In what seems eons ago, Governor Schwarzenegger undertook the California Performance Review (CPR), an effort to take a serious look at California’s sprawling bureaucracy and try to make state government more efficient and less costly. That report was submitted to the Little Hoover Commission in 2005. Since then, we have visited and revisited various fiscal crises in California, and CPR continues to collect dust.
But one of its recommendations should continue to be debated by those constantly debating how to tinker with, redesign, alter, amend, repeal and change our workers’ comp system – eliminating the Workers’ Compensation Appeals Board (WCAB). CPR recommended that WCAB and several other boards be consolidated into an “Employment and Benefits Board.” Well, that wasn’t such a great idea – and it failed – after the governor tried to combine judges and make them subject to political dismissal.
Come to think of it, CPR also recommended abolition of the Commission on Health and Safety and Workers’ Compensation and that its functions be absorbed into the Labor and Workforce Development Agency.
Well, let’s not stop there.
First, don’t abolish the commission, just move it. Move it so that it can honestly assess the actions and inactions of the Department of Industrial Relations (DIR) and its divisions – including the Division of Workers’ Compensation and the Office of Self-Insurance Plans. While you’re at it, change the composition of the commission to make it more like Oregon’s Management Labor Advisory Committee, which has served that state very well for 20 years. Get those who work for DIR off the commission so we can find some objectivity. Second, embrace the idea of collapsing the various administrative hearing boards as recommended by CPR and get WCAB out of the business of protecting CLE-challenged workers’ comp administrative law judges. After all, let’s not forget that Almaraz/Guzman and Ogilvie were creations of WCAB, not individual judges, who were trying to come to grips with their own ways to undermine SB 899. Of course, given the effectiveness of the applicant attorney lobby in Sacramento, that is not likely to happen.
Finally, while oversight of large individual public and private self-insureds has appeared fairly effective – with a few notable exceptions – the Legislature needs to deal with the Office of Self-Insurance Plans, which is woefully incapable of overseeing insurance companies, also known as self-insured groups (SIGs).
As recent events have demonstrated, the Department of Insurance needs oversight of all risk-bearing entities – and that includes SIGs. The insurance commissioner regulates excess carriers and sureties that provide critical security for these entities. The commissioner also regulates brokers that place business with SIGs. In some cases, as coyly alluded to in CHSWC’s report, some SIGs have become so large that they really should be treated as mutual insurance companies. Department of Insurance oversight would bring credible review of all-important actuarial assumptions that underlie assessments of individual members. Department of Insurance regulation would help ensure that SIG administrators and agents and brokers fairly and accurately explain what joint and several liability means. Of course, SIGs also have invested considerably in lobbyists, so that change is unlikely to happen, even after individual SIGs get the tab for regulatory failures once they hit the Security Fund.
No one ever gets a plaque for fixing bureaucracy. Signing ceremonies are left to “reform” and sound bites are about either injured workers or taming the “job killer,” workers’ comp. Ages ago someone called it pouring new wine into old bottles. In the past decade, employers and labor have poured a lot of new wine. Maybe, just maybe, it’s time to look at the bottles.