Workers’ Compensation Called a ‘Disgrace’

Calling the state’s workers’ compensation program an abuse-ridden “national embarrassment,” the Council on California Competitiveness on Thursday urged cuts in benefits for stress claims and for vocational rehabilitation.

The council also proposed, among other things, slapping tighter cost controls on medical care and scrapping the state’s current rate-setting system to encourage rate competition among insurance companies.

But the reform package encountered immediate opposition--including the dissent of the two labor leaders on the 17-member council, who opposed the suggested reductions in stress and rehabilitation benefits.

The package also was criticized for recycling previous proposals and for failing to provide innovative solutions.

“There are no ideas here that are new or original” on workers’ compensation, said Michael Franchetti, a lobbyist for the Coalition of Medical Providers, a group representing doctors, physical therapists and others treating people with workplace injuries.

“I don’t think they’re going to change anyone’s view one way or the other.”

The workers’ compensation reform package came amid growing demands in the California business community for measures to curb escalating costs in the $11-billion-a-year state system for compensating injured workers. Gov. Pete Wilson said Wednesday that business executives regard workers’ compensation expenses as the No. 1 problem in doing business in California.

At a lunch meeting of the Town Hall of California in downtown Los Angeles, Council Chairman Peter V. Ueberroth was interrupted by loud applause from the audience of about 250 business and civic leaders when he called the state’s workers’ compensation program “an absolutely abysmal disgrace.”

To curb claims for stress suffered on the job, the council proposed requiring that the workplace be responsible for at least 51% of a worker’s stress problem for the employee to be eligible for benefits.

Currently, the standard for stress benefits is 10%--meaning that a person can receive workers’ compensation benefits for stress if as little as 10% of his or her problem is judged to be work-related. California is among a handful of states providing compensation for stress suffered on the job.

The council’s report said vocational rehabilitation provided to injured workers under workers’ compensation to prepare for new occupations “involves costly schooling programs of dubious value.” The council proposed encouraging employers to reasonably accommodate disabled workers by putting them in new jobs instead of sending them to rehabilitation programs.