All medical rehabilitation costs rose by 115.6 percent from 2004 to 2009: IBC
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One of the reoccurring themes in the Ontario government’s introduction of auto insurance reform was the need to control claims costs.
The Canadian auto insurance industry has seen costs rise dramatically, especially in the last five years.
ILSTV asked Barb Sulzenko-Laurie, IBC’s Vice President of Policy to provide some insight into what the costs were – and what they are now.
Barb Sulzenko-Laurie: About 20 years ago the Quebec government – of course they have a public auto system, so they were very interested in the fact that people with whiplash were receiving disability income and med rehab resources for very extended periods of time and so they started the process of funding scientific research in this area. All of the research that started then and now has become a worldwide effort has focused on activation and people, getting them back to work and not using passive therapies.
We see that in Ontario, things have gone the other way. Let me just use as an example, so we bring in the reforms in 2003 from Bill 198 and between 2004 and 2009, we see the med rehab costs rising by 91 percent. We see examination costs – those are the assessments and examination costs – rising by 195 percent. We see all med rehab rising by 115.6 percent – and these are statistics that are not the insurance industry’s statistics but rather are collected by the regulators of the insurance industry. The cost of bodily injury tort compensation for injuries and the no-fault accident benefits rose by, as I said earlier, more than 81 percent over the course of five years and by 21 percent in the last year.
Those are significant numbers and we’re spending a lot of money and it’s not our money, it’s the people who drive cars and pay insurance premiums, it’s their money. We’re spending a lot of money and people aren’t getting any better. One of the reasons why these costs are going up is a simple sprain and strain injury is being transformed into a chronic pain injury as a result of a lot of expanded med rehab care. That’s not getting better. On the contrary, it’s making one’s life miserable as far as I’m concerned.
So will these 41 changes help to control insurance costs and give consumers more choice? According to Barb, it’s not an easy question to answer.
Barb Sulzenko-Laurie: The devil’s in the details on these ones, and I should add that the devil’s in the implementation. There’s been pretty significant pressure from some of the stakeholders to, for example there’s a cap on how much one can pay for an assessment – it’s a $2,000 cap. There’s been enormous pressure that’s been placed on the government by other parties and ourselves to lift that cap because they say they can’t provide complex assessments for $2,000. Unfortunately there’s a round of this sector because, again, there’s so many resources there. There’s developed a new industry that brokers assessment services, so there’s a middleman that identifies the assessors for insurer-arranged assessments as well as for payment assessments. The brokers, the middlemen are saying “We’re getting squeezed out at $2,000 as a maximum that can be paid for assessments.”
There’s enormous pressure on the government to keep these brokers in business and to increase the limit on assessments. There are other examples of stakeholders that are trying to find ways of breaking out of the $3,500 limit for med rehab expenses for minor injuries. For example, if there’s a psychological condition that develops, if the question is does the limit apply? We’re not out of the woods yet. There’s no question about that. We’ve got a nice set of reforms but we also have a stakeholder community that’s been used to making use of a very rich system. Whether they’re going to make those adjustments or whether they’re going to be able to find ways of continuing to keep these med rehab profits at, in our view, unsustainable levels is still an open question.
