Examining the Past and Predicting the Future: An In-Depth Analysis of Workers’ Compensation

Part Two of a Three-Part Series

Phoenix, AZ - The March edition of the 2023 Workers' Compensation Research Institute (WCRI) Conference brought together esteemed academics, experienced practitioners, and key policymakers. This annual gathering encouraged an in-depth discussion on the past, present, and future of the workers' compensation landscape. Among the experts was Price V. Fishback, Ph.D., a distinguished scholar from the University of Arizona. In his presentation, Fishback dived into the transformative phase that workers' compensation underwent following the pivotal 1972 Burton WC Commission Report and highlighted the challenges faced by the system today and those likely to be encountered in the future.

A Milestone in Workers' Compensation: The 1972 Burton WC Commission Report

Fishback commenced the second part of his series, focusing on the instrumental 1972 Burton WC Commission Report. This report marked a watershed moment in the history of workers' compensation, drastically changing the landscape of how employees' health and safety were considered and protected in the United States.

The Commission was led by its chair, John Burton, whose stern approach, and resolute threat of a federal takeover if states did not implement recommended changes had a profound effect. States took these suggestions to heart, adopting up to two-thirds of the significant recommendations. The impacts of these measures are still felt today, with the indexing of weekly maximums being one of the most significant changes resulting from the Burton WC Commission Report.

The Dance of Injury Rates and its Repercussions

One of the crucial aspects of Fishback's presentation was examining injury rates per million person-hours in two of the most critical sectors of the economy: manufacturing and mining. His analysis considered statistics before 1971, providing a historical perspective that showcased some startling shifts.

In the manufacturing sector, the accident risk plummeted by 53% from 1925-1958, marking significant progress in workplace safety. However, this positive trend reversed from 1958-1970, during which time the accident risk increased by 33%.

In contrast, the mining industry experienced a steady decline in accident risk over a long period. From 1930-1959, mining accident risk fell by 63.5%. However, the period from 1959-1970 only saw a minor 1.1% decrease in accident risk, indicating stagnation in progress.

A notable reference in Fishback's discussion was a Pro Publica article, which posed the question: "Is Workers' Compensation being Demolished?" This question and the arguments presented in the report have garnered substantial attention, highlighting the increasing public and professional concern over the future of workers' compensation.

The Changing Landscape Post-Burton Commission

The post-Burton Commission phase marked a significant shift in the landscape of workers' compensation. The aftermath of the Commission's intervention resulted in a slight expansion of the number of workers covered, a decrease in accident risk within the industry, and the expansion of coverage of occupational diseases, albeit to a limited extent.

One of the most significant changes was tying the weekly maximums to a state's weekly wage post the 1970s. This systemic change helped resolve issues associated with legal adjustments to maximums. However, Fishback pointed out that some states still have the power to legislate these changes, indicating a possible area of continued uncertainty and potential disagreement.

The Shifting Burden of Proof and Emerging Challenges

In collaboration with Andy Yuan, a scholar with both a law degree and a Ph.D. in economics now working at Northwestern Law on a post-doctoral project, Fishback discussed the intricacies of the shifting burden of proof and the emerging challenges related to medical restrictions.

While statutory benefits have risen, some changes have reduced payments per covered worker, adversely impacting them. These changes, Fishback argued, are primarily driven by the shifting dynamics of legislation, industrial practices, and broader economic factors.

The Detrimental Impact of Changes to Benefits

Much of Fishback's presentation was dedicated to exploring the harmful changes to benefits. These changes have included the removal of the Liberal Construction of Statutes favoring workers, the shifting burden of proof in intoxication-related cases, the move to apportion benefits to take into account pre-existing conditions, the introduction of medical fee schedules, and the setting of physician networks.

For example, Liberal Construction presumes that workers will prevail by default if there are ambiguities in the evidence. However, bans on Liberal Construction have significantly altered litigation strategies, leading to a chilling effect on the number of cases litigated by workers.

Similarly, the presumption that intoxication is a proximate cause of injury has shifted the burden of proof onto the injured worker. This shift compels workers to demonstrate that their injuries were not caused by intoxication.

Looking Forward: The Future of Workers' Compensation

Dr. Fishback underscored the critical need for reforms in the workers' compensation system. He argued that the changes that reduce payments per covered worker in ways that harm workers are unsustainable in the long run.

Stay tuned for the concluding part of this in-depth series on the evolution of workers' compensation. As we continue exploring this vital area of workers' rights and employer responsibilities, we will encounter enlightening discussions and revelations that will shape our understanding of this essential social safety net.

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