Workplace injuries and the role of insurance: claims costs, outcomes, and incentives.
Workplace disability and workers' compensation systems were designed in the first 3 decades of the twentieth century with 3 major objectives. The first objective was to reduce the inequities and uncertainties in compensating disabled and injured workers inherent in the previously existing tort based system. The second was to create appropriate employer incentives for safety by internalizing the costs of accidents to the firm. The third, and perhaps little appreciated at the time for its impact on the provision of care and the healing process of injured workers, was to introduce a no fault, prefunded insurance mechanism to guarantee certain benefits to workers injured on the job. Throughout its history, there have been periodic attempts to reform the workers' compensation system. During the past 15 years there has been a growing body of theoretic and empiric social science research that suggests that many of the attempted reforms have not necessarily worked as planned. Indeed, it has become clear that the workers' compensation system, through its varying financial incentives on the system participants, and the differing levels of information that are available, may itself play an important and perhaps not benign role in the outcomes and costs for treating injured workers. The existing research is summarized and some new evidence on the workers' compensation insurance effect is provided.
Durbin
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National Council on Compensation Insurance, Hoboken, NJ 07030, USA.
D000062:Accidents, Occupational / Q000191:economics*; D003365:Costs and Cost Analysis; D004608:Eligibility Determination; D006801:Humans; D014481:United States; D014942:Workers' Compensation / Q000191:economics*