The Myth of Injury Prevention Incentives in Workers' Compensation Insurance

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References

Worrall

John D.

, ed. Safety and the Workforce Incentives and Disincentives in Workers' Compensation, Ithaca, NY: ILR Press, 1983, p. 2.

Worrall , Safety and the Workforce, pp. 4–5.

Baram

Michael S.

Alternatives to Regulation, Lexington, MA: Lexington Books (Heath), 19, p. 80.

Darling-Hammond

Linda

and Kniesner

Thomas

. The Law and Economics of Workers' Compensation, Santa Monica, CA: The Institute for Civil Justice, the Rand Corporation, 1980, p. ix.

Cheit

Earl

and Gordon

Margaret

, eds. Occupational Disability and Public Policy, New York: Wiley and Sons, Inc., 1963, p. 78.

Chelius

James R.

Workplace Safety and Health: The Role of Workers' Compensation, Washington, D.C.: American Enterprise Institute for Public Policy Research, 1977, pp. 17–18.

Cheit and Gordon , Occupational Disability and Public Policy, p. 78.

Darling-Hammond , The Law and Econorr.'cs of Workers' Compensation, p. iX.

Chelius , Workplace Safety and Health, p. 19.

10.

Darling-Hammond , The Law and Economics of Workers' Compensation, p. ix.

11.

Nackley

Jeffrey V.

Primer on Workers' Compensation. 2nd ed, Washington, D.C.: The Bureau of National Affairs, 1989, p. 1.

12.

Chelius , Workplace Health and Safety, p. 21.

13.

Darling-Hammond , The Law and Economics of Workers' Compensation, p. ix.

14.

The Commonwealth of Massachusetts had passed this country's first law regulating employer liability for industrial accidents in 1887, the Employers' Liability Law, and that action had helped to plant the seeds for the workers' compensation insurance businesses, as underwriters subsequently offered premiums to insure employers against losses incurred in the courts.

15.

Chelius , Workplace Safety and Health, p. 20.

16.

Darling-Hammond , The Law and Economics of Workers Compensation, p. x.

17.

Thompson

Roger

. “Fighting the High Cost of Workers' Comp,” Nation's Business, Washington, D.C., March, 1990, p. 20.

18.

Burton

John R.

Jr.

“Workers' Compensation Costs in 1990,”

John Burton's Workers' Compensation Monitor, Vol. 4: 2, Ithaca, NY, April, 1991, page 1.

19.

Cheit and Gordon , Occupational Disability and Public Policy, p. 281.

20.

White

Lawrence

. Human Debris: The Injured Worker in America, New York: Seaview/Putnam, 1983, pp. 74–75.

21.

White , Human Debris, p. 75.

22.

Cheit and Gordon , Occupational Disability and Public Policy, p. 101.

23.

Berman

Daniel M.

“Death on the Job: Occupational Health Struggles in the United States,” New York: Monthly Review Press, 1978, p. 77.

24.

Berman , “Death on the Job,” p. 77.

25.

Berman , “Death on the Job,” p. 77.

26.

Victor

Richard B.

Workers' Compensation and Workplace Safety: The Nature of Employer Financial Incentives, Santa Monica, CA. The Institute for Civil Justice, Rand Corporation, 1982, p. vii

27.

Darling-Hammond , The Law and Economics of Workers' Compensation, p. xiii.

28.

See cover story and editorial, Nation's Business (published by the U.S. Chamber of Commerce), March, 1990.

29.

Editorial , Nation's Business, March, 1990, p. 3.

30.

Baram , Alternatives to Regulation, p. 79.

31.

Chelius

James

, ed. Current Issues in Workers' Compensation, Kalamazoo, Mich.: W.E. Upjohn Institute for Employment Research,1986, pp. 200–211.

32.

Chelius , Current Issues in Workers' Compensation, pp. 211–212.

33.

Chelius , Current Issues in Workers' Compensation, p. 212.

34.

Interdepartmental Workers' Compensation Task Force . Research Report Volume 4, Washington, D.C.: U.S. Department of Labor, 1979, p. 81.

35.

Interdepartmental Workers' Compensation Task Force. Research Report Volume 4, p. 86.

36.

Chelius , Current Issues in Workers' Compensation, p. 211.

37.

Chelius , Current Issues in Workers' Compensation, pp. 213–214.

38.

Chelius , Current Issues in Workers' Compensation, p. 213.

39.

Chelius , Workplace Safety and Health, p. 25.

40.

Victor , Workers' Compensation and Workplace Safety, p. x.

41.

Victor , Workers' Compensation and Workplace Safety, p. x.

42.

Worrall , Safety and the Workforce, p. 154.

43.

Worrall , Safety and the Workforce, p. 159.

44.

Kniesner

Thomas J.

and Leeth

John D.

. “Separating the Reporting Effects from the Injury Rate Effects of Workers' Compensation Insurance: A Hedonic Simulation,” Industrial and Labor Relations Review, Vol. 42, No. 2, Ithaca, NY: Cornell University, January, 1989, p. 280.

45.

Kniesner , Industrial and Labor Relations Review, p. 292.

46.

Chelius

James R.

“The Influence of Workers' Compensation on Safety Incentives,”

Industrial and Labor Relations Review, Vol. 35, No. 2, Ithaca, NY: Cornell University, January, 1982, p. 241.

47.

“Notes: Compensating Victims of Occupational Disease,”

Harvard Law Review, Vol. 93, 1980, p. 916.

48.

White , Human Debris, p. 79.

49.

Massachusetts Workers' Compensation Advisory Council . Report to the Legislature on Occupational Disease, Boston: Commonwealth of Massachusetts, Department of Industrial Accidents, May, 1990, p. 48.

50.

Notes, Harvard Law Review, p. 917.

51.

Notes, Harvard Law Review, pp. 926–928.

52.

White , Human Debris, pp. 79–80.

53.

White , Human Debris, p. 79.

54.

Mass. Workers' Compensation Advisory Council. Report to the Legislature, p. 47.

55.

Chelius , Current Issues in Workers' Compensation, p. 323.

56.

White , Human Debris, p. 80.

57.

Berman , Death on the Job, p. 69.

58.

Mass. Workers' Compensation Advisory Council , Report to the Legislature on Occupational Disease, p. 48.

59.

Boden

Leslie I.

“Comment on Epstein,”

Journal of Legal Studies, Vol. 13, Chicago: University of Chicago, August, 1984, p. 516.

60.

See Boden in Journal of Legal Studies, Cheit and Gordon in Disability and Public Policy, Notes in Harvard Law Review, and Chelius in Current Issues in Workers' Compensation.

61.

Mendeloff

John

. Regulating Safety: An Economic and Political Analysis of Occupational Safety and Health Policy, Cambridge, MA: The MIT Press, 1979, p. 12.

62.

Victor , Workers' Compensation and Workplace Safety, p. 3.

63.

Not part of our discussion, but worthy of note, is the fact that businesses can pass costs on to consumers. This very simple economic fact of life underscores the fact that employers do not bear the full cost of injuries and illnesses. One of this region's first workers' compensation advocates, William W. Kennard, Chairman of the Commonwealth of Massachusetts Industrial Accident Board in the early part of this century said, in 1918, that “the Workmen's Compensation Act is not a regulation of any substantive duty; it is exclusively an economic readjustment of the burdens of industrial accident from the shoulders of the employees to the shoulders of the consuming public.” (Letter to Governor Samuel McCall, included in the Report of the Special Recess Committee on Workmen's Compensation, Massachusetts General Court, Boston, February, 1919, p. 23).

64.

Morgenstern

Felice

. Deterrence and Compensation: Legal Liability in Occupational Safety and Health, Geneva, Switzerland: International Labour Organisation, 1982, p. 65.

65.

Baram , Alternatives to Regulation, p. 81.

66.

Baram , Alternatives to Regulation, p. 81.

67.

Darling-Hammond , The Law and Economics of Workers' Compensation, p. xiii.

68.

Associated Industries of Massachusetts . Legislative Bulletin, Vol. 30, No. 8, March 30, 1990, pp. 1–3.

69.

AIM , Legislative Bulletin, Vol 30, No. 8, p. 2.

70.

See Nation's Business, March, 1990, p. 26, and “Squeeze the Cost Out of Comp.,” Industry, Boston, November, 1989, p. 32, for two ‘10 point plans’ offered by industry consultants.

71.

Nation's Business, p. 26.

72.

Chelius , Current Issues in Workers' Compensation, p. 324.

73.

Worrall , Safety and the Workforce, p. 129.

74.

Worrall , Safety and the Workforce, p. 129.

75.

See Senate Bill 1 from the 71st Texas Legislature, Second Called Session, 1989.

76.

See Chapter 2, Oregon Laws 1990.

77.

See State of Maine Chapter 615 of the Acts of 1991.

78.

Chelius , Current Issues in Workers' Compensation, p. 324.

79.

Notes , Harvard Law Review, p. 937.

80.

Berman , Death on the Job, p. 186.

81.

White , Human Debris, pp. 93–95.

82.

White , Human Debris, p. 23.

83.

(a) Workers' Compensation Rating and Inspection Bureau (WCRIB), 40 Broad Street, Boston, MA. WCRIB is the organization that represents insurance carriers in Massachusetts, compiles statistics on the workers' compensation system, submits rate requests to the Commissioner of Insurance, and recommends policy changes on behalf of the insurance industry. The information provided by WCRIB and used in this discussion is based on interviews with agency officials conducted in 1990 and 1991.

84.

(b) Thompson , Nation's Business, p. 20.; and the National Council on Compensation Insurance, Issues Report, 1991: A Summary of Issues Facing Workers Compensation, Boca Raton, Florida: National Council on Compensation Insurance, 1991, pp. 26–42.

85.

86.

(d) WCRIB.

87.

(e) WCRIB.

88.

(f) WCRIB.

89.

(g) WCRIB.

90.

(h) WCRIB.

91.

(i) WCRIB.

92.

(j) WCRIB.

93.

(k) Day

Stephen

. Executive Director of the Massachusetts Workers' Compensation Advisory Council, Department of Industrial Accidents, Boston, MA, May, 1990. [Interview].

94.

(l) Joint Special Recess Committee on Workmen's Compensation Insurance Rates and Accident Prevention. Report of the Committee, Senate No. 370, Boston, February, 1917, page 35.

95.

(m) Russell

William

. Interview with Former Director of the Office of Safety, Comm. of Mass. Department of Industrial Accidents, Boston, MA, May, 1990.

96.

(n) Linsky

Steve

. General Counsel, Comm. of Mass. Department of Industrial Accidents, Boston, May, 1990 [Interview].