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Workers’ comp reform up in the air

Monday, May 30, 2011

* After last night’s House defeat of the workers’ compensation bill, Caterpillar, Inc. sent out this statement…

As previously stated, Caterpillar did not oppose the workers’ compensation bill passed by the Illinois Senate, but the company was concerned that it did not go far enough to position the state to attract additional jobs and investment. While the bill failed in the House, we are hopeful that a compromise can yet be reached, that would provide for meaningful reform. We remain committed toward supporting changes that support our goal of making Illinois one of the best states in the union for attracting investment and jobs.

* Gov. Pat Quinn’s office had a much different take…

“Tonight House Republicans have walked away from a chance to bring meaningful reform to Illinois’ workers’ compensation system—the best opportunity our state has seen in decades. This is a bill that saw bipartisan support in the Senate. This proposal had broad-based support in Illinois’ business community, from large companies including United and American Airlines, Hyatt, Ford Motor Company and Navistar, as well as business advocacy groups including the Illinois Manufacturers’ Association, the Illinois Retail Merchants’ Association and the Chicagoland Chamber of Commerce - groups that represent thousands of businesses across our state.

“Most importantly, this proposal would have resulted in more than $500 million in savings to Illinois businesses, while still protecting the rights of workers.

“House Republicans had a choice between enacting landmark reforms, or voting to support their own partisan agenda, and maintaining the status quo. Their political decision was made at the expense of workers and business owners in their districts. When they return home, House Republicans will need to explain to their constituents why they chose the interests of their political leadership over significant financial savings for their constituents.”

Notice he didn’t mention any of the Democrats who voted against the bill or cast a “Present” vote.

* Sen. Kwame Raoul, the bill’s Senate sponsor, pointed out the obvious: The House Republicans voted in lockstep to protect their favorite interest group, the Illinois State Medical Society

“The Republican leader and his caucus are largely financed by the medical society,” Raoul said. “I’m sure that Rep. Bradley could not donate as much to their campaigns as the medical society, so I don’t see them changing their position.”

* Raoul video

Give the docs credit for pulling off a huge win. They’re good. Very good.

* Not all House Republicans were happy with the way this went down

Freshman Republican Rep. Dwight Kay, who voted present, expressed frustration about the political nature of the vote.

“Today, I found out a lot of things that I really don’t know about politics,” said Kay, of Glen Carbon. “But I have learned a couple things. The first is that there is no such thing as perfection. Well, you learn that in life, but we try to attain it. Then you learn when you get here about politics, and you think you know what that’s about until you get here. And then when you kind of (get) disenchanted with the political part, you say to yourself, ‘What’s possible?’ Well, because we don’t have perfect and because there is an awful lot of politics in Springfield, we aren’t doing what’s possible. And I’m sorry, I can’t apologize for my feelings. Because we need reform.”

* Greg Baise, president of the Illinois Manufacturers’ Association, expressed his disappointment

“Illinois employers will not get an opportunity to realize $700 million in savings. No bill is perfect in Springfield, but this one was certainly better than the system we live under today.”

* Ditto for Dave Vite

“[Opponents say] we’ve never gone far enough, but we’ve never gone anywhere,” said David Vite, president and chief operating officer of the Illinois Retail Merchants Association. “Every election, candidates from both parties talk about the jobs climate, talk about helping Illinois business, and when it comes right down to it, they didn’t step up to the plate today.”

* The House has already passed the “nuclear option” bill to eliminate the workers’ comp system altogether. The Senate has advanced the bill to the floor. Will they call it or try to work out an agreement? Unclear at the moment

State Sen. Kwame Raoul, D-Chicago, was the Senate sponsor of the failed measure, and said late Sunday that he would be moving Bradley’s “nuclear option” in the Senate as soon as Monday.

“We need some type of workers’ compensation reform, and that may be our only option at this point,” Raoul said.

Business hates the bill, however

“For something that produces upwards of 20,000 cases a year or more, how’s the Illinois court system going to handle that?” Baise told the Chicago Sun-Times. “I guess it’s a lawyer’s delight.”

More on that topic

The sponsor, Democratic Representative John Bradley of Marion drew a line in the sand before the vote.

“46 votes in the Senate, most of your Senators voted for it. This is the vote.” He said.

Yet the House Republican Leader said talks could continue toward reaching a compromise.

- Posted by Rich Miller        

  1. - Quinn T. Sential - Monday, May 30, 11 @ 5:33 am:

    The “nuclear option” represents the plaintiff attorney’s full employment law, by blowing the lid off of the built in caps on reimbursements under the current system by shifting these cases to civil court.

    More cases would mean the need for more judges as well, so the apparatchik of Burke could amass more power through the appoitnment of the nomenklatura of hacks to the circuit court bench in Crook County.

    What could possibly be better for business?

  2. - SangamoGOP - Monday, May 30, 11 @ 7:33 am:

    I hope the Senate blows up WC - send it back to the courts with the coinciding judicial code of ethics and negligence standard and be done with it. The current system is a bastardized, quasi-judicial proceeding that is rife with mis-management, conflict of interest problems and is completely out of step with a system that is supposed to be balanced, just, transparent and accountable.

  3. - Bigtwich - Monday, May 30, 11 @ 8:30 am:

    Thinkin’ of Worker’s Comps workin’ up my appetite
    looking forward to a little Lawyer’s delight.
    Rubbin’ sticks and stones together makes the sparks ingite
    and the thought of billin you is getting so exciting.

    Sky rockets in flight. Lawyer’s delight. Lawyer’s delight.

  4. - wordslinger - Monday, May 30, 11 @ 8:31 am:

    The Docs rocked the House. In the Senate, you had a bipartisan vote in which Radogno, Brady and Dillard were on board. In the House, the bill couldn’t get its own GOP sponsor. That’s some power over a caucus.

    What’s CATs game? They keep putting out these mealy-mouth releases about “not going far enough,” yet don’t explain what that means. The Manufacturer’s association backed the bill, so you’d think they’d know.

    Maybe CAT is set to announce an expansion out of state or overseas. If nothing else, they’re providing cover for GOP “no” votes.

  5. - DuPage Dave - Monday, May 30, 11 @ 9:35 am:

    The trouble with the Republicans is when you move toward their position– in this case a higher standard of proof for causation, limits on carpal tunnel benefits, changes to the way arbitrators are assigned– they move the goal post and demand more movement in their favor.

    Not only do we have to make the business groups happy, we have to keep the doctors happy as well, and they are never, ever happy.

    For such a right-wing group, the medical society sure loves getting checks from the government– the higher the better.

  6. - Louis G. Atsaves - Monday, May 30, 11 @ 9:40 am:

    $300 million? $400 million? $500 million? $600 million? $650 million? $700 million?

    The numbers on Workers Comp “savings” from this pseudo-reform bill keep going up and up and up and up and up and up and up!

    What is the real number? How can the “savings” keep going up without a single change in the language of the bill?

    The proponents of this pseudo-reform aren’t really telling us.

    The “take the half a loaf” and keep on starving a little less argument is one thing. But when the size of the “half a loaf” is unclear, why should anyone bite on this?

  7. - Yellow Dog Democrat - Monday, May 30, 11 @ 10:01 am:

    @Louis -

    During debate yesterday, Rep. Bradley said the Dept. of Insurance had estimated the bill would have saved $500 million to $700 million, and he emphasized that that was a conservative estimate.

    The reason no one can say with absolute certainty is because it is difficult to estimate the cost savings from changes like implementing AMA guidelines, utilization review, codification of causation, and exempting workers who are intoxicated from benefits.

  8. - Yellow Dog Democrat - Monday, May 30, 11 @ 10:08 am:

    At the beginning of this session, I started telling folks that I thought that the business community would have gotten a better bill if they hadn’t insisted on circumventing the agreed bill process.

    Looks like I was right.

  9. - just sayin' - Monday, May 30, 11 @ 10:20 am:

    What are the House Republicans FOR exactly, other than hoping Illinois goes down the tubes so they can maybe get political advantage (won’t work).

    Oh yeah they’re concerned about milk crates. But failed on that bill too.

  10. - Louis G. Atsaves - Monday, May 30, 11 @ 10:45 am:

    Yellow, look behind the spin. Utilization review will save money on medical bills but cost more to administer. Medical fee schedules will save money on medical bills, but cost more to administer. Firing all existing Arbitrators and hiring new ones, and training them, and keeping them on leashes and yanking them around from call to call, will be costlier to administrate than the current bunch.

    The extra litigation created by limiting choice of physicians and arguing over appropriate medical treatment has a price tag which will not represent any “savings.”

    I could go on and on but those are but a tiny few examples to consider.

    Those floating numbers which not so mysteriously keep going up and up and up are designed to entire votes on the bill. They are not real, but pie in the sky wishes by the proponents of the bill.

    If the bill gets enacted, there will be many disappointed people once those “savings” fail to materialize.

  11. - Brian - Monday, May 30, 11 @ 10:48 am:

    Wow. The republicans that voted against this remind me of the petulant Veruca Salt: “Daddy I said I wanted a pink Rolls Royce, not a red Corvette!” Unless the “nuclear option” is exercised they’ll have to “get nothing and like it!”

  12. - DOC - Monday, May 30, 11 @ 11:12 am:

    Louis with a good point. This is a VERY complex situation with a lot of potentially bad remifications. California comp reform showed that UR was HORRIBLE. Every case became denied, and the UR cost to dispute the case was branded as medical cost by the insuranse companies so they could pad cost basis for premiums. Business saved nothing unless you owned an insurance company. Then you made a fortune. The workers suffered because no one will treat them any more, so the taxpayers now get to pay for all that disability.

    To Dupage Dave, it’s hard to be happy when you regularly get compensated 20 cents on every dollar you bill. Next time you make a house payment, offer them $200 instead of $1000 and eliminate their ability to foreclose and see how happy lenders become. I get the same dollar amount for a spinal decompression surgery today that my counterparts were receiving around 1980 (that is not a typo). The reality is that work comp does create a large amount of overhead. A UCLA study reported 300% more. When someone must do 3 times the work to make the same amount, simple economics suggests access to care may become an issue.

    I find it interesting that there has been little talk about safety standards and injury prevention. That would obviously drive down costs and is one of the reasons the Act was created in the first place.

  13. - jake - Monday, May 30, 11 @ 11:25 am:

    One of the interesting things about this is that it is the Illinois medical lobbying establishment rather than the medical establishment nationally that is the problem. This bill would have brought Illinois reimbursement rates more into line with national reimbursement rates. It is an old problem. It is the excessive revenue that the Illinois docs have received for years in this system that gave them the resources to effectively buy a caucus position from the Republicans to kill this, and continue to get the excessive revenues. It is a perfect example of the rich getting richer and the poor, poorer.

  14. - Pelon - Monday, May 30, 11 @ 11:28 am:

    “Well, because we don’t have perfect and because there is an awful lot of politics in Springfield, we aren’t doing what’s possible. And I’m sorry, I can’t apologize for my feelings. Because we need reform.”

    Rep. Kay,

    Where do you think that reform will come from if not you? The only way the system will change is if politicians can stand up to their leadership and base their votes on the issues.

  15. - Pelon - Monday, May 30, 11 @ 11:35 am:

    @DOC I’d be happy to get 20 cents on the dollar if I could bill 10 times what a procedure was worth ;)

  16. - Yellow Dog Democrat - Monday, May 30, 11 @ 1:23 pm:

    @jake - I rarely find myself in the position of defending the
    Medical society, but…

    While its true that Illinois medical reimbursement rates are higher than other states, its also true that reducing reimbursement rates for work comp just drives up costs for other health care purchasers.

    The core question is: do we shift the costs for work-related injuries from employers to society?

  17. - Vote Quimby! - Monday, May 30, 11 @ 1:28 pm:

    Memo to Dwight Kay: you complain about the politics in Springfield after you vote “present” on a bill?

  18. - jake - Monday, May 30, 11 @ 2:57 pm:

    @Yellow Dog Democrat

    I am not sure what the right balance is, and it might vary from time to time. I think when workmen’s comp rates are so high as to drive up unemployment, at that time maybe one does do the shift from employers to society. At another time, when we have almost full employment, then one would not do that.

    In any event, as a society, we have to somehow drive medical cost increases down to less than the inflation rate. No single sector of the economy can indefinitely grow faster than inflation–that is just mathematics.

  19. - wordslinger - Monday, May 30, 11 @ 3:02 pm:

    –In any event, as a society, we have to somehow drive medical cost increases down to less than the inflation rate.–

    Good luck with that, but I doubt if workers comp is the arena.

    We’re a hard-working, wealthy society that for this first time in history has the ways and means to live much longer, fulfilling, expensive lives.

    Everybody’s going to want it. The only thing I can think of is to start shaving zeroes off the right sight of the expense ledger.

  20. - jake - Monday, May 30, 11 @ 3:06 pm:

    I actually felt sorry for Kay. He truly wanted to support this, but under the discipline of a Republican caucus position, you are essentially walking dead for a long time, maybe forever, if you buck a caucus position. Ask Bill Black. That is not the way it should be, but that is how the game is played on that side of the aisle.

  21. - jake - Monday, May 30, 11 @ 3:16 pm:

    re: We’re a hard-working, wealthy society that for this first time in history has the ways and means to live much longer, fulfilling, expensive lives.

    Check out tables of life expectancy nation by nation. The United States is tied for 36th, with Cuba. But we are #1 by a long shot in how much we spend per capita on health care ($7,300 compared to the Switzerland, the second highest, at $4,400). We just have a brain dead system for distributing health care, and the system is perpetuated by lobbying from the people who collect the difference between what it should cost and what it does cost, and use a fraction of that extra money they get to influence legislatures like ours.

  22. - DuPage Dave - Monday, May 30, 11 @ 5:55 pm:

    Sorry, Doc, but I’m not feeling sorry for the physicians of Illinois.

    If they are all so broke, how do they afford the extra cash to lobby the General Assembly so effectively?

  23. - Republican voter - Monday, May 30, 11 @ 6:28 pm:

    Why the democrats feel compelled to push this at all is beyond me. Business groups should be all over the Republicans in the legislature for voting no. The compromise was fair and they said no. I say leave the system as is and stop complaining. You had your chance

  24. - DOC - Monday, May 30, 11 @ 7:08 pm:

    reply to wordslinger, Jake, Pelon and Dupage Dave

    Last year work comp fees rose by 1%. Costs of delivering medical services rose by a few percent. Doc fees have been far behind cost of doing business for decades. This state is also very expensive to practice and provide medical services. A physician gets paid the same for a lumber decompression that he did in 1980. Over the last 31 years, the inflation rate has NOT been zero. Medical costs do go up, but they do so to cover cost of technology, pharmaceuticals, staff, regulation, tort and so on. None of these issues add to the physician’s bottom line. Docs were willing to concede a 20% cut as painful as it was to help reform the system. What should be asked is why everyone keeps pointing their fingers at “rich” doctors whose fees have been stagnant for decades while overhead skyrockets. Yet, everyone seems fine with the fact that Caterpillar could double profits last year and say with a straight face that a 20% cut in doctor fees was not enough. This bill did not pass for a number of reasons, but the greed of big business is apparent. Why else would they leave a $500 million deal on the table? If the fee schedule had been backed off to 20%, docs would have gone neutral and the bill would have sailed throught the house last night, saving business millions. There were many businesses for this, but the greed of a few got in the way of many.

    Last, I would say if the medical care you get in not worth the cost, then next time you are ill, don’t go. Medical fees are set by Medicare, PPOs and fee setters like Ingenix. Docs are not the automatic millionaires that many of you obviously think they are. I can go to ALL border states except Kentucky and be paid better by workers comp cases. I can go to ALL border states and have markedly lower overhead costs from staff wages to malpractice coverage. I like many businesses enjoy being here. My family is here so I don’t want to move. I accept the added cost of business of praciticing here. Business does the same. You don’t see doctors pushing for legislation to create price controls for other professions or businesses. The free market should preside. If medical costs are too high, people will stop going to the doctor. If reimbursement is too low, docs will simply stop seeing those patients. The free market would regulate the system. 5 years ago, the North American Spine Society produced a study that showed a doc would not be able to cover overhead if his/her practice was Medicare and Medicaid. The public needs to wake up. Docs weren’t refusing to negotiate or compromise. At the end of the day is was business.

  25. - wordslinger - Monday, May 30, 11 @ 7:21 pm:

    –Docs were willing to concede a 20% cut as painful as it was to help reform the system.–

    If things are as bad for docs, as you say, for decades, why would you agree to a 20% cut? Is it not true, that even with 30% cut, medical provider costs still would have been the second highest in the country?

    –Last, I would say if the medical care you get in not worth the cost, then next time you are ill, don’t go.–

    Do you and the other docs take every patient off the street? A lot easier for you to turn someone down than it is for someone who is ill not to seek treatment.

  26. - Yellow Dog Democrat - Monday, May 30, 11 @ 7:26 pm:

    @DOC - There are some folks who believe that health care should not be treated like every other commodity.

  27. - Joe - Monday, May 30, 11 @ 7:36 pm:

    House GOP sold out to only buyer they have left. Doc’s said “Tom you pass this and you are toast”. If House GOP voted against the Docs they couldn’t raise $38K in 38 months.

  28. - DOC - Monday, May 30, 11 @ 9:16 pm:

    Like it or not medicine is a business and is run like many other corporations. A big difference is that our fees are largely dictated to us instead of being sorted out with free market forces. I think most docs believe that in addition to running their corporations that they should do the right thing. That is why most continue to see Medicaid and Medicare at a loss. That is why they deal with trauma at all hours of the night with most of those cases not paying. The higher quality PPO contracts including Work Comp allow docs to continue providing care to everyone. We have payrolls to make and rent to pay like everyone else. 14 years of post high school training and $500,000 in school bills requires reimbursement to cover. Docs were willing to take the 20% cut to reach an agreed bill. Believe me, no one is going to just volunteer that kind of cut, but that is a compromise docs felt would provide savings, and not affect access. The Illinois Hospital Association jsut competed a study showing that with Medicaid cuts and proposed work comp cuts, there would be an increase of 40% in the number of hospitals that operate in the red (loss) for a total of over 200 in Illinois. That is a real problem when the baby boomer population is going to drive need higher over the next decade. I agree that we don’t like to think of health care as a commodity, but the economic reality is that you get what you pay for in medicine just as in anything else. Quality docs fix injuries quicker with fewer complications and less disability. Those are the real cost drivers in the system. There are also a lot of folks who believe medical care is not an entitlement to be provided free to everyone.

  29. - Logic not emotion - Monday, May 30, 11 @ 9:32 pm:

    I’m a bit confused. Everyone’s bashing the Repubs for this not passing. For some strange reason - maybe related to the redistricting display of power - I had the impression that the Dems had pretty much complete control. If so, why is this the Repubs fault?

  30. - wordslinger - Monday, May 30, 11 @ 9:37 pm:

    LNE, it was a bipartisan bill in the Senate, with Radogno, Dillard and Brady voting for it. Not one Republican voted for it in the House, not even its GOP sponsor, although it was endorsed by the IMA and IRMA.

    As Fred Willard would say, wha happen?

Sorry, comments for this post are now closed.

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