We're heading to mid-summer.

Many of us have more interest in the ice cream flavors at the shop down the road than we do in what workers' comp cases are up on a writ or when that think tank is releasing another study.

Gotta hand it to California. We are cutting edge here. My favorite local shop in Berkeley is now into herbal and spice based ice creams. Allspice. Lemon Thyme. Bay Leaf.

But if you're reading this space instead of Wiki-leaked documents about treacherous Pakistani double dealing, you must be hard core.

And so you'll want to know that Joe Matthews sees another workers' comp reform coming.

Mathews is an astute observer. Those who never read his history of the Schwarzenegger recall of Gray Davis might want to pick up a copy. That's "The People's Machine: Arnold Schwarzenegger and the Rise of Blockbuster Democracy":
http://www.amazon.com/Peoples-Machine-S ... 1586482726

After all, you should know a little history. Who were the carrot people, after all? They are still very much around.

Mathews, a former L.A. Times reporter, is now a senior fellow at the New America Foundation and the author of "California Crackup: How Reform Broke the Golden State and How We Can Fix It".

Mathews notes that there are four major legs to the workers' comp table.

Employers are one leg, of course. Insurers are another. Medical providers are a third leg. Labor and the attorneys who represent workers are a fourth leg.

Mathews observes that six years after the 2004 reforms:
"the aggrieved parties are injured workers and medical providers who have found it difficult to get paid."

Continuing, Matthews claims that :
"they have a third leg of the four- legged stool joining them; insurers have seen a big decline in their premiums (for reasons that are disputed). Only businesses remain happy."

Since I started doing the blog I've had a number of employer lobbyists assure me that employers and insurers were joined at the hip, happy with the reforms and in constant contact.

That embrace may be starting to sour a bit.

Stay tuned.

Soon I''ll be posting about the Top 10 Developments in California Comp in the 1st half of 2010. I'll also be covering the 6th District Court of Appeal Decision in Guzman which will likely be coming down shortly.
And I'll be making an announcement about a major new project I'm involved in.

Here's a link to the Joe Mathews piece:
http://www.nbclosangeles.com/blogs/prop ... 75014.html

Julius Young
www.boxerlaw.com

"Workers' comp insurance becomes money loser"......

That's the title of a piece released today by Dan Walters, veteran political columnist of the Sacramento Bee.

Walters is widely admired in Sacramento and other political circles for his decades of experience as observer of the California scene.

Among the points made by Walters:
-in 2006, insurers earned nearly 27% on employer paid premiums of $17.3 billion
-premiums dropped to $9.1 billion in 2009

Walters essentially notes what I've been saying for some time.

Insurers reaped record profits in the early years after the 2003 & 2004 California comp reforms. Benefits paid to or on behalf of workers during those early years were a pitiful percentage of premium paid by employers.

Then came the housing crisis, the fall of Bear Stearns and Lehman and AIG, the tanking of the economy, and soaring unemployment.

As premium has declined (in large part because of a weak economy), costs have risen, especially medical costs.

In a number of other posts I've noted that cost containment and overhead expenses have risen sharply as a percentage of premium written.

So there's been less margin, leading the Schwarzenegger DWC to refuse to comply with the statutory mandate to revise the permanent disability rating schedule to increase benefits.

Meanwhile, benefits for workers with permanent disabilities were cut.
Using figures from a WCIRB 2008 Legislative Monitoring report, intended statutory reductions in permanent disability reduced permanent partial disability payments by $600 million. This included reductions due to changes in the law of "apportionment", PD reductions for a "return-to-work adjustment", and reductions in the number of weeks of disability paid out for many injuries.

Moreover, worker attorneys charge that PD benefits have been effectively cut by the 2005 permanent disability rating schedule and the refusal to amend the PDRS.

But as time went on, industry profits have been squeezed.

Citing the recent report from the Workers' Compensation Insurance Rating Bureau, Walters notes that "...insurers lost $1.5 billion on workers' compensation insurance policies last year after breaking even in 2008."

Walters acknowledges that insurers have been clamoring for rate increases. But Insurance Commissioner Poizner refused to recommend rate increases, and most insurers have been loathe to raise rates very much. Walters notes that there will be a new Insurance Commissioner elected in 2010.

Walters predicts that the stage is set for more workers' comp battles in the future, "making it a key, if little known, aspect of the gubernatorial duel" in the current Governor's race.

The WCIRB report, "2009 California Workers' Compensation Losses and Expenses" can be found here:
https://wcirbonline.org/wcirb/resources/data_reports/pdf/2009_loss_and_expenses.pdf

Stay tuned.

Julius Young
www.boxerlaw.com

Flash from the workerscompzone green eyeshades department, always seeking out future trends for your reading pressure,,,,er, pleasure.

30% of California doctors are over 60 years old. That's well above the national average.

Six out of nine California regions now have a primary care physician shortage. Only the Bay Area, Orange County and Sacramento meet primary care access standards.

Los Angeles, the Central Coast, the Inland Empire and the San Joaquin Valley and San Diego are among the regions underserved by primary care doctors.

As the population ages, this trend is likely to increase. Expanded coverage under the Obama healthcare reforms may exacerbate physician shortages.

Meanwhile, specialists are distributed unevenly among the various California metro areas.

The stats are all in a report of the California Healthcare Foundation in a study by Craig Paxton of Cattaneo and Stroud, a healthcare consulting firm. The study has many nifty graphs and charts, comparing physician access among many metro areas.

The study is found here:
http://www.chcf.org/~/media/Files/PDF/C ... es2010.pdf

Its a study that merits close analysis by workers' comp stakeholders.
Will tomorrow's workers' comp system be struggling to attract treating doctors? Should future regulatory and legislative fixes consider the effect on attracting doctors to comp? Should there be more organized attempts to train doctors for occupational medicine?

Stay tuned.

Julius Young
www.boxerlaw.com

July 20.

That's the deadline for comment on the latest version of the California physician fee schedule. An earlier version of of a revised physician fee schedule has been modified.

The initial proposal was supposedly "budget neutral". With this new version, costs have been added into the system, supposedly funded from cuts in spinal hardware costs and cuts in ambulatory surgical center fees.

The initial proposal followed the release of a study by the The Lewin Group on introduction of RBRVS into the California workers' comp fee schedule.
The Lewin Group study can be found here:
http://www.dir.ca.gov/dwc/RBRVSLewinRep ... rt2010.pdf

Many physicians were highly critical of the first proposed fee revision.

The DWC walks a fine line here. There is enormous pressure to find system cost savings. Medical costs have been increasing significantly (along with loss control costs). Unless medical costs are under control, it's hard to see how indemnity benefits will be brought to adequate levels.

But there needs to also be attention to keeping doctors in the system.
My recent post, "To Treat of Not to Treat", examined this from the perspective of some of the doctors. The question raised was whether it was worth it for doctors to take workers' comp cases:
http://www.workerscompzone.com/index.ph ... 707-091110

The comment forum on the revision to the fee schedule is open til July 20th:
http://www.dir.ca.gov/dwc/DWCWCABForum/ ... hedule.htm

Here is a link to the comments posted so far (note: the DWC often takes down these links after the comment period expires):
http://www.dir.ca.gov/dwc/ForumDocs/Phy ... mments.pdf

Among the comments so far, comments from neurologists and physical medicine doctors are particularly notable. The commenting doctors note that reimbursements for diagnostic procedures such as EMG/NCV testing would be substantially reduced. This would lead to an exodus of neurologists from the comp system, they predict.

As reimbursement schedules are adjusted, someone's ox is likely to get gored. But these changes can substantially affect worker access to treatment.

That's why it's good for doctors to give their input now, up front.

Stay tuned.

Julius Young
www.boxerlaw.com

Many of my Northern California readers know that all roads run through Oaktown.

Not literally, of course, but Oakland, site of my Boxer & Gerson office, really is the heart of the Bay Area. It's where the burbs of CoCo County meet, where the North Bay begins to transition into the South Bay.

Reputedly a place where there is "no there there", its a place where many different ethnic enclaves intermingle, a place of mean streets, hipsters in lofts, hillside architectural gems, and more good restaurants on one mile (College Avenue) than in some whole upper middle class counties in the Golden State.

Oakland is also home to many of the key players in workers' comp.

The Callifornia Workers' Compensation Institute, an insurance industry organization, is headquartered here. The WCIRB (Workers Compensation Insurance Rating Bureau) is here. The Division of Workers' Compensation has administrative offices in Oakland. The Commission on Health, Safety and Workers' Compensation is headquartered here. Non-profits dealing with worker safety, such as Worksafe, are sited here. And of course, the WCAB has a large district office in Oakland.

Federal deficit commission members Erskine Bowles and former Senator Alan Simpson have noted that the United States has cancer; a cancer of debt that could destroy our economy and way of life as we know it.

But if the country has cancer, so does Oakland.

The Oakland City Council has given pink slips to 80 police, about 10% of the force. With the city out of money and facing huge shortfalls, cops agreed to contribute more to pensions if they were promised job security. Rather than make cuts in libraries and some other services, the Council has decided to issue the layoff notices. Without passage of higher taxes, cuts could be deeper next year.

It's ironic that this comes after a second round of downtown violence following protests over the BART officer shooting of a young African American male.

Our office, like most in downtown Oakland, emptied out early last week as word arrived that the jury verdict in the Oscar Grant shooting would be forthcoming within the hour.

At least four depositions set of clients with Boxer & Gerson clients were immediately canceled as court reporters waited in our lobby for the lawyers to arrive. As streams of workers left downtown, police were gathering around our building and around the sites of many of the other workers' comp offices.

After several hours of peaceful speeches and protests, some looting ensued. It appears that some of the damage was led by anarchists and
graffiti spraying protesters. Of course, black owned businesses were not spared from the damage.

If you've seen a TV screen in the past week you probably know most of that.

But it's disconcerting to see the heart of the Bay Area on economic life support.

Many of us in the "comp community" like Oakland. We may live here, or we come here to work and get used to its gritty charms and its fab weather.

I'll bring you more on this story from time to time.

Julius Young
www.boxerlaw.com