DECISIVE ACTION STILL NEEDED TO REFORM WORKERS' COMPENSATION

Missouri's system of workers' compensation is broken. Five straight years of double-digit rate increases have signalled this troubling reality. Widespread recognition of this fact led the General Assembly to enact this year's Senate Bill 251, a stab at a comprehensive effort to get control of spiraling costs. While this reform effort is commendable, we believe it to be nothing more than a first step. We urge legislators and Governor Mel Carnahan to redouble efforts to fix the system in the legislative session that begins January 5.

One national workers' comp study group judges that SB 251 will actually cause costs to increase still more. To cite just one example, there's a provision permitting the reopening of claims. An injured employee is now allowed to reopen a closed claim at any time. Serious accidents dealing with heart attacks, strokes, and such will in essence never be truly closed. Further, reserves will remain on the claims, increasing costs.

One small Southeast Missouri trucking company has seen the following cost spiral in recent years: 1991: $6,400; 1992: $13,900; 1993: $29,474. Its struggling owner writes, "I can't stay in business much longer with costs like these."

Such stories are common. They should haunt legislators charged with writing laws to ensure a healthy Missouri business climate. Those who tout last session's SB 251 as the answer should sit with the anguished owner of that trucking company as he wonders how he can keep his doors open. He looks down the road and sees nothing but a continuing cost spiral. Real action is needed, and soon.

Workers' compensation is a complex program whose purpose is to ensure that workers who suffer injuries in the course of duties at their workplace will be compensated for those injuries. As originally conceived early in this century, it was to function with a minimum of attorney involvement, aiming for efficient compensation of injured workers. The idea was to minimize litigiousness.

Over the last decade, all this has changed. By any measurement, attorney involvement has exploded. One reputable national study concluded that Missouri has one of the most litigious workers' comp systems in the nation. That litigation adds dramatically to costs is not disputed.

Neighboring states such as Kansas, Arkansas and Nebraska have taken the decisive action necessary to reduce workers' comp costs. Oregon and Colorado are other states that have passed through the crisis of spiraling costs and moved on to real reform. Businesses there are actually seeing back-to-back years of cost (ital.) reduction. (unital.)

It therefore follows that we know how to reduce costs. It simply remains for legislators and the governor to summon the political will to act as these other states have done. To date, this has not happened. If we don't take decisive action, Missouri will increasingly be placed at a disadvantage relative to other states when it comes to business relocations and/or expansion. It's as simple and as frightening as that.

Recently, Gov. Carnahan announced a one-time, $50 million break in workers' comp costs for Missouri businesses, due to overflowing coffers in the Second Injury Fund. This is welcome news, but it should not be confused with the kind of decisive, cost-saving measures we must have.

We do not purport to have all the answers. We do know this: The price tag for Missouri's out-of-control workers' compensation system is more than one billion dollars annually. That's right, we're talking about a billion-dollar-plus item for Missouri business. Workers' comp is a jobs issue of the first order. We are suffering a loss of jobs as small and medium businesses close their doors due to crushing cost burdens. It is impossible to calculate the number of jobs that never located here because businesses reviewed our higher costs and chose a lower-cost state. In an age where businesses are more portable than ever, we cannot lose sight of this crucial fact.

As mentioned above, other states have acted decisively to deal with this problem. How many more jobs will our leaders watch us lose or never locate here in the first place before we take the decisive action they have already taken?