Problem:  Workers' compensation programs are a significant part of 
the health care problem.  Premiums have increased sharply, and 
delivery of benefits is often inefficient.  State programs 
frequently require supplemental funding from the legislature.  

Proposed Solution:  One problem with increasing the efficiency of 
workers' compensation is that conflicts between business and labor 
over the level of benefits and the program costs prevent the two 
from using combined leverage to reduce inefficiencies elsewhere in 
the system.  At least in part because workers in Washington State 
pay a percentage of the premiums themselves, the administration of 
the Washington program has been able to get workers and employers 
to agree to a combination of some benefit cuts and a commitment to 
maintain the public status of the program.  This support gives the 
program more leverage to keep costs down.  

Evaluation:  The annual cost increases in the workers' 
compensation program in Washington State have been only slightly 
above the inflation rate since the implementation of the reforms.  
Unlike most state-run workers' comp programs, Washington's has 
maintained a significant surplus.  Cost controls ahve been 
effective, and reimbursement of injured workers is efficient.

Contact:  Theresa Whitmarsh, Assistant Director, Washington 
Department of Labor and Industries, PO Box 44050, Olympia, WA 
98504.  Phone:  206-956-5418.

Citation:  "Innovations 1992."  Governing Magazine, Volume 6, 
October 1992, pp. 38-39.

Keywords:  workers' compensation, health care

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