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EMPLOYER Spring 2001 • Vol. 1, No. 1 Back to Workers’ Comp By Jacquelyn Horkan he premiums Florida employers pay for Shebel and Stiles are both experts in work- workers’ compensation are among the ers’ compensation, having studied the system Thighest in the nation. The schedule of for more than 25 years. Stiles, a founding benefits paid to injured workers, on the other partner in the law firm of Stiles, Taylor & 2001 hand, is among the lowest. In other words, Grace, specializes in workers’ comp defense, Florida employers pay more while Florida while Shebel is also the president and CEO of Legislative employees get less. Associated Industries Insurance Company, Some of the other problems in our state’s Inc., a workers’ compensation insurance Preview workers’ comp system were spotlighted last carrier founded by AIF, which still owns the summer by the Workers’ Compensation major share in the company. That experience Research Institute of Cambridge, Massachu- informed the ideas embodied in the setts. The institute issued a report analyzing association’s 2001 reform legislation. benefit delivery systems in the eight states, The reform proposals are divided into including Florida, that account for 40 percent four sections: litigation, benefits, medical, of the nation’s workers’ compensation ben- and administration. Each element attacks a efits. The following are some of the conclu- warp in the system that drives up the premi- sions reached about Florida’s benefit delivery ums paid by employers while keeping the system: benefits paid to injured workers low. On its • medical cost containment services are used own each element will not achieve the goals more frequently and their expenses are set forth by Shebel, but woven together they higher will supply the much-needed correction What’s Inside • both litigiousness and defense attorney fees to the system. are higher Shebel expects the efficiencies and cost- • paid benefits per claim are higher, savings that derive from the litigation, Common Sense: particularly for medical care medical, and administrative reforms will Fish in a Barrel be sufficient to boost benefits to injured by Jon L. Shebel That is why Associated Industries of workers. Florida (AIF) is making workers’ comp reform “Part of what’s sending costs skyrocketing,” A Solution to the its top priority for the 2001 legislation session. he explained, “is the gaming of the system Nursing Home Crisis “Our key battle this year will be reducing by claimant attorneys. It’s not just their fees, by Randy Miller the costs of workers’ compensation,” said it’s the cumulative impact of each lawyer Jon L. Shebel, AIF’s president and CEO. wanting to send his client to this doctor, Issue Roundup “At the same time we want to increase then that doctor, then another doctor to by Jacquelyn Horkan benefits to truly injured workers and make the build up his fees and the benefits due to his system easier to use.” client.” AIF’s Team of AIF general counsel Mary Ann Stiles has Lobbyists developed AIF’s “Workers’ Compensation Reform Act of 2001” to help achieve those (Continued on page 12) The Business at Hand goals. A publication of ssociated Industries of Florida Service Corporation C o m m o n S e n s e to a plaintiff lawyer for suing a nursing home or ALF over any slight or grievance, even those that never happened. There has been much blame put on large nursing-home chains for creating their own financial prob- lems by spending lavishly when Medicare reimbursements were high. Perhaps they shouldn’t have depended on continued government largesse, but the fact is, they were simply exhibiting a natural response to an incentive. And so are the plaintiff lawyers who amass wealth by suing nursing homes Fish in a Barrel and ALF. But can we, honestly and intelli- By Jon L. Shebel, Publisher gently, allow that incentive to continue when hen Florida’s workers’ compensation it’s harming the patients that plaintiff lawyers law was first enacted in 1935, it was purport to protect? Wintended to replace the adversarial The situation in the workers’ comp system system of civil law — where dueling lawyers is similar. Just like nursing homes, lawyers for battle in a winner-take-all contest — with a injured workers often receive attorney fees far self-executing system of statutory administra- in excess of what they win for their clients. tion. Unlike long, drawn-out lawsuits, the In the case of workers’ comp, however, the workers’ compensation system promised damage done to claimants by their attorneys immediate relief to the injured worker. is more immediate. Workers’ comp claimant The employer bought an insurance policy and attorneys thrive on delay. That’s why claim- the carrier paid the benefits, specified in law, ant attorneys warn their clients not to talk to EMPLOYER to the employee that were necessary to return employers and insurance carriers. If disputes him to health and gainful employment. are resolved quickly and directly, the claimant Published by Associated Industries Over the years, this automatic system of attorney, at best, will get a smaller fee; at of Florida Service delivering benefits has been twisted out of worst, he won’t get anything. And while the Corporation to inform shape by claimant attorneys who only benefit claimant attorney is racking up billable hours, readers about issues (in the form of legal fees) when they turn the injured worker is not getting the benefits pertinent to Florida’s business community. workers’ compensation back into an he very well may deserve. © 2001. All rights adversarial system. Attorneys for injured Trial lawyers are not the only problems in reserved. workers aren’t the only reason for increased workers’ compensation and long-term care. PUBLISHER costs, but they are the driving force. That’s why Associated Industries of Florida Jon L. Shebel The same holds true for the nursing-home supports comprehensive reform legislation ASSOCIATE PUBLISHER and assisted-living-facilities (ALF) industries. for both. But all of the other reforms will Stephen B. Trickey One defense attorney has compared the come to naught unless steps are taken to EDITOR business of suing nursing homes to shooting thwart harmful and wasteful litigation. Jacquelyn Horkan fish in a barrel. Plaintiff lawyers can sue the There aren’t many of us who would say PUBLICATIONS nursing homes and ALFs for violations of a no to easy money, but Florida’s employers SPECIALIST broad and loosely defined variety of so-called and injured workers, its frail elderly and J. Gregory Vowell residents rights. They don’t have to prove taxpayers can’t afford to let trial lawyers go EDITORIAL OFFICES on shooting fish in a barrel. ■ 516 North Adams St. negligence on the part of the homes and Post Office Box 784 facilities. And here’s the kicker: the plaintiff Tallahassee, FL lawyer is guaranteed payment of his fees and Jon L. Shebel is president and CEO 32302-0784 costs by the nursing home or ALF. of Associated Industries of Florida Phone: (850) 224-7173 Fax: (850) 224-6532 In other words, the law doesn’t just pro- and affiliated companies E-mail: [email protected] vide an incentive to sue; it provides a reward (e-mail: [email protected]). 2 Employer Advocate • Spring 2001 A Solution to the Nursing Home Crisis By Randy Miller Editor’s Note: The following is the text of ment rates and cutting wasteful litigation. To find out remarks presented at the October 30, 2000, One of the quality-of-care issues facing more about the meeting of the state’s Task Force on the Avail- nursing-home residents is a direct result of long-term-care ability and Affordability of Long-Term Care in the financial problems, and that is inadequate industry and Tallahassee, Florida. levels of staffing and wages. In nursing homes, long-term-care as in almost any other business, personnel insurance, he speakers who preceded me spoke to costs represent the single biggest expense. visit AIF’s the financial situation in the nursing When a budget crunch comes, personnel Information home industry, and I defer to their costs are often the first that a business person T Center on greater expertise. I would like to address an is forced to cut. About 80 percent of all aspect of the financial situation that has a nursing-home residents are covered by the Web direct impact on all employers. Medicaid or Medicare, so nursing homes (http://aif.com) In a tight-labor market, employers seek cannot increase fees to cover budget and the “Caring every advantage when it comes to attracting shortfalls; they have no choice but to cut for the Elderly” and retaining good employees. That’s why so expenses. archive at Florida many are absorbing the rising costs of health As revenues drop and expenses related to Business Insight insurance; it’s the employee benefit that litigation increase, nursing homes operators Online everyone wants. have to cut those costs even more, trapping (http://flabusiness There is another insurance product that residents and employees in a vicious circle. insight.com). more and more employers want to add their Staffing nursing homes with higher numbers menu of employee benefits, and that is long- of competent and experienced employees term-care insurance. This field of insurance is will help improve the standard of care still in its infancy, but it is becoming more residents receive, but the facilities can’t do valuable as we Americans grow older. that unless they have the resources to pay People covered by long-term-care insurance wages that will attract those employees. will be able to select the setting they prefer And part of that solution is redirecting money when they need help, be it home-based care, and time away from litigation and back to assisted-living facilities, or nursing homes.

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