Toronto Star >>
Of all the bailouts bequeathed to Canadian companies, there is one of which few people are aware. It’s being considered in the recesses of Queen’s Park, and would come in the form of new automobile insurance legislation.

The Financial Services Commission of Ontario, which regulates the auto insurance industry, conducted a comprehensive review that will affect drivers and passengers all over the province.

Of FSCO’s 39 recommendations, one has shocked health professionals.

If implemented, car crash victims not classified as “catastrophic” – those most seriously injured – would see their rehabilitation benefits slashed from $100,000 to just $25,000. Such a move would leave thousands of people stranded, without sufficient medical or rehabilitative care.

For many, $25,000 provides sufficient coverage. But to legislate this as a cap for all noncatastrophic accident victims would be to wilfully ignore the thousands of people whose needs far exceed this amount, and to pretend that they don’t exist.

True, policyholders could still get up to $100,000 coverage, but in this system they would have to pay more. Few drivers purchase additional accident benefits, and that’s unlikely to change in the current economic climate.

Cyclists and pedestrians would be directly affected because they receive standard accident benefits unless they take the unusual move of purchasing extra coverage.

As a cyclist, I was run over by a truck and received numerous injuries – some of which will be permanent. If this proposed cap were law, I would have exhausted all of the funds available for rehabilitative therapy mere months after the accident, long before I would have recovered.

Many people are in such a precarious state in the aftermath of a crash that they need every bit of coverage they can get. The cessation of such vital health care for those who cannot afford more would be disastrous.

By 2005, OHIP had stopped covering physiotherapy and chiropractic care. Most outpatients are not covered for psychological treatment or the therapy they need to learn to speak again after a brain injury. So instead of lining up for public health care, survivors of accidents must submit treatment plans to insurance companies, requesting approval for treatment in the private sector. That call is made not only with an eye to the care required, but to its affordability.

Insurers insist that rising medical costs put them on the brink of financial ruin. There’s just one problem with that claim: If the whole industry needs to be overhauled to account for such costs, why do a number of companies continue to make impressive profits? And medical and rehab costs have been rising for many years. Why did insurers not propose a rise in rates a long time ago? Some companies have failed to respond to these obvious market forces and are predictably sinking as a result.

But by no means all. MSA Research, an analytical research firm focused on the Canadian insurance industry, lists the total income of Canadian property and casualty insurance companies in 2008 as more than $2.6 billion. That’s down from previous years but still impressive, and after a decade in which insurance industry profits rose continuously from more than $100 million in 2000 to many times that figure in 2007.

But rather than weathering the economic crisis like other industries, auto insurers are asking the government to legislate them out of a downturn.

And they’re asking for help without first finding ways to increase efficiency on their own.

Insurance companies spend an enormous amount of money on bewildering bureaucratic procedures that are – even according to FSCO – costly and increasingly difficult to navigate.
They send out “independent examiners” to assess accident victims who have already been assessed, sometimes several times.

It’s meant as an occasional check to make sure therapists are not requesting unnecessary treatment. But according to a recent report by the Insurance Bureau of Canada, this corrective measure has become a subindustry in its own right. For every dollar insurance companies spend on treatment, they spend an additional 60 cents or more on assessments alone.

There is a host of other factors too, which have an impact on insurers’ performance, from their handling of premiums and payouts, to marketing, forecasts and investments. All of this and more affects insurers’ profits, but they have instead drawn apocalyptic graphs of rising medical costs and falling profits, begging governments to step in to rectify the ratios.

This would not be the first time. Back in 2003, insurers persuaded the Ernie Eves government to double the amount insurance companies receive in deductibles.

Families whose loved ones were killed or injured must pay insurance companies thousands of dollars out of their settlements. This is a gross injustice, which continues to this day.

To its credit, FSCO recommended the government eliminate deductibles for fatal claims and reduce them for the rest. This would allow more people to access justice without being deterred by the threat of financial penalties.

But by seeking a 75 per cent reduction in accident benefits, insurers are trying to balance their books on the backs of accident victims.

There’s no question the system is in need of an overhaul. Insurers are sometimes billed for unnecessary or inappropriate medical assessments. Inexperienced insurance adjusters reject treatment plans without good reason. But before begging for deliverance, insurers should first purge their costly and creaky bureaucracy.

Accident survivors should be given treatment that is reasonable and necessary – not the cheapest and most expedient.

The kind of treatment necessary, and when it should cease, should be determined by close medical scrutiny, not by a crude bottom line.

Cutting off people in need of care would leave them in a state of deep distress. We run the risk of making people suffer not only from untreated physical illnesses, but from the psychological illness that results.

In an effort to save a few thousand dollars, we would have instead a number of people who do not heal, do not return to work and who then depend on a host of public services.

In this scenario, we all end up paying.