Parliamentary Committees

PARLIAMENTARY COMMITTEE ON OCCUPATIONAL SAFETY, REHABILITATION AND COMPENSATION: VOCATIONAL REHABILITATION AND RETURN TO WORK PRACTICES

The Hon. S.W. KEY (Ashford) (11:27): I move:

That the 13^th report of the committee, entitled Inquiry into Vocational Rehabilitation and Return to Work Practices for Injured Workers in South Australia, be noted.

One of the functions of the Parliamentary Committee on Occupational Safety, Rehabilitation and Compensation is to keep the administration and operation of legislation affecting occupational rehabilitation and compensation under constant review.

On 16 July 2010, on its own motion, the committee resolved to conduct an inquiry into vocational rehabilitation and return-to-work practices for injured workers under the Workers Rehabilitation and Compensation Act 1986. The committee established terms of reference which are outlined in the report, and I will not go into their detail today. The committee was interested to understand the impact of the 2008 amendments on the Workers Rehabilitation and Compensation Act 1986 which intended to increase return-to-work rates, reduce levy rates and reduce WorkCover's unfunded liability.

The committee used the inquiry as an opportunity to explore concerns expressed by a number of participants that South Australia's Workers Rehabilitation and Compensation Scheme is not operating as effectively as it should be. I need to point out that, this afternoon, I will be tabling an erratum to this report correcting an error in a table and contribution on page 16 of the report.

The committee received 23 submissions from the parties involved in the workers compensation scheme and rehabilitation, and return to work. All but two gave oral evidence and some provided supplementary submissions in response to questions from the committee. A number of issues were raised by stakeholders and considered by the committee, including the manner of referral of injured workers to appropriate rehabilitation providers, whether or not the claims were managed in a timely and appropriate manner, and the operation of particular incentives to assist in the rehabilitation of injured workers.

The committee also considered the current statistics which measure return-to-work rates and the appropriateness of methods and definitions used. It may be of interest to you, Mr Speaker, that there is no accepted or agreed definition of return to work in Australia. My view is that it is important to return injured workers to meaningful employment, and as importantly, as safely as possible, following a work injury. This assists in reducing the human and financial cost of the injury or illness. The longer the worker is off work the greater the impact on the individual and his or her family. The ability to fit back into the workplace is usually dependent on a speedy return.

It is important that WorkCover operates as efficiently as possible and minimises its unfunded liability. In June 2012 that unfunded liability was $1.389 billion. The amendments to the act in 2008 would, we were told, assist in improving the return to work rates. Mr Clayton (of the Clayton Walsh report 2007) claimed the reduction in weekly payments was necessary to improve the return-to-work rates performance for WorkCover. In my view, the only tangible result of this measure is that thousands of workers in South Australia had their compensation payments cut by as much as 20 per cent because they had a serious work-related injury or illness.

Another problem is that the rehabilitation system is driven by claims management imperatives rather than a system that genuinely assists workers and their employers. Evidence from EML encapsulated this conflict with regard to vocational rehabilitation and claims management. I quote from page 68 of our report:

I believe that the people we are using are giving the best returns back to the organisation. For example, there are some that are used and the spend is categorised as rehabilitation, but they are actually doing work in terms of looking at people for work capacity review, so it's a rehab spend but, when you say 'return to work', we are not looking to return to work, we are looking to make sure that we have everything in place if we need to exit them from the scheme. So they are not always return to work, but I believe that we are, to the best of our abilities, utilising the dollars for the right reasons.

At a practical level, the committee heard evidence that this can include terminating rehabilitation programs when they come up to the 130-week review.

We heard, and received many submissions saying, that spend on vocational rehabilitation had increased significantly over the past decade but improved outcomes for workers had not. The committee agreed that rehabilitation services needed to deliver value for money. It was clear to me and other committee members, from the evidence presented, that the vocational rehabilitation system needs substantial reform.

The committee also heard about the nature and structure of the rehabilitation industry. We were told that there are currently 41 operating rehabilitation providers contracted under the workers compensation scheme but stakeholders reported that the process of allocating referrals was not transparent. They also reported that the fee schedules are process focused rather than outcome focused, which contributes to the high cost of rehabilitation and poor performance. While the committee supports a review of the fee structure and a move to greater accountability, any changes should be closely monitored. There also needs to be careful design of any new system to ensure that one set of poor incentives is not replaced by another of the same.

We were told that although there is a high level of referral to rehabilitation providers in the South Australian scheme, information supplied by EML (Employers Mutual SA Ltd) revealed that in 2010-11 the average number of days from the date of injury to the first rehabilitation service was 79, and 29.5 per cent of claimants do not receive rehab services until after 90 days.

I say that WorkCover and its agents have failed to deliver. There is a stark contrast when one compares the performance of self-insurers in both the public and private sectors. They have achieved much higher and sustained return-to-work rates. In my view, reform needs to take place and an injured worker needs to be at the centre of the picture. This includes their informed right to choose their rehabilitation provider. Workers choose their doctor and medical support and may rely on information about the best health professional for them, why not a rehabilitation provider? Workers need to be treated as people and not claims or claim numbers.

The committee is particularly concerned that there is no agreed method for measuring return to work in South Australia and recommends that the minister direct WorkCover to address this as a priority. We think this also needs to be taken up at a national ministerial level so that there is a national definition of return to work and you can actually make real comparisons.

I would like to take this opportunity to thank all of those who have contributed to this very long inquiry. I thank all those people who took the time and made the effort to prepare submissions to the committee and to provide oral evidence to the committee. I extend my thanks to committee members for their contribution and deliberations: the Hon. Rob Lucas, the Hon. John Gazzola, the Hon. Gerry Kandelaars, Mrs Leesa Vlahos, Mr Alan Sibbons, Mr Ivan Venning and the Hon. John Darley. I also extend my thanks to the staff: Mr Rick Crump, Ms Carren Walker, Ms Mia Ciccarello, Dr Leah Skrzypiec and Ms Sue Sedivy.

Motion carried.