Dear WCAN Member,

Each year, various government and private organizations track, compile, analyze and publish mountains of data on California’s workers’ compensation system. Although this research is critical for policymakers and system stakeholders to understand what’s happening in the workers’ compensation system – and promote changes when necessary – the reports can be dense and fail to deliver the “bottom line” for what the numbers mean.

Last week, the Workers’ Compensation Insurance Rating Bureau (WCIRB) published its annual “State of the System” report. During the past few years, this report has become an increasingly important measurement of California’s workers’ compensation system. Despite the vast amount of data analyzed by the WCIRB to produce the report, it translates this data into effective visuals and “bottom line” statements about what the data means.

While we encourage you to look at the report (available here), the bottom line for California is this:

  • Although average workers’ comp insurance rates have declined by 15% since 2015, California remains the most expensive state and 176% higher than the national median.
  • California’s high costs are due to high rate of permanent disability claims (especially in Los Angeles), high medical costs, prolonged medical treatment costs and much higher frictional costs, such as attorneys’ fees.
  • The proportion of claims filed for “cumulative trauma” has doubled since 2007 and now makes up nearly 20% of all claims. Most of these claims are filed in Southern California, involve multiple body parts and have attorneys involved. Many are filed post-termination.
  • Medical costs per claim decreased, then grew more slowly, after the 2012 legislative reforms (SB 863).
  • The volume and costs for prescription drugs, including opioids, has decreased. Prescriptions cause the most disputes in California’s medical review system.
  • Claims are closing more quickly than they were prior to the 2012 reforms.
  • California’s high costs for claims handling expenses are declining.

Although the report shows a mixed bag of results and some continued troubles for California, there are signs of improvement for employers and injured workers.

Thank you for working with WCAN to fight for a better, more efficient system.

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