Editorial: Gregoire’s workers’ comp plan is good start

After 15 years of sharply escalating workers’ compensation costs, Washington state urgently needs to adopt corrective measures. Unfortunately, voters turned down the most direct reform in November when they defeated an initiative that would have let private carriers compete for industrial insurance business.

With that option off the table for now, Gov. Chris Gregoire has proposed a reform package that has promise, as far as it goes. At present, Gregoire’s bill is the Legislature’s best opportunity to start reining in the excesses that are a brake on job creation.

Under workers’ compensation, someone hurt on the job can receive medical care and supplemental income without having to sue the boss. Sometimes medical care is enough, but if the injury prevents the employee from working, there’s also compensation for lost income. If the worker never returns to work, he receives a lifetime pension. Washington, whose workers’ compensation program differs from most other states in numerous ways, ranks near the top for the number of permanent disabilities on its books. That’s an expensive problem.

Such cases are only 8 percent of all claims, but they account for 85 percent of the benefits paid out, according to the Department of Labor and Industries. Dealing with that component is a central objective of Gregoire’s proposal, which relies on a statewide network of providers who are up to date on proven methods of occupational therapy.

Attacking the medical aspect makes sense. A couple of decades ago, replacement income was the most expensive part of the program, but the medical care component has sped into the lead in recent years. In fact, health care costs in workers’ compensation programs are escalating even faster than for health care in general.

Missing from the governor’s program is an opportunity to negotiate a final settlement of long-term claims as an alternative to lifetime pension payments. Including so-called “compromise and release” would strengthen the package. Washington is one of only seven states that don’t permit it now.

What’s more, only in Washington do workers themselves pay part of the premium. Only here are the rates paid by employers based on hours rather than wages. And, most significant, while 26 states rely entirely on private companies to provide industrial insurance, Washington is one of only four states that lock them out.

Meanwhile, Washington performs poorly on such important measures as the length of time injured workers stay off work. It’s hard not to think there is a connection.

It’s also significant that one element of the governor’s plan is to offer incentives to medical caregivers who achieve desired outcomes in the claims they handle – a fundamental of the private-sector model.

For the time being, though, November’s election precludes competition from the private sector. The most encouraging alternative still in play is Gregoire’s reform proposal. To borrow an overused phrase, it’s a start.