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Published: September, 2004; Vol 1, Num 4


Workers' Comp Outcomes Compared

Everyone complains about the Workers’ Compensation system, but is it really that bad?

Well, according to a new report card issued by the Work Loss Data Institute, it all depends on where you live and work.

The systems of California, New York, Delaware, Hawaii, Oklahoma, Rhode Island, West Virginia, Wyoming and Puerto Rico all received failing grades. California and New York got “F”s in each of the past three years. Another big state, Texas, moved from a “F” in 2000 to a “D-“ in 2002. New Mexico had the biggest decline, going from a “B+” in 2000 to a “D” in 2002.

On the other hand, Utah, Indiana, Minnesota received “A”s for each year, and Georgia, Iowa and Virginia got “A”s in 2002. Alabama was the most improved state in the union, also earning an “A” in 2002.

These outcomes and an array of support data are contained in 2004 State Report Cards for Workers’ Comp. The book is available from the Work Loss Data Institute for $225.

In a “Background & Methodology” report, the authors write that two major “drivers” affect workers’ compensation costs.

The first is outcomes, specifically the success within a state in preventing injuries, and when they occur, the success in returning the injured worker to health and productive endeavor, thus avoiding prolonged absence and medical treatment costs. The second driver of these costs is administrative burden, sometimes referred to as the “friction” inherent in that state’s workers’ compensation system. “Friction” is the accumulation of rules, procedures, disputes, delays, discretionary charges and patterns of practice, including lawsuits, that press upon the resolution of claims.

The 2004 report focuses on the first driver, outcomes. Six variables were compared:

  • Incidence rates
  • Cases missing work
  • Median disability durations
  • Delayed recovery rate
  • Key conditions: low back strain
  • Key conditions: carpal tunnel syndrome

Clearly, states could learn from each other’s experience. The report notes that “if the ‘worst’ states had controlled incidence as well as the ‘best’ states, their number of lost time cases could be cut to one-third of what they are.” Similarly, the number of lost work days in the ‘worst’ states could be cut to one-quarter of what they are.

More information on the report is available at Disability Durations.

[Steve Clark]