As we reported earlier, the Washington State Labor Council continues to perpetuate the delusion that our state’s workers’ compensation system is “one of the best in the country.”  With a $117 million proposed tax increase, the highest time loss rate in the nation, increasing administrative costs and pensions up more than 300%, we’d hardly consider it a model of success.

Vowing to fight benefit cuts in the 2010 legislative session, the labor council places the blame for the 2010 tax increase everywhere except where it belongs, and clings to the notion that somehow, in some magical way, Washington has figured out how to run a high-benefit, low-cost industrial insurance program.  Not only does this defy plain common sense, but it’s just not true.

Business groups, including BIAW, have already identified a number of possible changes to workers’ compensation laws which would (1) reduce costs while (2) preserving benefits for injured workers. Notice we’re not saying these changes would result in a “high-benefit, low-cost” system…..but they would likely reduce costs, which are currently projected to increase by 20% in 2010.

Our #1 reform suggestion would be to allow final settlement options for industrial insurance claims.  This is not a benefit cut.  It adds an option – not a mandate – that injured workers could explore if they do not want to stay in the workers’ comp system.  Forty-three other states already allow this.

Another reform idea would be to allow employers to use medical provider networks. This is not a benefit cut. An injured worker would still be entitled to all "necessary and proper" medical care.  Managed care networks help control costs and ensure treatment by providers trained in occupational medicine. They treat workplace injuries according to nation wide best practices and utilization reviews.  Forty-two other states already allow this.

We would like to define occupational disease to exclude more non-work related injuries.  This is not a benefit cut.  It's tightening up an ambiguous statutory phrase in light of conflicting court decisions.  Injured workers would still be eligible for benefits for occupational disease claims where a work-related exposure was the major contributing factor of the disease.

Finally, the best way to bring real improvement and efficiency to the Department of Labor & Industries would be to allow private insurance companies to compete with them.  If L&I had to compete for business, we’re guessing they would find a way to trim that 20% increase in costs.  Employers would have more options, and would be allowed to shop around for better coverage.  Competition is good for business, despite what the labor unions think.

Beyond the obvious fallacies being promoted by the Labor Council, a few contradictory statements simply cannot go unchallenged.  In one sentence they say "Business and labor efforts to ensure system solvency and stabilize rates have helped Washington's State Fund system withstand the recession's negative impact on investments and premium revenue." Later, they say "The Department of L&I announced Monday that the premium increase is needed because the recession had taken its toll on the State Fund -- an estimated $1 billion hit..."  Which is it?

Our favorite, though, is this gem: "The surest way for employers to bring down workers' compensation costs is to reduce workplace accidents by improving safety and training for employees."  Perhaps it has escaped the attention of the folks over at the WSLC, but workplaces are safer, as evidenced by fewer claims being filed ever year, down 55% since 1990 on a steady trend.  Yet a drop by more than half in the number of claims filed has not resulted in a reduction in costs -- instead they have skyrocketed to national outlier status, with 266 average days of missed work and nearly 2,000 pensions awarded each year.  Costs are increasing despite a massive drop in claim filings.  Employers are doing the right thing…..and the thanks they get is $117 million tax hike.