Olympia Business Watch

Washington gears up for possible return of swine flu

It's summer time now, and the days are beginning to heat up.

But state health officials are thinking ahead to fall and what could be a busy flu season.

To help prepare, the state Department of Health announced today that Gov. Chris Gregoire has authorized emergency funding that includes $700,000 to buy additional antiviral medications to go with supplies already received from the federal Strategic National Stockpile.

The allocation also includes $150,000 that will be used to cover part of the costs of the response this spring when the pandemic flu strain was detected in Washington.

"There's no way to be sure what the next flu season will bring, yet we know that this global outbreak isn't over," Secretary of Health Mary Selecky said in a news release.

Gregoire and Selecky praised state health officials as well as local health providers for their response this spring.

But even though the symptoms of the outbreak this spring were similar to those of seasonal flu, Gregoire noted that the H1N1 flu was recently declared the first global flu outbreak in 41 years.

"It's wise to prepare for whatever the flu season brings this fall by ordering more antiviral medications now," Gregoire said.

AWB board members: Lower cost of health care, increase quality of care

The Seattle Times is the lastest media outlet to publish the guest editorial on health care reform written by AWB board members Don Conant and Judy Coovert.

In the piece, also published last week by The Olympian, Conant, general manager of Olympia-based Valley Nut and Bolt, and Coovert, co-owner of PrintCom, Inc., a printing company in Burien, express their skepticism about a potential overhaul of the nation's health care system by pointing to examples of state reforms that have not gone well.

States that tried to centralize control of health-care costs through price controls, penalties for employer nonparticipation, mandates and business sin taxes saw devastating results, they write.

On the other hand, states such as Florida, Georgia and Indiana that enacted reforms that promote market competition saw increased competition, price stabilization and epanded access to coverage.

"The idea that the federal government can save small businesses from the burden of health care by providing a government-run system is completely without merit," Conant and Coovert write. "These examples indicate that government does not do health care well. With this in mind, it would be a mistake to give government even greater control over health care."

Conant also spoke about health care reform last week on the KUOW radio program "Weekday."

You can download the program here.

Malpractice Litigation Needs to Be Addressed as Part of Health Reform

There is an interesting opinion piece in today's Wall Street Journal by Richard Epstein on addressing malpractice lawsuits as part of health care reform.  Epstein is a University of Chicago law professor, a senior fellow at the Hoover Institution, and a visiting professor at Law School. 

AWB, along with the Washington State Medical Association, has pushed for medical malpractice lawsuit abuse reform as part of a comprehensive tort or lawsuit abuse reform legislative package. The American Medical Association also is pushing similar reforms and during its annual convention asked President Obama to support medical malpractice reforms.  The President refused.

Epstein writes:

A study led by David Studdert published in the 2006 New England Journal of Medicine concluded that the administrative expenses of the malpractice system were "exorbitant." And worse, it found errors in jury verdicts in about a quarter of the litigated cases. Juries denied compensation properly due in 16% of the cases, and awarded it about 10% of the time when it was unwarranted. These error rates don't include damage awards set at improper levels.

More disturbingly, a careful 1992 study by Donald Dewees and Michael Trebilcock in the Osgood Hall Law Journal concluded that the frequency of medical malpractice in Canada was about the same as in the U.S. -- for about 10% the total cost. In other words, our costly system doesn't seem to do much to deter malpractice. On medical malpractice at least, Canada does better than we do.

The U.S. cannot ignore serious reform. To be sure, medical malpractice premiums constitute well under 1% of the total U.S. health-care bill. But defensive medicine adds perhaps as much as 10%. High malpractice costs can shut down clinics that serve vulnerable populations, leading to more patient harm than the occasional case of malpractice.

The solutions:  

The best reform would be to allow physicians, hospitals and patients to contract out of the liability mess by letting the parties reject state-imposed malpractice rules. They could, for example, choose to arbitrate, to waive jury trials, or to limit damage recovery. Stiff competition and the need to maintain reputation should keep medical providers in line in such a system. Market-based solutions that make the private sector more responsive should in turn undermine the case for moving head-first into a government-run health-care system with vast, unintended inefficiencies of its own.

Amen!

Don C. Brunell, President (DonB@awb.org) (Cartoon courtesy of The Wall Street Journal)

Brunell asks Gov. Gregoire to support proposed Skamania wind project

AWB President Don Brunell sent a letter to Gov. Gregoire last week asking her to support the Whistling Ridge Wind Project, a 75-megawatt wind project proposed by SDS Lumber Co.

Brunell told the governor that the AWB is taking the unusual step of intervening with the state's Energy Site Evaluation Council on behalf of the lumber company because of the precedent-setting nature of the project northwest of White Salmon.

Many potential wind generating sites are located in forest land areas, Brunell noted. In addition, I-937 requires 15 percent of the state's electricity to come from renewable generating sources within the Bonneville Power Administration service area, not counting hydro and some biomass sources.

In order to comply with the requirement, "projects such as Whistling Ridge must come on line as soon as possible," Brunell wrote.

The project is located outside of the Columbia River Gorge National Scenic Area, and has the support of the Skamania County Commissioners. It would produce enough electricity to power 20,000 homes, and provide an important generating source to replace Condit Dam on the White Salmon River, which is scheduled to be demolished.

The Friends of the Gorge and some folks who have moved into an area adjacent to SDS Lumber Co. lands oppose the project, even though it is clearly outside the scenic area boundaries.

Read The (Vancouver) Columbian's article on the issue here.

Buffett: Cap and Trade Hurts Utility Customers

Speaking on the "Cap and Trade" legislation like that which passed the U.S. House of Representatives on Friday by a scant seven votes (219-212), billionaire Warren Buffett told CNBC's Squawk Box that utility customers are going to pay the increased costs in the form of higher energy bills--that's your electric bill and mine. 

The Washington Congressional delegation voted 7-2 in favor of President's "Cap and Trade" legislation with Republican Congressman Dave Reichert joining Democrats Jay Inslee, Rick Larsen, Brian Baird, Norm Dicks, Jim McDermott and Adam Smith.  Only Congressman Doc Hastings and Congresswoman Cathy McMorris-Rodgers opposed the bill as AWB members requested.

AWB believes there are better ways to control carbon and greenhouse gas emissions which are based on incentives, rather than punitive regulations.  "President Obama and Congress are setting the government up to create winners and losers to reduce greenhouse gas emissions as opposed to encouraging innovation and creativity through market-based solutions. 

Hopefully, the U.S. Senate will stop this juggernaut.  Congress ought to stop and pass carefully crafted and thoughtful legislation rather than racing the clock to beat a 4th of July or Labor Day deadline for the President.

Don C. Brunell, President (DonB@awb.org)

Maybe it's time to re-think how workers' comp benefits are figured

Word today from the state Department of Labor & Industries that workers' compensation benefits will go up 3.4 percent beginning July 1 is surely welcome news for anyone receiving such benefits.

But for anyone who runs a business, it could be foreshadowing of a looming rise in workers' compensation tax rates.

It's not hard to predict that higher benefits will equal higher taxes.

In addition to the bump in wage-replacement benefits, the department announced a 4 percent rise in the amount it will pay out for a permanent partial disability.

In a press release, Labor & Industry officials characterize the benefit increases as cost-of-living raises. State law requires a yearly recalculation to reflect the change in the average wage from the previous calendar year.

That's fine. But the formula for calculating cost-of-living adjustments - which is based on the average annual wage of all workers in Washington - has resulted in unreasonable increases in recent years.

The timing of this increase - when the state unemployment rate stands at 9.4 percent - only underscores that point.

The "implicit price deflator" would make for a more reasonable formula, says Kris Tefft, AWB's general counsel and director of government affairs for employment law. Under this inflation-based figure, benefits would not have gone up at all this year. Even under the CPI for wage/clerical workers in Seattle, that index is in negative numbers in late 2008 and 2009.

It's something the Legislature ought to take a look at.

Brunell: Join the union - or else

In his weekly column, AWB President Don Brunell writes about a difficult choice facing Washington parents who care for their disabled children: Turn over the care of their children to someone else, or join the union.

The complicated set of circumstances leading up to this scenario can be traced back to a 2001 union-backed intiative that created a state home healthcare authority.

State lawmakers tried and failed in the last legislative session to find a fix. They could take up the issue again, but not until the Legislature convenes in January.

Meanwhile, the only winner is the union that stands to gain new members, income and clout.

Longview Fibre Recalling Some Laid-off Workers

Here is some "Good News" to start the weekend. 

From today's The Columbian:

After cutting its work force by 40 percent over the past two years, Longview Fibre Paper and Packaging Co. has hired about 25 workers because of improving sales. The mill currently employs about 1,020 people. That's up from about 1,000 employees at the beginning of the year. The company employed about 1,700 in 2007, when it was bought by Toronto-based Brookfield Management Associates. Longview Fibre Chief Operating Officer Randy Nebel told the Longview Daily News that about 20 of the 25 new hires are former mill workers who had been laid off. He said the company will add another 20 workers by the end of 2009.

In May, Cowlitz County had a 14.2 percent unemployment rate.

This is welcome news.  Have a great weekend! 

Don C. Brunell, President (DonB@awb.org)

Use this opportunity to fix health care system the right way

Steward's comments were part of a panel discussion that included U.S. Rep. Jim McDermott, D-Wash.; Jack McRae, AWB board chairman and senior vice president of congressional and legislative affairs for Premera Blue Cross; Fred Kiga, vice president of government and community relations for The Boeing Co.; and Cheryl Scott, senior advisor of the global health program for the Gates Foundation and former CEO of Group Health.

Waxman-Markey "Cap and Trade" Bill Does More Harm Than Good

According to today's Philadelphia Inquirer, while U.S. officials vowed to learn from Europe's mistakes on "cap and trade" as a means to control "greenhouse gas emissions, the bill sponsored by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.) has many of the same flaws and adds massive "offsets" that blow away the "cap" in "cap-and-trade." Offsets allow polluters to, for example, pay to preserve an acre of forest so they can continue burning coal above the cap. The concept's problems are legion and well-documented.

In Europe, cap-and-trade has failed to deliver on climate change. It yielded windfall profits for utilities, but few reductions in emissions or investments in clean technology, the newspaper says.

The American Petroleum Institute (API) is urging Congress to reject the Waxman-Markey bill when it comes to the House floor later this week.  In a letter to Congress today, API said:

"Although the goal of the legislation is well-intentioned, API believes that this bill poorly serves that goal and will cause great harm to the economy. A Congressional Budget Office analysis indicates that it could add as much as 77 cents to the price of a gallon of gasoline over the next decade. And, according to the Heritage Foundation, this legislation could cause gas prices to jump 74 percent by 2035. That means, at today’s prices, gasoline would be well over $4 per gallon."

 

And according to the Heritage Foundation, this legislation could cause gasoline prices to jump 74 percent by 2035. At today’s prices that means gasoline would be well over $4 a gallon. A recent study by CRA International for the National Black Chamber of Commerce also estimates a net loss of over 2 million jobs a year.

“This places a disproportionate burden on all consumers of gasoline, diesel fuel, heating oil, jet fuel, propane and other petroleum products,” Gerard said. “If you drive, fly, take the bus or the train, your costs are going up.”

In an e-mail to her constituents, Congresswoman Cathy McMorris-Rodgers (R-Wash) wrote: 

"I have serious concerns about this so-called "cap and trade" legislation.  At a time when our economy is hurting, taxing hard working families and small businesses is the last thing Congress should do.Instead of taxing energy,or instituting a trading scheme, I strongly support a plan that encourages responsible energy development, conservation and innovation.

This is another case where Congress needs to slow down and consider the consequences.  What's the rush?

 

Don C. Brunell, President (DonB@awb.org)