Ont. auto accident benefits shouldn’t entail ‘arguing about what care is appropriate each and every time’
October 25, 2017 by Greg Meckbach, Associate Editor
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Addressing the problems of both Ontario’s auto insurance and workers compensation systems calls for packages of care that work for most injured people and not for cash settlements, the former chief executive officer of the Workplace Safety Insurance Board suggested to Ontario brokers Wednesday.
In Conversation with David Marshall was one of Wednesday’s topics at BIP Talks, a series of half-hour talks for which attendees at the Insurance Brokers Association of Ontario (IBAO) Convention can get Registered Insurance Brokers of Ontario education credits.
Don Forgeron, president and chief executive officer of Insurance Bureau of Canada, interviewed Marshall, whose report on Ontario auto insurance was published April 11. Marshall, a former CEO of WSIB, was appointed in 2015 to make recommendations on reforming the auto insurance system.
Auto insurance claims costs “continue to rise” in Ontario “while automobile accidents continue to fall,” Marshall said in his report.
Among Marshall’s 35 recommendations were that “there should be no cash settlements in the accident benefits portion of the Ontario auto insurance system for those benefits specified in the legislation as being for medical and rehabilitation care.”
Forgeron noted Wednesday during the BIP Talk that “most of us in the room likely have group insurance” through work or an association which provides for programs such as physiotherapy and dental care.
“So you may say have $200 annually for physio,” Forgeron said. “I can’t imagine that any of us would ever think of picking up the phone one day and calling Sun Life and saying, ‘You know, I’ve got $200 as a limit for physio but I am willing to settle for $100. Send me a cheque for $100 and I won’t take any physio treatments this year.’ We have that very same phenomenon that takes place in auto insurance.”
Ontario’s Statutory Accident Benefits Schedule was “never intended the auto insurance system to be a cash jackpot,” Marshall wrote in the report. But many auto insurers, Marshall suggested, “are incented to close their liability with as little cash cost as possible and hence they introduce the practice of negotiating cash settlements with claimants in lieu of medical treatment, future wage and other future benefits under the SABS.”
At Wednesday’s BIP Talk, held at the Shaw Centre in Ottawa, Marshall noted that when he took over as WSIB CEO, the organization was losing $900 million a year and had an unfunded liability of $14 billion.
“When I got there, people saw their job as providing compensation,” he recounted. But Marshall suggested that their job was not truly done until the claimant was well.
“You’re got to get that medical care to the person quickly which means you can’t start wringing your hands and doing your research and arguing about what care is appropriate each and every time,” Marshall said. “There’s lots of medical evidence to show that for straightforward injuries, which are 85% or so of auto injuries – they are not complex.”
An insurance system needs “to figure out, what is a package of care that works for most people,” Marshall suggested Wednesday.
Related: Road to Reform
In his report, Marshall recommended that the Ontario auto insurance regulator “should move as quickly as possible to create programs of care for the most common types of automobile injuries.”
In its budget document for 2017-18, released April 27, the Ontario government says it is “reviewing” the 35 recommendations from the Marshall report and it promised to hold consultations.
“There is nothing that I recommended that is revolutionary in itself,” Marshall told IBAO Convention attendees Wednesday. “The problem is that the government has devised a social safety net … but it does not have a mechanism for resolving structural problems and really what you needed is for the government to have a regulator or someone in the middle that is able to understand where the problems are occurring and to resolve them on an efficient basis.”
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Marshall presents a rosy picture of his work at WSIB, but the reality was that the Board was pressured to cut benefits to injured workers, and Mr. Marshall was paid very substantial bonuses for doing so. Workers with crippling injuries were often “deemed” able to work, and forced onto taxpayer funded welfare. The mental health cost of these decisions was enormous. Medical care from WSIB has always been very limited. WSIB is not a system dedicated to making workers “well” and definitely not a model for fair and affordable car insurance
When will it ever be apparent to anyone even mildly interested in the business that auto insurance in Ontario simply does not work and has not since the early ’70’s. I’ve been in insurance since 1952 and I believe I can honestly relate that from that time until the late ’60’s, we were spoiled as insurance people because the incident of auto accidents and large payouts for injuries were unheard of and this at a period of time when autos were basic machinery on 4 wheels with lousy radios.
Since the ’70’s on the vox populi has somehow become a culture or more an industry of experts in claiming against someone else as soon as disaster strikes, making auto insurance the grab bag of everything it was never meant to be. So here’s an idea: go through all the rhetoric you want to try to find a solution and I’ll take it to the bank that you won’t be able to and as the Government is already heavily steeped in the business, let them take it over and work out the kinks that private industry, because of the culture we live in, is deprived of the opportunity of accomplishing.
There is no social safety net. People will need to come up with their own solutions because the self interested government, the corporations, the banks and the insurance companies are all in it for themselves. In 2007, I hit a car in front of me and made a tiny scratch on the persons bumper. I did the honest thing and contact my insurer. Big mistake, they wanted to triple my premiums but I fought back. I went to the Ombudsman. He said it cost the insurer $50.00 to process the paperwork related to my claim and he could understand why I was upset about having to go from $100 per month to $300 per month in premiums for an accident that caused no damage to the persons bumper, except a 1/4inch scratch…and no injuries whatsoever. The insurance Ombudsman said I would have to keep my record clean for 7 years and there would be no increase in my premiums. So is the insurance industry fair? Are they accountable? Are they transparent? Are they white collar criminals? You can answer these questions for yourself. To me, I never did trust them and I never will.
There are several problems with how the auto insurance industry is run in Ontario. In my opinion a couple of effective solutions include:
1) Mandating that ONLY clinicians with active licenses be majority owners in the establishment of community health care facilities. This raises the stakes for practicing clinicians, thus ensuring that all operations are above board.
2) Capping the minor injury guideline med-rehab benefits to $7500. I’m sure if the IBC and FSCO reviewed the average insurer pay out per claim, they would agree that on average a cap of $7500 is satisfactory for all concerned parties.
The money spent to hire an expert panel, largely comprised of researchers as opposed to active providers to devise guidelines of care for traffic injuries resulted in further benefit to insurers while adding insult to injury for claimants and more confusion for providers.
Addressing the “but it’ll get better on its own” brigade, this is no reason not to manage pain associated with motor vehicle injuries.