Workers comp
payments show
decline

Benefits dropped from
$343 million in 1994 to
$288 million in 1996

By Pete Pichaske
Phillips News Service

WASHINGTON -- A national study released here today confirms what Gov. Ben Cayetano has been contending for months: Workers compensation costs are plummeting in Hawaii.

A study by the National Academy of Social Insurance, a research organization here, found that benefit payments in Hawaii dropped by 11.5 percent from 1995 to 1996, the most recent years for which figures are available.

Only three states had bigger declines, the study found. Nationally, the decline during the same period was 2.4 percent.

The drop in Hawaii comes on the heels of a 4.9 percent drop the previous year that also was larger than the national average. Before that, workers compensation costs had been climbing dramatically for more than a decade nationwide, with Hawaii among the leaders.

Reining in sky-high workers compensation costs has been a priority for Cayetano, according to aides. "The governor has taken ownership of the reforms," said Patrick Stanley of the state Department of Labor and Industrial Relations.

The state has adopted changes designed to curb abuses and hold down payments -- limiting requests for exams and limiting what injuries are eligible, for example -- and urged better training of workers to improve safety.

As a result, benefits paid out in workers compensation have dropped from an all-time high of $343 million in 1994 to $288 million in 1996, according to the study.

Daniel Mont, senior research associate with the National Academy of Social Insurance, said falling costs like Hawaii's are "a mixture of good and bad news. The good is it usually means more attention to safety. The bad news is that it could mean the state is being more stingy."

Jim Ellenberger, assistant director of the national AFL-CIO's Department of Occupational Safety and Health, who worked on the study, said a review of the changes in Hawaii reveals both needed reforms and fewer benefits.

"I see some restricting of benefits," he said. "Many states have tightened up the laws like that."

Eric Oxfeld, president of UWC, a national association of businesses concerned about workers compensation, said Hawaii's lower costs are long overdue -- and should be lower.

The lower costs, he said, are a counterweight to the "hyperinflation" in the 1980s and early 1990s, when payments rose by double digits annually.

"Hawaii still has an expensive program," said Oxfeld. "The reforms have been helpful, but they didn't go as far as they should. They're very litigious there, and they were slow to adopt a more efficient system."

Oxfeld predicted future reports will show Hawaii's costs on the rise again.