Employees are a vital part of almost every business.
A responsible employer is interested in its employees' safety on the job for two reasons. The first is the overall morale of the business. An injury to an employee results in that employee's medical expenses and lost work time. In addition, there is loss in productivity of other employees who witness the event and who may be expected to take on additional duties during the injured employee's recuperation. The second is the expense to provide workers compensation coverage because higher rates of employee injury result in higher premiums.
This month's cybercast addresses the win-win situations of workplace safety and post-injury case management. Read how insurance carriers and employers services companies work with employers to do the right thing for their employees and end up saving money in the long run.
MANAGING WORKERS COMP
Creating safer workplaces and providing better outcomes after injuries occur
By Dave Willis
Keeping employees safe and managing outcomes once injuries occur are important tasks for employers-and ones where agents and brokers can help if they understand the issues and can bring resources to the table.
"Workers' compensation is a complex line of business that's continually impacted by emerging issues such as co-morbidities, an aging workforce, narcotics abuse among injured workers and medical inflation," explains John Santulli, executive vice president of PMA Companies. "Employers can make a tremendous impact on their results by attacking losses with a holistic approach, integrating pre-loss, loss reduction and post-loss strategies into their workers' compensation programs."
There's good reason to do so. "Companies that keep their employees safe can see potential financial savings," says Jim Wucherpfennig, vice president of workers' compensation at Travelers. "U.S. Occupational Safety & Health Administration data show that some $1 billion is paid by employers in direct workers' compensation costs every week." That's on top of indirect costs resulting from accident investigation, productivity losses, and the need to hire and train replacement employees.
According to Santulli, "Loss prevention should be very strategic, based on an understanding of where losses are coming from and what's driving the costs."
Creating and fostering a culture of workplace safety is a good first step, adds Wucherpfennig. "That's more than just a set of activities focused on accident prevention," he explains. "It's a way of thinking about how you work-a shared vision expressed by the company's core values and behaviors. Weaving safety into the company's mission, policies and procedures demonstrates its importance and helps ensure its effectiveness company-wide."
"Establishing a safety culture starts with engaging management in creating, planning, implementing and communicating safety programs, and making sure they work and fit the business," says Woody Dwyer, Travelers' second vice president of workers' compensation.
Employees need to play a role. "A safety program will be most effective when employees at all levels are involved and trained to work safely," he notes. "Each department should set safety standards based on a job safety analysis. Outline responsibilities and accountability for all employees and make safety goals part of job descriptions and employee reviews. Positive reinforcement of safe behaviors builds a strong safety culture."
Dwyer says successful safety programs are clearly communicated in writing and available to all employees. "Furthermore," he adds, "employees should be able to contribute suggestions for a safer workplace. Also, make sure the program is continuously reviewed, revised and improved."
Mike Milidonis, ergonomics and employer services manager at GENEX Services, says the workplace safety culture should promote early injury reporting. "This lets employers review job tasks and identify associated risks, assess potential loss severity and prioritize work environment changes," he says.
"Reducing risks can stop progression of a claim and eliminate future ones for that job," Milidonis adds. "When looking at claims reduction, start with the historical data. This information can determine where to focus prevention efforts."
Kevin Hill, president of Integrated Care Management, concurs. "Both self-insured and fully-insured businesses need to understand their data," he says. "There's a lot of information out there, but it's not often shared.
Customers need to pay very close attention to their own data. They have to get what information they can and find a company to analyze it and show them what's happening," he adds. "Only then can they begin to make changes."
Hill says his firm has been able to help customers better understand their data. "We give them the data headers we need, and they provide the information," he says. "The more data they provide, the more we can help them shorten durations and eliminate claims by showing them what to watch for."
Agents and brokers can play a role. "When a broker brings us to the table and we make a big impact, the broker is in effect saving the client a lot of money, and that's good for his or her book of business," he adds. "They probably maintain a client for much longer."
Steve Love, president of MidAtlantic Insurance Services, recommends looking for common causes of injury for specific operations and then proactively reducing or eliminating the exposure. "For example, in restaurants, where slips and falls are common, require slip-proof shoes," he suggests. "In construction and similar jobs, where heavy lifting is part of the job, teach proper lifting techniques."
Ladder safety for building maintenance firms, defensive driving training for delivery services and others with auto exposures, and proper training and maintenance for manufacturers and others with machinery exposures are other examples he shares.
Marshall Kornblatt, executive vice president of insurance-operations at Berkshire Hathaway GUARD Insurance Companies, offers what he calls "a surprisingly 'low-tech' strategy that costs nothing and is readily available: the regular use of common sense on the job. Each year, hundreds of claims could be avoided by taking a split second to think before acting.
"For example," he says, "the higher you climb on a ladder, the less stable it becomes, so have someone hold it. And protective equipment, such as helmets, safety glasses and no-cut gloves, works best when actually worn! Common sense can reduce both injury frequency and severity."
Kornblatt also recommends the use of simple, low-cost incentives. "A pizza lunch for loss-free months or a gift card drawing after a good safety inspection can make a difference," he says.
Love suggests that agents and brokers show customers the impact that losses have on their experience modification and their workers' comp premium. "Use ModMaster®, for example, to make sure they understand the data on their experience mod worksheet," he says.
"Ergonomics is important for most employers and is the place where they can see the most improvement if they address the issues," notes Karl Siegfried, vice president of loss control and safety at The MEMIC Group. "Some 60 to 70 percent of claims come from ergonomic stressors, including neck, back, shoulder and knee injuries. This is particularly significant with Baby Boomers, who make up a higher percentage of employees in the workforce than ever."
To address these issues, he says, "Reduce the force required to do the work and get the workforce to work smarter, not harder. Design jobs that everyone can complete safely."
He recommends that agents and employers challenge their workers' comp insurers to provide services that address these issues. "Most companies we work with find reductions in injuries, plus an increase in efficiency," he notes. "It's a win all the way around."
Siegfried offers several recommendations. "Start by eliminating all lifts from floor level and below the knee," he says. "Several empty pallets can raise the load high enough to improve the overall lift. Once a product is at working height, keep it there throughout the process."
He adds, "Reduce the number of reaches, particularly those above shoulder height. For slip-trip-fall hazards, improve housekeeping. If something's on the floor, pick it up; don't step over it.
"Improve lighting and reduce background noise," adds Siegfried. "Better lighting can increase efficiencies and reduce errors, and decreased noise can improve communication and help lower blood pressure levels."
He suggests inviting the local medical provider network representative to tour the facility. "They'll better understand the work done and how to define restrictions most appropriately," he explains, noting the importance of having providers who are experts in occupational medicine.
"Finally," he recommends, "employers, agents, providers and insurers should communicate, communicate, communicate."
Better claims outcomes
Despite solid prevention efforts, injuries happen. "Unfortunately," Siegfried says, "too many employers don't know what to do when an injury occurs, particularly if they rarely have a claim."
"Whether fully-insured or self-insured-or a combination of these-the best strategy is to develop a strong return-to-work program," says Hill. "Have some sort of transitional-duty or light-duty programs, and make sure they're working extremely well. If you keep people at work, they'll come back to work. It sounds backwards, but it's absolutely true."
Dave Simmons, Berkshire Hathaway GUARD Insurance Companies' vice president of sales, concurs. "Getting an injured employee back on the job in any meaningful capacity speeds recovery and contains costs. To be ready, agents and brokers should encourage clients to prepare a list of all the different functions being performed within the operation and use that research to identify interim assignments. Everyone will benefit."
According to Todd DeStefano, president of risk management practices at York Risk Services Group, "Better claim outcomes start with aggressively managing losses and expenses, implementing strategies to improve adverse claim patterns, and leveraging managed care and claims data to fully understand what's happening with claims.
"Use predictive analytics and claim and managed care data to proactively identify claims that produce poorer outcomes," DeStefano adds. "Then let managed care and claims experts partner to make the best decisions to guide injured workers to appropriate treatment with the most efficient and cost-effective providers."
"With medical costs now approaching 60% of claims expenses, costs need to be addressed at every stage of a claim," Santulli notes. "This requires a tightly aligned managed care and claims program." He recommends deployment of new strategies to address emerging issues, such as the use of analytics to target intervention by specialists that can mitigate or prevent narcotics abuse.
Simmons encourages prompt claims reporting. "While some companies fear that reporting losses will cause premiums to rise, paying employees directly is always a bad idea," he notes. "A seemingly minor injury could become much more severe and the policyholder could be left with a large medical bill.
"When a claim is reported promptly," Simmons adds, "carriers can help injured employees get appropriate, quality medical care as quickly as possible, and they can gather information that's useful in adjusting the claim."
Love encourages creating and using a panel of physicians whom injured workers can see, and he says employers should know the warning signs of potentially fraudulent claims. "Aggressively contest any that are suspect," he advises.
He also recommends establishing three-point contact-with the carrier, the injured worker and the medical provider. "And," he adds, "stay in touch with the adjuster and employee until the claim is settled."
Paul Ross, senior vice president of business development at Sedgwick, stresses the importance of focusing on the treatment and recovery of the injured worker as early as possible. "A few ways to do this include ensuring that quality care is provided early on, engaging the injured worker throughout the process, and communicating to provide answers and access to information when needed," he says.
"When an unfortunate situation happens to an individual-on the job or off-compassion, communication, and quick and appropriate actions are key," Ross adds. "If the injury is work related, employers, brokers and claims professionals should work together to communicate benefits due under the law, set expectations for the next steps in the claim process, and identify available resources."
Another key to improving program results is locating and using primary care physicians and specialists associated with the best outcomes to treat workplace injuries. "When injured employees visit top-performing providers from the start, the results are shorter claim duration, less incurred cost, faster return to work, and lower litigation rates," he says.
"It's all about doing the right thing for the injured worker," Ross adds. "There's a good chance that, by going to a quality health care provider, they'll get better faster and return to work sooner."
Ron Skrocki, GENEX Services' vice president of product management and development, recommends appreciating the value of a strong and experienced case management team. "They play a critical role in every aspect of a claim," he explains. "They have the complete 360-degree picture, as well as the all-important personal connection with the claimant.
"This gives them the ability and knowledge to intervene with providers and make new recommendations for treatment, if needed, to ensure timely return to work and optimal outcomes," Skrocki adds.
It's important to challenge the status quo. "Just when you believe a platform has reached peak performance, it is time to look for leakage," suggests Mary Anne Hawrylak, president and founder of The Kingstree Group. "We typically use an analytics approach with clients' existing data to determine what's working and what can be improved."
She recommends subjecting claims management platforms to third-party analytics. "Measure them against best practices for a variety of metrics, including return to work, medical and indemnity costs, network utilization and performance inclusive of specialty networks, case management, and claim closure rates, among others," Hawrylak says. "And don't throw away the outliers; they tell an important story."
She adds, "Moving services from a bundled to an unbundled platform, adding a 24/7 nurse as first point of contact, or altering how providers are chosen or how case managers interact with specialty networks all represent change. And people naturally resist change. We all do." Hawrylak encourages frequent communication among all parties to reduce the impact and maximize the benefit.
According to Wucherpfennig, "Agents and brokers must make customers aware that establishing a culture of workplace safety is an investment that can prove to be very valuable over time."
Adds Dwyer, "When employees realize that their management team actively encourages a culture of workplace safety, they'll likely feel that their skills and well-being are valued. This could result in increased employee morale and lower absenteeism and turnover rates.
"Companies also may experience increased productivity as a result of their employees being healthier, happier and more motivated," he concludes.
Dave Willis is a New Hampshire-based freelance insurance writer and regular Rough Notes magazine contributor.