Posts Tagged ‘California workers compensation’

S&P Warns that California’s workers comp woes are not over

Friday, August 27th, 2004

A recent report by Standard & Poor’s Ratings Services indicates that California’s workers comp problems may be far from over, and that downward pricing pressures threaten to throw the market in another tailspin. The report does not mince words, stating that insurance commissioner Garamendi is inviting “the same irresponsible behavior that caused the last crisis.”
From the Insurance Journal story:
“Much of Standard & Poor’s analysis centers on the California State Compensation Insurance Fund (State Fund, or SCIF), which has “soaked up like a voracious sponge business abandoned by other insurers’ flight or failure,” the report states. After a six-fold increase in premiums in just four years, SCIF’s premiums/surplus ratio reached the “very precarious” level of 3.7 for 2003, compared with a safe level of 0.9 in 1999.
“State Fund could be in serious trouble if pricing for newer business proves inadequate,” said Standard & Poor’s credit analyst Jason Jones.
Any failure of SCIF, which wrote more than half of California premiums in 2003, would bring into play the California Insurance Guarantee Association (CIGA), which pays claims against insolvent insurers and which has just taken the unprecedented step of borrowing $750 million in the bond market to keep up with its workers’ compensation burden.”

We’ve talked about California

Research: outcomes for injured workers

Wednesday, July 7th, 2004

This year’s NCCI Issues Report contains a report by Richard Victor of the Workers Compensation Research Institute (WCRI) of Cambridge, MA on WCRI’s ongoing study of injured worker outcomes in California, Massachusetts, Pennsylvania, and Texas. The objective of the research is to measure key outcomes that are frequently at the heart of public policy decision making:

  • recovery of health
  • successful return to work
  • injured worker access to healthcare
  • injured worker satisfaction with healthcare

Most interestingly, the highest per-claim medical expenditures and the highest frequency of visits do not necessarily yield the highest satisfaction by workers or the best outcomes.
“For example, workers in Massachusetts and Pennsylvania report better outcomes after their injuries, on average, than do workers in California and Texas. This includes better perceived recovery of physical health and functioning; more frequent, faster, and more sustainable returns to work; greater access to desired providers and services; and higher levels of satisfaction with their healthcare.
Better outcomes occur in Massachusetts and Pennsylvania even though workers in California and Texas receive more medical services, on average, that generate more medical expenses for employers compared with workers in the other states. Further, this occurs despite the fact that workers from each of the four states report, on average, similar perceived severity of injuries.”

One of the specific examples that the report cites is that Massachusetts, a state with some of the best outcomes, also has the lowest medical prices of the four states at $4,937; in contrast, Texas has one of the poorest worker outcomes, yet it has one of the highest medical prices of the four states at $11,617.
It’s a report worth your time to read. This is one of the first major studies to measure injured worker satisfaction and outcomes, and to measure them against a multi-state backdrop so that system variables can be compared and contrasted.
The annual Issues Report available at NCCI is always worth checking out. Also, we keep a link to WCRI in the sidebar – it’s a good practice to periodically visit the WCRI – What’s New page to keep abreast of their current research and reports.