Commission on Health and Safety and Workers' Compensation
Information Bulletin

May 21, 2001 Christine Baker
(415) 703-4220

Commission Distributes Workers' Compensation Benefit Simulation Model

SAN FRANCISCO – At its meeting on April 19, 2001 in San Francisco, the Commission on Health and Safety and Workers' Compensation (CHSWC) voted to distribute the Workers' Compensation Benefit Simulation Model, "CHSWC Distribution" version.

The Benefit Simulation Model is designed to assist in the analyses of potential legislative changes to the workers' compensation benefit levels for Temporary Disability, Permanent Partial Disability, Permanent Total Disability and Life Pensions. Developed by a CHSWC-Department of Industrial Relations (DIR)-UC Berkeley project team, the model estimates the cost to employers and the impact on wage replacement rates for injured workers, based on research by Rand for the Commission

This micro-simulation model, based on an underlying claim level database, was developed to run on a personal computer. The model makes explicit the assumptions that are generally invisible in the estimates of statutory changes on system costs. It enables individuals or groups of individuals to make real time estimates of the impact of changing the numerous parameters that determine individual benefits. One such parameter, currently under study by the Commission, is an estimate of the increase in utilization as result of a benefit increase. Please note that for this version of the model distributed by the Commission, the utilization parameter has been set at zero. To date, various stakeholders have estimated the utilization factor within a range of 0 to 0.3. Users of the model may set this and other parameters as they choose to make their projections.

The "CHSWC Distribution" version of the workers' compensation benefit micro-simulation model on CD plus written instructions for its use are available for purchase for $45 from the Commission. Please note that the model requires 51.9 megabytes to run on an IBM-compatible Personal Computer (The model cannot be operated on a Mac).

The Commission and the Department want to express their appreciation to the individuals and organizations contributing to the Workers' Compensation Benefit Micro-Simulation Model: Frank Neuhauser of the University of California for developing the model, the California Workers' Compensation Institute for providing data, and the Rand organization for reviewing the methodology.

The model may be obtained by contacting the Commission on Health and Safety and Workers' Compensation, 455 Golden Gate Avenue, 10th Floor, San Francisco, California 94102, by calling (415) 703-4220, or by faxing a request to (415) 703-4234. Checks may be made payable to "CHSWC-Benefit Model".

The Commission is also exploring the feasibility of making an interactive version of the Benefit Model available at the Rand website within the next few weeks. Please note that the model would not be downloadable from the Rand website.

Technical questions regarding the development or use of the Workers' Compensation Benefit Simulation Model may be directed to Frank Neuhauser, Survey Research Center, University of California at Berkeley, at 510-643-0667.

The Commission is charged with overseeing the health and safety and workers' compensation systems in California and 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 and to examine those programs in other states.