Author: WorkCompAcademy

The Los Angeles Times recently published a scathing article about claims of excessive executive salaries and nepotism at the State Fund. The Orange County Register response to this report was “Maybe it’s time give the State Fund its wish and privatize it.”

In a response to this suggestion, Jonathon Tudor, senior vice president of communications at State Compensation Insurance Fund, sent the Orange County Register the following reply:

The editorial board recently stated their belief that the State Compensation Insurance Fund (State Fund) “really wants to be private.” This is not the case.

Our current structure as a quasi-governmental entity, while unusual, fits perfectly with our role – to provide workers’ compensation insurance to any California employer who needs it at no cost to California taxpayers.

Many employers, including many start-ups and those in high-risk industries, are unable to get the coverage they need – and are required to have by law – in the private market.

State Fund ensures these businesses can operate and by doing so supports job growth, entrepreneurship and economic expansion.

We recently announced a $160 million dividend for the 2019 policy year and we have the financial strength to fulfill our role during any economic environment.

We are also continuing to improve the value we deliver to policyholders by providing more advanced technology and a better customer experience. In our current form we have been protecting California businesses and injured workers for over 100 years and we have no plans to change course.

Physicians often complain that they spend too much time on paperwork, and cite this as one of the reasons they are unhappy with their profession. A new study published in the Annals of Internal Medicine and summarized by Reuters illustrates the problem. For each patient they see, doctors spend about 16 minutes using electronic health records.

Researchers examined approximately 100 million patient encounters with about 155,000 physicians from 417 health systems. They collected data on every keystroke, mouse click and second of time spent on various tasks in electronic health records (EHR) throughout 2018.

Across all specialties, physicians spent the most time in EHR doing chart review, which accounted for about 33% of total time using the records and an average of about 5 minutes and 22 seconds per patient. They spent about 24% of EHR time on documentation, averaging 3 minutes and 51 seconds per patient, and 17% of EHR time ordering things like lab tests, for an average of 2 minutes and 42 seconds.

The study was not designed to prove whether EHR use improves patient care or whether physicians spend more or less time on computerized tasks than they did under older paper-based systems.

Still, the amount of time providers spend using EHRs to support the care delivery process is a concern for the U.S. healthcare system, not only for cost related to patient care but also because of physician burnout and job dissatisfaction.

“We don’t know how much of the time is spent in valuable ways – doing more comprehensive documentation to create a more complete patient record, responding to alerts that reminded the physician to do something they might have otherwise forgotten, etc.,” said Julia Adler-Milstein of the University of California San Francisco School of Medicine.

While it’s not clear whether EHRs are a waste of time, it is clear that computers are transforming how doctors work in ways that could impact patient interactions, Adler-Milstein, author of an editorial accompanying the study, said by email.

“Whether it’s EHRs or anything else that is taking a doctor’s attention away from the patient, patients should feel empowered to speak up if they feel that they have not been given the opportunity to share all pertinent information with their doctor or feel that their doctor might have missed something because their attention was directed elsewhere,” Adler-Milstein advised.

BlueCrew and Wonolo both run on-demand marketplaces for blue-collar gigs. The startups use smartphone apps to connect people to temporary jobs such as warehouse packers, janitors, delivery drivers, forklift operators, line cooks and event staffers.

But according to the report in the San Francisco Chronicle, the two rivals diverge significantly when it comes to employment. Their contrasting approaches crystallize ways AB5 is changing the work landscape.

BlueCrew has always hired its workers as employees. Now, as California makes it harder for companies to claim that workers are independent contractors, it’s seeing a surge of interest from clients trying to comply with the new law and with Dynamex, the 2018 California Supreme Court decision that AB5 codifies.

Wonolo has primarily hired its workers as independent contractors. AB5 has prompted it to drastically shrink its California operations, essentially ending gig jobs here after the first quarter, although it will keep its headquarters in San Francisco.

“Given the limitations of AB5, we anticipate that we may not be able to allow businesses to post jobs in California as of March 31,” Wonolo CEO Yong Kim said in a letter to its workers. “This means you will see significantly fewer jobs on Wonolo in California. We have not made this decision lightly but have done so in order to protect businesses from any unnecessary risks associated with the new legislation.”

In an interview, Kim said that the move, which he characterized as “de-emphasizing” rather than exiting California for good, was a matter of principle in creating a “workers-first company.” Wonolo wants the freedom to devise its own modern ways to meet workers’ needs and feels it would be hamstrung here, he said.

Echoing arguments made by Uber, Lyft and other gig companies, Kim said that what blue-collar gig workers want “is flexibility and autonomy of their schedule, working when and where and for whom they want.”

Walking away from California, its largest market by far, “will be a financial burden to us,” Kim said, but the business is growing elsewhere in the country. “It’s a drastic move, but we stand for what we think is the right thing for providing new kinds of benefits for Wonoloers and other gig workers.”

By contrast, BlueCrew, based in Chicago with offices in San Francisco, has received dozens of client inquiries and new customers since the Dynamex decision in April 2018, and that intensified leading up to AB5’s Jan. 1 implementation, said CEO Adam Roston.

“Over the past few months there was a steep change of interest in California in what we offer,” he said. “We are designed to access workers quickly on demand but are also a compliant solution because 100% of our workers are (employees). Customers are coming to us who were using gig labor because they’re no longer comfortable with that.”

In California’s tight labor market, most of BlueCrew’s jobs pay about 50% above minimum wage – or else it couldn’t attract workers, he said. The company covers mandated benefits such as workers’ compensation and disability insurance.

California would get into the business of selling prescription drugs under a sweeping plan to reduce health costs that Gov. Gavin Newsom unveiled Thursday.

Newsom’s office provided a memo summarizing the proposal but declined to answer questions about how it would work and how it would be funded. Even some supporters say it will be hard to accomplish.

The Sacramento Bee reports that the plan, which will be part of Newsom’s 2020-21 budget proposal, would make California the first state to create its own generic drug label. Newsom also wants state agencies and private insurers to negotiate drug prices together to leverage lower prices.

Under the plan, California would contract with existing drug manufacturers to produce pharmaceuticals for the state. Newsom’s office argues that would increase competition and lower prices in the market for generic versions of brand name drugs.

Generics companies were surprised by Newsom’s announcement Thursday, said Jeff Francer, general counsel for the Association for Accessible Medicines, which represents generics manufacturers.

State government partnering with generics companies could help California leaders address problems the manufacturers face related to patents and anti-competitive practices by brand-name pharmaceutical companies, Francer said. But he added he’s waiting to see more details from Newsom’s office before taking a position on the plan.

Newsom also wants state agencies that purchase drugs, including Medi-Cal, CalPERS and Covered California, to team up with private insurers and other entities to negotiate as a group with pharmaceutical manufacturers.

His plan would create a single market for drug purchasing in California, forcing drug manufacturers to sell their drugs at the same price to everyone in the state. To sell drugs in the California market, Newsom’s office says the state would require manufacturers to sell drugs at or below the prices they charge other states, nations or global purchasers.

Priscilla VanderVeer, a spokeswoman for the pharmaceutical trade group PhRMA, declined to comment on Newsom’s proposals until his office releases more information.

Mary Ellen Grant, spokeswoman for the California Association of Health Plans, which represents insurers, said the association is waiting to see more detail.

The Los Angeles Times recently published a scathing article about claims of excessive executive salaries and nepotism at the State Fund, a quasi-governmental agency that is one of the largest providers of workers’ compensation coverage in the state.

The Orange County Register response to this report was “Maybe it’s time give the State Fund its wish and privatize it.” Here is the logic behind the newspaper’s suggestion:

At first glance the story seemed like business as usual: more waste, fraud and abuse of taxpayer money. A deeper read actually suggests a less serious problem.

But it is still time for the state to consider the very future of this agency that’s spent much of its history engulfed in controversy.

As the Times reported, salaries for seven executives at the State Fund exceeded $500,000 annually, making them some of the highest-paid public employees in California. By contrast, the governor gets paid $210,000 a year.

Throw in some light claims of nepotism, critics calling the salaries “beyond the pale” and a lawmaker calling for an oversight hearing and you have the makings of a standard Sacramento scandal.

Looking deeper though, we find the salaries are not paid by the government, which lets some air out of the outrage balloon. As far as the nepotism was concerned, one son of the CEO was making $50,400 annually as an underwriter and another son had previously made $16 an hour as an intern.

Inappropriate? Probably, but as far as scandals go, it lacks the criminal investigation that serves as the State Fund-scandal benchmark. It’s doesn’t even come close the scandals surrounding Ricardo Lara, the state’s insurance commissioner. But it does raise a good question about why the State Fund is still attached to the government in any way.

The State Fund is considered quasi-governmental because its board is publicly appointed (it’s often a cushy landing spot for former lawmakers and other well-connected types) and because it has a mandate to provide insurance no matter what, a market of last resort.

The State Fund exists because California is a no-fault state where employers must pay workers’ comp claims and, in exchange, workers can’t sue the employer for fault. Someone needed to insure the previously uninsurable.

But times have changed. There are other options. West Virginia, for example, moved to a competitive market with an assigned-risk pool and it seems to be working fine. And that’s a state that was previously dependent on coal mining. In other words, an expensive place to provide coverage.

The State Fund wants to pay its executives like executives in the private market and has asked for waivers from certain civil service requirements. Perhaps it’s time to reconsider its quasi-governmental status and privatize this agency, which really wants to be private. This would give lawmakers one less cushy place to go after life in the Legislature, but the state would survive.

Public employee unions would have a fit because State Fund’s approximately 4,200 employees are eligible for public pensions, but the state would survive that, too.

Lawmakers would argue that the State Fund’s quasi-governmental status makes it subject to scrutiny, like legislative oversight and sunshine laws. But if there’s one thing both the Times story and recent history have shown, it’s that oversight isn’t really happening and if it is, it’s not effective.