The Sacramento Bee

California Should Scuttle Its System and Start Over

By Stanton F. Long, SPECIAL TO THE BEE

New York — Gov. Arnold Schwarzenegger recognized in his State of the State address the need for California lawmakers to deliver "real," not modest, workers' compensation reform. As lawmakers gather and face the governor's March 1 deadline for meaningful reform, they might consider another option: Why not completely abandon the system and replace it with one that addresses the following key cost drivers:

• Compensation: The definition of what is a compensation injury or occupational disease must be tightly rewritten to reflect only the reasonable concerns of labor and management. One way to restore balance is to require that a compensable claim must be supported by specific, objective medical findings of fact.
• Use, not inflation: Controls have kept the unit price of medical services relatively flat. However, California has more medical visits per injury claim than other states, yet employee satisfaction is about the same as in states with much lower costs. Additional controls are clearly needed. The 24-visit limit to be imposed on chiropractic care is modest given the limits in other states (for example, 12 in Tennessee and 18 in Florida).
• Eliminate excessive disability awards: Either California law promotes excessive awards or, despite more extensive and expensive medical care, a larger number of injuries are untreatable than in other states and thus greater disability payments should be awarded. The absence of any increase in severe injury types, as well as a review of the results in comparable states, suggests there is award inflation rather than medical inflation.
• High legal and adjusting expenses: The state is first or second among comparable states regarding the high cost of claims processing. Nevertheless, proposals to impose new standards and requirements that would increase expenses on the adjusting process are common in California.