The Cost of Workers Compensation in an Ageing Workforce

Australia has an ageing population and, as a result, an ageing workforce.

It is predicted that there will be an average premium increase from the current 1.7% in the 2021/22 financial year to more than 2% in the following year for employers who are a part of the Return to Work SA scheme, as a result of an increased number of claims reaching the 30%WPI “seriously injured worker” threshold.

In the context of this ageing population, the likely increase in workers achieving “seriously injured worker” status is at least partly attributable to the symptomatic aggravation of pre-existing (and possibly asymptomatic) degenerative conditions, such as osteoarthritis. Surgical procedures such as total knee replacements are more likely to be pursued where workers are older (given the hesitance among medical professionals to perform joint replacement surgery on younger patients) and, if a worker has a poor surgical outcome, it is more likely than not that they will be declared to be “seriously injured”.

On top of this, it is all too common for people with ongoing pain issues to be prescribed opioid medication. Long term use of opiate containing medication will commonly lead to exacerbation of gastroesophageal reflux disease and contribute to the development of constipation. Both conditions may give rise to an assessable impairment and hence an increase in the entitlement to lump sum compensation under the Return to Work Act.

Of relevance is the recent decision of His Honour Deputy President Judge Gilchrist in Curyer v Department for Child Protection [2021] SAET 107 (“Curyer”)[1].

Mr Curyer, in his late fifties and considered to be overweight, has advanced degenerative arthritis in both of his knees and requires bilateral knee replacements.

In 2013, Mr Curyer, in the course of his employment as a youth worker, was playing soccer with children and felt a “twinge” in the back of his right knee when he went to kick the ball. Imaging revealed mild to moderate osteoarthritis. However, no meniscal tear or other indication of acute injury was observed during an arthroscopy

In 2014, Mr Curyer, again in the course of his employment as a youth worker, was required to chase after two youths. Mr Curyer reported that his left knee was swollen and painful after the chase. Imaging revealed a tear of the medial meniscus and chondral disease in the patella, and an arthroscopy was again performed.

Mr Curyer sought to have bilateral knee replacements. His position was that both knees had been asymptomatic prior to the incidents and that his employment had accelerated his need for knee replacements.

His Honour DPJ Gilchrist considered that, in the context of two relatively innocuous incidents at work, Mr Curyer’s “knee symptoms have deteriorated in a manner consistent with the natural progression of the ongoing arthritic condition in his knees, to the point where he now needs knee replacements, in circumstances where that need is due to the inevitable progress of his congenital condition and nothing else.” His Honour was of the opinion that it was only possible that Mr Curyer’s employment had accelerated his need for knee replacements, and that this was not enough for his claim to succeed.

If a worker such as Mr Curyer was able to substantiate a claim that employment had accelerated the need for surgical intervention related to a pre-existing degenerative condition, then there is real potential, where there is an ageing workforce, for the number of “seriously injured” workers to significantly increase. This is precisely the reason why the Treasurer recently foreshadowed the likely increase in premium for employers registered under the Scheme. For this reason, it is important that the relevant Compensating Authority is diligent in investigating any such claim by seeking medical records and arranging independent medical examinations before accepting any claims for compensation where the injury in question has any potential relationship to a condition that is degenerative in nature.

Mr Curyer has appealed the decision, and if successful, he will no doubt have the surgery which has been recommended. Bilateral knee surgery, even if successful and a good outcome achieved in each knee, will automatically entitle Mr Curyer to be assessed as having a whole person impairment in excess of 30%, which is the threshold an injured worker needs to meet to achieve seriously injured worker status.

Similarly, claims for shoulder pain are often associated with a minor injury to one shoulder in the workplace, and then, as a result of “overcompensating” for the injured limb, it is asserted that pain is experienced in the contra-lateral shoulder. More often than not, radiological investigations reveal evidence of pre-existent degeneration in the shoulder joints. One of the most common surgical procedures for shoulder pain is a decompression for impingement of the rotator cuff tendons. Studies in Finland and London published in 2018 revealed that the procedure was no more effective than the result experienced by those who underwent similar but “placebo” surgery, which did not involve the essential surgical procedure to shave the bone to stop it impinging on the tendons. The results support previous studies which revealed that surgery was no more effective in relieving the symptoms than conservative non-surgical treatment. Even more disturbing is that shoulder surgery in the context of pre-existent degenerative disease may give rise to an exacerbation of the disease and more pain and impairment.

In these cases, and particularly in the workers compensation setting, not only is the surgery expensive and perhaps unnecessary, but it will almost certainly give rise to a substantial entitlement to lump sum compensation payable by Return to Work or the self-insurer.

It is self-evident that it would be prudent for the compensating authority to thoroughly investigate the need for surgery before accepting liability for the procedure when there is a background of existent degenerative disease in the affected joint. The decision in Curyer makes that case very clearly!

[1] http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/sa/SAET/2021/107.html?context=1;query=Curyer;mask_path=au/cases/sa/SAET

For more information, please contact:
John Walsh

John Walsh
Director
p.  +61 8 8124 1951
e.  Email me

Tiffany Walsh

Tiffany Walsh
Associate
p.  +61881241898
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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