IR # 97-02
Friday, January 17, 1997

Christine Baker
(415) 557-1304

Commission Initiates Collaborative Study of
"Carve-Outs": Alternative Workers' Compensation Programs

SAN FRANCISCO -- The California Commission on Health and Safety and Workers' Compensation has announced it will conduct a year-long evaluation of the state's alternative workers' compensation programs, also known as "carve-out programs," operating within the California construction industry.

"This independent study will take an important first step for long term evaluation of the effectiveness of alternative workers' compensation programs," said Christine Baker, Executive Officer of the Commission. "The identification and establishment of baseline measurements will form the foundation for any nationwide study of such programs and will provide the workers' compensation community with information to enable the eventual comparison of California's experience to those of other states."

The carve-out programs, first approved by the Division of Workers' Compensation in 1994, have shown encouraging results. A September report indicated lower losses and reduced litigation for participants of carve-out programs compared to those in the statewide workers' compensation system. The program is considered one of the more innovative elements of the state's workers' compensation reform efforts.

The Commission has initiated the collaborative project with the DATA/Survey Research Center and the Haas School of Business at the University of California at Berkeley, and the Stanford Center on Conflict and Negotiation at Stanford University. Funding comes from both unions and employer groups and includes support from the Center for Workers' Rights in Washington D.C., the California Self-Insurers Association, the California Workers' Compensation Institute, and Californians for Compensation Reform,

Two key elements of carve-out programs allow collective bargaining agreements to establish exclusive lists of medical providers to treat on-the-job injuries, and they establish alternative dispute resolution systems that may preclude the need to litigate disputed claims before the Workers' Compensation Appeals Board. Eight carve-out programs have been approved since October 1994.

The Commission, created by the workers' compensation reform legislation of 1993, is charged with overseeing the health and safety and workers' compensation systems in California and with recommending administrative or legislative modifications to improve their operation. The Commission was established to conduct a continuing examination of the workers' compensation system and of the state's activities to prevent industrial injuries and occupational diseases. It also examine similar programs in other states.

Further information about the Commission and its activities may be obtained by writing to Christine Baker, Executive Officer, Commission on Health and Safety and Workers' Compensation, 30 Van Ness Avenue, Suite 2122, San Francisco, California 94102; by calling (415) 557-1304, or by faxing a request to (415) 557-1385. Information is also available through the Internet by accessing the Department of Industrial Relations' home page at