IR# 94-25
Thursday, June 23, 1994

John Duncan
(415) 703-4590
Richard Stephens
(415) 703-5571

State's First "24-Hour" Health Care Pilot Project Launched

SAN DIEGO--State and local dignitaries gathered in San Diego today to officially launch California's first pilot project in which employers will contract with a single health care provider to treat all of their employees injuries and illnesses "24-hour-a-day," including work related injuries covered under workers' compensation insurance.

According to Lloyd W. Aubry, Jr., director of the California Department of Industrial Relations, the first project to be approved by the department's Division of Workers' Compensation under legislation signed by the Gov. Pete Wilson last year is a plan submitted by Kaiser Permanente of San Diego, dubbed "Kaiser-on-the-Job."

"Under this pilot project, participating employers are expected to enjoy reduced insurance premiums by contracting with an exclusive provider of health care for all of their employee's medical needs, including both industrial and non-industrial injuries and illnesses," he said.

At ceremonies conducted at Kaiser Permanente, Aubry, a member of Gov. Wilson's cabinet, presented honorary certificates to Maurice Alfaro, medical director, Kaiser Permanente; David Janssen, San Diego County Administrative Officer; Carl Decina, owner of Decco Castings; and representatives of other employers currently participating in this unique and cost effective method of providing health care to workers injured on the job.

"Traditionally, many employers offer a health care plan as an employee benefit, providing for the general medical needs of workers and their families," said Aubry. "However, every employer in the state is also required to have a workers' compensation insurance policy, which pays for work related injuries and illnesses, or be approved to be self-insured."

By contracting with one exclusive provider of health care for both types of medical treatment, employers should realize significant cost savings because, among other things, duplicative administrative procedures can be eliminated, he said.

Employees who opt to participate will benefit by having the same doctor or medical facility care for all of their medical needs. Medical treatment provided for work related injuries will continue to be provided without coinsurance, deductibles or premium copayment by employees.

Five San Diego based employers, including Kaiser itself, are currently participating in the pilot project. Of the other four: two are public sector, the County of San Diego and the Community College District, and two are private businesses, Decco Castings, a small manufacturer in El Cajon, and Wawanesa Insurance of San Diego; two are insured by the State Compensation Insurance Fund and three are self-insured; and three are under collective bargaining arrangements and have strong union support and approval for this change.

Other area employers are eligible and welcome to participate in the Kaiser project, and more are expected to do so. Under the authorizing legislation, employers participating in pilot projects are eligible to receive a reduction in their workers' compensation insurance premium rates, and it is anticipated that insured employers in the San Diego pilot will receive reductions.

Besides reducing administrative duplication and premiums, "24-hour coverage" has other potential benefits for employers and employees, said Aubry. It offers the potential of assured access and continuity of care, as well as less litigation over whether an injury or illness was work-related (and which insurer, the general health policy or the workers' compensation carrier, is liable).

The three year pilot program, one of the first in the nation to test this innovative approach, was authorized by Assembly Bill 3757 (Bronzan) and AB 1692 (Margolin), which allow pilots to be established in four counties. In implementing regulations adopted last year, the Division of Workers' Compensation chose Sacramento, Santa Clara and Los Angeles Counties as the other three.

Other proposals have been submitted and announcements of further approvals are expected to be made shortly.

At the end of the three year period, a study will be completed that reviews employer costs and other aspects of this innovative approach to medical care delivery, Aubry said.


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