I will remind us that change is inevitable. The world is changing around us, a topic that has been a repeated theme here. See, Baseball, Hot Dogs, Apple Pie and Chevrolet or How will Attorneys (or any of us) Adapt? And, workers' compensation is perennially in a process of change (change is constant). Some is legally driven, some scientifically. Historically, the indemnity (lost wage or impairment benefit) was the predominant portion of the claim expenditure. But that has reversed in recent years, with medical expense now the more pervasive portion in many studies and reports. This is coming from both scientific advances and the effects of medical inflation. Since 1948, the U.S. The cost of medical care is increasing more rapidly than inflation generally. Certainly, the government has been criticized for the inclusion and exclusion of goods in the market basket that defines inflation. Despite that criticism, inflation generally will drive wages and prices, but the medical segment is expanding more rapidly.
This is impacting all payer systems, group health, workers' compensation and even Medicare/Medicaid. Some contend that tort liability, or the risk of it, contributes significantly to the overall medical costs. That is, that doctors practice "defensive medicine," being very cautious so as to avoid the sting of malpractice. Others contend that diminishing supply of medical professionals is naturally creating a greater demand, and an expansion of price that is wholly consistent with economic theory. And, there are those who believe that medical costs are being driven by interference with market forces; they say that government interference and regulation is stifling innovation, competition, and improvement as well as constricting supply. Each of these has potential to be part of our explanation. Despite the reality of increasing medical care cost, there has not been a corresponding acceptance of increasing workers' compensation premiums. The income side of the equation is avoided as it is seen as a tax and a cost.
Thus, the regulatory process has engaged in an effort to manage medical costs through fee schedules, treatment guidelines, medication formularies, tele-medicine, and more. Workers' compensation is not alone, states find themselves struggling to accommodate the increasing contributions required to maintain Medicare status quo as Baby Boomers require more care, and the cost continues to rise. We have recently begun to realize that spending more does not necessarily mean better results. We have seen massive investments in education that have not yielded the predicted student improvement. Likewise, our ever-increasing medical expenditures have not yielded medical improvement. The U.S. spends over 50 percent more on health care than most other developed countries, but we are not the healthiest, do not enjoy the lowest infant mortality, do not enjoy the longest life expectancy. In fact, U.S. life expectancy decreased in recent years for the first time in decades. We are faced with a rapidly growing population, yet a much smaller increase in those seeking to practice in the medical professions. We face shortages. And lower supply will inevitably lead to higher prices.
We are stuck in a pay for procedure paradigm in which we have lost sight of people's reaction to care (improvement, restoration of function) and instead remain focused on performing more tests or procedures as that drives income. Rather than address that flaw, we struggle to minimize the cost of those superfluous procedures. With the commitments made, we face a reality that will demand better answers. The paradigm must be changed. Constitutional Challenges have become a new normal for workers' compensation. In Florida, Castellanos v. Next Door (Fla 04.28.16), and Westphall v. City of St. Petersburg (Fla. Supreme Court to apply imaginative outcomes to workers' compensation disputes. However, the same Court has displayed restraint in Florida Workers' Advocates v. Florida, and Stahl v. Hialeah Hospital. There is discussion of why the Supreme Court accepted some for review and denied others. In that discussion, there is often raised the specter of Brock v. Waste Pro.
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