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The number of paid workers' compensation claims fell 36 percent relative to the number of employees from 1997 to 2007, according to a newly released annual report from the Minnesota Department of Labor and Industry (DLI).

According to DLI Commissioner Steve Sviggum, “While we have a very good workers' compensation system in Minnesota, we can improve efficiency and effectiveness by working together with labor and industry. The data in this report is a basis for discussion about the changes that are needed to curb rising costs."

Minnesota's workers' comp system parallels nationwide trends. The claim rates are on the decline, the system costs remain stable, but the costs per claim are on the rise.

Total benefits increased relative to payroll from the mid-1990s to the early 2000s, but have decreased somewhat in more recent years. This has reflected the combined effects of a consistently decreasing claim rate and increasing benefits per claim, particularly medical benefits. Total system cost has been stable relative to payroll in the mid-2000s with minor fluctuation.

Major findings

* The claim rate fell continually from 1997 through 2007.
* Workers' comp system cost has fluctuated mildly relative to payroll since 1997, with a somewhat lower value for 2007 than for 1997.
* Adjusted for average wage growth, average medical and indemnity benefits per insured claim rose substantially between 1997 and 2006.
* Relative to payroll, medical benefits have risen since 1997 while indemnity benefits have fallen, reflecting the net effect of the falling claim rate and higher benefits per claim.
* The increase in indemnity benefits per claim is due primarily to increasing benefit duration and increases in the frequency and amounts of stipulated benefits.
* The vocational rehabilitation participation rate increased steadily between 1997 and 2003, but has changed relatively little since 2003.
* The dispute rate rose substantially from 1997 to 2007.

The Workers' Compensation System Report is available online at www.dli.mn.gov/RS/WcSystemReport.asp.