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* Whenever a legislature tries to do some sort of budgetary or policy reform, somebody’s ox is gonna get gored. And sometimes, that certain somebody is a powerful interest group. For instance, the Illinois Hospital Association testified this week against lowering the rates paid for doctor visits for workers compensation patients…
Barb Malloy, consultant and former workers’ compensation administrator for the city of Chicago, said that medical fees employers pay for injured worker’s treatment in Illinois outpace what the state and federal government pay under medical programs for the low-income and elderly residents. Malloy said a standard visit to a doctor costs $24.25 under Medicaid, $42.99 under Medicare and $77.81 under workers’ compensation requirements in Illinois. […]
Mark Deaton, general counsel for the Illinois Hospital Association, said that as some of the largest employers in the state, hospitals are sensitive to costs of workers’ compensation. However, he warned that budget cuts and substantial federal health care reforms make it a dangerous time to do any major tweaking to Illinois’ health care sector. […]
Eugene Munin, budget director for the city of Chicago, said the city has seen workers’ compensation costs rise while the number of city employees decreased. Munin said the city has eliminated around 6,000 positions in the last 10 years because of budget cuts. He said the city had 2,000 workers’ compensation claims in 2005 and had 1,350 in 2009. But workers’ compensation cost Chicago $61 million in 2009 versus $38 million in 2005.
Clearly, the 2005 workers compensation reform bill didn’t save the system any money, and, in fact, raised costs. But changing the law will not be easy at all.
* More often than not, however, those “somebodies” are political nobodies with little power. From a press release…
Community Leaders to Governor Quinn: DON’T BE A GRINCH!
STREET THEATRE ACTION CALLS ON GOVERNOR AND IDOC TO KEEP THEIR PROMISES TO CHILDREN OF INCARCERATED PARENTSWHO/WHAT: Community and religious leaders will join Community Renewal Society’s Civic Action Network in a Christmas-themed action calling on Gov. Pat Quinn and Illinois Department of Corrections Director Gladyse Taylor to respond to the needs of children with incarcerated parents. Protesters will perform their adaptation of “How the Grinch Stole Christmas,” portraying Quinn as “the Grinch.” Protesters will also perform a series of mock Christmas carols and attempt to deliver letters to the offices of Quinn and Taylor. […]
WHY: At an Oct. 9 public meeting, Quinn and Taylor committed to working on behalf of children of incarcerated parents. But at a follow-up meeting, Taylor stated that she no longer felt that these issues fit into IDOC’s mission. Quinn has yet to schedule a meeting with the Children of the Incarcerated team, despite his commitment to meet by Thanksgiving.
Community Renewal Society’s Children of the Incarcerated campaign is advocating for vital resources for the more than 90,000 Illinois children who have a parent in prison or on parole.
* And these sorts of fight are likely to proliferate as the state attempts to solve its budget problems. Illinois isn’t alone…
The worst recession since the 1930s has caused the steepest decline in state tax receipts on record. State tax collections, adjusted for inflation, are now 12 percent below pre-recession levels[1], while the need for state-funded services has not declined. As a result, even after making very deep spending cuts over the last two years, states continue to face large budget gaps. At least 46 states struggled to close shortfalls when adopting budgets for the current fiscal year (FY 2011, which began July 1 in most states). These came on top of the large shortfalls that 48 states faced in fiscal years 2009 and 2010. States will continue to struggle to find the revenue needed to support critical public services for a number of years, threatening hundreds of thousands of jobs. States face:
A few charts…
Related…
* State eager to help keep local auto plant going: State officials aren’t saying exactly what they would do to help keep a Japanese carmaker in Central Illinois, but Gov. Pat Quinn hasn’t been shy about doling out big-ticket incentives for other struggling automobile manufacturers.
* Illinois to RTA: The check’s in the mail
* Budget Cuts Threaten Emergency Preparedness
* Rockford school district gets overdue payments from state
* Public policy meeting slated for Friday
posted by Rich Miller
Thursday, Dec 16, 10 @ 1:02 pm
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What do you do when your income is reduced? Does government do the same when its revenues are reduced?
Comment by Cincinnatus Thursday, Dec 16, 10 @ 1:17 pm
===What do you do when your income is reduced? Does government do the same when its revenues are reduced? ===
Some people go get another job to keep revenues coming in. Some businesses look to find new ways of making money (like myself, for instance, with blog ads). Lots of people borrow on their homes or get new credit cards, or did before the crash.
In other words, more revenues are often in the mix. You may cut out that trip to Tahiti, but you only take your kid out of parochial school as a last resort.
Comment by Rich Miller Thursday, Dec 16, 10 @ 1:23 pm
To piggyback on to what Rich said, a bad economy leads to a lot of social upheaval and dysfunction that puts greater pressure on government functions.
Unemployment around 10% and record home foreclosures for two years doesn’t make cutting services a slam dunk.
Comment by wordslinger Thursday, Dec 16, 10 @ 1:35 pm
It’s like this, time is tough, so you people with money, we’re gonna take it to spend it on Blago appointees and their pet programs.
You don’t really need it anyway, you can get by without the Dish for a year.
Comment by Listen Thursday, Dec 16, 10 @ 1:59 pm
Rich and wordslinger,
Government bloat, during good times, is a real problem, and at the root of the current predicament. Instead of stocking up a rainy day fund to help carry us through the lean times, during times of revenue surpluses, legislators expand spending (normally catering to special interests) until we end up with $13B annual deficits. This says nothing about bailouts, special deals and whatnot that we have seen from Quinn.
Now oxen need to be gored, and tempers flare.
Rich, can’t you even include reduced spending as one of the items on your list, even if not the first? The first thing people do is hit their savings, reduce their life styles to the basics before trying to find a second job.
Comment by Cincinnatus Thursday, Dec 16, 10 @ 1:59 pm
===Instead of stocking up a rainy day fund to help carry us through the lean time===
The federal government did that for a little while. Guess what happened? Tax cuts! Give the money back to the people! Now, come the bad times and here we are.
Comment by Rich Miller Thursday, Dec 16, 10 @ 2:01 pm
===can’t you even include reduced spending ===
Perhaps I wasn’t clear, but it was meant as an addendum to your post. Of course people cut, but they also look for more revenues.
Comment by Rich Miller Thursday, Dec 16, 10 @ 2:02 pm
The only cutting that needs to be done to balance Illinois’ budget is a cut to disposable income.
Comment by Listen Thursday, Dec 16, 10 @ 2:03 pm
Waste, fraud, and abuse are systemic in the workers compensation system, and are exponentially more prolific in a union or government sector environment, and that much greater in a union government sector environment combined.
There are legendary cases of abuse by city of Chicago employees allegedly or even legitimately injured on the job. Once in the system; even those legitimately injuired at work have, and often do take the opportunity to abuse the benefits provided to avoid returning to work, and instead get paid to stay home.
Some aggressive investigation and criminal proesecution of those that abuse the system could go along way towards solving this problem. Looking the other way however is the easy way out, because in doing so they simply shift the burden to the rest of us.
Comment by Quinn T. Sential Thursday, Dec 16, 10 @ 2:07 pm
Quinn-
There is no waste, fraud or abuse in state goverment.
Bill Holland has said so and who are you to besmirch that man’s character.
I demand an immediate retraction and if not, Rich should ban you.
Comment by Listen Thursday, Dec 16, 10 @ 2:10 pm
I have no doubt that some people injured on the job may decide to take it easy a little longer than necessary. However, I would imagine these folks aren’t going to be causing horrendously increased medical expenditures. By and large, they’re going to stay home, work a temp job, etc. but not seek out expensive treatments or medical care.
So is the paid time off going into the increased workers comp costs cited by Munin? Or is it the result of the higher medical fees that workers comp pays as mentioned by Malloy?
With medical costs inflation, I can see where fewer employees in 2010 might cost more in costs than more employees did in 2005.
Comment by cermak_rd Thursday, Dec 16, 10 @ 2:22 pm
cermak_rd,
All the prices of medical services are skewed, from MediCare and Medicaid and Workers Compensation. AND private insurances.
The entire medical system is a mess because there is a third party (government, insurance companies) between the service provider (hospitals, doctors) and the consumer. This system provides no significant effective cost controls, and only enables onerous requirements on both the provider and the patient.
I don’t know how to fix this, as it is probably the singlemost intractable problem in government financing. Perhaps Paul Ryan’s (of WI) road map will launch a national discussion and identify some free market solutions. The only other option would seem to be single-payer, which is causing a meltdown in Europe and has been also shown to not seriously limit cost, only access.
Comment by Cincinnatus Thursday, Dec 16, 10 @ 2:32 pm
Cincinattus,
But you have to look at the reason we have a third party. Most people do not want to have the unpredictability in their budget of medical care where a single appendectomy could easily wipe out a family’s savings.
So maybe you could do something with high deductable insurance but I grew up in an era when health insurance was essentially for emergencies and you paid out of pocket for office visits, checkups etc. I remember this meant that my family lived through minor aches, infections etc. without seeing a doctor and only had checkups when the school insisted. This resulted in a cousin who is hard of hearing today and another that eventually needed costly surgery to fix a problem that would’ve been far cheaper to fix earlier.
I don’t think single payer health care is the worst problem for Europe. I think earlier retirements than are warranted (Greece) and guaranteeing their banks (Ireland) are far more responsible for the current debacle.
Also, in the matters of workers comp, you have to have a 3rd party involved. After all, workers comp means the employee was injured on the job, so one way or another, the employer has to pay for it.
Comment by cermak_rd Thursday, Dec 16, 10 @ 2:47 pm
All of this discussion reminds me of two things. One, if these problems were easily solved they already would be. Two, the problems are to a large degree defined by us by the perspective from which we see them. To me a spending problem, to you a revenue problem, to him a waste and fraud problem, to her a government too large and intrusive, to them a government that is callous and indifferent…Oh, my!
Comment by steve schnorf Thursday, Dec 16, 10 @ 2:56 pm
Cincy, I’m not against cuts at all, they’re just easier in good times. So is setting appropriate revenues.
That takes leadership and good faith.
Comment by wordslinger Thursday, Dec 16, 10 @ 2:58 pm
City of Chicago Workers’ Compensation costs dramatically increasing? That’s no shocker to this veteran Workers’ Compensation practitioner.
Creating light duty programs for injured workers to get them off benefits usually slams into union rules on job transfers, seniority, and department transfer headaches. Thus, Chicago keeps on paying. For years, Chicago didn’t even try to get workers back into light duty work situations. Too many headaches.
Other employers, public and private, face the same headaches. In the meantime, light duty workers who actually get placed into jobs are treated like goldbrickers. Not a very friendly work environment for the injured worker.
There is no legislative solution to that mess other than to get everyone involved in the same room and negotiate sensible solutions. It goes deeper than simply trying to rewrite the Act. It involves union contracts, hiring practices out of halls, medical providers gaming the system, independent medical physicians who are anything but “independent” and other issues.
And trying to define fraud in the system is an invitation to multiple definitions. Employers, employees, physicians, etc. all have their own definitions which often contradict each other. So far only a handful of fraud cases have been rooted out of the system since the 2005 changes.
The medical fee schedule enacted in 2005 is a joke which has increased administrative costs on plaintiffs, defendants and medical providers. No one can come up with any studies showing any savings in medical costs. There aren’t any.
When the Blagojevich administration took over in 2003, there was heavy pressure exerted to increase awards to injured workers. Those Arbitrators who continued to author fair awards found themselves transferred around or harassed. Most of the Arbitrators got the message and loosened up the purse strings. Those who didn’t are still getting bounced around. A “fair” Arbitrator shouldn’t be under attack. A prejudiced Arbitrator (either for plaintiffs or defendants) should be pressured instead to be fair and not issue awards that are routinely too generous or too stingy.
Fairly administering the system in place would result in considerable savings to all concerned.
That would be a good start to turn around the increasing premiums and costs associated with the system.
Comment by Anonymous Thursday, Dec 16, 10 @ 3:07 pm
Sorry, Anonymous 3:07 is me. For some reason it posted as anonymous.
Comment by Louis G. Atsaves Thursday, Dec 16, 10 @ 3:09 pm
Louis,
Louis. I am familiar with an employer who solved his malingering; “light duty” conundrum very effectively as follows:
Any injured employee unable to actively engage in their own occupation at full capacity, had to report to their workplace, and sith through training programs on every job related program from soup to nuts. He figured that if he was going to pay the increased claims costs and corresponding premium increases for thier malingering anyway, then he wanted an ROI for his money. He felt that when they were released to full duty, they would be the smartest and best trained person in the building.
Guess what. Once this system was deployed he substantially reduced the number of lost work days from those who had filed workers compensation claims. Once they figured out that they were going to have to get up and drive to their workplace, and stay there the same amount of time they would have if they were working; but for less money, they decided that it was better off just to return to work.
Comment by Quinn T. Sential Thursday, Dec 16, 10 @ 3:46 pm
Quinn,
If your employer was a non-union employee in a non-union shop, I can see this working as you have described it. In fact, light duty workers are usually accommodated by employers more easily when there are fewer impediments, such as union work rules and contracts and seniority issues. When the system permits creativity, everyone benefits.
I represent a fair share of public sector employees and it seems that the layers of rules, contracts and past practices in many of them just add to their costs and extend the lost time periods. My clients want a regular paycheck. The comp check pays most of the bills for off work injured clients but there is no saving for the future, or working overtime or a second job to buy a new car, deal with tuitions, etc.
Many private employers tie themselves up in knots the same way through what I call the layering process, with many not realizing it until after the fact.
By the way, any thoughts about the new “civil union” bill and how it could affect Workers’ Compensation payments in certain death cases? No one thought of that one either during those passionate recent debates on the subject.
Comment by Louis G. Atsaves Thursday, Dec 16, 10 @ 4:05 pm
“Goring Oxen” sounds like a Teutonic Bond villain.
“So, Mr. Oxen, we meet again.”
“Please, James, call Goring.”
Comment by Eric Zorn Thursday, Dec 16, 10 @ 4:44 pm
Zorn with the zinger for two! lol
Comment by Bill Thursday, Dec 16, 10 @ 4:51 pm
Aon is a leading expert on reducing workplace injuries and worker’s compensation claims.
Perhaps Daley should ask them for a discount, or guarantee them a percent of the savings?
Comment by Yellow Dog Democrat Thursday, Dec 16, 10 @ 6:11 pm
Promises were made that cannot be met. These promises were made at a time when we all knew that these promises could not be sustained. No additional funding was created to pay for these promises. We all saw this happening for over the past twenty years. Programs were created, and no one mentioned how to pay for them. Everyone who supported these programs also knew that these programs were being paid for with hot air. That’s fraud.
We saw this repeatedly. Now, I know that over the years, Bill and I have both agreed that if you wish to pass new legislation to create expensive new social programs, you also have to create a means to pay for them. I usually disagreed with the new social program because I didn’t see them as necessary or whatever, and Bill usually agreed with the social program but accurately mentioned this constant lack of funding for them.
We are polar opposites on most issues, but we both recognized the potential here for government fraud. If you want new programs, raise the taxes to pay for them. Period. What we saw over the past generation of Illinois politics is politicians doing a half-*** cowardly job.
Illinois is worse off than the vast majority of other US states. I don’t like hearing how we are just thrown into a mix of other states with fiscal problems, because our fiscal problems are massive and special. Wisconsin’s problem? Give me a break! We were that screwed a decade ago!
We all knew we were on thin ice over a bottomless pit of a lake a decade ago when Blagojevich got elected. He jacked around and did nothing. So we were up stink creek before the rest of the US states got hit with the Great Recession. So stop yanking my chain by claiming that we are just another freaking Nebraska or Oregon.
Remember when Enron tanked? Remember all those “millionaires” that lost millions? Well, reality dictates that they were NEVER millionaires. What Enron claimed was worth millions was not worth dog poop on a string. So, they were suckers. They didn’t lost millions. They lost dog poop they could have sold to others for millions.
That is the same situation we find state depends with. They have claims against an Enron-like state government claiming to be able to pay billions annually, when they got noting but dog poop on a string. What oxen? They aren’t oxen anymore than Enron stock was worth something.
The entire situation is beyond ugly.
Gore the oxen.
Comment by VanillaMan Thursday, Dec 16, 10 @ 9:08 pm
Louis G. Atsaves: Yes, many people thought about it, but those that were worried about the cost of passing the civil unions bill were afraid to admit that they were in favor of discrimination because it saved money.
Comment by It's Just Me Friday, Dec 17, 10 @ 12:34 am
- VanillaMan - Thursday, Dec 16, 10 @ 9:08 pm:
“If you want new programs, raise the taxes to pay for them. Period.”
Option 2: Cut other obsolete or non-essential programs, or cut spending in other areas.
I would of course recommend Option 2 because your choice leads to an ever-increasing size and scope of government.
BUT, at least instituting a tax at the same moment a new program is created is intellectually honest and allows taxpayers to more fully understand the impact of the new program.
Comment by Cincinnatus Friday, Dec 17, 10 @ 1:23 am