How to Reduce Disability Costs

Randy Leonard

I want to ensure that the ongoing discussion of the changes needed in the fire and police disability system remains constructive. I was going to respond to a comment by Betsy in my earlier article on this subject, however, I think her concerns deserve to be addressed in a separate post.

In part Betsy said

"...some joker who got injured X number of years ago and now owns his own restaurant is STILL collecting a fat pension. On my dime? Come on!"

The firefighter who owns a restaurant and collects disability is a good example of the kinds of changes that should occur in a reform of the disability system. Although his disability benefits are offset by the earnings he reports from his restaurant, the charter-defined formula for the offset may be overly generous and needs to be reevaluated.

Unless, however, he is not accurately reporting his earnings, this is not an example of abuse, but of an adjustment that needs to be made to the charter. It is true, though, that in any system you will find people who abuse it. Those people should be sought out and dealt with harshly. But a few bad apples do not warrant scrapping the entire system. Officers and firefighters who receive serious –and some times life threatening- injuries while performing their duties must be treated fairly as they recover.

In fact, the major factor that causes the Portland disability system to cost more than others is not the amount paid to individuals who are injured. Ask any disability expert how to keep costs down and he or she will tell you the importance of keeping injured workers on the job. Effective early-return-to-work and limited-duty programs reduce disability costs by keeping employees connected to the work place. Every single day an injured worker is off the job diminishes his or her chances of ever returning. So why are Portland’s fire and police disability costs so high? It’s simple. The Police and Fire Bureaus make an unrealistically low number of limited duty positions available to injured officers and firefighters. They do not have early-return-to-work programs.

In every other bureau in the city and every other fire and police department I am aware of in the United States, injured workers are put to work doing what they are capable of while they recover from an injury. This makes good sense from a human perspective, but also from a financial one.

Most employers feel the pain of having injured workers off work receiving disability benefits… in their pocketbooks. But not the Police and Fire Bureaus. The Portland fire and police disability system is funded by a levy separate from the general fund. The downside of that funding mechanism is that there is absolutely no cost to the Fire and Police Bureaus when a worker is injured, a consequence that is unheard of in any other private or public sector workplace. Thus, there is no incentive for these two bureaus to bring an injured person back in a light duty position….so by and large they don’t.

That funding phenomena (and the resulting lack of return-to-work options) is the one factor –more than any other- that causes the costs to be phenomenally higher than what other comparable cities experience.

Knowing that, I proposed a budget note two years ago that required the Fire and Police Bureaus to identify positions that could be filled by injured firefighters and police officers. As a result, for an example, the Police Bureau opened an entire new shift of telephone report-writing unit positions and filled them with injured officers who had, until then, been collecting disability payments.

Within my own bureaus I have asked for a report on every vacancy that exists and given direction to the bureau heads to put firefighters and police officers receiving disability payments into whatever light duty positions we can identify.

All of the information conveyed in this post is information I conveyed to the reporters who did the story for the Oregonian. Unfortunately, they apparently thought those efforts of mine were irrelevant to the story they were writing.

I actually appreciated the tone and tenor of the Oregonian editorial today. I do think I have a special responsibility to work proactively and constructively to fix the problems that exist within the disability program for firefighters and police officers. As a result, I began today crafting an ordinance that would require every bureau within the city to identify positions within their bureaus that could be staffed by injured but recovering firefighters and police officers. I believe that if we put to work every injured firefighter of police officer that could do some work we could reduce our disability costs by at least half.

I will post more soon about the progress I am making in developing that ordinance.

  • (Show?)

    Randy.... Thanks for posting this. You're right: the lack of a direct budgetary incentive for police & fire to put injured workers on light duty means that they won't.

    Here's a suggestion for creating a financial incentive: When the police & fire bureaus find a light duty job for an injured worker, the salary for that person could be paid out of the disability fund. In other words, if you put an injured firefighter or police officer to work, that's a "free" position on your budget.

    Of course, we don't want to create a reverse incentive - so perhaps the salary should be limited to what they'd otherwise draw via disability benefit (plus some x percent?) Perhaps we could even open it up to other city bureaus - there must be work in other offices that injured firefighters/officers could do.

    Ultimately, it's all the same money - taxpayer's money - so if we can (for once) use some budgetary trickery to create an incentive to save money and be more humane, well let's do it.

  • Randy Leonard (unverified)

    Actually, Kari, that is exactly the kind of mechanism I am developing in the ordinance.

    I am thinking a three way salary cost split may make sense; 1/3 from the disability fund 1/3 from the bureau the injured worker is assigned to 1/3 from the either the fire or police bureau depending upon which of those two bureaus the injured worker is from.

  • Steve (unverified)

    1) I thought the reason "disabled" police/fire did not go back to work was not so much the lack of positions available as much as once someone was injured he only had to find his own expert doctor to say he cannot work.

    Take Mr Hurley, as long as he can find one "expert" who says nothing physical besides running a restaurant 12hrs+/7daysaweek, no other expert can overrule his opinion. How about getting honest appraisals of ability to work?

    2) Mr Leonard again neglects to mention the pension plan that is mostly funded by property taxes and very little by workers contributions. This is much more of a liability like PERS since we fund the difference.

    3) Taking beneficiaries off the trustees list of the fund might give the fund a little more integrity.

  • Randy Leonard (unverified)

    Steve- The Tom Hurley case you read of in the paper includes only those portions that the reporters wanted you to read. There is much more to it than what anyone understands by reading what the article said.

    Having said that, if light duty jobs become available that heretofore were not, everyone, including Mr. Hurley, would be matched up to a job that they could perform without aggravating their existing injury.

    Presumably, Mr. Hurley will be offered a light duly job. If he refuses it, I would argue that his benefits should then be terminated.

  • Steve (unverified)

    I understand the need to provide jobs, tell me if it is not true that a claimant only has to have one "expert" say he can't work to make a claim? Can you not challenge his expert's opinion? If so, you can offer him jobs all day he does not have to take "legally." I respect your opinion since you set this thing up.

    This is what I got from the WW article. So it would not help to offer him a job if he still has a "valid" claim. I still think the actual contirbutions to the pension vs. payouts really needs to be addressed more.

  • ron ledbury (unverified)

    "Presumably, Mr. Hurley will be offered a light duly job. If he refuses it, I would argue that his benefits should then be terminated."

    Sounds harsh. All or nothing. Even the Workers Compensation laws can accommodate measuring a lifetime disability related to the loss of a finger. A limited injury does not explain a policy of total fitness or no work at all. Can you measure the lifetime difference between light duty pay and high duty pay and then cut a check and be done?

    This is not lifetime welfare but just a work related injury.

  • Jon (unverified)

    Officers and firefighters who receive serious –and some times life threatening- injuries while performing their duties must be treated fairly as they recover.

    By "recover" I hope you dont mean like the PPD officer that was "recovering" while working as Paul Allen's personal bodyguard. I hope you really do something about blatant abuses like that.

    It just makes the whole system look bad. As well as those officers and firefighters that really do want to recover, and not screw the public.

  • Randy Leonard (unverified)

    It is possible to have a Dr. say a firefighter or police officer is not physically capable of performing the duties of a firefighter or police officer but may be able to perform other jobs.

    Not pick on Mr. Hurley, but lets use him as an example.

    He does have a letter from the Dr. saying he cannot perform the duties of a firefighter (climbing ladders, going up multiple stories with heavy gear, etc.) but obviously he can work because he is running a restaurant.

    Therefore, the city can legally identify a job that matches what his physical capabilities are and then have him report for work. If he refuses, the city has the right and responsibility at that point to cease his benefits.

    That is not harsh. It has always been a tool that could be used that has not only because of the reasons I have outlined in my post above.

  • Steve (unverified)

    First off, cutting off his benefits if he can work and won't take an acceptable job is not harsh. You've provided an alternative at the same salary, so where is the harshness.

    You still haven't answered my original question - From the WW article if CW Jensen's Dr wrote him a note saying he cannot work at all and yet still is filming cop shows (which seems a case of fraud on the surface), can the CoP do anything to have their own impartial Dr examine him and challenge this other finding?

    This is usually the way it is done in almost all other medical disability claims.

  • Randy Leonard (unverified)

    I don't know what about my answer you don't understand, Steve. Saying a person cannot perform the duties of a firefighter or a police officer does not mean they cannot work. It only means they cannot perform the duties of a firefighter or a police officer.

    What I have advocated for years that has fallen on deaf ears is to offer these individuals jobs that their disability does not disqualify them from.

    Virtually no disabled person has a Doctors slip saying they can perform no work. It is almost always qualified with only being restricted from performing the full duties of a police officer or a firefighter. Those are physically demanding jobs. That does not mean an injured person could not provide security for the reservoirs, city hall, the Portland building, mow lawns in the parks, be a 911 dispatcher, etc.

  • Steve (unverified)

    OK, one last try. If someone finds a doctor to say, for example, you have stress and can't work in any kind of job with stress (which can be loosely interpreted) and then decides to make cop shows for 10+ years like CW Jensen, can the CoP have their own "expert" challenge that eval?

    Or does the CoP have to accept whichever "expert" a claimant can dig up?

    This seems to go to the crux of any fraduulent insurance claim.

  • Dave Lister (unverified)

    Randy, One question. What is your position on changing the system so that accumulated sick leave should be used prior to the onset of disability payments? Virtually all private sector disability plans are structured that way and most, in fact, have some waiting period beyond. Also, what is your feeling about disabilities incurred off the job? Thanks, Dave

  • ron ledbury (unverified)


    Your claim of raising the threat of termination of both the employment and the disability claim at the same time is simply preposterous, in the legal context. Would you care to share your private communications with in-house or outside counsel on the matter? I would surely like to see their arguments, particularly those made in confidence and perhaps subject to attorney-client privilege. You are not prevented from revealing the details of legal advice to the public, only the lawyers are so prevented. You claimed, in your comment above, that your position was legally sound. I think you lied; or simply made it up out of whole cloth on a whim or based it on some misguided poohy.

    I'll try to make my case as straight forward and as clear is I can, for the moment.

    The instant that an injury occurs is also the instant that a claim for disability arises. Whether the insurer wishes to withhold payment upon that injury claim until the injured party reaches retirement age has zero evidenciary value as to the existence or non existence of the injury.

    Courts are confined to resolving cases based upon facts that are known here and now and cannot take into consideration contingent future events. The future event of the availability of positions offered by the employer and the injured party's willingness to accept such positions, against their will, is not even cognizable by the judge from the perspective of the claimant. The availability of light duty positions is relevant exclusively upon the terms of a contract between the employer and the entity from whom they obtained insurance, perhaps as a means of obtaining a reduction in the insurance bill.

    The fact that a city government can itself act as a self insurer does not eliminate the prohibitions upon a court to accept facts that are known here and now so as to render a final and complete remedy.

    If the city contracted with an outside insurance company to cover disability claims then the insurance company would make, as a business decision, their own estimates and projections of the costs associated with a deal between them and the city. The private insurance company would collect premiums based on that business judgment. Again, it would be a business judgment and the insurance company would have already received the money from the employer upon that contract. The proposal to cut off all disability payments, many years after the injury, if the injured party rejects a position offered by the city is designed to save the insurance company money . . . money that was due and payable (even if paid out as an annuity) but which they seek an arbitrary opportunity to escape the burden of paying.

    It is no less harsh than an employer that offers a pension to those workers who reach the age of 55 at that company but where the company routinely fires everyone on their 54th birthday and thus avoids paying a dime in pension to anyone at all. It is as if there where no pension at all. Here, it is as if there is no disability coverage all. The contract between the employer and insurer to include a reduction based on the availability of light-duty positions has grown to mean, instead, that the sole coverage for actual injury is the availability of lifetime light duty positions. The payments for disability would never materialize at all, none would exist other than the cost of medical care while someone is undergoing treatment. After which there is no payment at all, but for the availability light duty positions. There is thus no need for a disability payment because none is ever made. The cost of disability insurance, via a private company, would thus be a big fat zero.

    If I where an employer I could find many fine jobs that could encourage someone to quit, so as to escape the burden of covering for the actual injury which someone incurred years before.

    For context . . . If I were a private insurance company offering insurance to many many companies, and governments, I could then use the City of Portland as the example to say that I do not need to make any payments at all on any permanent partial disability claims, ever, because all I need to do is find them a light duty job, any job any where, upon my own arbitrary discretion for which the disability claimant must accept upon the pain of loss of any future claims for their past injury. This is such a dramatic shifting of the goal posts, by the insurer to save money, that it has become the equivalent of slavery. How can I make this just a slight bit clearer? If wheel-chair bound former firefighter A and B each want to open up a restaurant and A becomes wildly successful and B flops the disability insurance company wants to pretend as if A's success equates to the lack of the existence of an injury from the very start, it is as if A does not now have to rely on the use of a wheel-chair. It is a fiction so grotesques as to be absurd in the eyes of the law. The slavery angle is that the city would like to go one step further in grotesqueness and not even allow the wheel-chair bound injured firefighter A and B to have the opportunity to go open up a restaurant without first giving up all disability claims . . . . without regard to an examination of whether they would or would not become successful. And without regard to the propriety of whether the success of A should become a windfall gain to the insurance company. Remember the insurance company had already made a business judgment about premiums and now only wants to keep those premiums for itself by trapping the injured party into a legal box for which the only escape route is to quit or work as a slave, upon the penalty of conversion of their permanent partial disability into a temporary partial disability.

    Randy Erik, et al, you need to clearly define when you are wearing the hat of government employer and when you are wearing the hat of insurer. Your cut-off plan fully and completely eliminates the the very existence of any disability insurance at all.

    If you would care to release any private legal advice to the contrary, particularly as to the legality of the proposed Charter Amendments, then make them available together with the names of the lawyers offering that advice.

    The political support of the Portland Firefighters Association to the proposed amendments and perhaps inclusion of agreement to those terms within a Collective Bargaining Agreement would be of absolutely no consequence from the perspective of the injured firefighter that is faced with the work-for-the-city or quit option unless the position that is offered is that of a full fledged fire fighter. The bargaining unit does not include persons that are no longer firefighters and, I would argue, prohibit the inclusion in a Collective Bargaining Agreement of agreement to the proposed law as it pertains to currently healthy firefighters once they are prohibited from return to full duty.

    I think you had better get some legal advice or at least find better legal counsel. And, by all means, share that advice here or via some other means. The inclusion of your junk law into the Charter acts only as a restriction upon the scope of initiatives and the scope of City Councilor actions but adds not one tiny bit of added oomph from the perspective of a judge to rule on its' absurdity.

    See Sten puts forward fix for police, fire fund.

    Signed, The Court Jester

  • Randy Leonard (unverified)

    Slow down a little and read what I wrote carefully and you will see why I did not need any legal advise to come to the conclusions I did.

    A doctor may say a person is disabled from performing full duty as a firefighter or a police officer. That is not the same as saying the person is disabled from doing <u>any </u> work.

    Obviously, I would not support having a disabled person perform any work a doctor prohibited them from performing that may aggravate their injury.

    However, almost all doctor letters that I have seen for hundreds and hundreds of disabled firefighters and police officers say, within the letter, that the individual is disabled from "full duty" in police or fire work but may work "limited duty" (meaning predictable tasks that will not aggravate the injury) for the duration of the persons injury.

    Therefore, the challenge is not requiring the person to come back to work, it is in identifying positions for the individual to come back to work to.

    If a suitable job is offered to an injured person that does not aggravate their injury, and the person declines the job, it is then within the authority AND the responsibility of the pension fund to cease paying benefits.

  • ron ledbury (unverified)

    I am not saying that is not logical, mathematically, to see that restricting someone's liberty to choose whom they work for after sustaining a debilitating injury would not result in savings to the city. Any insurance executive would jump for joy if they had the power of a local government official to declare such action as consistent with public policy and thereby entitled to the judicial presumption (albeit rebuttable) of lawfulness.

    I am not contending that an injured firefighter is not capable of any work or even disputing whether, through their own efforts, that a wheel chair bound person cannot potentially make ten times more than if they had never been injured and remained a fireman, uninjured, until retirement.

    I am contending that you cannot extract from them an agreement to relinquish an inalienable right to choose to work where ever they may choose. Uninjured fireman are not prohibited from simply leaving their jobs and moving on. An injured fireman should retain the same freedom to move on as do the uninjured fireman. Your plan to keep the injured fireman tied to work or forever give up their disability is extraordinary beyond belief, particularly in regard to the extraction from them of an abandonment of individual liberty.

    I don't care what positions you might find. I don't care whether you would pay the same salary of a full fledged fireman, complete with all comparable raises. Those are not the issues. There is the risk too that someone could find what I call "Catch Basin" duty. Have you ever been handed a pair of rubber boots and a shovel and told to clean out the catch basins on a street as part of a paver's punch list? It is messy and stinky no matter the pay. There must be a long list of similarly unrewarding jobs available, and the choice of which ones to present to able bodied but injured former firefighters would not be that of the injured party but based instead upon the whim (arbitrary and capricious decision) of a potentially unscrupulous boss. You could try to carefully control the manner of the selection of the alternative positions that are offered but the whole regime itself would remain invalid, in total, because of the restriction on the liberty of the injured former firefighter.

    Exploring the outer limits of the scope of governmental power to interfere with contract rights is nothing new. See CHICAGO, B & Q R. CO. v. MCGUIRE, 219 U.S. 549 (1911) for a list of cases and a good survey, albeit historical, of some competing interests.

    You need to refine and expand your notion of liberty, inclusive of choice of occupation. See MEYER v. STATE OF NEBRASKA, 262 U.S. 390 (1923).

    I would say that the liberty to contract, and acceptance of terms of employment as a Portland firefighter, does not go so far as to agree to effectively postpone seeking a final judicial resolution of a disability claim until one has reached the age of retirement so as to measure the actual damages, that is, so as to scale the liability up or down based only upon one's earnings as a non-fireman either within Portland or in some private capacity off the Portland payroll. The claimed right by the city of Portland to compel future employment by the city of Portland, or to disallow any disability payments where employment is not sufficiently gainful to escape disability payments, is an unlawful threat designed to do nothing more than to convert such threat into a supposed valid agreement (a new agreement) to settle for a lower amount than one would otherwise consider to be reasonable.

    Don't get too hasty. Like I said . . . tell me what attorney gave you some convoluted advice and can I see it? You can act like Diane Linn any time you wish, and claim powers beyond that which you poses, but it is still unbecoming. Offering a plan for a Charter Amendment makes it no less unbecoming, and just extends the time period of embarrassment that you should feel.

    Go back to the drawing board and craft something that can be addressed in a court to achieve finality sometime within the first two years from the occurrence of an injury. If the Portland Firefighters Association does not insist upon the same position then they leave the door wide open to a new advocate for the interests of labor, at least as those those that get injured on the job.

  • allehseya (unverified)

    Uhm....I'm not sure that I've wrapped my head around this sufficiently to comment intelligently but I'll risk it anyway.

    Randy seems to be interested in keeping the injured party employed within the limitations dictated by a doctor while Ron seems interested in ensuring that the injured pary has the right to choose the kind of work performed.

    Randy appears to be saying that if adequate work is offered within limitation - And - turned down by the injured party -- the benefits would cease. Ron appears to be saying that this infringes upon the worker's liberties.

    So -- why not have the benefits be applied to training the injured worker in a field of his or her choice over a specified period of time until training is complete and the worker is certified as well as physically able to do that work?

  • ron ledbury (unverified)


    You want a mathematically logical answer?

    A fireman that is injured but that is no longer tied to the city beyond two years is also no longer tied to the pension system. But that is off the topic of the "disability" issue that Randy wants to focus on. Randy wants to keep them tied to the city so that they can also benefit from the pension system, but that is why he can't see the disability issue in isolation. Does any fireman, injured or not, have the lifetime right to participate in the pension system for life . . . even if they are fired due to lack of funds? I repeat, Randy can't think straight on the "disability" issue because his head is filled with the "pension" issue. The opportunity for light duty jobs is so that the injured party can still be in the pension system. That is a mighty fine way to mix match our apples and oranges into a fruit salad of an analysis. (I could toss in more fruit, such as the PERS tangerine, or the preference for firemen among the bargaining units of non-fireman peach , , . and then drop them all into a blender and we can then have ourselves a fruit smoothie to drink.)

    Two years to resolve the disability issue and be done I say.

  • Randy Leonard (unverified)

    So, Ron, you are arguing that a firefighter or police officer that is paralyzed from an on the job injury (auto accident, shot, falling through a roof) is cut off from all benefits after two years?

    I do "think straight" on diabability issues. However, I am not heartless on the topic.

  • ron ledbury (unverified)

    I am saying they should not have to wait until they reach retirement age to get a final legal determination, being forever exposed to the whims of today's and tomorrow's politicians.

    This is quite a different thing than saying their disability benefits cover only two years. Much different. (The allusion to an interpretation that allows for benefits for only two years is rather odd and absurd in itself. Wake up, and have some coffee. No wonder I am having a problem reaching you.)

    I am saying they need their day in court, on the disability issue.

  • ron ledbury (unverified)

    In simple terms, Randy's position (as I see it) is that of an insurance company looking for a gimmick to not pay for coverage for which they have already received premium payments. Were the city of Portland a private entity a jury would throw the book at the them so hard and so fast they would not have a chance to even blink.

    How much would the city of Portland have to pay to an outside firm to obtain disability insurance under Randy's plan? A big fat zero, for there would never be any pay-offs other than where the city fails to find some grunt work some where, any where.

    There can be no offer and acceptance, pertaining to a settlement deal, unless the injured party has the freedom to refuse the offer. Randy wants to use the law to make refusal of the offer not an option, which definitionally removes an essential feature of any contract, inclusive of a settlement agreement, to have validity. It is thus inherently irrational; or simply absurd.

  • allehseya (unverified)

    Continuing in my attempts to wrap my head around the issue(s):

    Ok. So now I’m a firefighter and I fall from a ladder saving a child and now I cant walk around without pain. I have kids and a wife and I’m nearing 50 something. If I understand Ron correctly, I would not be eligible for pension funds if I’m no longer tied to the city beyond two years.


    I might be very grateful for Randy’s offer to stay employed with the City and continue to receive pension funds (afterall, I have a wife and kids to support regardless of the fact that I cant climb a ladder anymore). Of course, I will also appreciate Ron’s stance – as I may not want to become a receptionist after becoming so used to saving lives and the job offers the City may provide as my options could actually be that void of mind, body and spirit interest to me. day in court comes and I have to prove that I qualify for disability. The City makes an offer to keep me in the pension fund. I really just don’t see myself as a receptionist. I decline the work. My choice has consequences but I’m not sure what either my choices or the potential consequences are?

    If I turn down the work, will I at least continue to receive the disability, but not the pension?

    If I accept the work, do I receive the pension but not the disability?

    Is there anyway that the benefits can be applied to train me in some other realm (I did afterall, give up my legs in service to the City) – and once I’m trained and working in a new field, I’m done with collecting my benefits from the City?

  • allehseya (unverified)

    Actually -- the more I think about it -- I think that my lost legs deserve to be compensated even if I do have a new career. You see, it still hurts like hell whenever I walk.

    Ouch. Tough issue.

  • allehseya (unverified)

    Yeah, I think I agree with Ron. If I were an injured firefighter, I'd want to know what's going on with my disability claim within a two year time-frame. My wife and kids need that assurance and it's the least the City can do in exchange for my legs -- I mean: service.

  • ron ledbury (unverified)

    allehseya | August 6, 2005 01:48 PM

    "If I understand Ron correctly, I would not be eligible for pension funds if I’m no longer tied to the city beyond two years." ["I" is used figuratively.]

    The pension stuff would remain as before. If positions were made available, but not compulsory, at full fireman pay then the hoped-for gains from the fireman's pension system would not be diminished. It would be as if there was no injury at all, someone would have just changed job titles. Randy's position could be viewed as rational as a means of treating injured and uninjured firefighters alike with regard to the pension options from the day a firefighter starts work until they reach retirement age. But he can only go so far as to make the offer of light duty (an offer that can be refused). The pension issues of an injured and uninjured firefighter would remain identical were the city to merely extend the offer of light duty . . . . which does not itself rationalize or justify making acceptance apply to the disability benefits in addition to the pension benefits, nor rationalize making acceptance mandatory upon pain of loss of disability benefits.

    I know I need to improve my 9th-grade-algebra-story-problem writing skills, and my spelling and my editing skills too, but . . .

    . . . hopefully Randy can still glean something useful from this so as to explain and justify a reversal of his public statements supporting the threat of cutting off disability payments for injured firefighters for refusal to accept light duty positions.

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