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Thursday, May 5, 2011 08:45 am

No agreement in sight on workers’ comp reform

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As if it weren’t already complicated enough to pass a workers’ compensation reform bill – what with unions, trial lawyers and the medical community so far allied together against major changes – there’s also a noticeable schism within the business lobby about what to do and how far to go.

This schism isn’t new. In one way or another, the major business groups compete against each other for members and, therefore, tend to tout themselves as the true leaders over the others. That sometimes friendly, sometimes not, rivalry intensified a bit since the Democrats won complete power in 2002.

The Illinois Manufacturers’ Association and the Illinois Retail Merchants Association are both run by political pragmatists who are far more interested in cutting a deal than taking shots. The National Federation of Independent Business is far more conservative, and the Illinois Chamber is sort of a hybrid of both. The IMA and IRMA have both appeared to be more willing to work closely with the Democratic majority than their counterparts. And that’s been the case with the workers’ comp reform negotiations as well.

The Manufacturers’ Association, for its part, has been attempting to cajole and drag the governor and the Democratic legislative leaders as far as it can to its side. The IMA is obviously encouraged by the progress. But, so far, the effort hasn’t satisfied the Chamber, and the NFIB is nowhere near on board.

Greg Baise, the IMA’s president, said last week that he knows he still has a ways to go before he can get a deal. And, he warned, if the business community is sharply divided, then the bill will likely fail. There’s no reason for Republicans to alienate the doctors at the Illinois State Medical Society and the Democrats to upset the trial lawyers and the unions if the reform legislation is decried as an empty sham.

That’s easier said than done, of course. But Baise believes, probably rightly, that Gov. Pat Quinn must take a far more forceful lead on the issue if it’s going to pass.

“The governor is the only person who can make this happen,” Baise said. Quinn, Baise said, needs to push this issue as far as he can toward the business’ side or “it won’t get done.” Baise has been taking that message to newspaper editorial boards lately, so we can probably expect to hear more on this subject soon.

There are some areas of compromise emerging, however. A bill pushed by the Senate Republicans which failed in mid-April included a section that allows business owners to choose the doctors who will treat workers’ comp-related injuries. The Democrats claim this is a killer political issue which they could use against the GOP if necessary. People want to choose their own doctors, so the issue can be framed in a highly negative way. The House Republican leadership is also said to be against the proposal, and they’re actively looking for ways they can climb on board a reform bill without completely freaking out the doctors, who contribute a whole lot of money to their campaign coffers. This issue may be one way to get them to an agreement.

But the distance between the two sides on this subject is more like a chasm. They don’t even agree on what caused Illinois’ workers’ comp costs to soar. Six years ago, Illinois had the 20th highest workers’ comp costs in the nation. By last year, it was the third highest.

Organized labor and the trial lawyers say the insurance industry is to blame for the high costs. The insurance companies, they claim, lost money in the Great Recession and stock market crash and are making it up by charging higher prices here.

The business groups say insurance companies are very competitive in this state and operate under low profit margins. Plus, why are our costs going up so fast and other states aren’t? That’s a good point. Instead, they say, medical prices have been allowed to skyrocket and none of the big reforms they wanted six years ago were implemented.

With the big recent blowup over whether Caterpillar would leave the state or not, workers’ comp has become a very high priority issue in the General Assembly. Legislators in both parties understand that something has to be done. But actually getting it done is a whole lot more difficult than it looks on the outside.

Rich Miller publishes Capitol Fax, a daily political newsletter, and thecapitolfaxblog.com.

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