REAL REFORM SOUGHT FOR WORKERS' COMPENSATION

There's a very real crisis in Missouri. Its name is workers' compensation.

The system is riddled with abuse and downright fraud. Rates are skyrocketing to the point of jeopardizing the financial stability of businesses across the state. Without real reform and medical cost containment, this single issue could break the back of Missouri business.

Unfortunately, the situation may still worsen before it improves. The National Coalition for Compensation Insurance (NCCI) has filed for a 23.8 percent average increase in workers' compensation premiums. A decision is expected this fall, but industry experts look for the rate hike to settle between 15-20 percent. That increase applies to many businesses without a single workers' comp claim. This newest round of rate increases will take effect before the legislature can provide any relief.

Already, the increases have threatened the profitability of many small businesses, and have limited opportunities for companies to expand. Workers' comp costs have increased about 38 percent over the last year, and more than 200 percent over the past eight years.

The situation discourages future investments in new businesses. Companies that would normally be hiring additional help may think twice due to the costs of workers' comp. They may also have little left over for employee raises. These costs are literally driving some companies out of business.

Unfortunately, there are no easy answers. It's a complex problem, not easily solved. The problem is due to many factors such as increased costs of health care, a broader interpretation by the courts on what is covered by workers' comp insurance and questions about how rate increases are determined. The bureaucratic paperwork adds cost to the process of filing claims as well.

The ultimate solution will require a cooperative effort of insurance companies, business leaders, labor leaders, health care professionals, elected officials, and attorneys.

But the legislature should lead the way. The General Assembly took a first step toward change when it approved legislation that initiated some reforms. The new law defined the issue of compensation for mental injury claims, encouraged the establishment of worker-safety programs and allowed insurers to offer at a reduced rate, workers' comp policies with a deductible plan. Though only a first step, it is an important move toward bringing this massive problem under control and providing stability to businesses.

Lawmakers must build on this framework when they convene next January. Substantial workers' comp reform should become a priority of the 1993 session. Legislators must make some hard decisions. The legislation must contain workable cost containment. The flagrant abuse in the Second Injury Fund must also be stopped. The Second Injury Fund paid out $31 million last year, up $6 million from just six years ago. Of the total, about $9 million went to attorneys' fees.

In 1986, the Cape Girardeau branch office of the Missouri Division of Workers' Compensation handled about 1,600 unsettled workers' compensation claims. That number has since more than doubled to 3,700.

Last year's legislation establishes a special committee to review the entire issue and study solutions. We hope this study group will put the legislature and Missouri on the road to meaningful reform.

As business goes, so goes our economy. That's why we need to help our small businesses with skyrocketing workers' comp costs. The players are mobilized and the stage is set for more substantive reform in 1993.