There is growing evidence that workers' compensation insurers are char
ged substantially more than health insurers for the treatment of simil
ar injuries. The first study of the problem, conducted in Minnesota in
1987, found that both overutilization of services and price discrimin
ation contributed to the charge differential. This article applies the
Minnesota model to 1991-1993 data on health care charges and payments
from California. Approximately 13,000 persons with work-related injur
ies are compared to approximately 3,600 persons with similar injuries
that occurred off the job, Despite important differences in the popula
tions and workers' compensation laws in California and Minnesota, work
ers' compensation insurers are charged move than health insurers for t
he treatment of similar injuries in both states. The difference in Cal
ifornia's payments is attributable to using more health care providers
and services to treat workers' compensation patients. The results do
not support the hypothesis that work-related injuries cost more to tre
at because they are more severe than similar injuries occurring off th
e job.