Abstract
A study of Australian experience in the state of New South Wales (NSW) suggests that private sector underwriting of workers' compensation insurance risk plus insurer competition on premium price may put downward pressure on benefits for injured workers, inhibit rehabilitation, and cause related cost increases for taxpayers and employers. Insurer underwriting also increases workers' compensation administrative costs and means an unnecessary loss of investment income for government and industry. An emerging and better alternative for the Australian community is for government and industry to underwrite a national workers' compensation scheme and to fix premium and benefit requirements which are competitively administered by insurers. In such a regulatory environment insurer inability to compete on premium price should promote competition to provide effective services to help employers prevent injury, assist rehabilitation and contain cost. National standards are necessary to enable widespread dissemination of comparable, reliable information on the outcome of health, rehabilitation, dispute resolution and return to work services. This is required to assess the competitive performance of service providers in order to ensure effective operation of the market to achieve scheme objectives. Holistic, multi-skilled and objective rehabilitation professionals are needed who can clearly demonstrate the effectiveness of their actions in assisting injury prevention, worker rehabilitation, and safe return to work across a range of industry contexts.
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