Work Covers A Annual Report 2009-10

8/2/2019 Work Covers A Annual Report 2009-10

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AnnualReport 2009-10


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This report is structured toalign with WorkCoverSAsStrategic plan 2008-11 .Chapters 1 to 4 present ke initiati es and corporate achie ements relating to our

critical success actors. The th chapter is about WorkCo er as an organisation.

WorkCo ers strategic priorities outlined in our strategic plan summarised on pages

12-13 are eatured in the rele ant section, plus there is a con enient summar table

on page 14. For more in ormation please see below, How to read this report .

WorkCo erSAs nancial statements are published in a separate document on our

website www.workco er.com.

Note: All nancial gures quoted in this report refect the consolidated result o all

unds controlled b WorkCo erSA unless otherwise speci ed.

Data or tables in this report relate to the period 1 Jul 2009 to 30 June 2010, howe er,

due to the time lag in collecting some claims in ormation, a cut o date o 9 August

2010 has been applied to claims-related gures to enable greater maturit o data.

How to read this reportOur annual report pro ides in ormation about what we achie ed in 2009-10. On page

12 we pro ide in ormation about WorkCo ers strategic plan. To make in ormation more

easil accessible to all readers, we ha e also included the Quick nd index below.

Quicknd index

Subject Page no

Claims data claims numbers, atalities, return to work, claims costs, redemptions 6, 16-19, 22, 29

Employers Mutual claims management, satis action with 7, 17, 38

Financial per ormance 6, 26-30

Fraud and compliance monitoring, outcomes 32, 44-5

Health providers medical and allied health issues, ocational rehabilitation 19-21

Levies collection, issues or emplo ers, disputes 6, 28, 33-5, 40

Sel -insured employers current list, acti it 34-35, 56

Stakeholders satis action sur e , Ser ice Centre, access and equit , relations withstakeholder groups

37-40

WorkCover as an organisation Board and management in ormation, human resources,structure and go ernment requirements

42-56


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4 WorkCo erSA Annual Report 2009-10

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8

10

11

12

13

1415

22

22

26

31

33

36

41

42

42

52

54

56

57

58

Contents

About WorkCoverSA

Statement rom our Chair

Statement rom our outgoing CEO

Statement rom our incoming CEO

Perormance against our strategic plan

Perormance against WorkCover Charter

and Perormance Statement 2009-10

The year in brie strategic prioritiesChapter 1 Return to work

Strategic priority 1

Working with our strategic partners

to improve injury and case

management outcomes


Fostering a return to work culture

Chapter 2 Financial perormance

Chapter 3 Scheme integrity


Implementing legislative reform

Chapter 4 Stakeholder satisaction

Chapter 5 Our organisation


Replacing our legacy IT systems


Encouraging an achievement culture

WorkCover Board

Our Executive Management Team

Private sel -insured employers

Glossary o terms

Index


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5WorkCo erSA Annual Report 2009-10

WorkCoverSA is unded by employers tomanage a balanced

and fnancially sound system that rehabilitates,compensates andreturns injuredworkers to sa e

workplaces and the community.


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WorkCoverSAs unfunded liability

ell to $982m, a ter a pro t o $77m

The average levy rate will decrease

rom 3.00% to 2.75% in 2010-11

Scheme funding at 30 June 2010

was 61.5%

WorkCoverSA achieved an actuarial

release o $130m against our

strategic plan target o $89m

WorkCoverSAs investment

port olio recorded a return on

in estment o 12.3%

There was a positive return on

in estment o $140m compared

with a loss o $136m in 2008-09

There were 19,740 claims incurred

rom workers emplo ed b

registered emplo ers

There were 6,480 income maintenance

claims incurred rom workers emplo edb registered emplo ers

There were 6,066 active income

maintenance claims at 30 June 2010

Approximately 79% of injured workers

either do not lose time o work,

or return to work within two

weeks after injury.

Note: The gures in relation to claim numbers inthis report ha e been impacted b changes in claim

reporting processes. For urther details see pages

16-17. In addition, WorkCo er does not ha e access

to a ull ears sel -insured data or 2009-10 and

consequentl no sel -insured data is pro ided

in this report.

Communication objective

WorkCo erSA is committed to open

and transparent communication withour stakeholders and sta about our

plans and per ormance. This annual

report explains who we are, what we

do and how we do it, including details

o our current strategic plan and our

achie ements compared with what

we set out to do.

WorkCo er is required to produce

an annual report under the WorkCover

Corporation Act 1994 and is

accountable, through the Minister

or Industrial Relations, to the South

Australian Parliament.

Our ke stakeholders are:

injured workers within the Scheme

employers, who fund the Scheme.

We also recognise those indi iduals or

groups who are a ected b or ha e an

interest in our business, including:

the representative organisations

of injured workers, employers and

health pro iders

our key service providers including

Emplo ers Mutual, who manage

claims on our behal , Minter Ellison

and other legal pro iders, who pro ide

expert ser ices or both workers

and WorkCo er

various health and rehabilitation

providers who service injured workers

related entities such as the

WorkCo er Ombudsman, the Workers

Compensation Tribunal, Medical Panels

SA and Sa eWork SA

the Minister and SA Government,

to whom WorkCo er is accountable

and the people of South Australia,

who bene t rom the purpose

and a ailabilit o the Scheme as a

social sa et net.

Best possible reco er ,

aster return to work

Why work isimportant or health

There is compelling e idence that

work pla s a ital role in our ph sical

and mental health. For most people,

work is good or their health and

wellbeing. Sta ing at work or getting

back to work can be a crucial part

of an injured workers rehabilitation.

A supporti e workplace can help to

reduce the nancial and emotional

impact of an injury on workers and

their amilies. With a positi e approach

and the right support, injured workers

can reco er and return to normal li e.

Helping impro e South Australias return

to work rates is e er ones responsibilit

and we all ha e a role to pla .

Taking care of injured workers and

gi ing them a air go in the workplace

also makes good business sense...

it makes dollars and cents to look

a ter our in estment in our people

and their knowledge o our business.

And nally, returning injured South

Australians to work is better or our

State and its econom , as well as or

the health o the WorkCo er Scheme.

Our vision Year in brie


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WorkCoverSA is unded by

employers to manage a balanced

and nancially sound system that

rehabilitates and compensates injuredworkers, enables them to stay at work

where possible, and returns them to

sa e workplaces and the community.

WorkCo er:

manages the collection of levies

rom South Australian emplo ers

outsources the management of

claims to Emplo ers Mutual

regulates, has oversight of and setsees or pro iders

has oversight of self-insured employers.

WorkCo er was established in 1987 and

is constituted as a statutor authorit

under the WorkCover Corporation Act

1994 with a Board appointed b the

Governor on the recommendation of

the responsible Minister (now the

Minister or Industrial Relations).

WorkCo er is responsible or

administering the Workers Rehabilitation

and Compensation Act 1986 and the

South Australian Workers Rehabilitation

and Compensation Scheme

(the Scheme).

In Januar 2006, the Occupational

Health Sa ety and Wel are (Sa eWork

SA) Amendment Act 2005 trans erred

occupational health, sa et and wel are

administration rom WorkCo er to

Sa eWork SA, which also reports to

the Minister or Industrial Relations.

WorkCo er has a memorandum o

understanding with Sa eWork SA.

For details see page 49.

South AustraliasWorkers Rehabilitationand Compensation Scheme

The Workers Rehabilitation and

Compensation Act 1986 (the Act)

pro ides or the rehabilitation and

compensation o workers who su er

workplace-related injury or illness, as

well as compensating a workers amil

in the e ent o a work-related atalit .

The Act establishes a no- ault workers

rehabilitation and compensationscheme that aims to rehabilitate and

restore injured or ill workers to work,

their amil and/or the communit .

Entitlements pa able include medical

and associated costs related to the injury

or illness, plus income maintenance to

the injured worker, as well as lump sum

compensation or non-economic loss

(permanent impairment).

Emplo ers Mutual is WorkCo ers

claims agent or the States registered

emplo ers. Emplo ers Mutual manages

workers rehabilitation and compensation

claims on WorkCo ers behal .

Serving injured workersand employers

WorkCo er manages the Scheme

as a bene t to:

all registered employers and their

workers there are approximatel

50,000 emplo ers that are now

required to register. (Registered

emplo ers emplo some 437,000

South Australians)

66 self-insured employers, plus the

South Australian public sector, which

manages its own claims and associated

liabilities in accordance with the Act

the South Australian community.

How we categorise employers

WorkCo er categorises emplo ers

into two t pes: Registered employers

More than 60% o South Australian

workers are emplo ed b registered

emplo ers. WorkCo er manages,

and holds the liabilit or, all claims

made b workers emplo ed b

registered emplo ers.

Sel -insured employers

Sel -insured emplo ers emplo

the balance o the South Australianwork orce and while the are also

registered with WorkCo er, the are

granted sel -insurer status to manage

the liabilities associated with their own

workers compensation claims.

All State Government agencies are

automaticall sel -insured unless

otherwise speci ed b the Regulations.

Commonwealth Government

emplo ees and licensees do not

operate under South Australian

legislation.

Ministerial reviewsand directions

On 25 March 2010 the Hon. Paul

Hollowa MLC was appointed as

the Minister or Industrial Relations,

replacing the Hon. Paul Caica. Minister

Hollowa is also Minister or Mineral

Resources De elopment, Minister or

Urban De elopment and Planning, and

Minister Assisting the Premier in Public

Sector Management. Minister Hollowa

has been Leader of the Government in

the Legislati e Council since March 2002.

During 2009-10 there were no Ministerial

re iews or directions gi en to WorkCo er.

About WorkCoverSA



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Statement rom our Chair

WorkCo ers

nancial result

or 2009-10 was

a pro t o $77.2million (2009:

$75.1 million

loss), which le t the Schemes un unded

liabilit at 30 June 2010 at $982.0 million

(2009: $1,059.2 million) and its unding

percentage at 61.5% (2009: 56.7%).

The 2009-10 nancial ear is the rst

time that WorkCo er has recorded an

annual pro t or 10 ears, since the

ear ended 30 June 2000.

WorkCo er continues to remain a strong

cash fow positi e business operation.

Its operating cash fow or 2009-10

was $136.2m (2009: $31.6m) and it is

important to note that WorkCo er has

had positi e operating cash fows or

each o the last se en ears.

There are three ke actors that a ect

the un unded liabilit calculation in

the WorkCo er results: the claims

management experience; the in estmentper ormance; and the change in

economic circumstances (essentiall

changes in long-term interest rates

compared with assumed infation rates).

The three ke actors a ecting our

un unded liabilit result are set out or

each o the last e six-month periods

in the table below.

For the th actuarial aluation in a rowWorkCo er has achie ed a claims liabilit

saving compared to the projections

o the Schemes independent actuar .

Claims management is the core

business that WorkCo er is responsible

or and it is the one actor infuencing

WorkCo ers un unded liabilit that is

within our control. It is a welcome sign

to see continuing impro ements in our

core business. I am also pleased that weha e reduced the number o long-term

claims (ie, claims greater than 3 ears

old) to 1718, which is the lowest number

o long-term claims since August 2001.

Global economic factors (speci cally

in estments and long-term interest rates)

are the other ke actors that infuence

the un unded liabilit and these arecompletel outside o WorkCo ers

control. In relation to global in estment

markets the onl minor infuence

WorkCo er can ha e is through its

in estment strateg which aims to

balance risk minimisation with the

in estment growth potential.

This ear it has been pleasing to see

positi e returns on in estment with$140.2 million compared with the

past two ears o negati e returns

arising rom the global nancial crisis.

WorkCo ers in estment return or the

ear was 12.3% (2009: negati e 10.0%).

O er the 22 ull nancial ears since the

inception o WorkCo er, the Corporation

has achie ed an 8.9% per annum

a erage return.

6 months to30 Jun 2008

6 months to31 Dec 2008


6 months to31 Dec 2009


Un unded liabilit ($984m) ($1.298bn) ($1.059bn) ($911m) ($982m)

Scheme unding ratio 60.8% 51.7% 56.7% 62.8% 61.5%

O erall pro t/(loss) ($73m) ($313m) $238m $148m ($71m)

Signi cant contributors to the overall result

Sa ings on claims liabilit 1 $46m $51m $102m $37m $81m

Impact o economic actors $13m ($188m) $138m ($7m) ($98m)

In estment income/(losses) ($80m) ($149m) $13m $138m $2m

1 The savings on the claims liability or a period is the di erence between the projected liability at the start o the period, the actual liability at the end o the period and the payments made in the period using consistent economic assumptions. The fgures relate solely to the Compensation Fund and exclude the Statutory Reserve Fund and the Insurance Assistance Fund.


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B contrast it has been un ortunate

that WorkCo ers un unded liabilit

has increased as a result o changes in

economic circumstances (speci call ,the long-term interest rate). The long-

term interest rate has decreased, which

has negati el a ected the un unded

liabilit o the Compensation Fund

b approximatel $100 million. It is

important to note howe er, that this

does not a ect WorkCo ers abilit to

co er its immediate costs because o

its strong cash fows.

The ear 2009-10 has seen the

consolidation and completion

of the Governments legislative

re orms designed to bring South

Australias Workers Rehabilitation and

Compensation Scheme into line with

similar schemes across Australia.

As at 30 June 2010 the legislati e

changes ha e all been implemented but

the e idence o their precise nancialimpact is still emerging and wont be

ull known or a number o ears.

Throughout the ear it has been

interesting to see strong e idence

emerge o the health bene ts o work

through the Australasian Facult o

Occupational and En ironmental

Medicine. This research shows the

signi cant social and personal costs

o long-term worklessness, and the

clear message that work is good or

health and wellbeing strongl rein orces

WorkCo ers return to work goals.

With those goals in mind, there is

a range o challenges a ecting the

Scheme mo ing orward including:

the end to the vast majority ofredemptions which will assist in

encouraging beha iour change in

relation to return to work

balancing the responsibility for

ensuring rehabilitation and care a ter

an injury, with the need for early return

to work (where the worker has the

capacit to do so)

the effectiveness of the approach to

work capacit assessments which iscritical to the turnaround o the Scheme

the ability for people to support injured

workers to sta at work (where

possible) and/or return to work with

the right support

the performance of front-end

claims which remains ke to reducing

the number o claimants sta ing on

the Scheme or long periods, which

greatl a ects the Schemes nancialper ormance.

O course WorkCo er will continue

to support those injured workers who

cannot return to work, but increasingl

our emphasis will be on educating

and supporting emplo ers to help their

injured workers stay at or return to

work. Experience and solid research

shows that this will pro ide the best

outcome or all.

A signi cant milestone occurred during

the ear with the commencement o

our new IT s stem. The design and

implementation o Cram, our new IT

s stem, has been a business priorit

o er the last ew ears.

The Cram s stem has been speci call

tailored to support WorkCo ers

core business processes o return to

work, claims management, Schemecompliance, emplo er registration, le

collection and nancial management.

Hal wa during the ear the CEO

Ms. Julia Da ison announced her

decision to resign. Julia was with

Workcover for just over six years and

during that period demonstrated a high

le el o commitment and dedication

to re orming and impro ing ourcompensation scheme. On behal o

the Board I take this opportunit to

thank her or her ser ices and wish

her well in her new endea ours.

A ter an exhausti e search or a new

CEO and the assembling o a strong

list o candidates, Rob Thomson was

appointed to the position and he

commenced in mid-June. Interestingl ,Rob is the rst workers compensation

specialist to e er be appointed as CEO in

the 22 ears o Workco ers histor . The

Board expect that his appointment will

assist the Board in bedding down and

implementing the new legislation and

impro ing outcomes rom the Scheme.

Finall , I am pleased to continue

working with m Board colleagues

and WorkCo er management towards

the goals outlined in our strategic plan

ultimatel best possible reco er ,

aster return to work.

PHILIP BENTLEy

Chair

WorkCo erSA


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Statement rom our outgoing CEO


Since I started at

the helm o this

organisation in

March 2004, I ampleased to sa

that WorkCo er

and its business ha e changed

signi cantl . We ha e changed rom

an organisation with a primar ocus

on occupational health and sa et and

workers compensation, to one that

places its central importance on helping

injured workers recover and return to

work as soon as possible.

Importantl , this cultural and business

shi t was instrumental in achie ing

the major legislative reforms to South

Australias Workers Rehabilitation and

Compensation Scheme. Bringing the

re orms to ruition during the past two

ears has been a signi cant undertaking

or WorkCo er as an organisation and

our claims agent, Emplo ers Mutual.Now, in 2010, we are in a position to

see the bene ts start to fow rom the

27 areas o legislati e and non-legislati e

changes to the Scheme that were

initiated in Jul 2008.

B re ocusing our primar goal o er

the past six years on returning injured

workers to sa e workplaces we ha e

raised the pro le o the importanceo returning to work in the wider

communit . The WorkCo erSA Recovery

& Return to Work Awards ha e attracted

a high calibre o nominations since

the awards were launched in 2007.

The stories and experiences o the

winners and nalists continue to

inspire and moti ate and to remind

the broader communit what we as an

organisation are working or.

Behind the scenes at WorkCo er it

has been rewarding to see the realisation

o our legac IT s stems replacement

project a major undertaking that

spanned se eral ears and in ol ed

working tirelessl with ser ice pro iders,

Cram, IBM and Emplo ers Mutual.

The new claims management and

business so tware went li e in April2010 and marks a new phase in

WorkCo er histor.

We are continuing to see a reduction in

the number o o erall claims. Since 2004

when I arri ed at WorkCo er, total claims

numbers ha e steadil decreased.During the past two ears South

Australias return to work rate has also

impro ed to at least align with national

statistics. Clearl there is still work to be

done to achie e optimal outcomes or

the health o workers, emplo ers and

the Scheme.

JULIA DAvISON

Outgoing CEO (June 2010)WorkCo erSA

By reocusing our primary goal over the past six yearson returning injured workersto sae workplaces we haveraised the pro le o theimportance o returning towork in the wider community.


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I am er pleased

to be here in

South Australia

as the new ChieExecuti e o

WorkCo erSA.

I started here in mid-June 2010 and ha e

come to South Australia rom New South

Wales, where I was General Manager of

the Workers Compensation Di ision o

WorkCo er NSW.

During m time at WorkCo er NSWI pla ed a lead role in the nancial

turnaround o the NSW scheme which

mo ed rom a $3.2b de cit in 2002 to

a surplus in 2006 three to our ears

ahead o the estimated time rame.

Statement rom our incoming CEO


M goal is to bring about similar

e ciencies and impro ements to the

SA scheme, and to continue to work

towards better and aster reco er whichincludes sta ing at work or i necessar

returning to work for people injured in

South Australian workplaces.

A priorit in the coming months is

considering what s stem we can

o er emplo ers to replace the Bonus/

Penalt Scheme and pro ide nancial

moti ation to infuence beha iours. We

are keen to ha e a s stem that ocuses

on employers preventing injuries andencourages them to keep their workers

at work, or i time o is required, to

support their workers to return to work.

In addition to this, we will also be turning

our minds to the uture as we de elop

a new strategic plan to take us orward

rom Jul 2011 until 2016. This new

strategic plan will guide our business or

the next e ears and ocus on urtherScheme impro ements.

As the new CEO, I look orward

to working together with our ke

stakeholders emplo ers and workers

and with the arious pro iderassociations to impro e the South

Australian Workers Rehabilitation and

Compensation Scheme.

Our goal is ultimatel to make a

positi e di erence to the li es o

the 34,000* workers who are injured

each ear in our State.

ROB THOMSONChie Executi e O cer

WorkCo erSA

Our goal is ultimately tomake a positive di erenceto the lives o the 34,000*workers who are injuredeach year in our State.

* This gure is approximate and based on allclaims rom workers emplo ed b both registeredand sel -insured organisations.


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1 Return to work

Indicators Per ormance June 2010 Target June 2010

CSI 1 1 - Full returnto work (< 1 ear)

83% o workers ullreturned to work(< 52 weeks)

92% o workers ullreturned to work(< 52 weeks)

CSI 2 2 - Full returnto work (1-3 ears)

37% o workers ullreturned to work

51% o workers ullreturned to work

2 Financial Per ormance


CSI 3 - A erage le rate 3.00% 3.00%

CSI 4 - Total Scheme 61.5% unded 61% unded

CSI 5 - Actuarial release 3 $301 million $149 million 4

4 Stakeholder Satis action


CSI 7 5 - Injuredworker satis action 5.6 out o 10

6 7.3 out o 10 6

CSI 8 5 - Emplo ersatis action 6.8 out o 10

6 7.3 out o 10 6

3 Scheme Integrity


CSI 6 - Negati e nancialScheme impacts arisingrom sel -insurers

Zero e ents Zero e ents


In WorkCo ers 2008-2011 strategic plan

we identi ed our ke areas that woulddetermine our success in the uture.

We call them our critical success actors:

1 Return to work ensuring e ecti e

rehabilitation, compensation and return

to work and the communit

2 Financial per ormance ensuring a

nanciall sound s stem

3 Scheme integrity upholding the

integrit o the Scheme4 Stakeholder satis action impro ing

stakeholder satis action

Our critical success actors are the ke

elements o our per ormance that willhelp us determine i we are achie ing

our mission to rehabilitate, compensate

and return injured workers to safe

workplaces and the communit .

Underpinning the critical success

actors are e strategic priorities, each

o which is identi ed as integral to

optimising organisational per ormance

and helping us to be success ul: Working with our service providers,

especiall Emplo ers Mutual, to

improve injury and case

management outcomes

Fostering a return to work culture

Implementing legislative reform

Replacing our IT legacy systems

(Project Harry and WIRE)

Encouraging an achievement culture

The tables pro ided here documentachie ements in 2009-10 against

WorkCo ers strategic plan.

WorkCo ers strategic plan articulates

the high le el goals o the organisation,the priorities to be undertaken and the

measures that will identi whether these

goals ha e been achie ed. It is designed

to identi and measure success at the

strategic le el rather than the more

detailed operational reporting which

sits below it.

Perormance against ourstrategic plan 2008-2011

1 The ull return to work (


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Following the legislati e changes

in 2008, WorkCo er has hadgreater accountabilit and reporting

requirements to the State Government.

As part o the new requirements,

the Minister or Industrial Relations and

the Treasurer must now prepare both a

Charter and Per ormance Statement or

WorkCo er, under sections 17A and 17B

o the WorkCover Corporation Act 1994 .

The 2009-10 Charter and Per ormanceStatement was de eloped in mid-

2009 and signed b both the Hon Paul

Hollowa , Acting Treasurer and the

ormer Minister or Industrial Relations,

the Hon Paul Caica, in September 2009.

Under sections 17A and 17B(2) o

the WorkCover Corporation Act 1994 ,

the Minister and Treasurer must, a ter

consultation with WorkCo er, re iew

the Charter and Per ormance Statementat the end o each nancial ear.

WorkCo er is required to pro ide

the ollowing in ormation (in addition

to statutor reporting) to the Minister

and Treasurer:

Quarterly, a statement of

comprehensi e income, a statement

o nancial position and a statement

o changes in equit

Quarterly, a statement of the natureand scope o in estment acti ities

Annually, a statement of achievements

and progress towards the outcomes

and targets detailed in the Per ormance

Statement and

Other information as requested

rom time-to-time b the Minister

or the Treasurer.

A new Charter and Per ormance

Statement or 2010-11 will come into

e ect rom 1 Jul 2010.

Perormance against WorkCover Charterand Perormance Statement 2009-10


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14/60

Chapter 1:

Returnto Work



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16

Chapter 1 : Return to Work

WorkCo erSA Annual Report 2009-10

Returning workers to sa e workplaces

and, where possible, enabling workers to

sta at work, together with the pro isiono appropriate medical support, remain

the most e ecti e outcomes or workers,

their emplo ers and the nancial position

o the Scheme. Impro ing our States

return to work rate is still the ke ocus

or WorkCo er and our claims agent,

Emplo ers Mutual.

WorkCo ers role in ostering a return

to work culture in South Australianworkplaces means educating and raising

awareness in the communit that work

is bene cial or health, howe er i time

off is required after an injury, sensible,

prompt return to work when appropriate

is better or e er one.

WorkCo er recognises that returning

an injured worker to safe employment

requires the sustained, dedicated e ortof many people the injured worker,

their emplo er, health and ocational

rehabilitation pro iders, case managers,

amil , workplace colleagues and riends.

We all ha e a role to pla in helping

injured workers stay at work or return

to work.

0

20

40

60

80

100

> 1 year cohort< 1 year cohortTotal rtw at any capacity

78% 77%75%83% 84% 81%

68% 72% 72%

Baseline 2009 2010

P e r c e n

t a g e

%

Graph 1: C mparis RTW i a capacit

0

20

40

60

80

100

Target July 2010Full RTW July 2010Full RTW July 2009Full RTW Baseline

89%

41%

88%

40%

83%

92%

51%

37%

Full RTW < 1 year cohort

Full RTW > 1 year cohort

Graph 2: F ll RTW agai st 2010 targets

Return to work survey

In 2009 McGregor Tan Researchconducted the annual return to work

sur e on behal o WorkCo er. This was

the rst assessment since the baseline

sur e was conducted in Januar

2009 and measured the return to work

experiences o two di erent worker

cohort groups, less than one ear and

greater than a ear. The WorkCo erSA

Annual Report 2008-09 detailed the

ndings o this sur e .

In August 2010, McGregor Tan Research

conducted the 2010 annual return

to work sur e . This was the second

measure against the baseline sur e

conducted in Januar 2009.

The less than 1 ear cohort measures

workers return to work experiences in

the rst 12 months after injury/illness.

The greater than 1 ear cohort

measures workers return to work

experiences more than one ear a ter

injury/illness.

Su cient numbers o workers were

inter iewed (1,093) across the cohorts to

pro ide a result o 95% con dence rateand less than 4% error rate. These are

workers who ha e had one da or more

o compensation paid.

Results summar

Return to work in any capacity

This is a simple measure o workers who

returned to work or an period o time, in

any capacity, since they were injured.

In the less than 1 ear cohort, this ears

survey results show that fewer injured

workers returned to work in an capacit .

In the greater than 1 ear cohort, this

ears results were the same as last ear

in the proportion o workers who had

returned to work at an time, in some

capacit . The results are illustrated below

in Graph 1.

Full return to work

This is a measure o the return to work

experiences of injured workers who

had either returned to work at equal or

greater than pre-injury hours, or returned

to work at medicall authorised capacit

at the date o the sur e . The results are

illustrated below in Graph 2.


16/60


60

80

100

09-1008-0907-0806-0705-0604-0503-0402-0301-0200-0199-0098-9997-98

84% 85%86%

84%83% 83%

86% 85%87%

SA

National

85% 85%83%

82%

79%

82% 82% 82% 82%

77% 77%75%

82%80%

85%

80%82%

Graph 3: RTW rate

There was a decrease in the number o

workers ull returning to work within a

year of being injured. For those workers

who were injured more than a year ago,

there was also a slight decrease in their

rate o return to work.

Impro ing return to work outcomesremains a clear priorit or WorkCo er.

A number o ke initiati es were

implemented during 2009-10, which are

discussed in this chapter.

Australian and New Zealandreturn to work monitor 2010

Published annuall b the Heads o

Workers Compensation Authorities,

this sur e is conducted b Campbell

Research. Some 2,689 injured workers

who ha e had 10 da s or more

compensation paid are sur e ed across

all Australian and New Zealand workers

compensation jurisdictions (not including

sel -insured emplo ers). Four hundred

and one workers were sur e ed rom

South Australia.

The 2010 RTW rate nationall was

reported as stabilising at 85% compared

with a decline o er the pre ious our

ears (2008-09: 83%).

South Australia was identi ed in the

June 2010 report as consolidating the

results o the pre ious ear, althoughstill remaining below the national

a erage. The RTW rate or South

Australia was 80% (a decrease o 2%

compared with 2008-09).

South Australia had the highest

proportion o workers currentl recei ing

compensation, at 35%, compared to

the national a erage o 23%. Howe er,

injured workers in South Australia

reported that the had the highest le el

o access to a return to work plan (69%)

as compared with the national a erage

o 56%. South Australian workers also

had a higher than a erage participation

in de eloping a return to work plan.

Claims overview

Workers compensation claims or SAsregistered emplo ers are managed

b Emplo ers Mutual. WorkCo er

and Emplo ers Mutual collaborate to

ensure the alignment and prioritisation

o our acti ities, with a shared ocus

on maximising the capacity of injured

workers to return to work or the

communit , and restoring the Scheme

to a ull - unded status. Our goal is to

moti ate and encourage workers withcapacit to sta at work or return to

work to the greatest degree possible,

and to help incapacitated workers

regain the abilit to work or return to

the communit . Impro ing our States

return to work per ormance remains an

ongoing ocus or the Scheme.

Claim numbers registered emplo ers

In 2009-10 there were 19,740 claims

incurred 1 rom workers emplo ed b

registered emplo ers (2008-09: 19,710).

O these, 6,480 required the pa ment o

income maintenance (2008-09: 5,080)

see Graph 5 over page (graphs 4 to 6

show trends in claim numbers).

1 Incurred means the date o injury is during thefnancial year. This number includes an estimateor claims incurred but not yet reported.


17/60

18



0

5000

10000

15000

20000

25000

30000

08-09 09-1007-0806-0705-0604-0503-0402-0301-0200-01

2 6

, 6 1 0

2 5

, 0 5 0

2 4

, 0 3 0

2 4

, 7 2 0

2 4

, 0 7 0

2 2

, 6 6 0

2 1

, 9 3 0

2 1

, 0 0 0

1 9

, 7 1 0

1 9

, 7 4 0

Graph 6: T tal claims i c rred b i j r ear registeredempl ers

0

1000

2000

3000

4000

5000

6000

7000

8000

3+ years 1-3 years < 1 yr

Jun-10**Mar-10Dec-09Sep-09

2,262

2,265

2,169 2,016

2,205

2,250 1,904

2,115

1,8581,718

2,170

2,178

Graph 4: Active i c me mai te a ce claims as at 30 J e 2010 rregistered empl ers*

** The June 2010 quarter < 1 ear and 1-3 ears are estimates pro ided bWorkCo ers actuar . The usual de nitions o acti e claims could not be useddue to unusual pa ment patterns

0

1000

2000

3000

4000

5000

6000

7000

8000

08- 09 09- 1007-0806-0705-0604-0503-0402-0301-0200-01

5 , 1

0 0

4 , 9

0 0

4 , 9

6 0

5 , 1

2 0

5 , 1

0 0

5 , 1

2 0

4 , 8

1 0

4 , 4

5 0

4 , 2

7 0

4 , 3

6 0

2 , 1

2 0

8 1 0

Claims (Income Mantainance) - Old rules

Excess waiver claims

Graph 5: I c me mai te a ce claims i c rred b i j r earregistered empl ers*

*The higher number o income maintenance claims incurred in 2009-10 andacti e income maintenance claims less than one ear old at the end o thisear is primaril due to the incenti e to emplo ers to lodge claims withintwo business da s (known as a wai er o excess).

Note: WorkCo er does not ha e access to a ull ears sel -insured data or2009-10 and consequentl no sel -insured data is pro ided in this report.

Fatalities and claims

At the time o nalising this report, there were six compensableatalities in 2009-10 (people who died as a result o their work).

There was one additional atalit where the claim had not been

determined.

Compensable atalities SA - by industry & year o injury(registered a d sel -i s red)

Fatalities as at June 05-06 06-07 07-08 08-09 09-10 Total %

Agriculture, orestr ,

shing, hunting1 2 - 4 1 8 13.3

Communit ser ices 3 3 1 - - 7 11.7

Construction 4 1 2 2 1 10 16.7

Electricit , gas& water

- - - - - 0 0

Finance, propert &

business ser ices1 - 1 - 1 3 5.0

Manu acturing 4 - - 1 - 5 8.3

Mining 1 - 2 - 1 4 6.7

Non-class economicunits (unclassi ed ind.)

- - - 1 - 1 1.7

Public administration& de ence

1 - - - - 1 1.7

Recreation,

personal, other1 - - - - 1 1.7

Transport & storage 6 6 2 2 2 18 30.0

Wholesale &retail trade

2 - - - - 2 3.3

Accepted 24 12 8 10 6 60 100

Table ootnote: Figures reported will ar rom ear to ear due to undetermined orinterim status claims not being included until determination or excluded upon beingrejected, or redeterminations being made or the addition of late reported incidents.Note the gures or 2009-10 will be understated due to dela s in reporting someincidents to WorkCo er. Percentages ha e been rounded. Onl atalities resultingin a claim or compensation are reported to WorkCo er. For statistics relating to allnoti able atalities in South Australian workplaces contact Sa eWork SA.


18/60


Redemptions

Redemption pa ments are thosemade under section 42 o the Act,

where eligible injured workers agree

to a lump sum to nalise their workers

compensation claim (in lieu o weekl

pa ments and/or medical expenses).

It is the clear intention o the legislation

to signi cantl limit redemptions and to

ensure all participants are ocused on

enabling earl inter ention and return towork opportunities as the clear goal o

the Scheme.

Improving health and vocational services to

injured workers

WorkCo er pro ides a ramework or

injured workers to receive accessible,

timel and appropriate ser ices pro ided

b a range o health and ocational

pro iders. We work together with them

to impro e the health outcomes o

injured workers by:

developing new or improved

ser ice deli er arrangements developing best practice guidelines,

tools and inter entions

reviewing and setting appropriate

ees or the arious t pes o health

and rehabilitation ser ices

developing various education initiatives

and contributing to uni ersit -based

education programs or health

under- and post-graduates.

As a rst point o contact and in

pro iding ongoing care, these pro iders

ha e an essential role to pla in the

recovery and return to work of injured

workers. An ongoing challenge or

WorkCo er is to infuence health

providers to encourage injured

workers to sta at or return to work so

that reco er times or people with

compensable injuries more closely

matches the reco er times or people

with non-compensable injuries. 1

WorkCo er has continued to work

together with health and ocational

pro iders to nd solutions to achie e

better health and social outcomes or

injured workers.

For details o the health pro iders

satis action sur e , see page 37

(Stakeholder satis action).1

Ro al Australasian College o Ph sicians.

Compensation and Health Outcomes: 2001; and Harris I,

Mulford J, Solomon M, van Gelder JM, Young J. Association

between compensation status and outcome a ter surger .

A meta anal sis: JAMA. 2005; 293:1644 -1652 .

Working with health providers

Some o the initiati es undertaken b

WorkCo er in 2009-10 that in ol ed

working with health and rehabilitationpro iders are explained in this section.

Baseline re iew o medical expert ees

Baseline ees using new ee setting

methodologies were established in

October 2006 or medical expert ser ices

(general practitioners, specialists and

allied health pro iders). Since then ees

ha e been indexed e er ear based

on a combination o CPI and labourindexation adjustments. In 2009-10,

WorkCo er re iewed these current

ees to ensure that the continued to

be reasonable or the arious health

pro ider ser ices deli ered. These ees

are required to be based on a erage

charges to pri ate patients (under

section 32 o the Workers Rehabilitation

Compensation Act 1986 ). As part o this

process, ser ice item descriptors andassociated guidelines contained in the

arious WorkCo er ee schedules were

also re iewed.

The baseline ee re iew identi ed the

need to re ne WorkCo ers ee setting

processes to ensure a more regular

re iew o ees is undertaken where

robust datasets are a ailable.


Redemption paymentsmade in 2009-10

Number o redemptions paid 1289

Total redemption pa ments $123m

A erage amount perredemption pa ment $95,000


19/60

20



Clinical practice guidelines or

acute-subacute low back pain

In the South Australian workerscompensation en ironment low back

injury is one of the most prevalent injury

conditions. Workers with low

back injuries generally have poorer

reco er outcomes and return to

work rates in comparison with other

injury conditions. To improve recovery

rates or these workers, WorkCo er

commissioned the de elopment o

a clinical practice guideline oracute-subacute low back pain.

The guideline is intended to pro ide

health pro essionals with updated

e idence and guidance on the diagnosis,

prognosis, treatment and management

o acute-subacute so t tissue low

back injuries.

The guideline and support materialswere released in April 2010 and are

a ailable on WorkCo ers website

www.workco er.com > Health pro ider

> Guidelines by injury type.

Clinical practice guideline or carpal

tunnel s ndrome

A clinicians guide to managing

carpal tunnel injuries was released

b WorkCo er in August 2009. Theguidelines pro ide recommendations

or health pro iders, taking into

account best practice and e idence to

manage this injury in a compensation

en ironment. The guideline is a ailable

rom www.workco er.com > Health

provider > Guidelines by injury type.

Better Outcomes Research Project

new trial with treating doctors

WorkCo er and Emplo ers Mutualcommenced an eight-week trial in

June 2010 aimed at identi ing

workers who ha e a high probabilit

o de eloping a long-term disabilit .

Statisticall , workers who are still awa

rom work rom our to 13 weeks a ter

their injury have a high probability of

de eloping a long-term disabilit .

The research trial in ol es working

with treating doctors to identi capacitor sa e and suitable return to work.

In this trial, the risk o long-term disabilit

is de ned as the probabilit o a worker

not returning to ull-time work 12 months

after injury. The trial is a doctor peer-

to-peer project that identi es high-risk

workers certi ed as partiall or ull un t

or work our to 13 weeks post date o

injury. It focuses on supporting treating

doctors who ha e limited experiencewith WorkCo er claimants and those

who work in clinics with onl small

WorkCo er claimant workloads.

A prognosis tool was de eloped to

identi workers at risk o long-term

disabilit based on a number o ke

risk actors. WorkCo er data was

used to determine the ke risk actors

or long-term disabilit , including:

high-risk injury groups

number of scripts for speci c

analgesics and mental health drugs

hospital admissions

number of WorkCover

medical certi cates

number of physiotherapy visits.

The trial will also test how e ecti e

this prognosis tool is in predicting the

probabilit o long-term disabilit .On identi cation o a high-risk worker,

medical practitioner ad isors recruited

b WorkCo er liaise directl with the

treating doctor to discuss the workers

risk probabilit , the current WorkCover

Medical Certifcate and wa s to pre ent

long-term disabilit .

An e aluation o the trial has

commenced and is expectedto be completed b the end o 2010.

Health provider education inworkers rehabilitation matters

During the ear WorkCo er

continued to support the education

o health pro iders in South Australia.

This included the ongoing teaching

o the clinical assessment andmanagement o common work-related

injuries to undergraduate medical

students at both Adelaide and Flinders

uni ersities, and the deli er o the

ph siotherap program Management

o WorkCover patients with the Uni ersit

o South Australia.

Ongoing training opportunities were

pro ided to general practitioner registrarsenrolled with the Sturt Fleurieu general

practice training group and clinical

training sessions were deli ered or

Divisions of General Practice where

requested. Our collaboration with the

Royal Australian College of General

Practitioners in de eloping training

material or general practitioner

management o pain continued.


20/60


The Assessment o musculoskeletal

injuries teaching manual and

accompan ing DvD de eloped in2008-09 has pro en to be popular with

health pro iders. Numerous requests

or copies ha e been made including

rom The Facult o Occupational and

En ironmental Medicine, which is

interested in suppl ing this material to

members o its training program.

WorkCo er is pleased to ha e been

in ol ed in changes to the Flinders

University Graduate Diploma inMusculoskeletal Medicine. From 2011

this course will be multidisciplinar in

nature and be structured around clinical

exposure and experiential learning.

This course has also been structured

to address the needs o those with

compensable injuries.

Vocational

rehabilitation services

WorkCo ers vocational Rehabilitation

Unit continued to support the deli er

o reco er and return to work ser ices

during 2009-10. There was a new

ocational rehabilitation pro ider contract

in place rom Jul 2010 and WorkCo er

will support a stronger regulator role in

uture, including o -site pro ider audits

and educational outreach. In 2010-11,we will be completing a comprehensi e

re iew o the operating ramework

and make recommendations aimed at

strengthening return to work outcomes.

WorkCo ers pre ious ocational

rehabilitation ser ice pro ider

agreements expired on 30 June 2010.New contracts commencing rom

1 Jul 2010 were aligned with the

Nationall Consistent Appro al

Framework or Workplace Rehabilitation

Pro iders, supported b the Heads o

Workers Compensation Authorities

(HWCA). The new ramework is

designed to impro e ser ice standards,

while harmonising administrati e

di erences between the ariousAustralian jurisdictions.

The assessment and reporting o

suitable employment was a major

ocus throughout 2009-10. Considerable

in ormation was pro ided to the

industr during the ear with numerous

changes adopted to support the ocus

on suitable emplo ment, including

the implementation o new ser icedescriptors and codes. Ele en indi idual

and industr sessions were also held,

aimed at impro ing e orts to identi

suitable employment with both pre-injury

and new emplo ers.

The long-term bene t o this work is

expected to be impro ed return to work

outcomes, e idenced b an o erallreduction in workers continuing to the

work capacit re iew stage o a claim.

A urther initiati e supporting return to

work was the re amp o the process

and documentation or the production

o return to work plans and programs.

In collaboration with the ocational

rehabilitation industr and Emplo ers

Mutual, the process was simpli ed.The documentation was completel

modi ed with input rom a ariet o

stakeholders, with the aim o increasing

the focus on returning injured workers

to workplaces. A post-implementation

re iew will be undertaken and urther

impro ements will continue to be made

in the second hal o 2010.

From Jul 2010, the ser ices pro idedb these pro essions will be known as

workplace rehabilitation ser ices.

We work together withmedical, rehabilitation andallied health providers toimprove the health outcomes

o injured workers.


21/60

22



STRATEGIC PRIORITY 2:Fostering a return to

work culture

Return to Work Fund

The Return to Work Fund has six

objectives:

to foster innovation that nds solutions

to the known barriers to return to work

and enhances the e ect o actors that

support return to work

to expand the retraining optionsfor injured workers

to develop greater workforce

participation options

to improve the skills of persons

operating in the Scheme

to undertake workplace initiatives that

result in sustainable programs to help

those sectors with known di cult in

achie ing success ul and timel return

to work outcomes to raise awareness and undertake

communication initiati es that

promote the rehabilitation and return

to work message.

Seven projects approved from round

one o the und are testing alternati e

approaches or impro ing return to

work outcomes. Some earl results are

encouraging. The learning gained will

be urther considered as to how the

Scheme can bene t rom the ndings.

The Return to Work Fund break ast

session held on 16 September 2009 was

attended b 70 delegates and generatedsome ideas for future projects for round

two unding. Ke themes identi ed were

family support, locality, injured worker

support and attitudes towards returning

to work. These themes were used to

encourage the targeting of projects for

round two o the und, which closed on

30 June 2010. Fort -three expressions

o interest were recei ed or round two

and, once evaluated, projects that areappro ed will start during 2010-2011.

Return to Work Inspectorateand Support Unit

The Return to Work Inspectorate and

Support Unit was established in 2008

to o ersee emplo ers responsibilities

under the Act, including the requirement

or all emplo ers with 30 or moreworkers to appoint a rehabilitation

and return to work coordinator.

The unit is responsible or

compliance and en orcement o

employers obligations to return injured

workers to their workplaces as soon

as workers are medicall cleared or

suitable duties. The unit also aims to

raise emplo er awareness o thesereturn to work obligations, support

rehabilitation and return to work

coordinators, and promote e ecti e

workplace rehabilitation of injured

workers leading to earl and sustained

return to work.

STRATEGIC PRIORITY 1: Working with our strategic

partners to improve injury and case managementoutcomes

We continued to work with Emplo ers

Mutual to impro e the qualit o case

management. WorkCo er has an

annual program o work that ocuses

on continuall impro ing the qualit o

claims management ser ices deli ered

through our agent. The ollowinginitiati es were implemented this ear:

Introducing an early noti cation

process for seriously injured workers

Overseeing and accrediting the

training o more than 2,000 workplace


coordinators nominated b emplo ers

Implementing new processes to

acilitate earl identi cation o return

to work barriers at the emplo er le el Reviewing and enhancing the RISE

program o emplo er incenti es to

support the employment of injured

workers with a new emplo er

Reviewing and approving Employers

Mutuals learning and de elopment

program or case manager

pro essional de elopment

Conducting educational outreach

sessions with ocational rehabilitation

pro iders (now known as workplace

rehabilitation ser ices) on requirements

of suitable employment and job

matching

Developing an improved rehabilitation

and return to work plan or use b the

ocational rehabilitation industr



22/60


E orts in 2009-2010 ocused on:

raising awareness amongst employers

about their return to work obligations providing professional development

or rehabilitation and return to work

coordinators b conducting network

sessions that are designed to increase

capabilit and understanding o return

to work issues

providing advice and assistance to


coordinators

conducting an employercompliance program.

During the ear the Return to Work

Inspectorate and Support Unit:

conducted 22 network sessions

that were attended b 970 rehabilitation

and return to work coordinators

conducted 360 compliance and

education isits to emplo ers

received 193 referrals relating to anemplo ers obligation to pro ide

suitable employment to its injured

workers (2008: 175).

During 2009-10, six supplementar

le ies were imposed on emplo ers

who had ailed to meet their obligations.

There were 21 acti e supplementar

le ies that reco ered $612,500 rom

emplo ers during the nancial ear.

B 30 June 2010, 2,643 rehabilitation

and return to work coordinators were

appointed in designated workplaces, and

2,286 had either enrolled in or completed

the required training program.

Research into actors thatinfuence our Scheme

WorkCo ers strategic research agenda

continued to contribute to the growing

evidence base on work-related injuries,

helping in decision making and the

de elopment o initiati es to impro e

South Australias return to work rates.

Underpinning this strateg is the need

to acti el oster research networks and

relationships with our ser ice pro iders,

other agencies and the external researchcommunit .

A number of research projects

assessing return to work options

deal directl with Scheme participants

and pro ide aluable opportunities to

rein orce positi e outcomes such as

return to unction and work.

Examples during 2009-10 were:

Three manu acturing sectors o ariablerisk classi cations (low, medium and

high risk) ha e participated in studies

assessing the role o the workplace

in ostering a return to work culture.

The iews o emplo ees were sought

rom the electronics industr (low-risk

sector); wine and brand (medium-risk

sector); and the meat and li estock

processing sectors (high risk for injury

and illness). The ndings show trust andcommunication between management

and the work orce is not rated as highl

as the commitment to report injury.

This nding rein orces that supporti e

workplace practices are ke to a return

to work culture. One o the main barriers

to return to work rom the workplace

perspecti e was ound to be the

pro ision o suitable duties.

The Back Pain Study measured the

impact o ps chosocial actors on

reco er and return to work or workerswith a back injury. The dominant

occupations in this cohort are personal

carers and other t pes o carers,

dri ers o ar ing t pes o ehicles,

storemen and cleaners. The iews o

the treating general practitioner and

ph siotherapist supplement that o

the workers. Participants (six months,

one ear and two ears ago) were

re isited, irrespecti e o their returnto work status to measure their pain

le els, unctional disabilit , ps chosocial

status, compensation outcomes,

recurrence, and experience with the

injury management process. The

results indicate that the use o rele ant

ps chometric instruments helps identi

workers at risk o dela ed reco er

and return to work due to one or more

ps chosocial risk actors such asdepression or anxiet .

The ndings rom the Swinburne

project Redesigning the workplace

or the ageing society drawn rom

real organisations ormed the basis o

interacti e workshops or rehabilitation

and return to work coordinators. This is

an example o bringing research to the

end-user and helps rein orce the alueo e idence in orming polic and practice.

WorkCo er continues to be an

industr partner in the health and

wellbeing project Australias baby

boomer generation, obesity and

work patterns, causes and implications .

This multi-partner project will provide

opportunities to collaborate with the

health and ageing sectors, both highlrele ant to our pool o current and uture

injured workers.



23/60

24



Above and beyond: The powero positive recovery and return

to work

Two sessions eaturing real li e

inspirational stories o return to work

after an injury were held in December

2009 and Februar 2010, attended b a

total o 150 guests including emplo ers,


coordinators, health and rehabilitation

pro iders and WorkCo er and Emplo ers

Mutual sta . A third session was held inMarch 2010 as part o the 2010 Recovery

& Return to Work Awards launch. Julian

Burton acilitated all three sessions and

15 award nalists rom 2008 and 2009

shared their stories with the audience.

WorkCo er will hold urther sessions

in 2010 and 2011, with the 2010 award

nalists continuing to raise awareness o

the importance o reco er and return to

work after injury.

The annual WorkCo er Recovery &

Return to Work Awards recognise

and celebrate the outstanding e orts

of South Australians injured at work,

and those helping injured workers,

to reco er and get back to work.

The awards are part o a concerted

e ort to raise awareness about the

importance o getting people back to

work in South Australia.

Nominations or the 2009 Recovery &

Return to Work Awards opened in April

and closed in Jul 2009. The awardsceremon was held on 14 September

2009. The awards were sponsored

b Emplo ers Mutual, Minter Ellison

Law ers, Business SA and Sel -Insurers

o SA (SISA).

WorkCo er recei ed 268 nominations,

101 ormal applications and 23 nalists

were selected by the judging panel. Each

award recipient recei ed a prize to the

alue o $3,000, a troph and a certi cate.

The 2009 winners were as ollows:

Worker achie ement award:

Matthew Ervin and Grace Neate

Case management excellence award:

Melissa Berridge (Emplo ers Mutual)

Emplo er excellence award (small to

medium): Communit Help or the

Isolated with Personal Support (CHIPS)

Emplo er excellence award (large):

AgriExchange

Emplo er excellence award (sel -

insured): N rstar Port Pirie Pt Ltd

Health and rehabilitation achie ement

award (ind): Smaroula La Paglia,

consultant to the South Australian Police

Health and rehabilitation achie ement

award (org): Insite Injury Management

Group

The 2010 Recovery & Return to Work

Awards were launched in March 2010,

with a new categor or rehabilitation

and return to work coordinators.

WorkCover annual return to work and

injury management con erence

On 15 September 2009, WorkCo ers

ourth annual con erence was held.

The theme was A brighter uture in

return to work: Better or workers -

Better or business - Better or the State .This con erence aimed to create a

positi e outlook or workers rehabilitation

and compensation in South Australia,

b continuousl learning rom and

embracing success ul return to

work initiati es and inno ations in

injury management. There were 643

registrations and 590 delegates attended

the con erence on the da .

Planning or the 2010 annual con erence

started during the ear and at the time

o reporting the program o e ents and

ke note speakers were being nalised.

Ke note speakers will include Pro essor

Sir Mansel A lward, Chair, Public Health

Wales, UK and John Marshall, Australian

Paral mpian/Police O cer, NSW.



24/60


Return to work awareness campaign

In Jul 2009, the Board appro edunding to mo e to the next phase o

WorkCo ers social marketing campaign,

which went to air between 29 No ember

2009 and Ma 2010. A return to work

awareness campaign has underpinned

WorkCo ers ocus on impro ed


outcomes for injured workers since 2005.

The 2009 campaign ocused on real li e

stories of three injured South Australians:

FRANK MEDvE - who was run o er

b a 20-tonne earth mo ing machine

and had his arm torn o and his legs

crushed. The man who ran him o er

went into shock and Frank had to call

his own ambulance ( rom underneath

the earthmo er). He had more than 20

operations o er a two- ear period and

su ered signi cant ps chological e ectsand depression. With the ongoing

support o his emplo er and his amil

and riends he returned to work. Franks

wi e, Deb Med e also eatures in the

campaign, telling the important stor o

the impact of an injury on the family and

the role the pla ed in supporting Frank.

GRACE NEATE - who was 17 ears

old and working a ter school at a foristwhen she slipped and was se erel cut

b glass rom a ase. She lacerated her

wrist, cutting through two ner es,

12 tendons and the major (median)

arter in her arm. At the time, her

ocus was on returning to school (rather

than work) to nish year 12. She had

excellent support rom her case manager,

rehabilitation pro ider and amil and

is now at uni ersit and working threepart-time jobs.

CARL FUTCHER - who ell down a li t

sha t at work racturing his cheek, e e

socket and skull. It was initiall thoughtthat Carl would not li e or that he might

ha e brain damage. He su ered terrible

shock at the beginning of the injury but

quickl set about ocusing on returning

to work and managed to do so within six

weeks. He recei ed excellent support

rom his emplo er Kimberle Clark as

well as his amil and riends, and is

now an advocate for safety and injury

management in the workplace.

The campaigns media strateg

ocused on tele ision as the ke

medium with support rom radio,

worksite ad ertising at higher-risk sites

and medical clinics with a large number

o workers compensation patients.

Targeted publications aimed at high-risk

industries such as aged care and rele ant

health publications ocused on generalpractitioners and ph siotherapists.

The campaign launch coincided with the

introduction o new communications

materials for injured workers and

employers, including two injured worker

booklets (Injured at work: Were here to

help you get back to work and The road

to recovery: Returning to work and li e) ,

three emplo er booklets (Registering

with WorkCoverSA, Welcome to

WorkCoverSA and Helping injured

workers return to work) and an updated

website to align the look and the content

with the campaign.

To monitor the e ecti eness o the

campaign, WorkCo er appointed

independent market research companBeatwa e Pt Ltd to do a baseline

sur e (No ember 2009) to test attitudes

and beha iours be ore the campaign

was aired and to do ollow up tracking

sur e s (conducted in Ma 2010).

Generally speaking, perceptions of the

role and per ormance o WorkCo er

either held ground or impro ed during

the sur e period, particularl concerning

the issue of returning injured workers

back to work.

The recall o communications rom, or

about, WorkCo er signi cantl increased

during the sur e period, mainl due

to tele ision ad ertising, which was

percei ed to be communicating the

message o getting back to work/

returning to work and pro iding the

iewers with pre iousl unknown,

positi e in ormation. WorkCo ers main

role was perceived to be To help injured

workers return to work.



25/60

Chapter 2:

FinancialPer ormance



26/60


Chapter 2 : Financial Perormance

Results

WorkCo ers nancial per ormanceor the ear refected an impro ement

in its unding position and a return

to positi e in estment results. The

nal result was, howe er, signi cantl

a ected b the impact o in estment

markets on longer-term interest rates.

Whilst short-term rates ha e increased,

longer-term rates decreased materiall

at the end o the nancial ear.

As WorkCo ers claims liabilit iscalculated on a discounted cash fow

basis, an decrease in these longer-term

rates will result in an increase in

the alue o the claims liabilit .

The result or the ear was a pro t o

$77.2 million (2009: $75.1 million loss)

which le t the Schemes un unded

liabilit at 30 June 2010 at $982.0 million

(2009: $1,059.2 million) and its unding

percentage at 61.5% (2008: 56.7%).

This is the rst time that WorkCo er has

recorded a pro t or a complete nancial

ear since the ear ended 30 June 2000.

Simpli ed income statement

2010$m

2009$m

Le rom registered emplo ers 610 631

Cost o claims (576) (467)

Other claim expenses (52) (57)

Underwriting result (18) 107

Net in estment pro ts/(losses) 138 (138)

Other income: 21 20

Operating expenses (64) (64)

Pro t/(loss) 77 (75)

Simpli ed balance sheet

2010$m

2009$m

In estments 1,389 1,182

Other assets 182 208

Total assets 1,571 1,390

Oustanding claims 2,498 2,385

Other liabilities 55 64

Total liabilities 2,553 2,449

Un unded liabilit (982) (1,059)

Funding ratio 61.5% 56.7%

WorkCovers nancialperormance or the yearrefected an improvement in itsunding position and a return to

positive investment results.


27/60



Per ormance highlights

The ke components o WorkCo ersnancial per ormance were:

decreased levy revenues from

registered emplo ers o $610 million

($21 million lower than or the

pre ious nancial ear)

$109 million increase in the cost of

claims (ie, the combined impact o

mo ements in the claims liabilit

and the amounts paid on claims).

This is almost totall due to thead erse impact o approximatel

$110 million arising rom changes

in long-term interest rates assumptions.

actuarial releases of $130 million

against a target o $89 million gi ing a

release o er two ears o $301 million

against a target o $149 million

an estimated lifetime costs of claims

or the latest nancial ear o 2.92%

o estimated remuneration

positive investment returns of $140

million compared with the $136 million

loss experienced in the pre ious

nancial ear

Scheme and other expenses of

$64 million, which were almost

unchanged rom the pre ious

nancial ear.

Levy revenues

To a large extent WorkCo ers le

re enues are determined b the le el

o emplo ment within South Australia.

The decrease in le re enue was largel

due to decreases in the remuneration

base rom which le ies are collected,

combined with changes to the de nition

o remuneration to exclude the cost o

trainees and apprentices.

These impacts can be signi cant

eg, a all o one percentage point in

interest rates will increase WorkCo ersreported liabilities b more than $140

million. In order to better refect the

results that are within WorkCo ers

control or infuence WorkCo er has

calculated its pro t rom insurance

operations (PFIO) o er the last e

ears. The PFIO is calculated b

remo ing the impact o :

investment returns that vary from

long-term returns the impact of changes in economic

assumptions (ie, interest rate and

changes in infation assumptions

rom WorkCo ers annual results).

In 2008 and 2009 the un a ourable

in estment market conditions had

a signi cant negati e impact on

WorkCo ers results. In 2010 the

reduction in longer-term interest rateshad a negati e impact on WorkCo er

liabilities that was partiall o set b

abo e a erage returns on in estments.

This shows that a ter remo ing the

impact o e ents outside its control

or infuence WorkCo ers underl ing

nancial per ormance has been

positi e or the last three ears.

Impact o legislative change

The recent changes to the Workers Rehabilitation and Compensation Act

1986 were designed to encourage a

focus on injured workers returning to

work as well as to reduce the costs

o the Scheme. As at 30 June 2010

those legislati e changes ha e largel

been implemented but the e idence

o their precise nancial impact still

remains uncertain and will remain so

or a number o ears. Accordingl , asrequired b the Applicable International

Accounting Standards, the nancial

results or the ear do not refect all the

anticipated nancial bene ts that should

accrue rom these legislati e changes.

Further details o the impact o these

changes can be ound in the report rom

Finit Consulting Pt Limited included at

www.workco er.com > WorkCo er >

Annual report.

Pro t rom insuranceoperations (PFIO)

These results refect some

circumstances and e ents that are

within WorkCo ers control or infuence,

such as the management o claims, and

some that are not, such as returns rom

global in estment markets, changes in

interest rates and infation assumptions.

Pro t rom insurance operations Financial year

05-06$m

06-07$m

07-08$m

08-09$m

09-10$m

Actual result, pro t/(loss) (41.9) (149.4) (140.5) (75.1) 77.2

In estment markets (82.5) (82.1) 183.3 227.4 (59.3)

Economic assumptions (14.1) (1.4) (12.5) 50.3 109.7

PFIO (138.5) (232.9) 30.3 202.6 127.6


28/60


Expenses

Actual levy rate

Claims paid

Outstanding claims

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Target asset allocationTarget30 June 2010

E posure30 June 2010

Cash 2.0% 4.0%

Fixed Interest 13.0% 13.0%

Infation-linked securities 20.0% 19.0%

Australian equities 19.0% 18.0%

O erseas equities (50% hedged) 21.5% 21.0%

Propert 7.5% 7.0%

Real return growth assets 17.0% 18.0%

Li etime cost o claims

A ke long-term nancial indicatoror the Scheme is the long-term cost

o claims expressed as a percentage

o the remuneration base o the

Scheme (see graph right). This is the

main actor in determining the a erage

le rate, which must co er this cost

and an additional amount to reco er

the Schemes un unded liabilit . Until

recent ears, the Scheme has not set its

a erage le rate at a high enough le elto co er the cost o claims.

The current estimate or the cost o

claims rom the 2009-10 nancial ear is

2.92% o remuneration (ie, 0.08% below

the a erage le rate). This estimate is

slightl abo e that o 2008-09 due to

the impact o changes in discount rates

noted abo e. As the e idence o the

precise nancial impact o the recent

legislati e changes becomes clearer

it is anticipated that these costs will

decrease urther.

Investments

Prudent in estment o the unds

collected rom emplo ers to meet the

current and uture costs o the South

Australian workers compensation claims

liabilities was a ke ocus or WorkCo er

during 2009-10.

Risk management remained central

to administration o the WorkCo er

in estment program during 2009-10

as it has or more than 20 ears.

The in estment strateg continues

to be re iewed regularl with explicit

consideration o the risk characteristics

associated with the claims liabilities

pa able rom the in estment port olio,

in addition to the usual in estment

market risk considerations.

During the ear the Board appro edcontinuation o the moderate risk,

balanced port olio approach that has

characterised WorkCo ers in estment

program since inception. While this

approach means in estment results

will fuctuate in line with the worlds

in estment markets, resulting in

quite high or e en negati e returns

o er shorter periods, the medium to

longer-term outcomes are expected

to continue to be competiti e and

contribute positi el to WorkCo ers

o erall nancial position.

Our in estment return o er 2009-10 was12.3%, com ortabl abo e infation and

the actuarial discount rate. O er the 22

ull nancial ears since the inception

o WorkCo er our in estment return

o 8.9% per annum is 5.8% per annum

abo e infation and abo e the actuarial

discount rates.

WorkCo er has achie ed sound

risk-adjusted returns from the consistent

application or more than 20 ears o an

in estment approach ocused on risk

management and the Schemes speci c

circumstances. This experience gi es

the Board and management con dence

uture in estment outcomes will

continue to meet our expectations.

Li etime c st claims


29/60



-10

-5

0

5

10

15

20

09-1008-0907-0806-0705-0604-0503-0402-0301-0200-0199-0098-9997-9896-9795-9694-9593-9492-9391-9290-9189-9088-89

1 4

. 8

1 1

. 9

1 2

. 5

1 4

. 4

1 5

. 9

6 . 7

7 . 8

1 3

. 5

1 7

. 8

1 0

. 8

9 . 5

1 3

. 6

2 . 1

3

. 9

0 . 6

1 4

. 6

1 3

. 1

1 5

. 3

1 4

. 4

5

. 1

1 0

. 0

1 2

. 3

6.0 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0

6.0

6.5

7.0

7.5

8.0

8.5

9.0

A n n u a

l i s e d r e

t u r n

( % )

Annualised Standard Deviation (%)*

WORKCOVER

ZurichSchroders Super

Suncorp Balanced

MLC Moderate

AMP

Blackrock Balanced

ING

BT Balanced

MLC Growth

INVESCOLegg Mason Balanced Trust

Lower volatility Higher volatility

Risk-ret r c mparis large bala ced p led ds ( et ret r s)22 ears to 30 June 2010

* Annualised standard de iations are based on quarterl returns

Source: Russell Investments, WorkCoverSA. Returns for WorkCoverSA are after fees and have been adjusted down to approximate the

tax paid b managers in the Russell In estments database. WorkCo erSAs actual return was 8.9% per annum o er this period.

I vestme t ret r si ce i cepti the SchemeO er a one- ear period


30/60

Chapter 3:

SchemeIntegrity



31/60

Chapter 3 : Scheme Integrity


WorkCo ers role as Scheme regulator

necessitates the balancing o access

to entitlements with prudent nancialcontrol, and while these aspects can

o ten be iewed as competiti e, sta ing

at work or a timel and sa e return to

work are widel recognised as the

best outcomes.

WorkCo ers approach to upholding the

integrit o the Scheme is multi- aceted

and essentiall in ol es:

ensuring employers receive value-for-mone ser ices or the le ies the pa

ensuring workers are informed and

ha e access to their ull entitlements

under the legislation and the policies

o the Scheme, while clearl

understanding their obligations to

participate in the return to work process

ensuring that the self-insured

segment o the Scheme is robust

and appropriatel monitored a sound, ethical approach to balancing

the o ten-competing requirements o

the Scheme.

During 2009-10, WorkCo er

implemented the nal phase o legislated

changes to the le pa ments s stem.

The goal is to create a more e ecti e and

e cient le collection s stem, aligning

with other workers compensation

schemes across Australia.

WorkCo er communicated these

changes to emplo ers in June 2009

and put measures in place to assist

them with the transition to the

new s stem.

The ke changes were:

changes to the requirement to register

levy payment in advance rather thanin arrears

incentives to employ apprentices

and trainees.

Also during 2009-10, the WorkCo er

Board ad ised that the Bonus/Penalt

Scheme would be phased out, nishing

on 30 June 2010. During the ear

WorkCo er started the process o

consulting with emplo ers on anew incenti es ramework aimed

at potentiall replacing the Bonus/

Penalt Scheme.

Ensuring compliancewith the Scheme

WorkCo er has a compliance and

en orcement program that supports

an integrated approach to managingScheme risk. The compliance program

ocuses on:

employer legislative compliance

internal fraud and corruption

external fraud and corruption.

Emplo er compliance programs

WorkCo ers emplo er compliance

polic is designed to take a balanced

and air approach b acti el pursuingnon-compliance an where in the

Scheme. Our comprehensi e audit

program (using targeted samples)

eri es an emplo ers reported

remuneration, as well as re iewing

the nature o the emplo ers business

to ensure the ha e the correct

classi cation with the corresponding

le rate.

Unregistered emplo ers

Our data exchange program with

Re enueSA pro ides WorkCo erwith data where anomalies in emplo er

details and/or le els o remuneration

are identi ed. The records were also

re iewed to identi unregistered

emplo ers. (Emplo ers are not required

to register i their remuneration is

under $10,900 per annum.) Se en new

emplo er registrations were recei ed as

a result o this program. The program will

now be implemented on a scheduledbasis, with the next project planned for

2011-12.

Other unregistered employer projects

implemented in 2009-10 resulted in 24

new emplo er registrations.

Work Covers A Annual Report 2009-10

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Transcript of Work Covers A Annual Report 2009-10