Narrator: Every state has its own unique workers' compensation system.

It turns out, Oregon has one of the best in  the nation. A system that benefits everyone,  

from employers to employees. In Oregon, claims per 100 workers fell by 68 percent since 1990,  

thanks in large part to the safety efforts of Oregon employers and employees. During the same  

period, premium rates for workers' compensation declined 78.8 percent. 35 billion dollar savings  

for Oregon businesses large and small. Oregon now has among the

lowest premium rates in the country;  but, it wasn't always this way.

Governor Ted Kulongoski: As  long as I can remember, every legislative session  

before 1990, late at night or early the next  morning ended in a fight about worker's comp.  

And not much ever happened.

Lisa Trussell: In 1989, the last bill  to die at the legislature was a worker's comp bill.  

It was highly contentious because there were lots of what I call "cottage industries" that were making  

a living off of the system. Employers were spending a ton of money. Our awards for disability were  

under average. We were at the low end: sixth highest in cost and at the low end on what we paid out.  

Bob Shiprack: I tell this story, and I'm not kidding, I have had grown men calling me at my house crying,  

trying to get out of the worker's comp system. It was easy to get in but you couldn't get out.  

Sheri Sundstrom: The workers would get caught up in this litigation  snarl and they just couldn't get out of it.  

And once they did finally have their  claim closed,

it didn't mean they had a job to go back to.

Eugene Derfler: We had problems with  workers comp. We had people getting on it,  

even though they weren't injured,  and couldn't get them off of it.  

The system was really a bad system, it  was really a disaster for the state.

The governor, he came up with this idea. He says, you know, the legislative process is not working.  

He says, I'm going to get half labor and half management together

and you're going to meet in my basement.

Governor Ted Kulongoski: We needed a group of people. Just employers, labor representatives trying to work this out.

Lisa Trussell: Once we got into Mahonia Hall and started talking, they came in with a whiteboard, and one of  

the members said if we were going to design the system today, based on  

what we know now, what would it look like.

Bob Shiprack: And then we broke the  system down into sections:

Benefit levels; safety; litigation; medical care - big, big ticket item there.

Lisa Trussell: There were several things labor wanted.  

There was probably 14 to 18 things that business thought should be corrected.  

And, I think that we hit almost all of them, if not all of them - all of what labor wanted, and  

what management also felt we needed.

Bob Shiprack: Three and a half months later we came up with a dramatic

document. Got it done, got it drafted, the governor called a one day special session of the  

legislature in 1990 and we passed it.

Jeff Gianola: Good evening  everybody, the Oregon legislature is in special  

session tonight working to reduce the cost of Oregon's workers' compensation system.

Julie Emry: That package is expected to save employers 400 million dollars

a year while still increasing some benefits to workers.

Narrator: The reforms made significant changes to improving safety, returning to work, managing medical costs

and putting medical professionals  in charge of care. The reforms included an emphasis  

on preventing workplace accidents by focusing on Oregon OSHA's role in workplace safety enforcement  

and education programs. And by requiring most employers to maintain a safety committee.   

They also established ombudsmen for injured workers in small businesses, advocates that help navigate  

the workers' compensation process. Today, there are fewer disputes. When litigation does occur,  

workers have rights to appeal decisions with an attorney, at no cost.

Bob Shiprack: The first thing that I noticed was a total change in attitudes

on the job about safety.  

Eugene Derfler: They did a lot of really good things in the bill,

like having safety committees, and I think the employers became a lot more aware that the  

cost of an injury was very expensive.

And so I think they were interested in making sure that  

they had fewer accidents also.

Sheri Sundstrom: There was a  drastic reduction in litigation in the State  

of Oregon, which means that the workers' claim goes faster, they get their benefits  

faster, they get back to work faster, they get back to their lives faster.

Lisa Trussell: For the company that I was with, we went from almost a million dollars in defense   

costs down to about $50,000. And our workers, since 

they knew we were self-insured, knew that that was money that was coming out of the

same pot for potential raises, capital improvements.

Lou Savage: Oregon has had some of the lowest workers comp rates  

in the country since the reforms have taken  place. But in addition to that the benefits  

that workers receive are really very strong. The  Mahonia Hall reforms, while they got into detail,  

really established some principles for the system.  One is return to work. It's so important that  

workers get back to work as soon as possible and  both management and labor are committed to that.  

The second is access to good medical care  both management and labor understand that  

in order to get back to work there has to  be good medical care on an ongoing basis.  .

Kimberly Wood: Oregon is one of the best workers' comp systems in  the United States. There's a balance between the  

what the employers are paying the services that  are being provided and and then the benefits that  

the employee receives. I think we've struck the  right bargain and the right balance in Oregon.

Narrator: One of the most groundbreaking reforms was  the creation of the management labor advisory  

committee or MLAC. The governor and legislators  looked to this committee for guidance on changes  

to Oregon's workers compensation system. Continuing  the legacy of the 1990 reforms the committee is  

still made up of five members from both management  and labor.

John Mohlis: Whenever a bill is introduced that has to do with the workers' comp system it is  normally referred to MLAC first to see if MLAC can  

take a position on it and if MLAC says "yup, thumbs  up we think this is a good piece of legislation," it  

doesn't automatically mean that it's going to pass  but it has a pretty good chance of passing, whereas  

if MLAC says, "No this is a bad idea" then it usually doesn't get much legs.

Diana Winther: The benefit of being in the MLAC system is that management and labor  have to come together to talk about something.  

There's a lot of systems in which  legislation is passed there's maybe  

debates on the house floor and some behind the  scenes activity but there isn't this same public  

discourse that's required before a piece  of legislation or a significant change can  

pass on to becoming you know implemented.

Jennifer Flood: I believe  through MLAC process versus without MLAC then

I don't believe that there would be as many voices  heard and as many perspectives heard through that  

process. MLAC provides that opportunity and then  can provide information to our legislators to  

make policy decisions.

Narrator: The committee is the reason Oregon has such a strong workers compensation system while businesses pay some of the lowest  rates in the country injured workers get some  

of the most robust benefits and everyone  gains from strong safety measures and an  

overall reduction in injuries. The management  labor advisory committee ensures balance so no  

single narrow agenda can drive changes to workers  compensation it's a system that works for everyone.  

I hope MLAC stays in place, and I would hope  that people from both sides of the aisle that  

come sit at the table, their intent and their  desire when they're sitting at that table is to  

do the right thing for the workers' comp system.  Our predecessors really dug in and figured out  

this is how we want this system to work and so for  for those of us on MLAC for those that come after  

the current members it's just so key that  we continue to keep those tenants in mind  

as we go forward it's town amount to our being  able to maintain the system the way that it is.  

Governor Ted Kulongoski: A lot of citizens believe, a number of  citizens, a large number of citizens believe  

that the legislative process just doesn't  work you can't do big things. I think what  

the Mahonia Hall group did more than anything  else it actually told the public the system works  

we can make your life better.

Lisa Trussell: I used to be involved  in labor negotiations and I always felt there was a winner and a loser.

Mahonia Hall was the first  time in my life that I saw you could do a win-win.

Special thanks to: Eugene Derfler Jennifer Flood Ted Kulongoski

Special thanks to: John Mohlis Lou Savage Bob Shiprack

Special thanks to: Sheri Sundstrom Lisa Trussell Diana Winther Kimberly Wood

Archival footage provided by KATU News

Produced in partnership with: Oregon Department of Consumer and Business Services Oregon Workers' Compensation Division SAIF