BUSINESSto BUSINESS MARCH 2014 Change needed now in workers’ compensation By Rachael Petro need and deserve a workers’ compen- steadily rise. legislation specifies that reimburse- President/CEO, Alaska Chamber sation system that provides quick, ef- The most significant and growing por- ment for services must be billed under ficient, fair, and predictable delivery tion of workers’ compensation costs are the workers compensation statutes of the Wouldn’t it be nice if good intentions of indemnity and medical benefits for medical costs. The latest data shows that state where services are provided. HB automatically led to good injured workers at reason- medical costs comprise 75 cents of each 141 cleared the House before Valen- outcomes? Alaska’s work- able costs to employers. All dollar spent on workers’ compensation tine’s Day with strong bipartisan support ers’ compensation laws prove those things are included in benefits in Alaska. and awaits Senate action. The Chamber good intentions often aren’t the law’s purpose section (AS Fees charged for medical services supports HB 141. enough. 23.30.001). in Alaska workers’ compensation cases HB 316 was introduced Feb. 19 and One of the Alaska Cham- So what is wrong and how are often much higher than the same fee changes the way Alaska’s workers’ com- ber’s top priorities is enacting can we fix it? charged for the same service by regular pensation medical fee schedule rates are systemic changes to Alaska Systemic change will re- insurance. Overall, 76 percent of work- set. HB 316 changes the fee schedule to workers’ compensation stat- quire all employers, includ- ers’ compensation costs in Alaska are a system similar to those used by thirty- utes. This makes sense given ing businesses that profit from associated with medical costs. In addi- two other states. The proposed system our purpose in existing is to the current system, to rally tion to rising medical costs, legal costs incorporates the relative value for ser- improve Alaska’s business Petro around workers’ compensa- per case are rising and the retraining vices, including physician work, prac- climate. Workers’ compensa- tion principles that support program outcomes remain poor. tice expenses, and professional liability tion is a real issue affecting businesses evidence based treatment guidelines, Alaska businesses have successfully insurance, as well as adjustments by the of every size in every industry sector, direction of care, fee guidelines based reduced on-the-job injuries. Now it’s corresponding geographic practice cost making it an issue ripe for Chamber ac- on federal benchmarks, and an effective time to reform our workers’ compensa- index. The Chamber is evaluating HB tion. and streamlined dispute resolution sys- tion system to get employees back on the 316. The intent of Alaska’s workers’ com- tem. job and let businesses focus on growing While these bills do not encompass pensations law aligns with what employ- A reformed system can improve treat- their business — creating new jobs. all the principles the Chamber believes ers and employees want, but the reality ment programs, promote injury recovery Already this session the Alaska Leg- necessary to systemically change Alas- is the system isn’t working as intended and return to full employment by injured islature’s House Labor & Commerce ka’s workers’ compensation system — we and makes Alaska less competitive in workers and make Alaska businesses Committee has introduced several bills will support changes we believe move us creating and maintaining jobs. Alas- more competitive. The good news is that addressing the issue — House Bill 141 in the right direction. The Chamber will ka’s workers’ compensation costs are Alaska’s on-the-job injury rates have ac- and House Bill 316. It’s no secret that continue to advocate for comprehensive, the highest in the nation. Every Alaska tually been falling since the 1990s with Rep. Kurt Olson, chairman of the com- systemic workers’ compensations re- business, Chamber member or not, is successful improvements to workplace mittee, is committed to improving Alas- form. We believe Alaska can and must impacted by the fact that Alaska has the safety. In just that past five years along, ka’s workers’ compensation system. do better. highest costs of workers’ compensation there has been a 14.2 percent decline HB 141 eliminates the potential for in the entire nation. These costs make it in claim frequency. The bad news is workers compensation claims that are Rachael Petro is the President and Chief harder to do business in Alaska. that while on-the-job injuries have de- treated in another state to bill at Alas- Executive Officer for the Alaska Cham- Both employers and employees want, creased, the cost per injury continues to ka’s much higher allowed rates. This ber. Employee engagement never mattered more By Brad Osborne for employees. look at the numbers, it makes Think about that for a second. So how do I leverage this Chair, Alaska Chamber As owners, executives and sense. The way we get to the When employees get access to information? Here at NANA managers of companies we can numbers is to look at elections. the information that their em- Oilfield Services, we have em- Hey, employers. Talk to your radically improve the lives of Specifically, we can look at ployers have, they use it. ployees spread across the state employees. Why? Because they those we work with because the information sources that They appreciate it. They care what you think! they trust us. They know that employees find helpful when trust it. See Osbourne, Page 4 If you were lucky their trust won’t be deciding to vote. enough to attend the abused. Gregory Casey, in a 2012 Alaska Chamber’s How exciting is Harvard Business Review ar- annual conference in that? ticle, did just that. Casey cites Fairbanks last Octo- But that’s just employers as one of the most Save The Date! ber, you’ll remember one type of infor- credible sources of informa- Andrew Sykes. An- mation. The op- tion. In fact, 35 percent of em- drew is the chairman portunity to help ployees rank their employer Plan To Attend! for Health at Work the people we work as the “most credible source and spoke to us about with — and by ex- of information about political health and wellness tension, our com- issues and elections affecting Outreach Trip in the workplace. Osborne munities as a whole their job.” His statistical — isn’t limited to Thirty-five percent might Nome, Alaska presentation about the life- individual health and personal not sound like a lot, but we’re June 23-25, 2014 changing and life-improving wellbeing. talking percentage of the whole impact that employers can have I think that as employers here. Employers are competing Alaska Business Week on their employees was both we often try to keep our at- against media outlets, political impressive and humbling. work communications focused parties, blogs, social media, ra- Fairbanks, Alaska Why is it that employers solely on whatever task is cur- dio ads and more. July 27-August 2, 2014 can have such a dramatic rently at hand. To put it into perspective, long-term impact on the indi- We don’t want to intrude on 16 percent of workers rank me- vidual well being of employ- our employees with other infor- dia as most credible and only Fall Conference, ees while ad campaigns, pub- mation. Even if that information 12 percent for political parties. lic programs and fads fall so is related to the health of our That 35 percent is HUGE and Policy Forum & Awards Gala short? economy. guess what, it’s not nearly as Girdwood, Alaska That question can be an- Would it surprise you to high as it could be. October 20-22, 2014 swered, at least in part, by know that the majority of em- Thirty-five percent grows to statistics. And the statistics ployees want that sort of infor- 61 percent among employees Mark your calendars and check our website for show us that employers are a mation from their employers? who visit their employer web- details in the coming months at www.alaskachamber.com. trusted source of information It surprised me. But when you sites at least once a week. Page 2 • March 2014 • Business to Business – Alaska Chamber Why We Fly By Andy Rogers creation or production of every Deputy Director, Alaska Chamber asset and resource consumed by the state. Session is in and downtown A wise person whose opinion Juneau has been transformed. I trust once told me, “If you don’t Flights are full. Restaurants have a seat at the table, then are full. Hotels are full. Ses- you’re probably on the menu.” sion is in and everyone is com- That’s true for businesses. And ing to town with legislative wish when it comes to resource-ex- lists clutched firmly in hopeful traction states like Alaska, the hands. The Alaska Chamber folks that show up at the dinner is no different. Well… maybe table have voracious appetites. we’re just a little bit different. State spending has doubled in No one is paying us to show a decade. Not many businesses up. or families can say the same. So Most people who come to Ju- we need to be involved. It’s im- neau get paid to do it. To be fair, portant. I’m on that list these days, as It’s not enough to say that the well. It’s part of my job to be in legislative process is too diffi- Juneau. I get paid to sit through cult, or that it moves too slowly, hearings.