Feedback 4/04

Good Comp, Bad Comp

Your article on the workers' compensation crisis ("Staying Alive," January) made a lot of dangerous generalizations. First, you seemed to be giving legal advice about workers' comp, when the rules in every state are different. For example, you stated that some small-business owners don't need insurance. Here in Illinois, that is not the case in almost every instance. Second, while rates have gone up, that is not because of increasing injuries but rather because the poor stock market has caused insurance companies to lose millions.

I am a small-business owner and entrepreneur, but I also get to see the effects of bad workers' comp laws on honest, hard-working people. Go to Indiana, Kentucky, New Mexico, Texas, Utah, Wyoming and many other states, and take a real look at how many people are going belly up over laws that allow their companies to discriminate against them. When your employer [can] send every employee to the same doctor who always says that the worker is fine, then there is a big problem.

I hope [your] future articles will show all sides rather than implying there is a crisis. The real crisis is greedy insurance companies that aren't regulated.

Michael Jay
Owner
InjuryLawyer
Finder.com
Chicago

After reading the article about workers' comp in your January issue ("Staying Alive"), I felt the need to comment. I have over 10 years' experience as a loss-control consultant for workers' compensation carriers, so I know a bit about the subject. I felt the article did not stress accident prevention enough as a way for reducing workers' compensation costs. If an employer [has no accidents] or only a few minor accidents, he or she will not have to worry about the high medical or litigation costs of claims. It's ironic that the author quoted a roofing contractor. I remember interviewing one roofing contractor who told me that having caused two employees to [become] quadriplegics in the past year was "not bad, considering [he] did 2,000 roofs last year." With so many employers having a disposable-worker mentality, it's no wonder their rates are so high. No amount of legislation is going to reduce the medical costs of caring for quadriplegics for the rest of their lives. Preventing those types of accidents from happening in the first place will.

Also, where did the author get the factoid that "older employees get hurt and sick on the job more often"? Based on my experience, older workers have fewer accidents because they are more experienced and less likely to take risks that younger workers often take. According to the latest U.S. Bureau of Labor Statistics reports, workers between the ages of 25 and 44 had 827,510 lost-time injuries in 2001, compared with 451,484 injuries for workers [aged] 45 to 64. Any way you look at it, younger workers have more accidents. Of course, older workers will likely have more occupational diseases, because it usually takes years of exposure to toxic chemicals before noticeable disease manifestation. If the employer had prevented toxic chemical exposure in the first place, there wouldn't be a disease in that older worker 20 years down the line.

Diane Herrera
Certified Industrial Hygienist, Certified Saftety Professional
Austin, Texas

Editor's Note: Our article inaccurately paraphrased statistics from the National Academy of Social Insurance. Older workers are not injured on the job more frequently than younger ones. However, when they are injured on the job, they tend to take more time off work than do younger workers (an average of five weeks, compared with about three and a half weeks for workers aged 25 to 44).

"Staying Alive" (January) was a timely article, but I'm afraid you missed the most important story. It was actually buried on [the third] page, where Paul Darely chose to control his costs at the source, using the same type of business plan most companies would require of any new aspect of business.

The bottom line is that properly managed, rising workers' compensation costs can be used to allow a company to gain a competitive edge rather than becoming an "uncontrollable" expense. The majority of your article discusses "reactionary" management, such as controlling provider fees. If you study the issue, provider fees should actually be increased if they are willing to provide timely information in a way that can be understood. It's "time" (or delays in time) that is the major cost-driving culprit.

John W. Shervey
President
John W. Shervey and Associates Inc.
Kent, Washington

Interesting article on workers' comp ("Staying Alive," January), except it should have been titled: "Laughing All the Way to the Bank: Tried-and-True Workers' Comp Bromides and PR Myths That Pit Employers Against Employees and Bring Ever-More-Obscene Profits to the Insurance Overlords."

Bob King
Via e-mail

Little Train That Could

I enjoyed the article "Beyond Basic Training" in the February issue. I believe that all business owners, of all companies small to large, should attend leadership training programs. An ongoing commitment to developing [yourself] is essential to being a successful leader and business owner.

I was, however, disappointed with one large aspect of the article. Three training programs were featured in the article. Each of these programs is sponsored and led by a large corporate entity. There are many entrepreneurial businesses that offer quality programs. This is Entrepreneur magazine. Shouldn't the magazine feature smaller businesses when possible? I believe that with better research, [Dale] Buss could have found many high-quality leadership training programs provided by small businesses.

Stephen Harap
President
Partners for Productivity Inc.
Downers Grove, Illinois

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