By G.W. Schulz
Both the Los Angeles Times and the San Francisco Chronicle ran large stories last week on problems in the workers’ comp system since Schwarzenegger so proudly initiated reforms two years ago as part of a major recall campaign promise.
In fact, the pendulum has swung startlingly fast in the other direction away from what was viewed as a bloated system that encouraged excess and fraud. My computer's operating very slowly this week, otherwise I'd post the links. You'll have to find them yourself. The reporters are Marc Lifsher at the Times and Tom Abate at the Chron.
Reimbursement-crazed doctors. Whining workers. They were all killing the defenseless little insurance industry, we were told. The most recent figures show just how much that story has truly changed. The Chron reported that not only have employers saved $14 billion over the last two years alone, insurers have still managed to earn nearly $8 billion in profit during the same period. Insurers are paying out just 31 cents for every dollar they take in from premiums.
To be sure, huge reductions in insurance premiums for employers could become an enticement to hire new workers, especially among the small businesses that drive San Francisco’s economy. But the “utilization review” created by lawmakers during reform negotiations can handcuff doctors who are trying to properly diagnose and treat injuries.
From the Chron:
“Before the reforms, state law said a physician treating an injured worker was presumed correct. Whatever the doctor ordered, workers’ compensation had to provide. But the reforms stripped physicians of that assumption. Instead, the state designated a set of treatment guidelines – written by the American College of Occupational and Environmental Medicine, better known as ACOEM – the arbiter of medical necessity. Lawmakers also created the utilization review process as a safety valve for both sides. Doctors could request treatments not in the guidelines if they had scientific evidence of their efficacy and necessity. Payers could order reviews if they questioned a request.”
Problem is, doctors interviewed by both the Chron and the Times said every procedural request they make these days is being subjected to review.
“Every little request is a battle,” the Times quotes one doctor. “The delays are 10 times worse than anything I was dealing with three or four years ago because everything is being challenged.” And as the red tape builds, severe symptoms related to a worker’s injury can grow substantially worse before they finally receive treatment.
A knowledgeable friend pointed out that the state workers’ comp office is often perceived as a conduit for insurers and employers. But to the division’s credit, it’s proposing a penalty system for insurers who abuse the review process and attempt to subject every injury to intense scrutiny. The idea is unpopular among employers and the insurance companies – and presumably, too, the governor – but a workers’ comp director told the Chron she thought it was a good idea.
Workers’ comp is a tough, bureaucratic story to take on. And it ain’t all that sexy, either. But it affects an enormous number of people, particularly workers who are permanently disabled. Drinks up to both reporters for taking it on last week.