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Mar
15

Regulations – the good and the bad

Work comp and healthcare are probably the two most highly regulated sectors of the economy – and yes I’m including the financial sector.

Over the last 25 years I’ve spent a ton of time with regulators, legislators, lobbyists and the government folks tasked with implementing those laws and regulations.

Here are my learnings…

  • < 5 state legislators know anything about workers’ comp, and only a smidge more about healthcare.
  • what legislators DO know is from mass media (healthcare) or lobbyists (work comp, because there’s never any mass media coverage of work comp)
  • the laws that pass (with some exceptions) leave much to the regulators
  • Regulators are mostly thoughtful, diligent, attempt to do the right thing and generally open to input.
    • There are some glaring exceptions – Florida being the most problematic.
  • That said they rarely – and understandably – fully understand the potential impacts of their rulings, with big consequence for injured workers, employers, and taxpayers.

According to sources that know a lot about financial regulation, the collapse of Silicon Valley Bank was due in large part to laws passed by Congress (with mostly R and some D support) that loosened capital and other requirements for a lot of banks.

Incompetence added fuel to the dumpster fire. Now staunchly-Libertarian Silicon Valley investors and business owners have suddenly become huge fans of central government intrusion into private business (what a bunch of %$#(*&># hypocrites).

credit New Statesman

From the LATimes:

venture investment firms…actually launched the run on SVB on Thursday, when they suddenly urged their companies to pull their deposits from the bank, triggering the $42-billion outflow. “And they now want the Taxpayer to bailout their investments…?! Capitalism, Silicon Valley-style.”

Tellingly, SVB dropped a half-million dollars lobbying to get those laws passed…and their CEO – a huge champion of de-regulation was the biggest champion.

Now we have what just might become a global financial problem that – with better US banking legislation and regulations – would never have happened.

What does this mean for you?

If you are a state legislator, find and talk with objective and informed people in each area you’ll be voting on.

If you are a regulator, do what you can with what the legislature gives you, but be realistic…work comp is <1% of US medical spend, so do NOT expect healthcare providers to do anything different for their work comp patients – even if your regulations require them to.

If you are a Federal legislator, think a lot more about some massive effort to shrink the government.

Those Silicon Valley Libertarians sure wish they did.

 


2 thoughts on “Regulations – the good and the bad”

  1. Scary stuff… I’d like to think state legislators have at least a basic understanding of workers’ compensation, but agree there may be variation in their level of expertise depending on their individual background, experience, and jurisdiction. I also encourage legislators to work closely with industry experts, labor advocates, and other stakeholders to gather information and insights that can inform their decision-making.

    1. Thanks for the note Nikki – I’ve only found a handful, and their knowledge was usually that of business owners and not experts.

      It’s a tough job – part time, constantly campaigning, and everyone wants a piece of you. Most are there for the right reasons. As sssssssssssssssssssssssdisappointing as the “system” can be, it is better than any other.

      best Joe

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Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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