Compensating Permanent Workplace Injuries

A Study of the California System

by Mark A. Peterson, Robert T. Reville, Rachel Kaganoff Stern, Peter S. Barth


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Workers in California experiencing injuries at work that result in permanent partial disabilities (PPD) are eligible to receive compensation. The workers' benefits, doctors' and attorneys' fees, and the system that processes the hundreds of thousands of annual claims cost employers billions of dollars each year. This report evaluates the workers' compensation system by examining its efficiency and the adequacy and equity of its benefits, and suggests system reforms. The authors conducted interviews with system participants and found that the system is still troubled by many of the same problems that plagued it before the 1989 and 1993 reforms. It remains overly costly, complex, and litigious while delivering modest benefits. The authors estimated the wage losses of PPD claimants in 1991-93, and found that even after five years, the injured workers earned considerably less than controls. In addition, injured workers experience considerable time out of work, not just immediately after the injury, but also after the initial return to work. The authors identified particular problems among claims categorized by the workers' compensation system as "minor," the vast majority of claims. For this group, wage replacement rates were lowest. Reform proposals include an elective fast track to streamline claims processing, and a revision to the disability rating schedule to improve the relationship between wage loss and benefits paid.

Table of Contents

  • Chapter 1


  • Chapter 2

    The History of Workers' Compensation in California

  • Chapter 3

    Other States' Experience with PPD Programs

  • Chapter 4

    Understanding Process Issues, Participant Values, and the Outcomes Associated with Recent Reforms

  • Chapter 5

    Benefits, Wage Loss, and Benefit Adequacy

  • Chapter 6

    The Validity and Consistency of Disability Ratings and the Equity of Compensation

  • Chapter 7

    Processing PPD Claims

  • Chapter 8

    Policy Issues and Recommendation

  • Appendix A

    Commission on Health and Safety and Workers' Compensation 189

  • Appendix B

    Advisory Group to the Commission on Health and Safety and Workers' Compensation

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