Could Massive Changes to California’s System Be a Guiding Light for the North Carolina Workers’ Compensation System?

April 28, 2012, by Michael A. DeMayo

Last year, when we discussed 2011’s massive overhaul to the North Carolina workers’ compensation system, we went on and on about the amazing amount of waste and inefficiency in our system.

If only we could come together as a state and find out ways for all parties involved – insurance companies, lawyers, employers, workers, hospitals, and bureaucrats alike – to work towards mutual solutions. Think about it. It would be awesome. We could probably make massive improvements not only in terms of cost savings but also in terms of better care and better results for everyone involved.

Well, good news. The great state of California has apparentlt taken us up on the challenge. According to a April 12 article in the Los Angeles Times, big companies and labor unions are working in tandem (yes, together!) to overhaul the $15 billion California workers’ comp system to reduce delays, improve medical care, and help break down some of the obstacles facing workers who need compensation.

California workers are hard up.

According to the Los Angeles Times, back in 2004, the average permanent partial disability recipient got $25,000. Meanwhile, UC Berkeley data show that that number has been more than cut in half – down to $12,000 per worker! Employers have been making out okay in the Golden State – workers’ comp premiums have actually gone down by 60%, per the Times. And insurance companies have done well because they have had to payout fewer claims and smaller claims at that.

But the workers themselves are apparently suffering grievously!

Meanwhile, a 2009 analysis conducted by then Governor Arnold Schwarzenegger’s administration found that CA’s system could be streamlined to the effect of $1.5 billion savings annually. That’s about 10% of the total value of the system – a significant amount of waste. California’s system is clogged up with “inefficiencies and frictions” according to stakeholders. Negotiations to overhaul the system will focus on how to strip down those obstacles to make the system “more administrative, more predictable, more affordable [while putting] more money in the hands of injured workers and [bringing] down the cost to employers.” (That quote is courtesy Sean McNally, a VP for a California carrot grower quoted in the Los Angeles Times story.)

Are there any takeaways for the North Carolina workers’ compensation system?

Perhaps – and perhaps not. Comparing the California system to the North Carolina one is a lot like comparing apples-to-oranges. Yes, they are both metaphorical fruits, but there are many important distinctions.

Again, however, the lesson holds not just for California and North Carolina but for all 50 states – we need to strip away inefficiencies and obstacles and needless bureaucracy. It is a quest that concerns us all and it is a quest we should collectively root for.

If you need help dealing with a specific injury or illness, connect immediately with a responsible and respectable North Carolina workers’ compensation law firm.

More Web Resources:

California’s workers’ comp overhaul is stirring

UC Berkeley’s survey on California workers’ disability costs

 
 

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