Washington governor says proposed changes could save millions

Reduced pensions, wage subsidies for injured workers, and the expansion of a facility that helps health care providers improve their services to injured workers are part of an overarching proposal to reduce costs in Washington state's workers' comp system.

Gov. Chris Gregoire said her plan to revamp the program will help spur economic growth in the state by freeing up more funds for businesses.

Washington's state fund is the seventh largest workers' comp system in the country. Saying the system is fundamentally sound but has systemic trends that are driving up costs, the governor announced her plan in early January.

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The Department of Labor and Industries recently announced an average 12 percent rate hike under an emergency rule that is effective for 120 days. That followed voter rejection of a ballot initiative that would have opened the monopolistic market to competition from private insurers. Washington is one of four states with a monopolistic workers' comp system.

In announcing her plan, Gov. Gregoire said she will propose legislation that should reduce further rate increases, maintain the quality of care for injured workers and improve their outcomes, and redirect benefits to those who most need them.

The governor said she will propose legislation to:

Create a statewide medical provider network for both State Fund and self-insured employers; to save an estimated $160 million over four years, as well as improve outcomes and better treat injured workers, and reduce business costs. Workers would still be able to choose their own doctors, and state and self-insured employers would be able to encourage providers to follow best practices to help workers remain productive and healthy.
Help workers return to their jobs sooner after a workplace injury.
Modernize the benefits structure.
Reduce pension costs. One of every 19 time loss claims becomes a lifetime pension -- a rate that has doubled in the past 10 years. Lifetime pension claims comprise half of all workers' comp costs. Her plan would offer lump-sum benefits to older workers unlikely to reenter the workforce and adjust pensions of totally disabled workers who earn income through limited work.

The governor said her plan would incentivize employers to keep injured workers on the job by subsidizing wages in exchange for offering employees light-duty work.

She also hopes to expand the Centers of Occupational Health and Education, which encourage health care providers to adopt best practices and return workers to their jobs.

Read more at the WorkersComp Forum homepage.

February 3, 2011

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