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Financial incentives in workers' compensation: an analysis of the experience-rating programme in Ontario, Canada

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Objectives: To investigate the incentive for health and safety and cost management at the firm level associated with the degree of experience rating in a retrospective workers' compensation programme in Ontario, Canada.

Methods: We use panel data on all firms in the principal Ontario experience-rating programme between 1998 and 2007 to estimate regression models of the relationship between the degree of experience rating and various claim rates. We control for firm characteristics and contextual factors that may be associated with the outcomes under investigation.

Results: A higher degree of experience rating was found to be associated with a lower lost-time claim rate and a higher no-lost-time claim rate. The relationship with the total claim rate was insignificant. The degree of experience rating was also associated with outcomes that proxied for cost management practices.

Conclusions: A higher degree of experience rating appears to be associated primarily with increased secondary prevention efforts (ie work disability prevention), rather than primary prevention. There is also some indication of an incentive for cost management. Workers' compensation authorities need to consider how best to ensure there are appropriate checks and balances in financial incentives programmes.


Document Type: Research Article

Publication date: May 31, 2012

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  • Policy and Practice in Health and Safety is an international journal published twice a year. It's designed as a forum for academic and policy discourse on health and safety and is aimed at those who practise, tutor, research or study health and safety regulation and management. All published papers have undergone a double-blind refereeing process by at least two referees.

    Policy and Practice is an important source of reference for anyone studying or working at a professional level in health and safety. It'll help to keep you up to speed on developing debates on a wide range of topics.

    The editor, David Walters, Professor of Work Environment at the Cardiff Work Environment Research Centre, leads Policy and Practice's authoritative international editorial board. The journal addresses practical workplace health and safety issues as well as focusing on a broader context - the social, economic and political discussions that shape employment and work.

    Subjects covered in recent issues include comparisons of different regulatory and management frameworks, case studies of occupational safety and health in individual locations, and the impact of economic and political factors on health and safety.
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