a bit more than that. That compares to the Medical Services Plan alone having a $1.4 billion budget for the rest of the health care system. That is talking about diagnostics, physician services alone. For practical purposes the Board's share of the activity is small. As a private practitioner myself in a small community on the island with a fair amount of work place injury and a full mix of case load a practitioner would typically see about 5% of their practice related to WCB. If you were in a speciality area like orthopaedics you may see 10 or 20% of your practice is related to WCB.
Q: Do you have a rough idea of where something like ICBC would fit in?
A: It is smaller I would think because the treatment is not funded directly as it is with us. The actual direct payment to physicians, for example, I think is of the order of $15 – 20 million annually whereas in our case it is double that.
Q: Where I am going with this is that even $50 million but joined with other organizations like ICBC, is there any consideration given to using that economy of scale for developing other public sector programs? I know, for example, that you are involved with the MRI program but are there any others?
A: At this point I can tell you that ICBC is developing a soft tissue program for their clients somewhat similar to our work conditioning. They are effectively dealing with some of the same providers we are. The programs are also pretty similar although they are quite independent of us at this point.
Q: So the trend there is to go into private providers as well?
A: They are independent professionals. Private providers in most cases are in private practice. A few of them are operating through hospitals. We have a few work conditioning programs based in institutions.
Q: That is my point. It seems that with $50 million – that is a gross number - some hospitals' rehabilitation departments could benefit from that.
A: They certainly have the opportunity if they wish to use it. Some institutions have done that quite consistently and others have, in fact, tended to limit or even downsize, pushing rehabilitation into the private community. We are currently seeing that with physiotherapists in the sense that they are having increasing struggles with Medical Services Plan. They are basically opting out and they are presenting a different problem for us because they are also opting out of the tele-plan system for payment. The same applies to some of the therapy services or even just the medical rehabilitation services. We have to be pretty self sufficient around that scenario.
Adding to that Mr. Steeves every opportunity for the delivery of care is put out to public tender and all public hospitals are given the opportunity to submit. For example, the occupational rehabilitation piece I believe that when we did go out to tender, BC Rehabilitation did respond to tender but were only willing to take 1 or 2 clients per week. Based on their own allocation of resources, that is another large rehabilitation centre in the province and the fact that they were only interested in taking one or two clients per week speaks to the problem of the allocation of resources within that sector today. Most hospitals are providers of occupational rehabilitation services but when we ask them to take the kinds of numbers that we have they are not interested and for whatever reason they don't see it as a core business and are not able to take in the kinds of numbers of clients that we have.
Q: In medical care of injured workers we see a number of different medical applications – the GP, the specialist, the chiropractor, the Board medical advisor, the Board outside consultants and so on. I would like to talk about how we deal with the opinions of all these professionals. Typically a GP will give an opinion and then a Board medical advisor, who hasn't seen the client, will give another opinion and somehow Board medical advisor's opinion prevails. Can you give us some explanation of how medical opinions are weighed within the Board, assuming that they are of equivalent detail and expertise.
A: I think that the historic system would see a situation where the Board medical advisor would be reviewing the file and possibly also examining the client at the 12, 14, 16 or 20 week-point and at this point there could well be, if you will, some hardening of positions and attitudes towards what has worked and not worked thus far. In our ideal world of case management we see a lot of that changing because the Board's medical advisor or nurse advisor, in some cases, will be involved in discussions about care and the ongoing process a lot earlier on. I think it will shift the balance significantly and take away a lot of the adversarial stance that we have now.
Q: My question is that I understand getting workers back to work sooner and that eliminates many conflicts between workers, doctors and the Board. Even under your case management system continuum of care there are going to be conflicts between doctors. The question that workers pose all the time is that my own doctor says I shouldn't go back to work and WCB says I can so now they are dealing with the appeal system. What do we say to workers who have been seen by their family physician since they were born and then ruling is made by a doctor they have never seen?
A: One of the examples that we are seeing at the moment is people coming out of work conditioning programs and they have quite a detailed assessment of their capabilities within those programs and at the point of discharge. The comparison may be based on a ten minute office visit or less and the doctor may not have a lot of knowledge about the work place requirements. I think that there are some of those situations where there is quite an imbalance in terms of the amount of knowledge about the nature of the work and the nature of the injury and even the capability of the individual. We would see some of that resolved just by better acknowledgement just on the part of the physicians. The attending physician may cast themselves in the role of advocate for their patient, to some extent, regardless of the facts of the matter or the nature of the injury. They then find themselves locked into this position and they are defending their earlier position even though clinically they realize that they are offside on it.
Q: I am not talking about that but rather a genuine conflict over diagnosis or ability to return to work decision. How many doctors are at the Board?
A: About 50
Q: Of those does that include outside consultants or is that separate?
A: That includes the medical advisors around the area offices and lower mainland offices, those in disability awards, occupational health and so on.
Q: Outside consultants would be on top of that?
A: Yes
Q: Of the medical advisors that you have do any of them have speciality qualifications?
A: Some have qualifications in occupational medicine. The majority are family doctors and some have certification or fellowship in the College of Family Practice. None of our front line medical advisors are certified specialists.
Q: Not even certified specialists in occupational medicine?
A: Not all of them, some are.
Q: How many would that be?
A: Perhaps ½ a dozen of them are certified in Occupational Medicine or Canadian Board certified.
Q: Are any of them certified in public health or community medicine?
A: We have 2 in our prevention area, which is not directly related to medical services, who are certified that way.
Q: For the ones that aren't trained in occupational medicine what kind of training do they have through the Board with respect to return to work or causation?
A: The selection process is weighted towards those with experience in occupational medicine, training in occupational medicine or areas of interest around such things as emergency medicine, sports medicine, orthopaedics, work and injury related knowledge. Internally the education process currently in place is to require mandatory continuing medical education up to a fixed level annually as part of our employment agreement with the physicians.
Q: If I start work today with the Board as a Board medical advisor and I was a family physician what steps would I take?
A: It has been a while since the Board took on a new medical advisor. You would start off with a fairly thorough orientation to the role of Board medical advisors. I believe that it would probably be 1 to 2 months of medical orientation basically understudying an experienced medical advisor in the field and working in one of the area offices.
Q: Is there a written curriculum on that or is it a mentoring program?
A: It is a mentoring program and there is an extensive orientation manual of which there is an expectation to be knowledgeable about it. Quite a lot of that is detail and background around Board policy, about management of the medical side of claims and also about the policy relating to the medical component of causation and so on.
Q: Is there an evaluation at the end of that 1 to 2 months?
A: There is a regular evaluation program done annually.
Q: That is done every year?
A: I believe that it is done annually.
Q: Is that done by you the director?
A: Me and there are three senior medical advisors who take responsibility for that.
Q: What about continuing education.
A: Continuing education is in two parts. There is the mandatory requirement of 50 study hours annually as recognized by the medical CME groups and there is an equal additional amount of time funded within the agreement for program related training related to the area of work within the organization.
Q: As part of the initial and continuing curriculum is epidemiology part of that?
A: Not that I am aware of. Now there are several members of the Board's staff that have epidemiological training and one of the things that the organization has done is sponsor individuals, for instance, at UBC to do health care and epidemiology training and get a Master's certification in that. There have been several who have taken the opportunity to do that.
Q: If I was a doctor I would have to get that training myself?
A: My understanding in the past was that if an individual expressed interest then the organization would provide the funding. But it was up to the individual to initiate it rather than the organization to stipulate it.
Q: I wondered if we could talk a little bit about nurse providers and you or Mr. Hurst indicated that this was a new idea at the Board. You also indicated that there are roughly 50 medical advisors at the Board.
A: Overall
Q: Will that number stay the same with incoming of nurse advisors?
A: We anticipate a slight reduction. The objective in each of the area offices or service delivery locations is to end up with one medical advisor and one nurse advisor as a general level of staffing for those offices.
Q: What number of medical advisors are you looking for?
A: We have 17 service delivery locations so we want at least 17 medical advisors and we would probably also want some relief and back-up. We would want an equal number of nurse advisors when we reach that point. I point out that they are not nurse providers they are nurse advisors.
Q: Although you call them providers?
A: No we call them advisors.
Q: The current number is 50 and you will have 17 in the individual service delivery locations. How many will you have on top of the 17? Are we talking about a 50% reduction or what?
A: There are also rehabilitation physicians supporting the programs. At the moment we are not down to 17 medical advisors.
Q: I understand that but you mentioned moving down to 17 and then having a number of other ones. I want to get an idea of the number of other ones.
A: The other ones, if you want to call them that, at the moment totals about 20 and the majority of those are in the rehabilitation centre and some are in prevention and occupational disease.
Q: Are we talking about a reduction from 50 to 37 or something like that?
A: Perhaps that many by the time the plan is rolled out.
Q: The number of nurse advisors will be 17 and would there be others on top of that?
A: Perhaps one or two more than that. For instance, the initial allocation of nurse advisors was to the entitlement unit and there may be need for one or two more in the front end of the process.
Q: So say 20?
A: Basically
Q: So in the end we are talking about 37 medical advisors and 20 nurse advisors?
A: Probably in that range yes.
Q: And the idea is that they would replace or they would take over the work of the 50 medical advisors that we have now?
A: And I think significantly expand some of that work in terms of clinical contact and clinical input to the file process.
Q: Can you explain the difference between the role of the medical advisor and nurse advisors?
A: Have you seen the practice directives that set out some of the differences in our process of developing the roles.
Q: I would love to see the practice directives.
A: Are they not distributed?
Q: No and if you could provide a copy of that I would be obliged. My suggestion is that you mail out distribution list information to everyone who is on the subscription list for the manual. Perhaps you could paraphrase the differences between the medical advisor and the nurse advisor as opposed to the nurse advisor by itself.
A: In the simplest terms a nurse advisor is intended to be part of the claims adjudication process to provide straight forward advice around some of the simpler issues – around clarifying diagnosis, identifying some of the medical content in the file for the sake of understanding and their knowledge of what is happening with the claim, to assist in interpretation of some of the medical information for non-medical staff and also to provide some of the routine contact with providers, attending physicians and others who may be involved. This is demonstrably parallel to what you see in nursing roles in hospitals, etc. Also to assist in some of the expediting and arranging of referrals, appointments and taking on some of the occupational health nurse activities relevant to their training around such things as work site visits and reviewing some of the requests for extensions of certain treatments and a variety of service delivery location tasks.
Q: The question is can nurse advisors give opinions on causation. If you will take a look at the binder – tab 20, Nov 24, 1997, the top of the 4th page. It is about bilateral carpal tunnel syndrome. At the top of the 4th page is a paragraph with a circle around it. The adjudicator says "you're file was reviewed with a nurse advisor who attended you work site. It is the work advisor's opinion with which I concur that in your case the occupational risk factors demonstrated were mild influenced to some extent by the speed at which you would be operating at any given time. The fact that you are peri-menopausal and mildly overweight would be viewed as non-occupational contributing risk factors. The fact that you are experiencing symptoms bilaterally would also favour the likelihood that your carpal tunnel syndrome is an intrinsic condition. I also note that you seem to be involved with the use of a computer at home and this activity may be viewed as a contributing risk factor. It is the nurse advisor's opinion with which I concur that the risk factors of your work place are minimal and unlikely to make any difference to your development of carpal tunnel syndrome and eventual need for surgery."
Now we think that that is not a role for the nurse advisor to be giving an opinion about causation and giving an opinion about surgery. Do you agree or disagree with that?
Nurse advisor attended the work site and We think that that is not the role of the
A: What the nurse advisor is doing is providing a clinical opinion and the adjudicator is in the process of making decisions on causation. If that opinion had been given by a medical advisor it would be the same content and the same information and the adjudicator would again be making their decision based on the information provided to them.
Q: Are you as a doctor comfortable with nurses, no matter how qualified, giving opinions about the need for surgery?
A: No I wouldn't be content about that part of it but a nurse could quite easily make the other observations that are included here about the situation, the individual and their condition.
Q: Now is a nurse advisor a qualified practitioner in the meaning of the term that you had up on the slides?
A: Nurse advisors are required to be registered under the RNABC, which is the college for registration for nursing. They are not specifically referenced in our slide or in the current legislation as providers.
Q: So they are not qualified practitioners?
A: They are not qualified practitioners under my reading of the current legislation.
Q: We have a nurse who is not a qualified practitioner giving opinions on causation.
A: You could put it that way. One can't make the assumption that the opinion is made in isolation without relevant available advisor input when appropriate. These are professionals who are capable of evaluating these findings and also professionally deferring to the expertise of the medical advisor where it is appropriate. They don't have free reign within a system that is not overseeing their work.
Q: I see no reference to a medical advisor in this decision letter.
A: That is true in the wording of this letter.
Q: It is probably not in the best interest of my clients but it seems to me that if I go to the review board on this decision and I have even an opinion from an attending physician that is going to carry more weight than the opinion of a nurse advisor.
A: That is true and the opinion of a highly qualified specialist would carry more weight than the next least qualified specialist beneath him.
Q: My point being again that it is not in my client's best interest. Aren't you making it easier for us to appeal by having nurse advisors versus medical advisors?
A: I suppose in the long run we are hoping to reduce the need for appeal and to come up with more accurate and effective decisions and perhaps more timely decisions on some of these claims.
Q: Mr. Hurst are you familiar with the term performance based payment?
A: Yes I am.
Q: I understand that is for if you retain an outside provider. That is the term that describes the payment relationship between the provider and the Board. Am I okay so far?
A: It is part of a relationship between a particular type of provider and the Board.
Q: If the provider is an occupational therapist and they get more people back to work they will get more work from the Board. Am I stating that too simply?
A: I think that is a reasonable statement. You are referring I assume to the work conditioning program?
Q: Yes
Q: It seems to me that that kind of situation would motivate outside providers to get people back to work because their very existence depends on that. Is that fair?
A: The pay for performance or incentive payment is an agreement that we have with work conditioning providers. There are core fees as part of the payment program and a pay for performance for the remainder of the program. The core fees are in a range of about $1000. The pay for performance or incentive is around $650. There are 4 areas that we measure. First and foremost is durable return to work. That is the percentage of those clients that are still at work 90 days post-discharge, the percentage of fitness to return to work after conclusion of the program, client satisfaction and the average length of stay. Those are the criteria we use in evaluating the outcome if you will.
Q: If I was an outside provider are you saying that there is no economic incentive to return people to work?
A: I think the incentive is to return people to work yes. The whole idea of the program is safe and timely return to work. That is the goal.
Q: I am talking about a level above that. If I don't get more people back to work then my competitor then I am not going to get any more work from you.
A: Not only that if you don't meet minimum standards then you may not get any work.
Q: How do you make sure that I am not pushing people out before they are ready?
A: That is why we take a balanced approach. We measure those 4 areas and every client that is discharged gets a client satisfaction survey to complete. We also have Angus Reed talk to clients post 90 days to make sure that we have a durable return to work and to make sure that they have been treated in a professional and responsible way.
Q: Don't those measure the perceptions of workers versus objective standards? I may tell Angus Reid that I was treated well by the provider so I may not know how I am doing. Do you have any objective standards to measure?
A: I think that is why we take a blend of the 4 measures that I mentioned. The criteria is weighted and the one given the most weight is durable return to work.
One thing that is measured is the assessment for intake to the program is also watched closely. One might say that programs would be tempted to assess rather stringently so that only their potential successes would get in. In fact that percentage is monitored closely so that the program doesn't have the ability to reject a high number for the sake of picking the more straight forward cases. In monitoring the durable return to work and also monitoring the fitness return to work on discharge percentage is also fairly objective. It is also repeatable in the sense that if the long term return to work statistics aren't there then something else has got to be looked at.
Q: I have a couple of more detailed questions. In terms of health care medical aid, Section 21 and 56 in chapter 10 of the manual. Section 56(1A) talks about getting the form 8 within 3 days. We heard that it is really the form 8 that starts the process in most claims. Has there been problem with collecting the form 8 from physicians? If so can you give us a rough idea of how significant a problem that is bearing in mind that it is generally what kick starts a claim?
A: Generally we don't have a problem getting reports from physicians. About 50% of the claims initiated are on the basis of a report from a medical practitioner.
To elaborate, in recent negotiations we have contracted the window within which physicians will be paid for the forms. We have reduced the window of payment of forms from being open ended to now being 5 days or less. The physician is required to submit a form to the Board but there is no legislative requirement to pay so if they don't submit in 5 days they don't get paid. This is why the form 8s are driving more claims registration than the form 7s.
Q: I had a number of questions on Chapter 10. Section 74.50 talks about a worker changing doctors because of a loss of rapport with the doctor or because they want a different practitioner. That should be referred by the adjudicator to the medical advisor. Do you have any information on the number of times that that has been referred and a worker's decision has been overturned?
A: I think that it would be rare.
Q: As you may know the Board, in most cases, restricts physical therapy to 8 weeks and that is a matter of controversy among workers and doctors. What is magic of 8 weeks?
A: 8 weeks is buried somewhere in the history of the organization. I don't know but perhaps there was a time where the medical evidence or the clinical evidence suggested that 8 weeks was an optimum point in terms of cut-off of benefits. I think that what we are seeing now and it is basically exemplified in the continuum is that the evidence is saying that passive modalities are probably as effective as anything else in the acute stage for pain management and simple mobilization. But after about the 3 to 4 week mark the passive modalities start to lose out in terms of the evidence and, in fact, the 8 week limit may be long by today's standards. It perhaps should be 4 except for maybe the therapists who are not part of the new conditioning program and don't follow the new evidence.
Q: Continuum of care for soft tissue injuries – what do we mean by soft tissue injuries?
A: It is basically defined as strains, sprains and contusions. If you want to use back injuries as an example about 90 – 95% of back injuries are classified as mild strains so that excludes disk related injury, traumatic injury, fracture, malignancy and infection.
Q: Would those all be ASTD claims?
A: ASTDs are considered to be part of the continuum. The handling is somewhat separate and a separate continuum is being developed for ASTDs.
Q: So it is soft tissue injuries except for ASTDs?
A: Yes and the other exclusions that I mentioned.
Q: Your J-curve, the base numbers involved in this curve are only ones still on claim so to speak aren't they? The ones considered plateaued and ready to go back to work they are out of the system for the purposes of a J-curve?
A: Yes although my understanding would be that historically the point of reaching plateau is hitting the point of J-curve, which is about 24 weeks. I don't know that in the traditional system anyone would be plateaued with a soft tissue injury any sooner than that point.
JIM SAYRE:
Q: Let's talk about the qualifications of medical advisors. As I understand it there is no special qualification when you hire a medical advisor. Is that right?
A: The process is designed to try and identify those with some kind of previous training or experience in occupational medicine. At this point in time a level such as the Royal College certification is relatively new however and there aren't a wide variety of these people available to the Board.
Q: So they are basically general practitioners, some with occupational medicine qualifications who more or less learn on the job in the same way that all doctors learn and that is by taking continuing education classes. Is that right?
A: There are some specified training such as the Canadian certification in occupational medicine, the CCBOM and similar training programs. At this point there are only 4 or 5 occupational medicine fellowship physicians registered in the whole Province so we don't have a large pool to draw from.
Q: Are all the Boards' present medical advisors qualified. Would they all be able to practice privately if they chose to.
A: They are certainly all licensed by the College of Physicians and Surgeons. There are some who may need retraining or upgrading.
Q: The belief in the worker community is that the medical advisors have not been qualified to practice medicine anywhere else. Is that incorrect?
A: I think that is incorrect.
Q: Has it ever been correct in the past?
A: In the past there have been medical advisors who were licensed from other countries that achieved a certification to work at the Board who would not have been certified into private practice. They are no longer with us I have heard that complaint before and we could provide a roster of our physicians on staff if necessary.
Q: Is the department that you head Dr. Blair responsible for any research into the causes of work place injuries?
A: Not directly within my department. Now over time there has been a fair amount of research into some of the statistics and the information within the Board but in my short time here I haven't been involved with that. I would expect that there would have been some over the years in occupational medicine, for instance, and occupational diseases and other areas within some of the specific programs in rehabilitation.
I would like to mention the other area, which is the rehabilitation centre where we have had medical involvement in research initiatives. We currently have a multivariate predictor study that has medical involvement, Dr. David Hunt is involved in that. There have been other such studies out of the rehabilitation centre but I think that Dr. Blair is responding more on the compensation side. Those medical advisors are really medical advisors who would not participate as much as the rehabilitation centre physicians or the occupational disease physicians.
Q: You gave us the number of 50 medical advisors working for the Board now and that would be reduced to approximately 37 with the change due to case management. Is that right? Were those numbers including all doctors employed by the Board or just the doctors that are employed as medical advisors?
A: The 50 includes all of those employed by the Board. Approximately 30 of them are employed in medical advisor positions around the province. In some of those area offices there are also sessional people who assist with part of the work and there are a couple of situations where there are people working less than a full time position as well.
Q: Which are the positions that are to be eliminated in the near future?
A: There is no group to be eliminated but we will be reducing the number of medical advisors in some of the area offices, in some cases from 1.5 down to one and in other cases from 2 down to 1 or 1.5. It will depend on the size of the office.
Q: I would like to go through with you the continuum of care and the involvement that the worker has in each stage of the process. I believe you said that the first contact would be after 3 or 4 weeks and one of the purposes of that would be to find out if the worker was amenable to taking part in the continuum. Is that right?
A: I am not sure if I used the word amenable. It was in the context of identifying whether there was an established return to work date or a plan to return to work that was eminent.
Q: Suppose the worker said to the caller I am going to take care of that with my doctor. I am working with my doctor and he is going to tell me when I can go back so I don't need your help. What effect does that have on the worker's claim?
A: The process that is in place defers to the judgement or concurrence of the attending physician. In some instances that would probably trigger a contact between our own medical advisor or other Board staff to follow up on that. Normally that would trigger some communication with the attending physician who may have same sentiments or other options in mind.
Q: Let's say that you are talking with the family doctor and he/she said the worker is not capable of returning to work. Would you cut off benefits if the worker is not willing to take part?
A: That point of view of the physician would be accepted in the current model. It is quite reasonable for us to expect the attending physician to be willing to discuss his plan for return to work of the worker with the Board physician. If he or she doesn't have a plan then that has to be accepted but I don't think that it should go without a reasonable amount of challenge and questioning. I think that in that process the attending physician starts to recognize that it is quite legitimate to have expectations around outcomes and a planned approach to care. To put it in context the Victoria office, when it got down to the soft tissue injuries to refer into work conditioning programs 95% of the time the attending physicians supported it quite readily. In fact the question I go back from some of them in personal conversations was could we refer our patients sooner than 3 to 4 weeks if we thought it was suitable.
Q: The J-curve that you refer to that is a curve based on average findings by somebody about when a worker is ready to start conditioning. Is that right?
A: The curve reflects actual statistics.
Q: I should have asked the question with respect to the time intervals –is that is based on group experience or US research or what?
A: It is based on the research and the medical literature that is fairly generic and wide spread in the field of work place injury that says for these kinds of injuries at about the 3 to 4 week point most of the acute symptoms should be passed and this is an opportunity for the implementation of a more activity based process. Perhaps the best example of a study on that would be Dr. John Franks' paper from the Ontario Institute of Work and Health and prior to that the Quebec taskforce. To characterize this research or mainstream evidence based approach to be American I think would be unfair. The Quebec taskforce is the basis of the ICBC soft tissue management continuum and it certainly gave rise to our initial approaches in this area.
Q: That is based on general predictions for the work force as a whole. Suppose that when you contact the family doctor and he says that this may be the right time for a lot of patients but not this patient. This patient needs another 2 weeks of rest.
A: That is up to the judgement of the attending physician.
Q: Nobody is going to cut him off benefits?
A: No that won't happen. The other side of it will be that at some point this attending physician will have their own interest tweaked in what the evidence is and they might ask themselves if it is an occasional patient of theirs that is unsuitable or if there is something unusual about their practice where all of their patients are unsuitable. If we start to see patterns in the future where some physicians have a predictable percentage of patients returning to work hardening versus some physicians who are barely returning any. We need to go to those individuals and figure out what is so unique about their practice that they are able to exclude all of their patients from what the evidence says is sound treatment for the majority.
Q: Would it not be fair to say that there are parts of the medical community who feel that rest may be more appropriate treatment at the outset of the injury?
A: At the 4 week point that evidence is probably pretty scanty and questionable.
Q: Would you see a doctor who felt that way as negligible in his practice?
A: Well we would ask for their evidence. The most recent study that I saw was a Scandinavian study that showed even as little as 2 days of rest and inactivity could be detrimental to the recovery process. That is the way that the evidence is going.
My colleague just presented me with a package of studies that would be contrary to your view Mr. Sayre.
This is part of the process of setting up expectations. Some of these expectations are around what is good evidence and how to evaluate it and how to apply it to care on a day to day basis so I don't think that we need to be shy about holding forth the best knowledge available in trying to incorporate that in our approach to treatment
Q: What I am hearing from you as you explain it in more detail is that the Board has adopted this continuum of care approach as a gospel approach to how these things should be treated and is going to lean pretty heavily on any doctor that doesn't agree with him. Is that a misunderstanding?
A: I would phrase it a little differently. I would say that medical practice is trying to move towards modelling care after the best available evidence. We are recognizing the direction that the evidence is going and recognizing that there are early, mid and late adopters when it comes to evidence and that is how practice changes and evolves. I guess what we are saying is that we would like to be in front of the change rather than behind it.
Q: There is a range of variation within the patient population itself.
A: Yes and that is where well-informed professional judgement is critical.
Q: You are saying that you will accept that a doctor says a worker is not yet ready to start unless there is some good reason based on evidence not to?
A: Yes no problem.
In the practice directive on the continuum there is a section that covers where the attending physician does not refer. The methodology is laid out and it basically requires discussion between attending physician and the medical advisor about an alternate care plan. I think that what we would like to see is some reassurance that there is a clinical care plan being worked on by the attending physician given the preponderance of evidence that leaving people to lie in bed is not the mainstream kind of evidence based medicine that flies today.
Q: When I mentioned rest I meant something other than exercise, not bed rest. My next question is about the next stage of the process. What involvement does the worker then have at this point? How is the worker involved in creating that return to work plan?
A: In the absence of involvement in a work conditioning program...
Q: No this is just after the 4 week process and the worker is called to say that he should be making a plan and the worker says great I'm all for it.
A: One option is to go through a work conditioning program and they go through an assessment process and the program is effectively tailored to their needs, their particular injury and their level of function. Their attending physician could work out an alternative plan if there was an issue where they were having too many symptoms or were too acute for work conditioning. Then they could opt for some other therapy for perhaps a 1 or 2 week period and then reassess their suitability for work conditioning or whatever else is necessary depending on the clinical investigation. By then we should be 4 to 6 weeks along to determine what progress has taken place or what is needed.
Q: I thought that you said the plan would be worked out between the medical advisor and the attending physician and that this was the difference between the new model and the old model. In the old model the medical advisor would get involved in a negative way later in the process and now he or she is going to get involved in the early stages to help create this plan for return to work. Now you seem to be saying that the worker is going to be referred to a third party provider for work hardening and they are going to decide whether they are ready for the process or not and that very much concerns me.
A: Perhaps we are getting this out of order but if they go to a work conditioning program it is with the concurrence of their physician. If the attending physician or current provider does not concur then it is up to them to sort out a plan. It may involve some discussion with the Board medical advisor to confirm what sort of a plan they have in place.
Q: I'm talking about how the process works when all parties are willing to be involved. What happens to the worker? Is there a meeting at the Board between the medical advisor, the attending physician and the injured worker? Is there a phone call between the three on a party line?
A: At the point where the contact occurs at the 3 to 4 week point if the likeliest sort of option seems to be the work conditioning then the instructions are that they attend with their physician a ...
Q: Who decides that that is the likeliest option? Wouldn't that be the attending physician who decided that that was the first part of the process?
A: Yes somebody has to decide yes or no. At some point there needs to be a suggestion that that's an option. In some cases there may be attending physicians who will even one up the Board and refer them to work conditioning programs prior to the 3 to 4 week point. Failing that having occurred or failing a work plan that is eminent then the contact from the EIPS co-ordinator on staff with the claimant and fax the request to attending physician should trigger a discussion between the claimant and their own physician about their suitability for work conditioning and their response to the Board. All players are involved pretty quickly.
Q: How does this plan work? Is it a document like a rehabilitation plan where they all sign on to it? Do the parties, in effect, officially agree to it?
A: As you know from the case management presentation only workers who are not fit to return to work after leaving a work conditioning program will go into case management. The first phase of the continuum of care would be managed through the entitlement area. Because of the high success rate, 80 to 82% in the last 3 quarters it seemed appropriate that we triage in that fashion.
Q: I am one step up in the process.
A: Before the first phase the worker is asked a series of 8 questions - do you plan to return to work, have you discussed return to work with your physician, have you talked to your employer recently, etc. The worker is then encouraged to see his or her attending the physician and the physician refers or doesn't refer. If the referral is made the return to work plan or the restoration of function plan is between the worker and the clinicians within that work conditioning program, with contact with the employer if necessary. However, the worker is encouraged to call their employer every week to maintain contact.
Q: If the Board calls the worker and asks if he wants to get involved in work conditioning plan and worker says yes. He then goes to attending physician and asks if it is possible and it if is he gets involved.
A: Yes
Q: How does the doctor know whether it is appropriate or not. How does the doctor know enough about the nature of the activities in the work conditioning plan to know whether the worker is capable of doing those activities safely or not? We heard Mr. Graham say that his duty is to make doctors aware of what programs are available.
A: I am relying on the professional judgement of the therapist, the work conditioning program staff, in this case, to assess this individual and to take into account any restrictions that I might impose on the individual such as lifting limits and design an appropriate program. Now Dr. Graham's point I think was to say that we do need to do some education with practitioners in general about the usefulness of these programs and their effectiveness and we also an indication of what they contain in terms of actual activity. There is a professional involved there, a licensed therapist, who accepts a good deal of the responsibility for the actual program.
Q: What sort of information is the 3rd party provider given when the worker is sent there so that they can make an appropriate assessment as to whether it is safe to embark on a program and if so what kind? The work hardening programs are not all the same are they?
A: The first step in any program is an assessment. The clinician takes a history, discusses the injury with the client and develops an individualized care plan. That is true whether the worker is referred to work conditioning, work hardening, occupational rehabilitation, a pain program or a medical rehabilitation program. The first step is a rigorous assessment, history taking, etc. to determine what is being dealt with and what the individual treatment plan is going to be for the individual. In keeping with Doctor Blair's comments a worker who goes through that assessment would have been given a much more rigorous assessment than what you would be given at a visitation with your attending physician.
Q: Would the 3rd party provider have access to all the Board's medical information at that point?
A: No but that part of it is the role of the attending physician to provide the relevant information, which would be relating to their access to their patient's record. If you are alluding to an x-ray finding of a fracture or something that was unrecognized or if there was something that would limit or make risky the process of a work hardening or a work conditioning program then that is why we contact the attending physician at that point. That gives them the opportunity to say yea or nay about suitability or safety.
Q: The attending physician communicates what the 3rd party program needs to know in order to make the assessment?
A: That is why we ask that they are involved and that we ask for their concurrence.
Q: Is there a step built into that process where the attending physician is able to say yes or no after the assessment before the program actually starts?
A: I believe that it wouldn't happen automatically. If the clinician doing the assessment felt that there was a discrepancy between the fact that the person had been referred and their perception of their abilities or limitations, or perhaps a new finding then they would communicate that back directly and that is part of their professional responsibility.
Q: Of course the worker could go back and initiate.
A: They could also initiate something. The worker could go back and say look there's a change since the day before yesterday and I want to go back to my attending physician. That wouldn't be an issue either.
Q: The next step of the process is after the initial stage – the case management system starts.
A: After the work conditioning piece the claims in the new model would be triaged into case management. This is where the internal team of Board interdisciplinary staff would work collaboratively to identify psycho-social issues and any kind of issues that should be recognized in a rehabilitation plan. Then they would present that to the attending physician through the Board physician and present it to the employer, worker trade union representative in the work place if appropriate. There we are really talking about a return to work plan versus a clinical care plan. In our traditional model, which we still have up and running what we are trying to ensure is that if a worker is not successful in returning to work through work conditioning that we get an immediate referral into occupational rehabilitation with the attending physician's blessing so that an interdisciplinary team can start working on a return to work strategy.
Q: Is the worker involved in the case management process?
A: The worker would be less involved than in the case management model but it would be done in agreement with the attending physician.
Q: Would the worker be involved in the case management return to work process?
A: Yes
Q: Is that plan a written plan?
A: That is an area that is still being flushed out with respect to the appropriate templates that will be used and the processes that will be introduced into the work place. I believe that when the Commission visited Prince George they had some comments from staff about the need for further refinement of the actual written document that get presented in the work place and whether a visit needs to take place before a written document is proposed. So those kinds of things are being worked out in collaboration with the stakeholders involved. However, at some point a written proposal would be put on file where the worker, attending physician, the employer and the Board have reached an agreement on what a proposed course of action should be.
Q: In the ordinary model of how that would work would the worker be called into the Board office to attend a meeting?
A: No the worker would be asked to attend the work place.
Q: So the meeting would take place at the work place?
A: The meeting would take place at the employer's and worker's place of work.
Q: I imagine that is not always the case.
A: Where possible it will occur at a person's work otherwise it will be here at the Board.
The Prince George prototype as it has been described to me, in general, there is a care plan initiated early on. The medical advisor with the information available and discussion with the attending physician crafts a simple one pager that summarizes what the discussion was and what the appropriate plan is. That will be faxed to the attending physician to determine whether they agree or disagree and then it comes back. That is incorporated into the routine process now.
Q: The process that you were just describing. That is the process that takes place when case management begins?
A: That, in general, is what is used in case management. It is reasonable to identify that consensus between the attending physician and the case management team and, if you will, ensure that that discussion has occurred and been agreed to.
Q: Nurse advisors – how are the interactions between nurse advisors and the people making decisions on the claims going to be recorded? Are these going to be recorded in memos the same way as the opinion of a medical advisor is today?
A: It would depend on the nature of the information. If it was a clarification of medical terminology or making sure there is understanding around the nature of the injury I wouldn't see that as being documented. If there was a work site visit involved and some observations made around the claimant, the nature of the work and risk factors that would be documented in a report that would become part of the record. In those instances where a nurse advisor was on site making observations about the claimant's performance of their work that is very imp information that needs to be documented.
Q: It certainly sounded like the claims adjudicator was finding it relevant to quote the nurse advisor's opinions as part of the basis for the decision.
A: In that decision I think what you saw was the adjudicator using the nurse advisor in a way that medical advisors have been used in the past. There has been a fairly extensive instruction go out from the medical services department that the evaluation of risk factors in the work place are not to be medical issues. They are to be risk factors that are weighed upon having watched and observed work being done in the work place. I think that what has happened here was that the nurses were brought to the Board in contemplation of moving towards a case management model. Your specific question on whether or not a nurse advisor's opinions could be documented would be found in the practice directive where it says that the majority of requests should be handled without the necessity of a written or electronic referral. The reason for that is the nurse advisors are anticipated to be part of the interdisciplinary team that will have a case conference on a claim at the outset. The physician liases with the physician. The nurse advisor is there to ensure that the ongoing delivery of rehabilitation services is in accordance with the rehabilitation plan. We have staffed up with nurses and some of them are working in a traditional model here in the lower mainland waiting for the role out of case management. I think you may see some aberration from the intention of why the nurses were brought to WCB.
Q: I am still concerned about the extent to which nurses might be asked to&ldots; I am going to go back to where I started last Friday, which was to point out to you that one of the greatest single grievances of workers is that the Board frequently rejects the opinions of their attending physician on the basis of reference to a medical advisor. Can you assure us that there are not going to be any situations where workers are told that what their treating physician has said about their ability to return to work or their degree of disability or whatever is not being accepted because a nurse advisor disagrees with them.
A: I am always afraid to make absolute statements because I am sure that in several 100,000 claims over the past couple of years or looking to the future you will find one where we have deviated from what I am going to say today. The intention is to move them out of that role and to use a dynamic treatment and rehabilitation scheme that will elevate the standard of care as the injury is prolonged. So you move from a uni-disciplinary focus to an interdisciplinary treatment focus and you elevate the standard of care to deal with the specific injury. That negates the necessity for a Board medical advisor to get involved other than in a collaborative way. Because you have the admission and the evaluation at the start of work conditioning and you have the discharge report at the end of conditioning. You have the assessment at the start of occupational rehabilitation and you have the discharge at the end. You have the assessment at the start of the pain program and you have the discharge on discharge. You've got a whole variety of reports that show an elevation of the standard of care as the injury prolongs. So there is no need for the medical advisor to intervene in that. You have a medical advisor available to the occupational rehabilitation and the pain providers. That is a requirement, to have a full blown interdisciplinary team. There are other medical people that are working on the issues.
Q: These are also medical advisors?
A: No they are not. They are medical advisors employed on a sessional basis or in a hospital environment where the programs are delivered in a hospital who are part of the interdisciplinary team that works on this particular worker's clinical care plan.
Q: These would be people in private practice?
A: It could be private practice or it could be physicians associated with acute care hospitals. Most of the private providers are employing sessional physicians from the community to give advice and expertise with respect to the clinical care plan. So you have a whole variety of information from the various treatment regimes so I don't see a need for medical advisors to be involved in most of these claims. That is why we are downsizing the number of physicians who work in the claims area. We still have many physicians in the rehabilitation centre who are associated with the delivery of rehabilitation. They will stay there because as member of a CARP accredited program you must have physicians available. If it does go to appeal or if an adjudicator needs to make a decision you weigh the evidence of the work conditioning provider, occupational rehabilitation provider, the pain program provider and the physician.
Q: You are telling the commission that the evidence, for the most part, is from non-board employees and if there is a disagreement then the review board will have to sort it out?
A: Yes
Q: Can you tell us what the visiting specialists program is and what effect it will have on the worker's choice of medical services?
A: This is a program set up to bring together a select group of highly qualified specialists, often sub-specialists in certain fields particularly in orthopaedics together. A small clinic is set up in the building and these specialists are brought in for ½ a day or a day, a week or every second week or once a month to see certain kinds of cases that are having trouble getting seen elsewhere for various reasons. One is individuals where the subspecialty is in short supply and there are parts of the province where ready access doesn't seem to be happening. Some situations may have attending physicians and referring consultants from the periphery seeking another opinion from a higher level specialist. So there is a whole variety of situations where there is a need for highly specialized expertise in a fairly expeditious timely way.
Q: Is it up to the attending physician to concur in the referral of a patient to that visiting specialist?
A: Yes it is and it is up to the worker to want to come. It is also up to the Board medical advisor, many cases, to make the attending physician aware of who is available to see the worker. In some cases these are the kinds of particularly difficult cases that individuals would try and see a physician for but it would help eliminate the 6 month wait.
Q: Is this program expected to continue?
A: The visiting specialist clinic was created to assist workers in their movement through the continuum. So if you had a medical contraindication to treatment in the continuum for a soft tissue injury we wanted access to a specialist's opinion quickly so that we could either determine whether surgery or elevated treatment or referral back to the continuum was needed. In a study that Mr. Hurst did in 1996 our population of injured workers was waiting, on average 404 days for an arthroscopy. That varies by geographic region but the average wait for an arthroscopy was 404 days. It didn't make much sense to me to have a continuum that was focusing on early intervention to be thwarted by a 404 day wait to get someone into surgery.
Q: You anticipate having to continue this program for the same reason then?
A: Yes and in fact most of these people participate in research and teaching. They were hired to continue researching and to help promote mainstream evidence based practices in community. In fact, some of them have done that already.
WINTER:
Q: No questions
COMMISSION:
Q: I think it is excellent that these busy sub-specialists are making themselves available – what is their incentive to participate?
A: It was difficult because initially the marketing only went as far as the secretary. We pay them a reasonable sessional rate and we give them early cases. In the past they were late intervention physicians and as Dr. Hawkins said to me, I don't want to see people who have been operated on 3 times and then you are looking for me to perform a miracle. They get paid $800 for about a 4 hour session and they see 3 to 5 clients. The normal fee for an expedited consultation is $200 so some days they make more than a day's wage at their office and sometimes less. I am not sure if it is a monetary incentive or that they just want to participate.
Q: I wanted some clarification on the numbers. Dr. Blair spoke of the current Board medical advisors being at 50 –those involved in compensation and rehabilitation. Are those including the sessional contracts or are those salaried employees?
A: That excludes the sessional contracts Within that group there are 3 that are certified specialists in the field of medicine or surgery that do consulting for us but the vast majority are medical advisors and they are salaried positions. Within that group there may be a few that aren't working full time. They may be at .8 or .6 depending on the arrangement of that area office.
Q: Who will you be using for the physician component of case management? Will they primarily be sessional or salary people?
A: They will be the medical advisors we have now subject to training and adaptation to the new model. Our regular medical advisors will become the key medical component of the case management model.
Q: With respect to the role of Board medical advisors how does the input from your own medical advisors on causation issues that is entitlement – whether the injury arose out of employment – when does that come in and which medical advisors are involved in that issue?
A: The medical advisors in the area offices are involved in the clinical input to that. There is a fairly technical differentiation between causation and the medical nature of the injury or its likely cause and occurrence and so on. I don't want to get into this maze of who decides causation. That is the responsibility of the adjudicative staff.
Q: I understand that but the doctor has got to give his opinion as to whether the trauma is responsible for the symptoms and the injury sustained.
A: That is right to the extent that they are able to. Obviously there are lots of situations where there isn't any evidence that will say that this injury will cause or will be caused by that particular occupation or activity. To some extent there are sort of in a position to say that you the adjudicator probably know as much about causation as I do and from the medical perspective this is the nature of the injury and this is what has happened but beyond that it is subject to the rest of your evidence.
Q: Will nurse advisors play any role in providing medical input to adjudicators on causation issues?
A: Excepting the example that Mr. Steeves brought forward that tends to read that way that is not the intent. There are certainly many situations where additional clinical information can be brought even just to bring clarity to the adjudicator's understanding of the file and the understanding of the treatment that is being initiated by the attending physician.
Q: I take it that the main motivation in replacing medical advisors with nurse advisors is an economic one?
A: I wouldn't see that as a primary motivation. I would rather see it as augmentation rather than replacement. A significant part of the old role of the medical advisors would not be suitable for the nurse advisors in today's world. I think that a significant amount of the clinical information that we need, which in the past didn't exist at all, can be provided by nurse advisors as sort of a more front line availability to the claims staff.
The primary driver is not financial. The driver is that if we move to a model that is less forensic in nature and more holistic then we don't need as many medical advisors giving opinions on every file that comes into the organization. The whole strategy is based on relying on the attending physician to do the right thing and providing the attending physician to work collaboratively at an early stage. So it is not financially driven. In other jurisdictions that we have looked at nurse advisors have very adequately filled the niche in terms of delivering advice on the delivery of rehabilitation services – Alberta and Ontario for example.
Q: You are not suggesting that they can do a better job than qualified, licensed medical doctors are you?
A: For the role of the physician they cannot do a better job. What I am suggesting is the role of the physician in the old model is not as great in terms of volume and involvement as what it is in the new model, therefore, we don't need as many attending physicians within the Board or medical advisors within the Board.
Q: What has been the experience in terms of the willingness of general practitioners to co-operate and make the time for consultation with Board medical advisors in terms of treatment plan Dr. Blair.
A: In general it is quite good. Sometimes we have nurse advisors contacting attending physicians for backup information or to follow up on reports and get some information exchanged as well. I did mention earlier on where with regard to work conditioning program quite a high proportion of the attending physicians were supportive and accepting of the initiative of the Board in putting work conditioning forward. There is another side in that there are situations that our adjudicators face now where some attending physicians are hardly co-operative or supportive in trying to assist the process of recovery. We have situations where attending physicians won't talk to board staff, they won't return phone calls and they send in rather brief reports. It is not all roses when dealing with attending physicians out there. Sometimes a nurse advisor may be able to develop a better rapport.
Q: I am a bit surprised at the idea that there was an acute phase time period applied to all soft tissue injuries, primarily spinal tissue injuries, when those of us who have done litigation in this area know it can range from mild to severe. The prognosis and the course of recovery can vary widely with soft tissue injuries depending on the severity of the strain. How do you take into account the severity of the damage to the soft tissue in terms of the continuum that you use?
A: From my clinical perspective the contact at 3 to 4 weeks is already being relatively conservative and that is obviously built into the process where it is subject to the concurrence of the physician. If there is an issue of insufficient recovery at 3 to 4 weeks then the discussion shows that it is premature. On the other side of it I don't think that everyone with a soft tissue injury is doomed to 3 to 3 weeks of pain and discomfort. Some are feeling much better within a week and, in fact, could be in a work conditioning program sooner than 4 weeks. So there is flexibility in both directions there.
Q: Is the referral to work conditioning program done through a general practitioner in the same fashion that he would refer to a physiotherapist outside the Board situation?
A: It is initiated by the Board but subject to their agreement.
Q: I am just wondering about input from the general practitioner in terms of concerns or limitations and so on. If it is not the general practitioner making the referral what means is there to ensure that the general practitioner's input on restrictions or limitations get to the work conditioning assessors?
A: The communication goes to the attending physician first, there is contact with the attending physician and the claimant, there is agreement on it and then the information comes back for the referral. That is basically done on a fax form basically are you okay with the work conditioning, are there special issues that you want to discuss with us and are there limitations?
Q: I am curious on your monitoring and your follow-up in terms of return to work. You have indicated that you do a follow-up in terms of durability on return to work in assessing your external service providers. Has the Board done any formal review of workers returning one year hence or 2 years hence?
A: There is validity in doing that but at this point I don't think that we are quite one year into the process but the return to work at 3 months is documented now. I don't believe that it has been studied beyond that but given time there should be. For this cohort I am not sure that we will do a follow-up at one year. What is important is that we measure the recidivism of this population and in that regard we have approached Dr. Frank to work with us on an evaluative study to look at the recidivism out of this cohort versus those that were not put through the continuum. I think that the advice that we have been given is that 3 months is a pretty good follow-up for this particular cohort and if the injuries are more severe then we should probably be doing a follow-up at one year and some of those would be the vocational rehabilitation type injuries and interventions.
Q: Unless payment of the physician's account is made within 60 days the Board pays interest on the account. Am I correct on that?
A: The old agreement was that we would pay interest but now the new agreement is that we pay interest in excess of 60 days. The entire interest bill for the previous year or 18 months has been $1000 compared with a significant amount of interest on the old paper billing side.
Q: So the tele-plan has been successful in that regard?
A: It has been successful in ensuring that those physicians who bill accurately through tele-plan are reimbursed very quickly and there is no attraction of interest. We have a lot of difficulty with physicians who are signing on ensuring that they code the information correctly via tele-plan and we have a committee up and running with respect to ironing out issues around the doctors' frustrations with tele-plan.
Q: When in Prince George there were 2 doctors there that were part time. Were they community doctors?
A: Prince George is one of the area offices where we have 3 sessional physicians in addition to the two full time medical advisors. There are sessional physicians who do a day a week and then we have the two full time medical advisors there. One of the full-time medical advisors is involved in doing pfis and disability evaluations.
Q: How do you pay sessional physicians?
A: The sessional arrangement comes out of the BCMA negotiation actually with the government with the medical services plan. It is basically a process that converts into half day payments. They are basically a block payment for a ½ day of time. The sessional rates are calculated through the fee for service agreement. There are some areas of medicine where it is used quite widely – i.e. psychiatry and other situations where they are doing different kinds of care. The Board basically transfers that sessional rate and understanding over to our purposes and we pay them on a half day basis.
Q: Is that the same as a specialist, $800 for ½ a day?
A: It is a different rate that is set according to the size of their practice because it includes a theoretical overhead component relating to their fee for service income. In general the fee for a ½ day session is somewhere in the neighbourhood of $300 for a family physician. A session is currently defined as 3.5 hours.
Q: Comparing the doctors fees that they bill to MSP versus what they bill to WCB there is a concern that there is a much higher fee paid overall by WCB than there is by MSP. If you put together the forms and the value of the visit is it significant?
A: For a family physician doing an office visit, no procedures, the form fee is effectively the same as the office visit so it effectively doubles the billing for that office visit. If the physician is doing an emergency visit after hours or on the weekend then their emergency fee is significantly higher and the form fee is the same amount. I believe that the form fee is $28 or something like that.
Q: So if it is two visits and 2 forms is that $100?
A: That is about $100. I believe that a current office visit is $25 and some cents under the MSP.
Q: What is basic rationale for the difference in remuneration for doctors providing for injured workers versus at large through the MSP?
A: The basic agreement we have depends heavily on the existing medical services plan schedule of benefits, which is a standard fee guide and used across the province. The schedule of benefits is quite tightly defined around diagnosis and treatment of illness so it historically has not had any provision in it for things that were not direct treatment or care. So it is kind of a constrained schedule because although it has 1000s of items it has very limited purpose. For what the Board needs around submission of documentation or form 8 or form 11 or for certain kinds of evaluation – special visits - there is no equivalent in existence in the MSP fee schedule so the Board has developed a short list of 10 or 15 individual fee items, which are available for certain items including the form fee. So effectively speaking an office visit triggers an office visit fee that is intended to be identical to the MSP plus a form fee. That is a standard approach.
Q: Isn't the office service component enhanced as well?
A: It is enhanced under the new agreement by 6%. The basic medical services plan fee schedule doesn't include all of the benefits to physicians. They are all privy to benefits around a continuing education fund, reimbursement of their CMPA premiums, their medical malpractice premiums and also a disability insurance program. Those are kind of fringes that have been negotiated on the medical services plan schedule for years. They go back 20 years and they have a net value of about 4%. So the Board payment, to equal the medical services plan equivalent, requires the Board to pay 104%. Now with the new agreement there is an extra 2% because of the cost of doing business, of our requirements around electronic submissions to tele-plan and electronic submission of all other data, which we are working towards over the next year. So with that additional 2% the Board will have complete electronic communication with physicians.
Q: That extra 2% represents some kind of capital cost that it is expected that doctors will have to pay?
A: It is intended to address some of the costs of doing this unique business with the Board. There are costs for setting up their computers, there's vendor costs, there are work flow costs in the physicians' office so we are trying to be fair in balancing that cost so that they will work with us in that way.
Q: There is also a dictation service that the fee agreement is contemplating?
A: That is part of the electronic information and one of our transitional technologies will be to put together a dictation service where they can basically pick up the equivalent of a 1-800 line and dictate into our system directly. We will provide them with a fax response to double check that with them.
Q: In terms of implementing the agreement is the Board confident that the medical services plan will be able to play its role in terms of assisting the implementation of agreement to which I gather it is not really a party?
A: We had questions about the medical services plan's ability to meet the technology needs and at this point things are looking pretty optimistic. One of the things that they are limited by is that their regional tele-plan system is pretty primitive electronically. It is really just a bill payment plan and we're needing clinical information and diagnostic information tagged onto the bill payment. They are working with us in order to extend the capability of the system to do that. The big advantage that it gives us and the attending physician is that it allows some management of the reconciliation process. It allows a simple kind of one stop billing process and it also allows a sorting of this process, it allows a sorting of this process of deciding those cases that end up not being WCB and they need to be re-billed to MSP. It allows a seamless process behind the scenes to look after that for them.
Q: What would be the argument against doctor's billing for compensation related services in accordance with any fee agreement directly to MSP as opposed to the Board?
A: Do you mean at established MSP rates?
Q: Not necessarily
A: Well that is what we are trying to do with tele-plan. Effectively they will just be billing it through tele-plan and then tele-plan will be passing it on to us. So they are dealing with one paying agency on the surface but behind the scenes the Board is handling part of that and paying part of their account. That is what we are trying to move towards.
To elaborate, initially when developing our strategic alliance with MSP we did lay out all of our functionality requirements. Like with any new partnership with a provider there wasn't anything that couldn't be done. Their basic business application is a payment engine. When we started looking for information through their payment engine I think that they became aware of the amount of programming changes that needed to be made to accommodate our other business requirements so if your question is could MSP continue to be the payment engine for the Board – yes. Will it fulfil all of the functionality that the Board requires in its relationship with physicians and other providers the answer is no. E.g. physiotherapists recently bailed out of their arrangement with government and so we can't bill them through tele-plan because MSP does not allow any billings to go through MSP for opted out providers. We will be forced to provide our own payment engine as a result of the opted out providers. We have approached MSP about allowing us to have opted out providers billed through their payment engine so there are a number of subtle disputes going on that complicate the issue.
Q: My next question is about the gathering of data in health care only claims. I am wondering whether there are any efforts being made to track data on health care claims regarding the nature of the injury sustained, the duration of health care only claims, the nature of the treatment and those kinds of items of information?
A: We have purchased a tool called Provider Compare, which allows us to track not only health care claims but ongoing claims by injury type and by provider that would allow us to do the same kind of report cards that MSP currently sends to physicians and other providers. The whole notion of moving health care providers to submitting fielded data is to allow us to then take that data, extract it and be able to slice and dice it however we want. With the current process we end up re-entering data off paper in fielded forms that don't necessarily lend themselves to that kind of analysis. The nature or area of injury is intended to give us that kind of data by health care claim and by short term disability claim. So that whole recoding from the ICD9 methodology to the AWCBC methodology was intended to allow us to do analysis and also to benchmark ourselves against other jurisdictions by injury types and treatment protocols.
Q: Some submissions we heard touched on this very contentious area of how you deal with conflicts of opinion regarding medical treatment. The common fact pattern was where there was a difference of opinion regarding treatment. Very often those kinds of decisions need to be made quickly and are not amenable to a 6 month or a year wait and through an appeal hearing. It could involve different costs in terms of time off work, benefits, consequences if treatment is not successful and what are your thoughts on how that issue should be resolved?
A: In the past the Board has been very conservative in terms of authorization of treatments. Obviously Dr. Blair's arrival reflects a willingness to take a look at all areas of our interaction with clients in the medical arena.
The provider-comparer software and analysis process that was mentioned opened up quite an exciting opportunity for the Board to study different types of care with different types of injuries and even with different kinds of practitioners as to the eventual outcome, the overall cost and the overall impact in terms of time loss from work as well as disability or the lack of it or recovery without disability over the whole case. It's actually a data set that the rest of the health care system does not have access to. The rest of health care is fragmented. No one else has indemnity information around illness that this organization has. To pull that together will help us to discover some really quite useful things. For instance, the efficacy of certain kinds of treatment, their impact on return to work, the overall costs – both in terms of health care and in terms of the overall cost to the worker or even potentially to society. Some of that is a bit of a ways away because we need to get the data honed and refined on the front end, the nature of injury and the coding process has to be tightened up considerably and then the process of pulling together this sort of diverse data into an analysis package should give us some useful things. MSP has a collection of billing data but doesn't discuss diagnosis or treatment. Hospitals have tons of information on what occurs within their walls but nothing outside and Pharmacare has a separate link around prescriptions without any links to the other 2.
Q: At the end of the day whether you call it two-tier or not the effort is to move injured workers ahead of the line. Are we doing that?
A: We are attempting to do that. Part of the rationale is that the funding of medical services is not coming out of the general public pool. The employers have a separate pool that is funding services to injured workers and we believe that we should very aggressively be trying to move injured workers through the queues using that separate funding pool. Secondly, I think that the statistics that have impacted on us relative to procuring expedited services are those statistics around people who are off work for long periods and never return and they become advocates of our services or of other social safety nets. I think the impact to injured workers and their families of not receiving expedited treatment and certainly to the employers with respect to costs of not receiving expedited treatments are huge.
Q: There was a chart put up by Mr. Hurst on health care benefit costs. Are these real dollars or have they been adjusted for inflation?
A: Those are real expenditures. Those are real dollars.
Q: Clearly there is an upward trend there. How well do you understand what is driving those costs? Secondly, how does this compare to other jurisdictions?
A: I don't think that we understand it as well as we might. My colleagues have alluded to the provider-compare that would allow us to go and get that kind of information. In terms of our comparison to other jurisdictions I think that there are similar patterns being experienced by other Boards right across the country. The one exception is in the area of expenditure in terms of our investment into the continuum. We are one of the few Boards who are as proactive in introducing the continuum in terms of treating clients.
The 1997 health care costs were a direct result of the Board's articulation in its strategic plan of investing in rehabilitation services for workers so there is about a $10 million increase I believe in the cost of the providers who service the workers entering the continuum of care. The assumptions based on other best practice models are that you can affect duration of claim through early intervention and effective treatment and you can significantly reduce your conversion of short term disability claims to long term disability claims if you proactively put people into treatment and have recovery and you have return to work. That has been the experience of other jurisdictions that I have visited and it will take 2 or 3 years before those trends fully emerge in this jurisdiction. It has only been in the last 6 months that we have been able to get all of the workers who are entitled to those kinds of services into that kind of treatment regime.
Q: What does the Board do to educate the medical profession on some of strategies the Board has undertaken on the continuum of care or work conditioning?
A: In terms of the work conditioning program when ever there is a contact made there is actually information that goes with that message about the work conditioning program and supporting summary information on why it is used, how it is set up and sort of back ground information. We are also putting together more educational and informative pieces that are more broadcasted, for instance in the medical journals and some of the larger publications in the province. We are trying to raise the level of awareness around the continuum, around case management as we get there and around the various other parts of it. Another bit of that is the opportunity we have with the fee agreement process. As we develop, from time to time, differing fees or different approaches – even our whole message around exchange of information, which really arises out of the fee agreement – is an opportunity to educate the provider. I can't refer to a single fixed communication plan sometime in the past but it is perhaps more of an ongoing effort.
Q: I was thinking of it more as an educational plan then a communications plan.
A: The other part of it in the sort of new role of our medical advisors is to be more available to and to meet with groups or providers in their own communities to allow for educational meetings. We see it as an ongoing educational channel to local providers.
In addition the Board medical advisors are encouraged to be involved in hospital rounds on acute care. They are doing that and presenting, on occasion, on Board initiatives as well as hearing concerns and complaints about how their dealings with the Board is going.
Q: You mentioned the Quebec task force. I heard that useful information came out of that task force on chronic and back pain management. I was wondering if there was any adoption of protocols by this Board?
A: Are you referring to it in terms of the set up of the continuum and the timing because one of things with the Quebec task force was this recognition of the three phases and the importance of activation coming in at the sort of late end of the acute phase as sort of a timed approach and effectively a care plan based on time and categorization of the soft tissue and then the phase of recovery. Is that what you were talking about?
Q: Also on the diagnosis side?
A: In terms of the initial assessment, for instance, and recognizing whether the issue is a benign back strain versus one where there could be underlying pathology or some other process, that is effectively part of the initial assessment. That is common to other expert evidence as well, the AHCPR, the American Health Care Policy Research guidelines on management on lower back pain are quite similar. So that is kind of becoming the currency of treating non-disk back pain.
Q: Am I to understand that what you are saying is that there are some clear assessment guidelines that the Board uses in dealing with chronic and low back pain.
A: True and the published version of that is the Attending Physician's Hand Book, which effectively is a summary of those guidelines. We can get you a copy of that as well.
Q: How recently was that published?
A: Spring 97 I believe.
Q: I would like to see those.
A: Certainly
Q: In conversation with some phosiatrists I have heard that general practitioners, generally speaking, are not well equipped in dealing with back strains and overuse passive modalities of physical therapy. It has been suggested that undergraduate medical education should be utilized to try to improve the knowledge of general practitioners in that regard. Is the Board liasing with the university in any way in terms of curricula for undergraduate medical students?
A: Yes that part is under discussion and historically there have been some members of the Board's medical staff involved in various parts of the teaching program. Another bit of it is developing a liaison with the department of family practice at UBC to give them some of that information and perhaps even bring some of their trainees out here to do an elective or on a rotation to get a closer look at some of the issues around work place injury. The only caveat that I have with that when I hear it is that it is a great idea and in 30 years we will have covered the whole profession. So it is desirable but only one end of the educational issue.