What was the impact of the adoption of an AMA-based permanent disability rating schedule in California?

That was the question addressed in a significant new study by Frank Neuhauser, Executive Director of the UC Berkeley based Center for the Study of Social Insurance.

My last post briefly covered a presentation Neuhauser gave to last week's meeting of the California Commission on Health, Safety and Workers' Compensation.

Neuhauser's study compared permanent disability claims evaluated by the DEU for the years 2003 and 2004 with claims during the 1/1/2010 to 6/30/2011 period. The study notes that "By using claims from the most recent data period available (1/1/2010-6/30/2011) we are evaluating the PDRS-05 schedule after the parties have adjusted to the new schedule and include the impact of the Almaraz/Guzman/Ogilvie case law as interpreted during the period."

At the bottom of this post I've included a link to a pdf version of the study.
But let's look at some of the key findings and "do the numbers".

Average permanent disability ratings for cases with ratings of more than zero decreased overall by 31.5% (40.1% for unrepresented cases and 28.4% for represented cases). As you might expect, ratings dropped at various percentages depending on the body part involved. Neuhauser's report did not explain the phenomenon, but it is widely noted among doctors and lawyers that some of the AMA chapters are particularly strict compared to other chapters.

Average compensation for cases with ratings of more than zero decreased overall by 40.4% (51.7% for unrepresented cases and 37.2% for represented cases).

At least 25% of the cases which received a permanent disability rating of more than zero under the old rating system now are rated as "zero".

The effect of changes in the law on apportionment was to reduce the average rating for unrepresented workers by 5.3% and to reduce the average compensation for unrepresented workers by 6.2% (note: apportionment reductions might be higher in represented cases "because apportionment is more likely to be an issue in litigated cases").

The bottom line?

Neuhauser notes that :
"If one assumes the fraction of apportioned cases was the same for represented and unrepresented cases, and the average "zero" case eliminated was similar in rating to cases not eliminated, then the impact of the PDRS-05, the change in apportionment, and the case law involving Almaraz, Guzman, and Ogilvie was to reduce PD compensation by 58%".

Although Neuhauser didn't specifically say it, it is obvious that without the Almaraz/Guzman/Ogilvie cases that the overall drop in PD compensation would have been even more than 58%.

If the Brown Administration and some in the labor movement had been tempted to latch on to arguments advanced by some stakeholders that would do away with the Almaraz/Guzman and Ogilvie cases, Neuhauser's
study will make that less appealing.

A 58% reduction EVEN WITH Almaraz-Guzman and Ogilvie.

Any legislation that may cause workers to lose even more ground in permanent disability awards and payouts would seem likely to receive even higher scrutiny after the Neuhauser study.

Here's the link to the study, which is a draft posted for public comment on the CHSWC website:
https://www.dir.ca.gov/Chswc/Reports/2012/CHSWC_ImpactOfAMABasedPDSchedule.pdf

Stay tuned.

Julius Young
www.boxerlaw.com

If you were were expecting to hear Governor Brown mention workers' comp in his state of the state address today, you were disappointed.

I wasn't expecting him to do so. There are far bigger icebergs in the ship of state's path than comp.

But today's meeting at CHSWC (the California Commission on Safety, Health and Workers' Compensation) proved to be quite interesting.

I'll have more analysis later.

But the outstanding take away from the presentation by UC Berkeley's Frank Neuhauser was that when all is said and done, figuring in the AMA rating system, apportionment, increased amounts of workers who get zeros as well as the recent Almaraz-Guzman and Ogilvie cases, there has been a
58% decline in permanent disability compensation for workers.

Neuhauser documented that at least 25% of injuries rated under the "old schedule" recieved "zero" under the AMA rating system/2005 PD schedule.

Neuhauser noted that this was a "really dramatic reduction".

I'll have more details later. But 58% is a figure you'll be hearing quite a bit.

If there were questions about the adequacy of PD benefits even before SB 899, and if they have now fallen by 58%, how shall and can they be raised?

This study will be key as stakeholders move forward with ideas about how to raise benefits in an environment where the governor wants offsetting cost reductions.

Julius Young
www.boxerlaw.com

Workerscompzone will be covering tomorrow's CHSWC meeting in Oakland.

The agenda promises to be interesting:
https://www.dir.ca.gov/chswc/meetings/2012/January2012.pdf

DIR Director Christine Baker will be appearing and offering remarks.

Seth Seabury of RAND will be presenting on "Permanent Disability Ratings Under the AMA Guides".

Frank Neuhauser of UC Berkeley will be discussing "Permanent Disability Awards Under Senate Bill 899".

Previous RAND studies have been influential in systemic reforms. So many stakeholders will probably be looking with great interest at what conclusions come from RAND now.

Both RAND and Neuhauser have close ties to Baker, who headed CHSWC before Governor Brown appointed her to be Director of the Department of Industrial Relations, the umbrella agency over the California Division of Workers' Compensation.

And with the conventional wisdom being that there may be efforts to put together an omnibus comp reform package this year, the think tank studies can set the tone of the debate and influence the political agenda.

Readers wishing to attend can appear January 19 at 10am at the auditorium at the Elihu Harris State Building, 1515 Clay Street, Oakland.

I'll provide some commentary tomorrow on what I hear.

Julius Young
www.boxerlaw.com

Few of us mourn the demise of occupations such as switchboard operator or railroad car porter.

Many of us now bank online, book our own flights, stream our movies, and read downloaded books, so tellers and travel agents and projectionists and bookstore clerks are endangered species.The telecommunications, entertainment, publishing and news gathering industries are constantly evolving in new ways.

It's all part of the structural changes in the economy-along with the shrinking domestic manufacturing sector-that has so many concerned where they and their children will fit in.

This year from time to time I intend to muse upon some of those trends and how the basic notion of work is evolving.

The conventional wisdom is that job growth will be in service sectors of the economy.

But if tech increasingly gives us tools to do things for ourselves, will tech render many of those services obsolete?

What caught my eye on this subject over the weekend was an article by Stacy Finz in the San Francisco Chronicle, "Tablet Computers Take the Wait Out of Waiting Tables".

For years there have been systems which transmit table side orders taken by the waiter to the kitchen. But the concepts are being refined and expanded.

Finz profiles the Presto tablet which is being used at Calafia Cafe in Palo Alto. Diners using the tablet can order food themselves, track their order, and pay with the tablet, even splitting checks. Diners can also play games with the tablet and can research wines.

Presumably tables would turn more quickly, and the need for waiters and waitresses would be reduced.

Some diners may be turned off. Making the dining process too mechanical may be a turn-off. After all, earlier attempts to "automate" the dining process such as 50s era "Horn and Hardart" ultimately failed:
http://en.wikipedia.org/wiki/Horn_%26_Hardart
But some customers, such as one quoted in the article may love it because they "dread human interaction".

Food service is a huge source of jobs in the economy, of course.

So are we on the verge of transition in one of the world's oldest industries?

It's not clear in this instance, but what is clear is that many "service sector" jobs previously thought to be immune to technological change may in fact be at risk in an era of smartphones, tablet computing, and rapid developments in robotics and artificial intelligence.

In such a world, how do we value work? And who gets to work, and who is not given work?

Here is a link to the article on the Presto:
http://www.sfgate.com/cgi-bin/article.c ... 4/MNQN1MOO

Stay tuned.

Julius Young
www.boxerlaw.com

Workerscompzone recently celebrated its 5th birthday.

As we roll into 2012, its hard to believe that I've been doing this for over half a decade.

Some of you have asked me how I manage to do this and handle a busy workers' comp caseload.

Sometimes there's lots to write about. Think tank studies. Pending legislation. Case law developments. People in the news in workers' comp.
Emerging trends. Even though there are some terrific reporters covering the California workers' comp beat, there are often angles that don't get covered.

And I've had an occasional scoop along the way.

But sometimes things are slow. The system just kind of rolls on. We're in one of those periods, as the WCAB and the courts are in a fallow period for comp, and legislative and regulatory developments are slow to emerge.

And yet, at those moments, I'll get an inspiration, or make some connection.
That's part of the challenge and the fun of it.

What strikes me as I look back over these past 5 years?

California itself has changed. The post-Lehman brothers meltdown and ensuing mortgage debacle has left millions of Californians more uptight about their future. Nationally and locally many started to feel that the country was on the "wrong track", and respect for Congress and the California legislature dived to record lows.

Some cities declared bankruptcy. Jobs disappeared. Credit and savings dried up for many folks. Some state workers were furloughed.

The Tea Party and the Occupiers stepped into the vacuum. Anger boiled over at both ends of the political spectrum.

The Schwarzenegger era ended. Brown took over, telling us that we are in an era of limits when government must do more with less. Brown's message was (and is) that increases must be offset with savings.

Actually the workers' comp "community" of judges, lawyers, doctors and insurance company staff has managed to pull through all of this without massive layoffs or upheaval (except at SCIF).

But the system itself lives in the shadow of the greater economy. One of the recurring themes of the blog has been how the system fits into the state's larger economy. California employers are now more organized and more vocal on workers' comp costs than they had been before the millennium.
With national healthcare policy still in legal and political play, there is no real resolution about how to control healthcare costs.

Job creation and job killers are now themes that arise in almost any policy consideration, whether in comp or other arenas of California life.

Adequacy of compensation is still on the minds of many system stakeholders, but it's taken a back seat to affordability. In an era of limits, there's a lack of the "vision thing" about where the system could or should go. Even CAAA feels constrained to set forth a minimalist legislative program.

These are just a few of the background noises against which the daily workers' comp drama unfolds.

If you're reading this, thanks for inviting me into your cyberworld from time to time. My goal is to both inform and challenge you.

May the system continue to evolve in order to provide assistance to the working men and women of California.

Julius Young
www.boxerlaw.com