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NEWSLETTERS
NEWSLETTERS
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In this issue
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Case Study: Grocery Store Chain saves $100k, keeps MOD down |
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13 tips to shorten claim duration |
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Loss of productivity more costly to employers than health care costs
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Case Study: Grocery Store Chain saves $100k, keeps MOD down
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Insured
An independent grocery store that employees 500 people with annual revenues of $20 million.
Situation
The employer had a large open claim reserve of $140,000 as a result of a back injury to an employee. There was also a possibility of litigation as a result of the injury.
Assessment
Certified WorkComp Advisors (CWCA) explained to the client that open claim reserves increase the Experience Mod in the same way as claims actually paid. As a result, the Mod was in danger of increasing from .94 to 1.06. To prevent this, steps needed to be taken to reduce the open claim reserve before the critical valuation date.
Solution
The CWCAs used information taught at the Institute of WorkComp Professionals on how to work effectively with claims adjusters. They worked with the company's Safety Director to develop a comprehensive plan that would lower the outstanding reserve. The plan convinced the claims adjuster that the employer would implement the proper procedures needed to control costs.
Result
As a result of the plan, which included eliminating litigation, the claims adjuster reduced the reserve by $100,000 before the critical deadline. Thus, the Experience Mod remained at .94. Over three years, this represented a premium savings of $60,408.
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13 tips to shorten claim duration
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The costs of a claim and the impact on the company's Experience Mod are more severe the longer a claim remains open. Here are 13 tips to help you shorten the duration of a claim:
1. Require all employees to report accidents immediately, no matter how minor.
2. Thoroughly investigate accidents immediately after they are reported. Separate witnesses from the injured employee to get the whole story and signed statements.
3. Stay in contact with the employee. Immediately assign someone, preferably the supervisor, to stay in touch with the employee on a regular basis to keep the injured employee motivated to return to work. Positive, encouraging messages of the employee's value to the company are often the best medicine.
4. Assist the employee in understanding and filing the necessary claim forms. Answer the employee's inquiries quickly and efficiently, preferably designating one person as the primary contact.
5. Be cognizant of the employee's emotions. If the injury is serious, employees can become depressed or angry and may need assistance.
6. Understand your state's waiting period for indemnity payments. Waiting periods for employees who are eligible for wage replacement benefits pursuant to the Workers' Compensation Law vary by state, generally ranging from 3 to 7 days. When the injured employee does not receive pay, the waiting period can create a sense of urgency to return to full or modified duty. In addition, the moment injured employees become eligible for indemnity, they are being paid not to work. When they understand that the payments are tax free and not that much different from their take home pay, there can be a fundamental shift in motivation to return to work, particularly if they are ambivalent about their job or if the future of the job is uncertain.
7. Identify and establish relationships with doctors who have an expertise in occupational medicine and understand the value of returning injured employees to work.
8. Have a Return-to-Work program in place. Be sure the injured employee, supervisor and fellow employees understand the work restrictions. A common cause of reinjury is that the supervisor does not educate others about the work restrictions and, unknowingly, peers place pressure on the injured employee to perform tasks beyond the restrictions.
9. Eliminate disincentives to return to work. While federal and state laws govern what employers can do in this area, reducing the injured employee's salary for a short-term modified duty position can send a powerful message to the employee that returning to work is not a good idea.
10. Use medical disability duration guidelines as a resource not a hammer. Every employee is different and recovery from the same injury will vary from employee to employee based on age, overall health, etc. The disability guidelines provide a common framework for non-adversarial communication between all interested parties-employers, employees, medical providers and insurance companies as to the anticipated treatment plan and return to work timetable.
11. Monitor claims progress. Review loss reports from the insurance company and identify those claims that are not progressing as expected. Discuss the claims with the medical provider and your Certified WorkComp Advisor to determine how to get the claim on track.
12. Know your claims. If you have a high number of claims with an indemnity payment of less than $1000, there is a clearly missed opportunity in returning workers to modified duty and controlling increases in Experience Mod. Moreover, by examining your claims, patterns may emerge that identify areas in need of attention.
13. Close claims promptly. Open claim reserves affect the Experience Mod in the same way as actual claims paid. In some cases, claims that are closed may be on the books as open or the reserves set for the claim may be excessive based on your knowledge of the claim. |
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Loss of productivity more costly to employers than health care costs
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Poor health among workers is far costlier to U.S. employers than they realize, impacting their profitability and undercutting productivity, according to a major study published in the April 2009 issue of the Journal of Occupational and Environmental Medicine (JOEM). In fact, according to the study, lost productivity costs companies an average of $2.30 for every dollar spent on medical and pharmacy expenses. This productivity loss is seen at all levels in an organization.
Surprisingly, the study concludes that presenteeism (when an employee is working below his or her capacity due to a health condition) actually costs a company more than when an employee is absent. It further suggests that many employers miss an opportunity to improve productivity and their bottom-line by failing to recognize health-related productivity costs when they develop integrated employee-health strategies and related intervention.
The study also found that when considering medical and drug costs alone, the top five conditions driving costs are cancer (other than skin cancer), back/neck pain, coronary heart disease, chronic pain, and high cholesterol. But when health-related productivity costs are measured along with medical and pharmacy costs, the top five chronic health conditions driving these overall health costs shift significantly, to depression, obesity, arthritis, back/neck pain and anxiety.
A press release from the National Pharmaceutical Council offers the following quotes:
"The wake-up call for U.S .employers is that simply looking at the costs of specific medical conditions by adding up medical and pharmacy claims costs alone won't give a true picture of the full impact of poor health on the much greater costs of lost productivity in the workforce," said Ronald Loeppke, MD, MPH, executive vice president of Health and Productivity Strategy for Alere® and one of the study's lead researchers. In addition to his role at Alere®, Dr. Loeppke serves on the board of directors of both IBI and ACOEM.
"Employers need to move beyond solutions that focus only on specific medical conditions and toward the development of integrated personal health support strategies that deal with multiple health conditions and health risks by focusing on the whole person as well as the whole population," said Thomas Parry, PhD, president of the Integrated Benefits Institute. "This is especially important if American business is to remain competitive in the midst of a dire global economy."
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