Comcare has traditionally led the nation in return to work results. In recent years, however, returns to work rates have been trending downwards while claims costs have jumped dramatically.

According to the 2010-11 Australia and New Zealand Return to Work Monitor, Comcare’s return to work rate has dropped for the second consecutive year, down from 93% in 2008-09 to 87% over the last financial year. Comcare’s durable return to work rate has stayed steady on last year’s result of 81%, down from 88% in 2008-09. While the Comcare sample size is small in the monitor and should thus be taken with a grain of salt, these figures are corroborated by Comcare’s 2010-11 annual report.

Data provided by Comcare to the Monitor shows that average claim costs jumped to approximately $27,000 in 2010-11, a $12,000 increase from five years ago and now twice the national average. The average number of days compensation paid per claim has also risen sharply in the last year, from 50 to 70 days per claim.

The financial health of the Comcare scheme is also being impacted by the high participation rate in rehabilitation services. Rehabilitation costs averaged about $2,900 per participating claimant in 2010-11, the highest of any jurisdiction in the country and about $1,100 more than the national average.

The increase in claim costs has led to a dramatic rise in Comcare’s operating expenses. According to Comcare’s 2010-11 annual report, more than $459m was spent on workers’ compensation claims expense in 2010-11, up from $330m the year before. 

Why are claims costs through the roof?

Comcare has noted a long-term rise in the number of mental health claims lodged by employees under its jurisdiction. In the four year period to July 2010, 9% of Comcare claims were from some kind of psychological injury, and a further 2% of claims had psychological illness listed as a secondary medical condition.

While this may sound small, 43% of total claims costs over this period related to claims where psychological illness was either a primary or secondary factor. Comcare’s 2010-2011 annual report shows that the average total cost of mental stress claims in that year was $191,000, compared to around $47,000 for all other claims.

The Return to Work Monitor suggests that Comcare employers are struggling with successfully managing the return to work of mental health claimants. In 2010-11, one in five Monitor respondents reported that they were not ready to return to work on account of being mentally unprepared.

Less help, more hindrance

This year’s Return to Work Monitor catalogues increasing barriers to a successful return to work in employers under Comcare’s jurisdiction.

Historically, Comcare has led the pack in the development and helpfulness of RTW plans for injured employees. More than 70% of Monitor respondents reported that a RTW plan had been developed for them, and nearly 90% of these said they were involved in the plan’s development, rates that reflect the long-term average. However, the number of claimants who said they found their RTW plan helpful has dropped in the last year from 81% to 76%, and is now below the national average.

The Monitor suggests that Comcare claimants are receiving less assistance from their workplaces in making a successful return to work. Roughly half of Monitor respondents considered their main supervisor or employer to be helpful with their return to work. At the same time, 37% of respondents said that someone made their return to work harder. 22% of respondents said that their employer or their main supervisor made their return to work harder, with both figures increasing sharply from the 2009-10 results.  These figures are the highest out of any jurisdiction in Australia.

Comcare acknowledged the problem of employer hindrance in its submission to a Parliamentary inquiry into mental health and workforce participation. The submission suggested a number of reasons why employers which fell under the Comcare scheme were impeding return to work for employees with mental health claims, including:

• A breakdown in employer/employee relationships and trust, especially in mental health claims which involved bullying;
• Lack of knowledge among managers in how to implement flexible working arrangements for employees suffering mental health problems; and
• Failure by employers to recognise early warning signs leading to delays in early intervention.

In its submission, Comcare noted that in 2010-11, less than half of mental stress claims lodged with Australian Government employers were received by Comcare within their benchmark of 10 calendar days of when they were lodged. This delay in receipt of claims has the potential to draw out claim length, which often leads to poor return to work outcomes.

The problem of suitable duties

The Return to Work Monitor gives an insight into the problem with suitable duties under the Comcare scheme. In the last financial year, more than 65% of Comcare claimants returned to work with modified duties, up from about 50% five years ago. However, the number of Monitor interviewees who said they had been assigned suitable duties upon their return to work has dropped in the last year, from just over 80% to about 75%.

The results reinforce Comcare’s assertion that employers have been slow to cater for the rise in stress claims and lack knowledge about implementing flexible working arrangements for affected employees.

Future directions

Comcare may be able to arrest the rise in claims expenditure by educating employers about suitable duties for employees returning from mental health claims.

Comcare’s latest annual report states that the scheme is developing tools and training packages for those working at the front line of managing mental health issues, as well as “working with employers to test a range of approaches” to identify and support people coping with mental health conditions. Comcare’s actuarial team has also developed specific questionnaires to help develop a better understanding of the circumstances facing stress and mental health claimants.