Posted on 08/28/2003 8:48:11 PM PDT by NormsRevenge
Edited on 04/12/2004 5:56:47 PM PDT by Jim Robinson. [history]
Organizers of an initiative that would make it easier for the Legislature to pass budgets and raise taxes said Wednesday that they have more than enough signatures to put the measure on the ballot.
"It's a broken process that we're facing, and this is what's going to fix it," said Anthony Wright, executive director of Health Access, a statewide coalition that advocates for health care coverage.
(Excerpt) Read more at sacbee.com ...
Gilbert Chan - Sac Bee
As California's chief auditor Wednesday released a highly critical report on the state's failure to rein in workers' compensation medical costs, employers and lobbyists ratcheted up pressure on lawmakers to overhaul the system.
Dark-suited lobbyists swarmed Capitol corridors, trying to make a final pitch for their proposals. Insurance Commissioner John Garamendi and employers held press conferences inside and outside the Capitol while another business group staged a rally on the Capitol grounds.
The chief executive officer of retail giant Costco threatened to move some operations out of the state unless workers' comp costs decline. Garamendi joined Costco CEO Jim Sinegal in kicking off a petition drive to recruit the company's more than 10 million California members to the reform campaign. Garamendi was the first to sign the petition.
The whirlwind of activity came as a special six-member Assembly-Senate conference committee began its second day of workers' comp hearings Wednesday and the Bureau of State Audits released its report on the system's medical payments.
The report criticized the state for doing a poor job of controlling medical costs that have helped fuel skyrocketing workers' comp insurance premiums for private companies, schools, cities and other public agencies across the state. Workers' comp-related medical costs have climbed more than 250 percent in the past decade and totaled $5.7 billion in 2002, according to the report.
"Implementing some cost controls was critical," state Auditor Elaine Howle said outside the conference committee hearing room. But that didn't happen, the audit found, at the workers' compensation division of the state Department of Industrial Relations, the government agency charged with overseeing the massive $29 billion system designed to protect some 1 million workers injured on the job every year.
In the coming days, the conference committee will craft a package aimed at reforming the system and offering employers some kind of relief from insurance rate hikes that in recent years have doubled and, in some cases, even tripled.
Sen. Richard Alarcón, D-Sun Valley, co-chairman of the committee, warned that a legislative solution will not leave anyone entirely happy. "The system is fractured in many places and we're going to need Super Glue to repair (it)," he said at the opening of Wednesday's hearing.
As Alarcón spoke, a parade of lobbyists streamed into the upper gallery of the Jesse Unruh memorial hearing room. Others gathered outside, talking on cell phones, huddling in corners or taking notes on yellow legal pads while watching the afternoon proceedings on a flat-screen television monitor.
Earlier in the afternoon, Garamendi reiterated his call for change, saying the lack of major reforms will put a further strain on companies and the state's anemic economy. Otherwise, he said, employers will see another hefty double-digit increase in insurance rates this winter and the entire workers' comp system will face collapse.
The insurance commissioner enlisted some employers, ranging from Costco to Brookfield's restaurants in Sacramento, to press his case.
"The system is corrupt. We would be prepared to move our employees out of state," said Sinegal, president and chief executive of Issaquah, Wash.-based Costco, which has 97 locations in California.
Sinegal said the company set aside an additional $26 million against earnings in March, most of it due to increasing workers' comp costs in California. Roughly 70 percent of its overall workers' comp expenses are incurred in California, but only 36 percent of the the company's work force is in the state. Sinegal said Costco is considering moving some support operations out of state and re-evaluating expansion in California.
Lawmakers, business leaders and insurers have blamed medical costs for much of the run-up in premiums. Medical payments account for about a quarter of the total system cost for employers.
In its review of medical costs, the state auditor concluded:
* Fee schedules aimed at controlling the amounts paid for medical services and drugs are outdated or nonexistent.
* There are no treatment guidelines that can be enforced to keep medical costs down and to streamline treatment to injured workers.
* The state lacks a program to collect information to help monitor medical costs or evaluate the effectiveness of reforms.
Workers' comp division officials were unavailable for comment Wednesday. In the auditor's report, they attributed medical cost problems to double-digit staff cuts since 1999, legislative stumbling blocks and a focus on improving the administrative appeal process.
To help control costs in the future, the auditor recommended the state adopt a medical fee schedule, set up medical treatment guidelines and improve its monitoring system -- an endorsement of many of the reforms proposed by lawmakers.
While the state auditor couldn't say how much the state can lower medical costs, the Commission on Health and Safety and Workers' Compensation estimates those savings could be $960 million in 2004 -- enough to cut insurance rates by about 4 percent.
jockeying for 2006 already ;-)
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