WorkSafe TasmaniaScheme Update

Brad ParkerDirector Compensation and Communication

© WorkCover Tasmania BoardThis presentation has been prepared for the Actuaries Institute 2013 Injury Schemes Seminar.

The Institute Council wishes it to be understood that opinions put forward herein are not necessarily those of the Institute and the Council is not responsible for those opinions.

Today we will cover

• Overview of the Scheme• Recent developments• Insured sector experience• Asbestos Compensation Fund• WorkCover Tasmania Initiatives

2

Scheme OverviewIn 2012-13:

7 Licensed Insurers

11 Self Insurers

Tasmanian State Service

Total Written Premium $145,000,000

232 000 FTE workers

8 400 new claims reported

5 500 (or 66%) of claims received weekly benefits

Total claims payments $147 million

Total weekly benefits $49 million

Lump sum benefits $41 million

Medical and related benefits $46 million

Average claim size $17 500

Average medical and related benefits $5400

Recent developments• WIMS went live 1 July 2012

– Resulted in a higher than usual level of uncertainty in the data for the first six months following implementation. However a number of initial teething problems have now been sorted out with only a small number of issues left to resolve

• Primary Treating Medical Practitioner Role introduced July 2010

– Requires medical professionals to spend more time with injured workers at the initial consultation to ensure claimants are being treated appropriately

– Resulted in an increase in above-medical-excess claims, but we think these relate to claimants with more minor injuries

• Impairment assessment guides v3 introduced October 2011

– The intention of the revised Guidelines was to provide clarification on the methodology to be applied in assessing Whole Person Impairment (WPI), but there have been concerns raised by insurers and doctors that the new Guidelines may result in higher WPI assessments, in particularly for injuries involving spinal fusion

– The scheme actuaries have allowed for a 4% increase in lump sum costs as a result4

CoverageWages increased by 3% in real terms (i.e. after adjusting for inflationary increases). This is the first real increase in wages since 2009

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Year Ending 30 June

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Total claim numbersTotal claims have reduced over the ten year period shown, with a sizable reduction in the last year

01,0002,0003,0004,0005,0006,0007,0008,0009,000

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Year ending 30 June

All Claims

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Above excess claim numbers Above excess claim numbers have increased over the ten years, with

the large increase in 2010/11 attributed to the Primary Treating Medical Practitioner role

The above excess proportion has increased from 60% to 90%

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Year Ending 30 June

Above Excess Claims

Above excess claim frequencyAbove excess claim frequency is currently estimated at around 0.80 claims per $m wages

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Accident Year Ending 30 June

Claim payments After increasing over the last ten years, weekly benefit

payments have reduced a little in the last year (1% lower) Medical payments have also reduced in 2012/13 (5% lower)

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Payment Year

Weekly Benefits

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Payment Year

Medicals

Claim payments (cont’d) After some stability in lump sum and legal costs, both

payment types were considerably higher in 2012/13 Lump sums impacted by some very large payments in the

year• There is also a timing impact due to the 2009 amendments

– Redemptions delayed due to the two year rule that is only now being reached

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Payment Year

Lump Sums

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Payment Year

Legal Costs

Lump sum numbers The number of redemptions has decreased in the first two

years following accident – catch up is now evident Offsetting this, the number of impairment benefits have

increased Potentially reflects claimants receiving their impairment

benefit in advance of the redemption

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Delay since accident (Half Years)

Number of Redemptions

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Delay since accident (Half Years)

Number of Impairment Benefits

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Post-amendment

Premium rates

Suggested premium rates have increased by 4% p.a. since 2010/11 while achieved rates have increased 5% p.a.

Achieved rates remain around 20% below suggested rates

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Policy Year

Suggested Achieved

2009 amendments effective

Implications for profitabilityWhile achieved premium rates have increased, the scheme actuaries estimate that insurers (as a whole) continue to make losses on this business

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Accident Year Ending 30 June

Combined ratio Loss Profit Premium Rate Index

Asbestos Compensation Fund

Asbestos Compensation FundEstablished on 1 October 2011

Insurers, self insurers and the Tasmanian State Service pay a levy of 4% of premium to pay for the Fund• 58 claims reported since inception

– 34 claims accepted

• 19 ‘new’ claims, 15 ‘backlog’ claims (i.e. diagnosed prior to Scheme commencement)

– 15 claims assessed as less than 10% WPI and therefore not eligible for compensation; these claimants’ diseases may develop such that WPI exceeds 10% in the future

– 6 ineligible for compensation and 3 reported with incomplete information

• About 2/3rds of accepted claims were ‘fatal’ i.e. mesothelioma and lung cancer15

Asbestos Compensation Fund (cont’d)

Just over $10 million paid by the Fund by 30 June 2013

Almost all of this (98%) is in respect of lump sum payments and funeral benefits

Very little has been paid in medicals or weekly benefits

16

New WorkSafe Tasmania Initiatives

Fair and Sustainable Project

The WorkCover Tasmania Board has initiated a project to define what constitutes a sustainable premium range for fair levels of compensation for workers in the Tasmanian Workers Compensation Scheme

The Fair and Sustainable Project, will assess and make recommendations on:

what constitutes a sustainable workers compensation premium range for employers in the Tasmanian Workers Compensation Scheme?

what constitutes fair levels of workers compensation for workers in the Tasmanian Workers Compensation Scheme?

what constitutes fair and sustainable workers compensation coverage in the Tasmanian Workers Compensation Scheme?

what proportion of Tasmania’s Workers Compensation Scheme costs should be paid directly to the worker?

Workplace Bullying in Tasmania

The WorkCover Tasmania Board established a working group charged with investigating – the prevalence of workplace bullying in Australia and Tasmania the role of workplace cultures in preventing and responding to bullying the adequacy of existing education and support services to prevent and

respond to workplace bullying   whether the existing regulatory frameworks provide a sufficient

deterrent against workplace bullying the most appropriate ways of ensuring bullying culture or behaviours

are not transferred from one workplace to another possible improvements to the national evidence base on workplace

bullying

Scope of Survey

The Board commissioned a survey commenced in late August and the survey continues to collect data through September and early into October.

A three-stage survey methodology is being applied that includes: Stage One – Tasmanian Community Bullying Survey Stage Two – Workplace Bullying Depth Interviews Stage Three – Workplace Bullying Organisational Research

It is important to note that a proportion of the sample has been collected to date and preliminary findings are not yet available.

New Initiatives to Support Role of Primary Treating Medical Practitioner

Accredited Medical Practitioners Online

Medical Mentoring and Advisory Service

Medical Practitioner's Handbook

Accreditation Medical Practitioner Online (AMPO)

Integrated approach to management of accredited medical practitioners:

Register Apply for accreditation

• Access training and reading materials• Complete assessment• Code of Conduct

Access a range of resources Manage accreditation Participate in ad hoc training

Accreditation Medical Practitioner Online (AMPO)

Training content:

WorkSafe Tasmania and the scheme

Roles and responsibilities of the Primary Treating Medical Practitioner

Certification including case study

Benefits of return to work

Evidence based practice

New Medical Practitioner Handbook

• Developed by WorkSafe Tasmania in consultation with medical practitioners

• Developed for accredited medical practitioners involved in managing patients with a workplace injury or illness

Aims to:

• Provide a holistic and practical understanding of the injury management process & its philosophies

• Highlight the role and responsibilities, and those of others involved in the injury management process

• Explain WorkCover Tasmania’s expectations of the role in the management of patients with a workplace injury or illness.

Medical Practitioner HandbookDivided into three main sections:

1. Preparing for the consultation– Injury management– People involved in the injury management process

2. During the consultation– Clinical framework principles of injury management– Workers Compensation Medical Certificates– Assessing the injured worker

3. After the consultation– Planning the worker’s treatment and return to work– Other health care professionals

WorkSafe TasmaniaScheme Update

Brad ParkerDirector Compensation and Communication

© WorkCover Tasmania BoardThis presentation has been prepared for the Actuaries Institute 2013 Injury Schemes Seminar.

The Institute Council wishes it to be understood that opinions put forward herein are not necessarily those of the Institute and the Council is not responsible for those opinions.