What drives workers’ comp is employment – more specifically, payroll, industry type, and claim frequency.

Employment is the end-all and be-all of workers’ comp – for premiums and policies on the front end, and getting work comp patients back to work when claims do happen.

So when a whole lot of jobs in a bunch of industries look to be disappearing, we work comp folks need to take notice.

If you insure, manage claims for, provide services to, or otherwise work in the transportation/logistics industry, you’d best be watching developments in Pittsburgh and keeping your eye on Otto.

Uber is experimenting with its self-driving cars in the Steel City, a big step on the way to fully automated driverless cars.

Ford is heavily involved, and will have a self-driving car on the market in 5 years.  Sign me up; as one who spends way too much time behind the wheel, I’m all over this.  Do work, read, work while being transported to client meetings? Heck yes!

The giant “ride-sharing” company is also behind Otto, an effort to automate long-haul trucking.

Photo below from SF Chronicle; testing of Volvo truck by engineer Nic Munley.

Unlike competitor Lyft, Uber doesn’t seem to care that its current drivers are going to be left ride-less in the not-too-distant future, nor is Uber bothered that, if when Otto and its lookalikes are successful in removing drivers from trucks, those 900,000 truck drivers will not have jobs.

And without truck drivers, truck stops won’t be selling much food or necessaries. Motels won’t be providing showers or rooms. Body shops won’t be needed as much either.

Uber contends that the 24/7 usage of driverless vehicles will mean more jobs for mechanics, but that’s speculative at best.  In fact, as these vehicles will just be replacing miles driven by vehicles currently piloted by people and not adding more vehicle miles, I don’t see why any more mechanics will be needed. Actually, less maintenance may be the norm due to constant monitoring of vehicle systems.

So…

• far fewer truck drivers
• fewer support staff
• fewer jobs in service stations, motels
• fewer “taxi-type” drivers
• fewer accidents = less work for body shops, less demand for auto parts and paint, less need for auto claims adjusters

For work comp…

• much lower premium volume
• far fewer claims to service
• far fewer jobs to return injured drivers to
• possibly more claims in the near future as drivers see the writing on the wall

Not much, at least according to workers’ comp legend Frank Neuhauser. In an article published in last month’s Perspectives, the IAIABC journal, [sub req] Neuhauser argues that workers’ compensation is no longer needed for 90% of America’s employees, as the workplace has become safer than the non-occ environment.

Noting that the occupational injury rate has dropped precipitously over the last 25 years, he draws a contrast between today’s occupational risks and those extant 100 years ago when workers’ comp was just a few years old. This contrast is so compelling that Neuhauser makes the case that workers’ comp insurance is superfluous, unnecessary as the risks are so low in our largely service economy.  Further, he makes the case that this safe workplace is one of the primary reasons to do away with work comp. Moreover, the medical care that would be needed for those few injuries that do occur can be delivered via health insurance, while disability coverage can simply be added to workers’ existing short- and long-term disability.

I find Neuhauser’s case far from compelling.  In fact, it is so far-fetched at least one very knowledgeable colleague wondered if Neuhauser had penned the piece just to provoke discussion.

If that was his mission, it was accomplished. At today’s Maine Workers’ Comp Summit, all panelists at the Think Tank disagreed with the central premises of Neuhauser’s case, raising multiple objections to his data and logic.  Here are a few.

• About a third of workers have disability coverage.  What about the other two-thirds?
• About 15% of workers do not have health insurance.
• Employers have worked diligently to reduce injuries and risks thereof in large part because they pay higher premiums with higher injury rates.  Removing that financial incentives would almost certainly result in higher injury rates.
• Eliminating workers’ comp would also eliminate the tort protection enjoyed by employers in today’s no-fault system.
• In some cases, there is no tort system as a recourse. As Think Tanker Alison Denham pointed out, some injuries, such as those suffered by fire professionals, have no “cause of tort.”  Who would an injured fire professional sue?

Pennsylvania Judge David Torrey succinctly addresses many of Neuhauser’s arguments, bringing a much-needed legal perspective.

The net?  Sorry, Frank.  Work comp is here to stay.