Standing Committee on Finance and Economic Affairs Auto Insurance Hearings - Day 3

The following are summaries of presentations made on July 10, 2012.

Ontario Trial Lawyers Association
Andrew Murray

On the issue of catastrophic impairment changes the perspective that I have to offer is from my review and summary of the freedom-of-information data.

We’ve heard the superintendent and from Minister Duncan comment that it’s all about science and getting the medical science right. When you take a look at the minutes from the expert panel group and some of their weekly commentary, which is not information that was ever disclosed publicly—it’s clear that it’s much more vague than how it has been presented in terms of this being a consensus viewpoint, certainly in terms of this all just being about the science.

Almost all of the panel members made comments, initially, indicating support for the notion of combining mental and physical impairments together when looking at the whole-person impairment. That ultimately did not form part of the recommendations, but when you look at the commentary, you can see that they were struggling with this. It almost looks like there was, for some reason, some arm-twisting going on.

With respect to whether or not the current definition for brain impairment, being a Glasgow coma score of nine or less, was appropriate, the initial dialogue between the eight panel members resulted in only three of them strongly disagreeing or disagreeing, so sort of being against that notion. It begs the question that if their initial impression was that it’s probably an adequate tool, why have the need for a change to make something more complicated?

When asked to provide recommendations for improvement to the definition of catastrophic impairment, one of the comments was this: “One thing is certain: It is not always better to change a system without understanding the consequences of implementing new rules.”

On the issue of combining—this is combining mental and physical impairments—one of the comments was this: “To enshrine the prohibition to quantify is arbitrary, discriminatory and inaccurate.” I note that the Court of Appeal has more or less made similar comments, but on the expert panel itself, certainly this individual supported the need to combine mental and physical impairments.

Pierre Côté, who was the chair, had this comment: “How things are done in the field is beyond the scope of this project.” So, expert panel, don’t be concerned about what actually happens in the field. It’s a huge issue but not required in order to make recommendations on the definition. We say, of course, that that is wrong-headed and that you must have regard for what’s going on in the trenches before you make any of the changes.

Willie Handler, who was involved at the time, noted that the cost impact of what the expert panel was analyzing was not part of the discussion. That was off the table. It wasn’t something that they were to consider. It will be a discussion that the government will be undertaking later.

I now want to make some comments about the superintendent’s recommendations, because that’s new from the time of my last appearance. Something that was new was the recommendation by Mr. Howell to have family physicians sign all of the insurance forms for ongoing treatment and therapies for individuals who have a catastrophic impairment. There are some significant flaws with that approach. First off, as we all know, many people do not have a family physician. Even those who have a family doctor will fill find that the doctor is very disinterested because they’re busy.

Phil Howell is to be commended for hearing the stakeholders when they said that you cannot make hospitalization in an in-patient rehab facility a prerequisite to passing any of these various definitions.

I want to end this segment of my talk reflecting on the interim catastrophic impairment designation, because the expert panel said that there needs to be some mechanism to get benefits in a timely way to those who need them, and they came up with the interim catastrophic impairment designation. Mr. Howell, unfortunately, seems to have hollowed out the spirit and intent of that recommendation by restricting any interim benefits, seemingly for all categories, attendant care and medical rehab, to an additional $50,000. This interim benefit, essentially, for those who have an interim catastrophic designation, would simply restore a benefit that people had 15 years ago.

What are OTLA’s main criticisms with the proposals that have been put forward by Mr. Howell? We say it is far too complex. If these recommendations are accepted, we now have injected into the analysis the American Spinal Injury Association classification of spinal injury; the extended Glasgow outcome scale for traumatic brain injuries; the global assessment of functioning for psychiatric disorders; and a very long list of psychiatric impairments.

I can tell you that whenever you add new tests like this, which incorporate external documents, you’re injecting uncertainty, you’re adding unpredictability to the system, you’re going to increase the disputes.

Our other main criticism is rebutting the suggestion that this is all just based on good science. I’m hopeful that the excerpts that I reviewed with you from our freedom-of-information request show how even the expert panel didn’t feel that this was all about good science. You may use some scientific measurements to assist you, but when it comes down to figuring out where on a spectrum someone sits, it’s basically a policy decision.

The last point that I want to make, then, relates to the need for data and the type of data that this group should insist on having and should use your powers to obtain in order to make properly informed decisions.

Hughes Intelligence Investigation Services
Barry Bentley
Ron Prior

The Ontario Auto Insurance Anti-Fraud Task Force December 2011 interim report identified four key areas which they believe need to be addressed—prevention, detection, investigation and enforcement—to successfully combat fraudulent activity and its effect on automobile insurance premiums and related health care expenses in Ontario. We agree with this finding, along with the need for consumer awareness of fraudulent activities.

In our experience, it is essential to establish a central control unit which utilizes all available police and private investigator resources in Ontario to reduce fraudulent activities.

Mr. Justice Archie Campbell recommended that police meet required core competencies. We recommend that a similar approach be taken to combat fraudulent automobile insurance injury claims, including health care fraud. To meet this objective, we recommend the following:

—adopt a criminal investigation technique similar to those developed by the United States Health and Human Services Office of Inspector General;

—develop a central and regional insurance fraud control unit and certification programs;

—implement a health care fraud investigation certification program for investigators, adjusters, service providers and all others involved in insurance fraud assessment, review, prevention, detection, investigation and enforcement;

—apply statistical and artificial intelligence fraud detection techniques to existing data banks. Remove barriers to data mining by certified fraud investigators;

—explore the development of a special roster of crown prosecutors specializing in handling insurance and health care fraud cases.

[For anyone reading the Hansards transcripts there is a quote from Mr. Paul: Basically, an insurance company right now can’t walk into a chiropractor’s office or a physiotherapist’s office or a healthy-equipment supply place and say, “You’ve billed us. We want to see your invoices or we want to see your records.” They can’t do that right now. I feel compelled to provide a correction. O. Reg. 194/11 amended the SABS to include provisions (ss. 46.1, 46.2 and 55) that enhance the ability of insurers to seek verification of invoices received for goods and services provided to claimants. Those amendments came into force on July 1, 2011.]

Dr. Michel Lacerte

I want to give you my perspective as a busy treating physiatrist, which is a specialist in physical medicine and rehabilitation, and also the perspective of a rehabilitation counsellor and, on occasion, a disability management policy analyst.

I would like to stress that when we’re talking about all of this, we’re talking very much about private sector rehabilitation, and I have strong views in terms of strengthening the public health care system that basically treats everybody equally.

Since the beginning of my practice in 1990, being trained in the US, I clearly identified the Americanization and lawyer-ization of service delivery in Ontario. You see many American companies where services that are being provided in a gunshot approach, which is basically you come in the door and you can have access to all sorts of treatment, not just the physio, not just the chiro. What is important is that in contrast to the US system, we do not have strong utilization management controls.

Hospitals have been creative and have been offering their own private services. The reason why, in many cases, they move them out quickly is so that they can get other services—the other door. Hospitals right now can go in direct competition with the folks and in many cases will take away the folks who were providing physiotherapy, for example, to the public and will put them instead to provide services now that can be billed to insurers.

What is important for me is that when you look at rehabilitation right now, we’re really facing what I would refer to as a Chinese buffet, because basically you can have all sorts of services; there’s no limit. You want to have aromatherapy? You want to have a colon enema?

What we see is that the family doctor, as was referred to earlier, is oftentimes not equipped or remunerated to try to do the case management, so by default in many cases, plaintiff lawyers basically have hijacked the whole rehabilitation service delivery in Ontario.

I agree, when we were talking about for catastrophic, that there should be—the family physician maybe is not the best person, but at least make it a physician. To raise the case manager to be the one doing it—many of them have no background; they may be social workers, and they’re generally selected by the plaintiff attorney—is absurd. I would certainly not support this.

Katherine Worotny

I am a brain injury survivor. I’ve come to talk to you today from a survivor’s perspective on the changes to the catastrophic definition and what that means to other survivors and to drivers in Ontario who may one day be in a crash.

Back in 2001, I was a founding board member of the Brain Injury Association of Windsor/Essex County, and 11 years later I’m still an active board member. As our local survivor representative to the Ontario Brain Injury Association advisory committee, I go to Toronto five times a year. My job is to bring survivor concerns locally to the provincial level.

Before my car crash I was a teacher in life skills and I was a supervisor of six educational assistants and had 21 mentally and physically handicapped students in my class. I spent eight years in rehab. Today, 19 years after my car crash, I still do some therapies. I never went back to my career as a teacher. I do volunteer work with the Chrysalis Day Club and I volunteer at Hôtel-Dieu trauma services.

I want to just end this by saying I understand that the proposed changes to auto insurance may make it harder for people who are seriously and catastrophically injured to get benefits, including the medical and rehabilitative benefits that they need. This means that they will look to the public system and they will go without therapy. This is troublesome. After an accident or a car crash, people want to get better. I am an example of how, after a crash, someone can be rehabilitated and is able to give back to the community. Without therapy, paid for by my car accident insurance company, I would not be where I am today.

On behalf of car crash survivors like myself, I would like you to consider how changing the definition and making it harder to get benefits after a crash will affect other crash victims like me.

Honourable Howard Pawley

I should say that in 1969, the newly elected Premier Schreyer contacted me and said, “I want you to look after the red-hot-button issue: automobile insurance.” We established a committee called the feasibility committee—feasibility insofar as whether public automobile insurance ought to be established or not. We travelled throughout the province. We heard from Manitobans. When we returned, we recommended the establishment of public automobile insurance.

Subsequent to that, I became the minister who was responsible for introducing it in the Legislature. It was enacted, and I was the first chair of the Manitoba Public Insurance Corp., so I do come with a certain amount of bias this morning, because of what has been a very positive experience.

When the decision is made to establish compulsory and universal coverage, it follows that there must be an obligation on the part of government to provide auto insurance at the lowest possible price.

The most effective way of comparing auto insurance programs from province to province is to look at how much of every premium dollar is returned to the ratepayer in the form of claims payments and benefits. This gives us an apples-to-apples comparison. Recent published annual reports illustrate how the administrative costs of the public plan avoid costly administrative duplication and are only one half as much as those incurred by private insurance companies. Public plans return a maximum return of each premium dollar of 85 cents to 90 cents—that’s administrative costs. With private plans, the administrative costs range from 65 cents to 70 cents on the premium dollar.

Since 2002, Manitoba’s auto insurance cost has increased at a much lower rate, 1.5%, as compared to the countrywide performance of 5.3%—3.5 times less than the national average. Last year and this year, MPI returned just over 90 cents on the dollar.

The inclusion of basic compulsory automobile insurance with the licence plate is the most efficient and economically capable method of delivery. Supplementary auto insurance is also available from either government plans or from private auto insurance companies.

For example, a 21-year-old male with a clean driving record living in Ontario would pay more than six times the rate that we charge, and in Alberta, it would be 2.5 times what the province of Manitoba would charge.

Why do public, driver-owned, public-profit auto insurance plans win, hands down, over the private auto insurance systems? Provincial insurance corporations, as the owners of public auto insurance, have every political reason to reduce accidents and claims by insisting on safer driving conditions for their motorists, and pursue traffic safety and loss-prevention programs.

In Manitoba, there is no discrimination based on age or sex. Bad motorists are surcharged additional dollars on their driver’s permit. That is a fairer way than discriminating based on sex or age.

This past year, the Public Utilities Board ordered that a dividend be paid to Autopac customers, which means a $338-million rebate, plus lower rates for most. The dividend gave motorists varying amounts of rebate. It’s not unusual for them to range from $250 to $350 for that one year.

Ontario and other provinces have legislated reduced benefits, unfortunately and sadly—and this where the catastrophic comes in, where I think it’s basically wrong in principle—where there has been legislation of reduced benefits by putting caps on payments to the victims of crashes in the hope rates will come down, but rates haven’t come down elsewhere.

In Ontario there exists a minor role for regulatory bodies in respect to rate applications. There must be an appropriate and strong regulatory body to examine the following issues:

(1) It should examine significant cuts in coverage in auto insurance, resulting in the introduction of deductibles and caps in respect to awards and general damages. Can we be assured the insurance companies are passing all these savings on to the motorists?

(2) Are there costs or expenditures included in rate calculations for Ontario for losses, for adverse experiences encountered in other jurisdictions, including other Canadian provinces that operate with private insurance? If so, should we object to any such inclusion?

(3) Is the investment income properly reflected in the rate calculations and being used to reduce premiums or increase benefits?

(4) Is there industry creaming taking place? Some companies offer very low rates by limiting their business to only the least risky motorists. The result of this can be highly unfair rates to younger and risk-prone drivers.

(5) Do the rates charged in the various regions reflect the loss experience in that particular region?

(6) Are private companies promoting accident benefit programs, as they do in western Canada, where governments, as the owners of public auto insurance, have every political reason to reduce accidents by insisting and encouraging safer driving conditions for their motorists?

Victoria Cross

I’m a general practice lawyer here in Windsor.

I want to make three points. I recommend that this committee expand its mandate to include serious, intense, short-time-limited public review of the various public models of auto insurance in Canada for the express purpose of developing a made-in-Ontario public auto insurance plan. Second, I want to debunk a few myths and misunderstandings about auto insurance. Third—and this may be even the most imperative—I am going to make an appeal for this committee to take strong recommendations on the comprehensive European trade agreement, so all of Ontario’s future or potential public enterprises and present ones are protected before it’s too late.

The Financial Services Commission of Ontario is preparing for its mandated five-year review of services. All of the auto-insurance-related objectives in its most recent statement of priorities and strategic direction can be met with convening such a public review, and such objectives may be easily amended to include such a review without having to, I believe, go to the Legislature on the matter.

We’ve had 20 years to review our no-fault system and deal with successive periods of increases, regulation and re-regulation. Some can argue that Ontarians prefer our much-revised, modified tort and enhanced no-fault insurance system. This is how it’s provided. Wrong: Insurance providers prefer it.

Injured parties in auto accidents need to be treated as whole beings. It is wrong to return, through the back door, to the days when psychological benefits are limited, and we are left with a meat-chart vision of a person, relying on a capped percentage of impairment. We need lower rates, and rates that will continue to be affordable for persons who are low-income. Fewer young people are choosing to drive, or have chosen to put off learning to drive, due in part to the cost of insurance.

I know that in other provinces, there are perhaps three to five territories. In this province, there are 55 territories available to insurance companies, some of which could be as small as 2,500. That I got from the testimony from May 28. I think that’s something that—you know, the FSCO has been rubber-stamping these requests over and over again. I do not support narrowing territories as a tool to discriminate against drivers. All decisions, and the primary decisions, should be made on the individual driver’s risk. It shouldn’t be about age; it shouldn’t be about marital status or gender.

Driver-based fees are the best way to be fair. Individual driving records should be the predominant, if not the only method, of determining rates. A tort component, I believe, must remain in the system to ensure justice for people.

I do want to say something very important. International agreements will not keep us from setting up a plan. The Lord government retreated in part or in whole because of fears about NAFTA and GATS. That is only true if we let those fears take over. The left and the right in this province have been captured by their own rhetoric about what these trade agreements will mean for insurance. According to Steve Shrybman and Scott Sinclair, NAFTA and GATS are navigable concerns.

CETA involves the provinces in decision-making in a way that NAFTA and GATS do not. The province of Ontario unfortunately has not taken the time or interest, or perhaps has decided not to involve itself in the CETA process.

Brain Injury Association of Thunder Bay and Area
Janet Heitanen
Karen Pontello

The Brain Injury Association of Thunder Bay and Area, which is the regional representation of the Ontario Brain Injury Association, would like to present the following concerns regarding the changes to the cat determination for individuals with traumatic brain injuries, referred to later in this report as TBI.

In supporting people who have sustained brain injuries in motor vehicle collisions, we believe that individuals require a system that emphasizes integrity in the areas of access, accountability, fairness, transparency, consistency and expertise as outlined below.

(1) Access to medical and rehabilitation care: Individuals with TBI require access to care that is available to them in a responsive and timely manner. Individuals require care that addresses their needs at the point in time when it is important for them. In order to access care, funding from their accident benefits must be available for medical and rehab services. The stipulation on the proposed interim cat determination that requires individuals to be treated in an in-patient neurological facility, outpatient rehab program or day-patient rehab program may limit access, particularly if these rehabilitation services are not immediately available in the larger centre of Thunder Bay or if the interest of the individual is to stay in their home community, which is in the rural areas in the district.

The proposed change for removing the Glasgow coma scale used for cat determination, for TBI individuals who are impaired in completion of their daily activities, considering work and other activities, and who are left with a choice of working and being limited in other activities or completing other activities and being unable to work, may no longer meet the catastrophic threshold using the Glasgow outcome scale extended. Without the cat funding available, these individuals will place increased burden on the OHIP system when the non-cat $50,000 limit is depleted.

The proposed change for limiting the combining of impairments and determining cat designation related to whole person impairment is problematic. Individuals who suffer mild to moderate TBI, along with other psychological impairments such as depression, post-traumatic stress disorder and orthopaedic injuries, deal with the combined effect of each impairment on a daily basis.

(2) Accountability, fairness and transparency: Individuals with TBI require their insurance companies to be accountable and fair in managing claims based on medical rehabilitation need. Insurance companies are not responsible for determining need. The management of medical and rehabilitation benefit under the SABS requires transparency so that individuals can receive services to manage the brain injury even when the insurer questions individual need. The ability of the insurance company to question need is considered okay if the individual can continue with services until the need is determined not to be required based on expert opinion.

(3) Consistency: Individuals with TBI require their insurance company to maintain consistency of care as they manage the claims process. For example, a claimant receiving medical and rehabilitation services should have these services continue while insurance examinations are being conducted. For individuals with significant injuries, consistent services are required to maintain the gains achieved in treatment. It is not clear how continuation of services will be addressed as cat determination is being reconsidered with the interim cat designation.

(4) Experience and expertise: Therapists and practitioners treating individuals with TBI and those completing insurance examinations should be using the same frame of reference when assessing individuals’ medical and rehabilitation needs. It is not okay for insurance examiners to have less experience than the treating providers, as opinions may not be reliable or consistent.