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| | WCIRB First Messes Up Statistics--Then Doubles Cost Savings Prediction To 7 Billion For Work Comp In 2004
By John Franklin - March 17, 2004The reform savings calculations resulting from the late last year (September 2003) Reform and subsequent predicted figures were recalculated by the Workers' Compensation Insurance Rating Bureau (WCIRB) and found to contain egregious errors which retranslated into a newly predicted potential savings for this year, 2004. The prediction in savings is to about 7 billion dollars overall for the Workers' Compensation system.
Governor Arnold Schwarzenegger's camp appears to be happy to hear this news, but according to his spokesman, Vince Sollitto, these new savings estimates are "welcome to a certain extent" but nothing to write home to Mom about. He further stressed, "they (the newly predicted savings numbers) should not dissuade or distract us from the larger need for major systematic reform."
The governor, according to Sollitto, prefers a legislative solution over an initiative on the November ballot. Schwarzenegger almost daily is meeting with employers, labor unions, legislative leaders, and technical experts. He is optimistic he will succeed with a quick passage of a reform law.
Schwarzenegger has moved his self-imposed deadline for Workers' Comp reform to March 31st from March 1st.
The San Francisco-based insurance rating bureau said it arrived at the higher savings estimate after discovering it had made an error in its earlier cost calculations. A memo explaining the mistake, signed by Dave Bellusci, a top bureau executive, blamed it on two factors: underestimating medical cost savings and overestimating the number of employers who are self-insured. |
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