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| | The Liberalization Of America. A Nation Divided. What It Means For Businesses, Individuals, And Insurance Claims.
By Lonce LaMon - November 7, 2012
With the reelection of Barack Obama as the President of the United States, I watched whom I perceive to be the most qualified candidate who has ever run for U.S. President in my lifetime, lose the election. Mitt Romney’s vision of championing small businesses in order to springboard the economy into an energetic wellspring of economic growth, in my view, is the right one.
Lower taxes for small businesses and limited government regulations for them give them the chance they need to survive. This survival and flourishing creates jobs. With more jobs, more and more small businesses then jump on the bandwagon in a snowball effect. Then competition for the best workers drives wages up.
Allowing small businesses to grow into bigger businesses by keeping all business insurance rates for them low, is the way to
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... in 200 plus years since the Declaration of Independence, the psychology of the general population in America has changed. We are no longer hell-bent on self-sufficiency. We are hell-bent on dependency. |
go by especially keeping low and manageable workers’ compensation insurance rates.
But it’s not going to happen now; because in 200 plus years since the Declaration of Independence, the psychology of the general population in America has changed. We are no longer hell-bent on self-sufficiency. We are hell-bent on dependency.
Workers’ Compensation insurance rates have gone up, they are continuing to go up, and we’re already seeing further increases traverse the nation. Since the tragedy of the Triangle Shirtwaist Company fire in New York City just a rat hair over one hundred years ago in 1911, we have gone from a society too lacking in benefits with no regulations and no responsibility on the backs of businesses, to a society of excessive benefits and massive entitlement programs.
All the benefit systems are so excessive that they drain businesses at the same time that they change the psychology of the benefit recipients from once proud souls of self-sufficiency to shameless dependents who would rather be taken care of by a system.
The unemployment insurance system in California is so loosey goosey that claimants have an easy time pretending they are looking for work (none of the employees of the state Employment Development Department really check where the claimant claims to have applied for work; they are so lazy!) and the claimant goes forward on autopilot collecting 66 weeks of benefits. Few questions asked.
With workers’ compensation, the benefits allowed are now so expansive, they even encompass treatments for sleep disorders, sexual dysfunctions, psychotherapy, gastrointestinal, weight gain… and other ailments way out on the periphery of the primary injury. And the problem is, businesses cannot afford to sustain these benefits. So, our economy is crumbling.
Last year, when I studied the Triangle Shirtwaist Factory fire at the mark of the 100 year anniversary of that tragedy, I calculated that the reckless and negligent owners wound up paying about $3,500 per employee death. But, that amount that seems low to us today was worth $82,000 in today’s dollars adjusted for inflation. Isn’t that amazing!
The Triangle Shirtwaist Factory was on the 8th, 9th, and 10th floors of this building in Manhattan, New York on March 25th 1911. 146 garment workers, mostly women, died in the fire. The majority of them jumped from the windows.
But as I checked death benefit amounts with a few workers’ compensation adjusters, the rates varied depending upon dependents from anywhere between eight hundred thousand to two million dollars. Thus the value of a death increased by 10 to 24 times. It didn’t merely double.
Now, what else do these growing, avalanching systems attract? Fraudsters. The larger, more impersonal, and abstract the system, the greater the propensity of indifference in human psyches that have no qualms to defraud it.
I remember the sign at the window inside the doctor’s office in the 1960s: Payment Is Due Upon
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There's nothing more attractive to a fraudster than a large, abstract, and impersonal system. |
Services Rendered. One was seen by the doctor, looked him in the eye, and then looked him in the eye again while handing him his fee on the way out the front door. It was all so personal. We were connected to one another. No more. It’s all impersonal, abstract, and just a gigantic system: a system that’s grown into so much dependency.
The general world of the U.S. with big business, big government, and big huge entitlement systems are doing nothing but growing larger and larger and more abstract. And there’s nothing more attractive to a fraudster than a large, abstract and impersonal system. I’m including rampantly fraudulent medical providers here, too.
Back on August 3rd, attorney Paula A. Montgomery wrote to me when I put out an inquiry to the claims industry about the reasons for fraud. She wrote:
“I believe it is because of the increase in the number of people involved. Our world and workers’ compensation system has become so large, with so many new people coming in that they do not feel like they are hurting anyone they know. In smaller groups—like we used to have (think small towns) not only does everyone know what everyone else is doing so they would know if someone was cheating them, most people do not want to hurt someone they know and associate with. When the participants in a system don’t know each other and believe they can get away with something, they will.”
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"They (the claimants) often feel completely and utterly justified in what they have done—to the point that it is often their own attorney who must convince them that what they have actually done constitutes fraud."
Carol Powell, Workers' Compensation Defense Attorney
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Sue Ludden, Account Executive from Jenkins Insurance Group, back on July 31st wrote to me, “It’s because the word got out… it’s so EASY to get benefits now, since all the “reform”. Remember pre-reform, before 1990, carriers could just get an eval and deny the claim? Not now sister. And remember when a claim was on delay, no benefits were paid? Now, an employee gets free medical care up to $10,000 for 90 days when their injury is disputed. How great is that? And fraud prosecution is so rare, the threat of going to jail just isn’t there.”
Workers’ Compensation defense attorney, Carol Powell, also on July 31st 2012 wrote, “I have been a Workers’ Compensation defense attorney for 25 years, and I agree that fraud seems much more prevalent. I believe the increase is in large part due to the economy, and the 2004 reforms. Due to the poor economy, some workers’ lose their jobs or have their hours cut, or their employers don’t give them raises or medical benefits, so that they feel justified to balance the scales by trying to get more than they should. A little quid pro quo shall we say. If the system is unfair to them, they should be unfair to the system.
“So, workers feel justified to exaggerate their symptoms or hide prior injuries, or stay off work a little longer than necessary, or even work while on TD, to get the same amount of PD or TD that they would have gotten before the reforms. They feel utilization review unfairly deprives them of medical care, so they excessively/fraudulently use chiropractic care or pain management and especially pain medications. They claim to have a host of health conditions that are somehow compensable consequences (which we rarely saw in the past), like sex and sleep disorders, psyche, gastrointestinal, weight gain, or hypertension, in order to balance the perceived unfairly low PD on their underlying ortho injury. They want to fight perceived inequity with their own inequity, while firmly believing they are the victim and thus entitled to engage in just a little bit of fraud.
“As someone who has obtained many dismissals of claims based on fraud over many years, I often see these underlying themes. They often feel completely and utterly justified in what they have done—to the point that it is often their own attorney who must convince them that what they have actually done constitutes fraud. And because they do not feel they are doing anything wrong, fraud prosecution by DAs hold little threat to them. We are dealing with a different comp system and different economy, and a
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Until the spirit of small business comes back to where there's that personalness, that individual contact, that asses-to-elbows human relationship that's not a machine and a blind, mindless system, we're not going to see a growing economy. |
completely different mind- set of injured workers. Once we understand the causes of fraud, we are in a better position to solve the problem.
“Please note, these are my own personal views, and do not necessarily reflect those of my firm.”
So, here we are. Now we’ve got Obamacare, another huge social medicine system. The door has opened wider to more and more exploitation, waste, alienation, impersonalness, and abuse.
Until the spirit of small business comes back where there’s that personalness, that individual contact, that asses-to-elbows human relationship that’s not a machine and a blind, mindless system, we’re not going to see a growing economy. We’re going to see more grasping and clawing for benefits, and more fraud.
Things are not going to get better. Please forgive my pessimism.
lonce@adjuster.com
This article is dedicated to Jan Heinricks... We're in the spirit, Lesley
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