Think of it as an unintended gift from Ald. Edward Burke to governments throughout Illinois: A private-sector company now will manage the City Hall workers’ compensation program that Chicagoans long described as Burke’s $100 million-a-year fiefdom.
Mayor Lori Lightfoot has hired an outside claims administrator to manage the program, which she aptly describes as vulnerable to corruption. Let’s see: For decades one alderman, his veins coursing as much with politics as with blood, oversees how the city doles out payments to claimants who say their injuries keep them from working. What could possibly go wrong?
A federal charge of attempted extortion against Burke roiled his, well, fiefdom in January. Mayor Rahm Emanuel moved workers’ compensation from the Finance Committee to City Hall’s Finance Department. Emanuel also launched an audit by accounting firm Grant Thornton. To the surprise of no one, a preliminary draft of that review has found “significant control deficiencies and weaknesses.” The audit describes inadequate controls to prevent cheating, insufficient training of employees to spot suspicious claims and no hotline that would let citizens report suspicions of fraud.
Lightfoot’s expectation is that Gallagher Bassett, a company that boasts of handling injury claims for some 4,800 organizations in 60 countries, will save Chicago taxpayers significant money by professionally evaluating claims, helping employees get back to work in reasonable time and perhaps reclaiming payments on fraudulent cases from the Burke years.
Just as important, public officials statewide stand to learn what happens when a big Illinois government puts an important backshop operation in the hands of an apolitical private-sector company accustomed to big caseloads.[
We’ll pause here while defenders of an ever-larger public sector dredge up stories of this or that company that didn’t do a good job for an Illinois government. But rising public opposition to property taxes, plus the enormous budget pressures driven by unfunded pensions, sooner or later will force Illinois governments to change how they do business. Think of all the backshop operations — payroll, benefits administration, purchasing — that private-sector contractors just might handle better, and for less money. At minimum, Chicago’s City Hall won’t incur pension expenses for Gallagher Bassett employees. That alone is a break for city taxpayers.Read: Audit of city’s $100 million-per-year workers’ compensation program »
So let’s all monitor how the company performs, and for what ultimate cost. We keep urging local governments to consolidate, to economize, to do what private-sector employers have been doing more aggressively for more years: Find new ways of serving citizens and employees.
Who knows, maybe this unanticipated experiment — this gift from Ed Burke — will show public officials and taxed-out citizens statewide that a lot of the work done in government offices ought to be done in the private sector. Gallagher Bassett, we’ll all be watching you.