Political Developments: Duncan at DWC Educational Conference

Friday, March 19, 2010 | 2

By Julius Young

The Director of California's Department of Industrial Relations, John Duncan, gave a headliner address in Los Angeles and Oakland recently at the Division of Workers' Compensation's 17th annual conference.

Duncan's comments are an important indicator of the remaining agenda for the Schwarzenegger administration in workers' comp.

Duncan has recently been under fire from key legislative Democrats, who demanded a response on the decision to flout the statutory mandate to amend the PDRS effective January 1. 2010:

In 2009 I did a piece, "Dear John", a fantasy pen-pal letter to Duncan, responding to his sudden appearance in the limelight on comp issues after the Almaraz I/Guzman I decisions:

Today, workerscompzone readers can savor a followup pen-pal piece......

Dear John:

How's it goin'?.

I was able to catch your speech in Oakland at the DWC conference last week.

First, it was good to know we have something in common. I also like wearing Lacoste shirts. We're both preppy. Gotta love that crocodile! And to think some folks call it an alligator shirt....Harrumph...

Anywho, it was fascinating to hear that story about how you were in your Lacoste on the beach (was it Malibu?) when you got the call during the recall era to brief Arnold on workers' comp issues. My fantasy is that you were sitting there under a cabana drinking a Pimm's Cup when you got that call from Arnold's people.

I love a glass of Pimm's Cup on the patio, don't you? Even the little sliced cucumbers they give you to stir with...

And who knew the Guv dressed so casually?

But back to your speech at the DWC conference.

Glad to hear that the DWC is working with the external users group to simplify EAMS. That's gotta have been a big heartache for you the last couple of years. You heard mostly complaints from the comp community and the EAMS has been a budget buster.

Your comment that workers' comp is an "essential lubricant" in state's economic picture had me briefly thinking of AstroGlide. But lets not go there.

Your comp stats were impressive. The average cost of workers' comp cut by half. Over $50 billion in savings for California employers. You "wouldn't want to imagine" today's California economy without the savings due to the reforms.

Some folks might want to rehash old arguments about why pre-reform comp costs where rising so much after the millennium, or why insurers were allowed to reap such huge profits in the early post-reform years. Re-exploring all that is a non-starter now. I know that and you know I know that.

I gotta applaud many of the efforts you're now taking to control rising medical treatment costs. Out of control treatment costs will kill the system. If treatment costs grow too rapidly there's little room for benefit increases for disabled workers.

So you've got your 12-point plan. Reducing HCO barriers. Simplifying MPN notice regs. E-billing. Revising PR-2 and PR-4 forms and streamlining authorization requests. Surgery center fee schedules. Dealing with hardware reimbursement formulas. WCIS regs. Pharmacy network regs. UR regulation simplification. RBRVS fee reimbursements. A drug formulary. Efforts to address liens which are choking the system. Making medical treatment guidelines more comprehensive (as you said, the treatment guidelines are "a living document").

Wow. Makes me tired just listing it all. I've got to hand it to you. Looks like you won't be turning off the lights until January 2011.

I'd love to see an independent assessment of how all those changes fit together from both a cost standpoint and a quality of care standpoint. Devil's always in the details.

What took you so long to focus on medical costs?

Maybe it was my vinegar-laced salad dressing, but hearing that "nearly 12% of California employers are uninsured" seemed like a throwaway line.

I love seeing the occasional labor standards investigator busts, but where's the leadership on really cracking down on the large number of scofflaw employers?

Where's some of that good ole-time preppy passion? I missed that part.

What I found most interesting in your talk was your vision of the comp system generally. You referenced the "social contract" where workers injured on the job gave up their right to sue in exchange for the guaranteed benefits under the comp system.

On the one hand you referenced keeping the "compensation bargain."
And you used the term"adequate benefits"

But it's clear you don't want a system which focuses on the individual impacts. In your view efforts to identify an appropriate result on a case by case basis basis are "doomed to failure." You want cases determined on a basis that is "objectively verifiable" and "reproducible."

That must have charmed your lunch partners, the commissioners of the WCAB.

I can't help thinking that many disabled workers don't get the concept that they are subject to a cookie cutter dispensation and then told to "move on". Where's the "adequacy" and the fulfilled "compensation bargain" in that?

Try telling a union worker who just lost his good job to "move on" after he loses the job because of work restrictions but is awarded "zero impairment."

That worker might come rip the crocodile off the canary colored Polo shirt of anyone who told him to "move on."

But I realize you are not alone. There are many stakeholders-and some consultants to labor and CHSWC-who really want a cookie cutter system. Your presentation merely laid out the case in a stark fashion.

You referenced that a prior tentative PDRS revision would have increased benefits by 16% and that the DWC is prepared to use more current data in a future revision. Bravo.

But you claim there's too much uncertainty to do so now, so you will not amend the PDRS now. "California employers are hurting and can not absorb more costs."

So it was John Duncan, defiant.

Looking back, you are the Wilsonian legacy. You've been in key positions at DIR for most of the last 20 years and have headed the department under two governors.

I can keep a secret. Will you morph into a key role in the Whitman brain trust?

Your credibility might be higher in many quarters if you had shown some personal advocacy for disabled workers whose benefits were slashed after the reforms. Granted, their situation is not your total portfolio, but it is in there. The problems at Cal-OSHA compound that perception.

But you're a good and able soldier for business interests. As we say in my homeland, the South, it's just "bidness." "Bidness" creates jobs.

I thought I'd take the time to add to your mailbag. The DWC presentation made interesting political theater. John Duncan defiant.....

Ciao
Your neighbor by the Bay

<i>Julius Young is an applicants' attorney for the Boxer & Gerson law firm in Oakland. This column was reprinted with his permission from his blog, http://www.workerscompzone.com</i>