Workers’ Comp Costs and Fraud

Lloyd Rowe’s letter (Feb. 3) opposing workers’ compensation reform is misleading and inaccurate.

Rowe writes, “There is no real evidence that worker’s comp costs are inciting business flight from the state.” I invite Rowe to answer my phones for one day and listen to the business people calling to tell me that they are being forced to close down business operations because they cannot afford their workers’ comp premiums. I encourage him to read the study conducted by five major utilities in the state which found that 669 manufacturing firms left our state in the last five years and cited workers’ comp costs as the primary reason for their relocation.

Rowe, who is president of the California Applicants’ Attorneys Assn., ought to understand “self-serving”: his association’s members benefit from the claims that are filed. Earlier this year, I presented Rowe with my Golden State Fleece Award for his condemnation of an employer who sued a medical mill for coaxing workers to file phony workers’ comp claims. Rowe has indicated that such lawsuits are unfair because the clinics may not have the money to defend themselves. What a bogus claim! In workers’ comp, the injured worker receives only 16 cents out of every dollar, with the rest of the money going to Rowe, his clients--the mills--insurance companies, vocational rehabilitation firms, and other attorneys.

Rowe, a lawyer sworn to uphold justice, thinks it is right to let fraud go unpunished if the perpetrators lack--or claim to lack--the money to defend themselves.

Rowe writes, “The surest way to decrease costs is to reduce the number of workplace injuries and illnesses.” I wish it were true. The reality, however, is that the increases in workers’ comp premiums have occurred while workplace safety is holding steady or improving. In the late 1970s there were 39.5 disabling incidents per 1,000 workers. In 1990 there were fewer than 35 per 1,000 workers. Yet between 1975 and 1991 workers’ comp premiums doubled, with a 64% increase between 1982 and 1991.

Fraud and abuse are responsible for directing benefits away from seriously injured workers and enriching greedy third parties. I am more interested in helping injured workers than I am in lining the pockets of lawyers, doctors, insurance companies, and vocational firms.

SEN. BILL LEONARD

R-Big Bear