Increasing claims for soft tissue injuries in workers' compensation: Cost shifting and moral hazard

✍ Scribed by Richard J. Butler; David L. Durbin; Nurhan M. Helvacian

• Book ID: 104624253
• Publisher: Springer
• Year: 1996
• Tongue: English
• Weight: 875 KB
• Volume: 13
• Category: Article
• ISSN: 0895-5646
• DOI: 10.1007/bf00055339

✦ Synopsis

During the last decade, the distribution of workers' compensation claims has exhibited a marked shift towards soft tissue injuries such as sprains, strains, and low back claims. There are three possible explanations for this trend: (1) safety incentives induced by workers compensation or OSHA may have reduced other, traumatic claims; (2) the movement away from heavy manufacturing and the 1980 construction recession may have changed the underlying risk of a workplace injury; and (3) there has been moral hazard behavior on the part of workers and health care providers. Using a new data source and estimation framework, we find evidence that moral hazard response explains most of the 30% increase in the proportion of soft tissue injuries during the 1980s.