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AS WE SURVEY state legislative activity on the tort reform, workers compensation and risk management fronts, we generally are very pleased with what is going on.
Health care legislative developments, though, are not as encouraging.
As we report this week, states continue to reform their workers compensation statutes-albeit at a more modest pace than a few years ago. States also are continuing to enact tort reform measures. Just as important, business groups are fighting legal challenges aimed at weakening or overturning reforms enacted years ago by several states.
At the same time, risk managers are in the trenches actively lobbying for more alternatives to the traditional market. That effort succeeded in Maine with the enactment of legislation to allow employers to establish captive insurers there. In North Carolina, they're fighting to assure that fronting arrangements aren't saddled with expensive and unnecessary new regulatory burdens.
On the health care front, however, managed care plans are under attack. They're passing measures that, if continued, eventually could undermine the ability of managed care plans to keep costs under control.
Looking at those three main areas of legislative activity, we're most encouraged about workers comp reforms at the state level. As we report, two states-Ohio and Kentucky-have passed major reform statutes. Just as significantly, several states-Connecticut, Maine and Massachusetts-beat back efforts that would have undermined previously enacted workers comp reforms.
In the tort reform area, no one would confuse the rate of legislative activity this year with the mid- to late 1980s, when state legislators responded to the liability insurance crunch of that period with dozens of bills intended to bring more balance and certainty to the civil justice system.
Still, Alaska, Iowa and Montana enacted comprehensive tort reform bills so far this year, while other states enacted smaller reforms. We think that is a decent record, especially given the fact that many other states have already enacted broad-based meaningful reforms in the past few years.
Of course, tort reform is not a one-shot deal. Business has to continue push for additional reforms as well as defend what already has been enacted.
The situation in health care is different. States continue to pile benefit mandates on insurers and health maintenance organizations. As we have said many times, those measures have more to do with the power of special interest provider groups than good health care policy.
States also are trying to undermine the efforts of managed care plans to hold down costs, such as by allowing patients to go directly to specialists rather than primary care physicians, who are supposed to coordinate care. Legislators also are mandating how much coverage health care plans should provide for specific health conditions.
To be sure, some managed care practices, such as forcing women out of the hospital within a day of delivering newborns, are outrageous and thus invite a legislative response.
Still, we're somewhat encouraged that state lawmakers are defeating other attempts to restrict sound managed care practices as often as they are passing them. We hope that's a sign that some legislators are beginning to understand that they would be better off not trying to micromanage the health care system. It's up to the business community to make every reasonable effort to persuade lawmakers that that's indeed the right approach.