How does Oregon do it?

Friday, October 26, 2007 | 0

Oregon's workers comp system is a success.

It is 42nd lowest in insurance rates and among the highest benefits for injured workers in the nation.

Costs have declined 50% during that time.

Here are some of the factors behind that success.

First, this is a system, a package, and adopting one or a few components may not deliver the results enjoyed by Oregon.

Key to the program is a stakeholder group that includes Republicans and Democrats, management and labor -- the “Management and Labor Advisory Committee“ -- an entity that was empowered by the Governor, and still benefits from that office's complete support. This group is highly influential, and actually directs most of the legislative action.

Oregon shines a bright light on performance payers' timeliness of benefit payment and other metrics are published on a web site for public review, and there are also financial penalties for failure to pay benefits on time. These reports appear to be just one output of the state's extensive data collection and analysis program. Oregon's regulators clearly believe strongly in monitoring the system and measuring both processes and outcomes.

The state's payer and system monitoring processes cost money - and Oregon's administrative expenses look to be significantly higher than other jurisdictions'.

The treating dos provides the info for the impairment rataing, but the actual rating is done by the WC department using objective criteria, and permanent impairment rating uses a guide to bolster consistency.

Oregon has structured its dispute resolution process with a keen focus on expediting cases, reducing the chance for cases to be reopened, and strict requirements on all stakeholders. It must work, because most PPD payment amounts are agreed upon outside the litigation process.

When there is a disagreement, Oregon mandates a mandatory informal dispute resolution process when there is an objection to case closure. This serves to dramatically reduce delays and legal maneuvering. When PPD is awarded, it has to be paid within 30 days. There are also reduced compensation for claimants attorneys at reconsiderations than at the initial hearing (10% v 25%).

Return to work is also emphasized with state-run incentives for return to work program development, an active and assertive re-employment and training program, and specific assistance to mitigate the financial and potential liability risks involved when employing an injured worker.

Employers' buy-in to the system is nothing short of remarkable. In fact, Oregon's employers are big supporters, and have funded over 100 OSHA inspectors. That shows just how different Oregon is from many other states -- can you conceive of any other jurisdiction where companies would actually want to hire regulators that would go onsite, have the power to issue fines, and even shut down their jobsites?

Again, what works in Oregon may not work in your state, but there are clearly lessons to be learned.

Joe Paduda is principal of Health Strategy Associates, an employer consulting firm based in Connecticut. This column was reprinted with his permission from his Web blog at http://www.joepaduda.com/.