Vocational-Rehab Program Ineffective And Wasteful

OF Washington's human-services programs, none should help people more than the Department of Labor and Industries' (L&I) workers' compensation program. Yet, no state program draws more fire.

Workers' compensation protects workers and employers from the effects of industrial injury or illness. Injured workers get medical help and help returning to work (vocational rehabilitation). In exchange, employers can't be sued for most job injuries.

Workers' compensation is enormously expensive, but worth the money if it works. About a billion dollars are paid by L&I in benefits each year. Nearly $50 million go for vocational rehabilitation.

The program doesn't work.

The companies L&I pays for vocational rehab return fewer than one injured worker in three to work. The most-expensive vocational services, involving retraining injured workers, return just 17 percent of the workers served to work. Most injured workers returned to work go to jobs paying less than the job on which they were injured. Tens of thousands of people are directly harmed.

For employers, damage in lost money and anger at an arrogant, unresponsive bureaucracy is bad enough. But to injured workers, the cost - broken marriages, impoverished children, foreclosed houses, and fury at a system that has humiliated rather than helped them - is tragic.

For the past two years, L&I has tried to argue that problems with the system are due to bad law rather than L&I's performance. This is not true. L&I has willfully disobeyed the law since 1985, not exercising the care spending the people's money that folks use to purchase groceries. It sends injured workers to companies for vocational services regardless of the quality of their work. As a direct consequence, hundreds of millions of dollars have been wasted and tens of thousands of lives have been damaged.

In 1985, L&I was nearly bankrupt. Then, law was part of the problem, but L&I's performance was a main ingredient. The Legislature replaced the offending statute. Because the disaster L&I had just escaped resulted to no small extent from its poor procurement of vocational services, the Legislature required L&I to "establish criteria to monitor the quality and effectiveness of vocational services" and make referrals based on the monitoring.

Had L&I obeyed the law, it would have established criteria and monitoring in 1985, used the data to let its first contracts, and thus have started with high quality, effective contractors. These would have been encouraged to improve their services by L&I's referring more business to those who did the best job.

L&I has never obeyed the law and doesn't plan to any time soon.

-- Since 1985, L&I has let contracts five times and extended them another five. Not once has L&I let or extended a contract on the basis of quality and effectiveness.

-- Although castigated by the Legislature and the state auditor for not referring injured workers to vocational providers on the basis of the quality and effectiveness of the provider's work, L&I has not changed. While L&I implemented what it calls a performance-based referral system in June, analysis shows that it sets no standard of care for vocational services, confuses good with bad work, and there isn't even a requirement that it be used to refer injured workers for vocational services.

Behind talk of referrals are people who can't care for their children because they can't earn a living wage. Behind talk of employers are failed business. Behind all is the destruction of public trust caused by willful violation of law by a state agency.

It is tempting to respond to this by removing workers' compensation from L&I and giving it to insurance companies. Think of the roughly 2,000 bureaucrats who would be cut from public payrolls. Think of not having to deal with an arrogant, nonresponsive state agency any more. Tempting, but a mistake.

Workers' compensation is not like car insurance. Rather, it is the result of a deal between business and labor establishing a balance of justice that protects each from the excesses of the other to the benefit of all. It is essential then that workers' compensation be run by an entity with an obligation to render justice. Aristotle told us long ago that a government (and its laws) is good only if it renders justice. A private insurance company is good if it maximizes profits. It treats customers and claimants well if this maximizes profits. But state government has an obligation to render justice, and this is essential to workers' compensation.

Gary Moore, L&I's director, must quickly make his agency obey law and render justice. Because L&I's management is responsible for years of resisting legal compliance, Moore must fire some people. If he does not, his agency will continue to fail. If that happens, workers' compensation operated by state government in Washington may be a thing of the past, and all will suffer. But patience can only yield so much time, so many chances.

Bainbridge Island resident Samuel P. Harvey has worked at Labor and Industries since 1991. Since 1992, he has been responsible for monitoring contract compliance of vocational providers for L&I. He has a Ph.D. from the University of North Carolina, Chapel Hill.