That's what Chicago, IL, defense lawyer Gene Keefe told WorkCompCentral yesterday after the National Council on Compensation Insurance (NCCI) released its recommendations for voluntary market rate changes in the state.
Keefe told WorkCompCentral that as of Aug. 1, there were approximately 26,000 new claims filed for the year, “pointing to an all-time low” of 45,000 for 2012.
NCCI proposed a 3.8% decrease in rates and Keefe thinks a reduction in the number of litigated claims is a key factor.
According to Keefe there are a number of reasons for the drop in claims including economic factors, increased safety awareness and better claims management.
In addition the implementation of medical networks (called preferred provider programs or PPPs) in the state should contribute to the decline, Keefe said.
NCCI reported Illinois saw a decline in medical severity which offset an increase in frequency, and improved indemnity loss ratios “driven by a decrease in average indemnity severity.”
Jay Shattuck, executive director of the Illinois Employment Law Council, told WorkCompCentral that the reductions don't appear to be "specific to the reforms", but reflect improved experience in several areas and data from previous years, when there were high numbers of claims, “dropping out of the formula.”
In the meantime, NCCI proposed a rate increase of 7.9% for low cost neighbor Iowa.
Driving that increase is a rise in claim frequency in 2010 of 3.2% and ongoing rise in medical costs, up another 2.5%.
Still, Iowa in the last Oregon Department of Consumer and Business Services cost survey ranked Iowa 36th at $1.82 per $100 of payroll. In 2010 the median cost was $2.04 per $100 of payroll.
Illinois was ranked third most costly with a 2010 cost of $3.05 per $100 of payroll.
Keefe's analysis seems to have some validity if compared to Iowa. According to the Iowa Workforce Development, Iowa's total inventory of litigated claims is only about 4,500 and has remained relatively stable at that number for several years.
Taken as a percent of total population both Illinois and Iowa have relatively low litigation rates.
Illinois' total population is 12,830,632 according to the US Census Bureau. Iowa's population totals 3,046,355.
This means that Illinois' workers' compensation litigation experience rate compared to total population is 0.35%, or 3.5 litigated claims for every 1,000 people; Iowa's is 0.15% or 1.5 litigated claims for every 1,000 people.
Compare to California, with a population of 37,253,956 and new litigated filings last year of about 350,000, and the rate is 0.94%, or 9.4 litigated claims for every 1,000 people.
Despite the heavy litigation rate, California's cost per $100 of payroll was $2.68 in the last Oregon study ranking the state 5th most costly.
I'm not sure whether this is good news, or bad news. While there is less litigation in Illinois, the cost to the system based on payroll is disproportionately high.
Or California litigation is unusually efficient...