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NEWSLETTERS
NEWSLETTERS
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In this issue
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Case Study
General Contractor's Workers' Comp drops $101,207 in just two years |
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It pays to be nice: Employer's treatment of injured worker more important than satisfaction with health care in Return-to-Work programs |
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Managing an aging workforce: the impact on Workers' Compensation |
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Case Study
General Contractor's Workers' Comp drops $101,207 in just two years
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Insured
A commercial general contractor with 110 employees and revenue of $52 million in 2006.
Situation
A 62% Workers' Comp surcharge drove up the company's Experience Modification Factor jumped to 1.12, costing them an additional premium of $185,000 per year. It also restricted them from bidding work for large corporations that required a 1.00 or lower Experience Mod.
Assessment
A review of the 2004-2005 Experience Mod work sheet, the loss data from the previous four years and OHSA logs revealed that the number and severity of claims was higher than expected.
Solution
A Certified WorkComp Advisor (CWCA), showed the general contractor how they were paying the insurance company $3 for every $1 paid in claims. He designed an aggressive rehab plan of action: installing a safety committee, including training and recordkeeping, providing administrative support for the company by running the WorkComp process, and training the safety coordinator. In addition, he worked with the client in establishing a relationship with Occupational Medical Center, initiating a claim reporting system and a return-to-work process. He also assisted them is completing necessary job descriptions.
Result
Experience Mod went down from 1.12 to 1.03, with a projected 2007-2008 Mod of .95. Because of a radical reduction in the number and size of Workers' Comp claims, additional discounts were negotiated, lowering the premium cost from $430,302 in 2004 to $394,000 in 2005 and $365,318 in 2006.
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It pays to be nice: Employer's treatment of injured worker more important than satisfaction with health care in Return-to-Work programs
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If the following question were posed to an injured employee, how does the response affect your bottom line:
"Overall, how satisfied are you with the way your employer has treated you following your injury? Would you say you are very satisfied, satisfied, dissatisfied or very dissatisfied?"
While most employers recognize the importance of this question, few fully understand the impact that the answer can have on their Workers' Compensation costs. A recent article, It Pays to be Nice: Employer-Worker Relationships and the Management of Back Pain Claims, by Richard Butler, PhD, William Johnson, PhD and Pierre Cote, D.C., PhD examined the effects of workers' satisfaction with their employers' response to a Workers' Compensation back claim over a 12 month period and compared it to the effects of their satisfaction with health care on post-onset patterns of employment.
The focus on back pain is relevant because of the frequency of the problem and because, for many workers, back pain follows an episodic course of periods of recovery and employment interspersed with periods of pain and work absence.
The results: Workers' satisfaction with their employers' behavior has a much larger impact on employment stability than does their satisfaction with health care. The implications of this finding for employers are significant:
1. Cost savings: reduction in number of lost time claims
The study finds that workers who are satisfied with employer's response are more likely to have a medical only claim (64% versus 56%) than those who are dissatisfied. Also, for those workers who do have at least one lost time claim there is a lower likelihood of multiple episodes of injury-related absences. Only 32% of those satisfied with their employer's response end up with multiple episodes of injury related absences whereas 58% of those dissatisfied with their employer's response end up with multiple absences.
2. The workplace response is key
Even companies with strong return-to-work programs can be challenged by seemingly conflicting objectives and adversarial attitudes. While employers and employees benefit from maintaining a skilled workforce, reduced stress on co-workers who are expected to cover for absences, and improved employee/management relationships where workers have a greater sense of security and commitment, there are concerns about how productivity is affected by reintegrating workers who are not yet "100%" and in some cases injured workers are treated with suspicion as to the legitimacy of their claims.
It's easy to understand this conflict. The pressures and frustrations created by an injured worker on productivity and work flow are immediate. Although responding in the best interests of the employee will ultimately benefit the company, it can be difficult to keep the long-term goals in focus, with the immediate demands of production. Unwittingly the company can convey to the injured worker that maximizing profits is the priority and not the well-being of the worker.
Injured workers who feel alienated by the employers' reaction to their claim will be reluctant to cooperate and may extend the duration of their absence or have more frequent reoccurrences as found in the study by Butler, Johnson and Cote. The bottom line: increased Workers Compensation costs.
3. Supervisors need training
Management and front-line supervisors must establish a relationship of trust with their injured worker. Besides the basics of injury reporting and injury management, supervisors must understand the importance of an empathetic response to injury. If the worker feels needed in the workplace and is motivated to return, the program has a much greater chance of success. Frequent expressions of sincere regard and regular communication with the injured worker help reduce the probability of lengthy lost time.
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Managing an aging workforce: the impact on Workers' Compensation
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Many business owners and managers today will tell you that one of the most pressing problems they have is finding qualified, competent employees. As more Baby Boomers prepare for retirement, there is reason to believe that this problem will only worsen.
Over the next decade, the 55 - 64 age group will grow at a rate four times the rate of the total work force and the 65 and older group will grow seven times as fast according to the white paper "Safety & Health Implications of an Aging Workforce" by Glenn D. Daviet. Some employers fear that the unprecedented increase in the number of aging workers will lead to more serious injuries and illnesses and higher workers' compensation costs.
Yet, the need for experienced, dedicated, skilled workers and the possibilities of rising Workers' Compensation costs do not have to become a catch-22 for the employer.
The practical and proven processes of controlling Workers' Compensation costs - 24 hour injury response, claim coordinator program, back-on-the-job program, supervisor training, medical clinic relationships, independent nurse, workplace wellness programs and on-going training - will have the same positive effect on older workers as on younger workers.
A December 2006 research brief by the National Council on Compensation Insurance provides valuable insights for employers. The key findings show:
1. Younger workers (20 - 44) have a higher incidence of workplace injuries and illnesses than older workers (45 - 64), while older workers have higher costs per claim. However, the difference in number or frequency of claims between young and older workers is declining and age may not play an important role for frequency trends in the future.
2. Differences in wages and claim durations accounted for the majority of the difference in indemnity severities between younger and older workers
3. Older workers experience relatively higher-cost injuries, where the most notable differences in diagnoses involve injuries to the joints - rotator cuff and knees - which were more commonly experienced by workers aged 45 - 64 and sprains of the ankle which were more commonly experienced by workers aged 20 - 34.
4. Carpal tunnel syndrome and injuries to the lower back are among the top ten diagnoses for workers of all ages.
5. The key driver explaining about 70% of the difference in medical severities between younger and older workers is the markedly higher number and different treatments within a diagnosis. For example the older worker has 90% more treatments than the younger worker for a sprain of shoulder or arm injury. Over all diagnoses, the older worker received 43% more treatments on average than the younger worker.
6. There is very little difference in the frequency and severity levels of the 45 - 54 and 54 - 64 age groups.
These facts lead to several significant conclusions when it comes to the older worker:
* On the plus side, older workers can bring a wealth of experience that adds value to the job, have a strong work ethic and a better than average attendance record. They appreciate having a job and demonstrate job satisfaction.
* Offsetting these positive qualities is the fact that older workers tend to have diminished cognitive capabilities and higher than average costs of job-related injuries.
What do these conflicting conclusions mean to an employer? Is it in a company's best interest not to hire or retain older employees to avoid higher job-related injury costs? Or are these additional expenses the price paid for having experienced, satisfied employees?
This does not need to be an either-or decision. The key is having a system in place that enables employees to obtain the appropriate medical treatment from a physician who practices occupational medicine and who is committed to a recovery-at-work approach. Since the primary difference between younger and older workers is essentially the number of treatments, proper medical care and a return-to-work program can help reduce that disparity and the costs involved.
With this approach, companies can benefit from the rich legacy the older employee can bring to the job and control Workers' Comp costs at the same time.
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Institute of WorkComp Professionals has a banner year in reducing Workers' Comp costs for clients
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As a Level 5 member of the Institute of WorkComp Professionals, we have access to an arsenal of resources on all aspects of Workers' Compensation that enable us to save money for our clients. At the recent Annual Graduate Symposium at Laguna Beach, CA, members heard from leading experts on Workers' Compensation and shared their experiences. Case studies of 21 clients showed that the Institute's practices saved over $1.6 million for them in the past year. We are proud to be a part of this forward-looking group and continue to work on innovative solutions for injury control in 2007.
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Study finds working "moderate" overtime may not have adverse effects on health and safety
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According to a February 2007 article in the Journal of Occupational and Environmental Medicine, a study of long work hours at a heavy manufacturer revealed that employees working "moderate" overtime (48 - 59 hours per week) were no more likely to incur adverse physical or mental health, presenteeism and disability outcomes. Those working 60+ hours were more likely to report new injuries and diagnoses, but those effects were overwhelmed by prior health, demographics and compensation categories.
Many previous studies have suggested that long work hours generate a wide range of adverse outcomes across the employee continuum. This study found no evidence for pervasive effects working less than 60 hours per week.
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