1. | WHAT’s At Risk|
Safety First
Keeping the Lid on Workers’ Compensation Costs
By Patricia Kagerer
A
s the number of obese people in the United turns, layoff and catastrophic financial issues for the world.
States rises, so does the number of workers’
compensation claims as well as the cost of Americans who have a job, any job, are holding on tight to
medical care. According to a study released by the perceived security the job provides. The downsizing of
a major insurance carrier, the cost of the most the economy over the last three years has left the American
disabling workplace injuries and illnesses in 2008 amounted workforce doing more with less, working more hours with
to $53.42 billion in direct U.S. workers’ compensation costs, higher demands for productivity and efficiency. New roles
averaging more than $1 billion dollars per week. and responsibilities are mandated, yet they may not come
with training and development due to budget cuts. This
Overexertion, which includes injuries related to lifting, push- pressure cooker environment creates stress.
ing, pulling, holding, carrying or throwing, maintained its
first place rank, costing businesses $13.4 billion in direct costs. Stress produces anxiety in people. Many people turn to
Consistent with past years, this event category accounted for eating, smoking and drinking to combat stress. Longer
more than one- quarter of the overall national burden. working hours mean less time for sports and activities that
actually reduce stress. The proverbial rat race creates the
Impact of the Economy perfect storm for injuries and illnesses caused by stress and
The economic conditions of the world have taken the unhealthy lifestyle choices.
American workforce on a stressful roller coaster ride for the
last three years. Analysts predicted that if we could all just With the current economic conditions, employers most
hold on until 2012 things would turn around. In the fall of likely will see a rise in the cost and frequency of workers’
2011, the economic conditions in Europe doused the hopes compensation claims. There is a myth that during a bad
of resurgence in the American economy in 2012. The impact economy the number of claims often decreases as employees
of the global economy means that trouble in Europe means fear losing their jobs. However, the opposite can occur. Since
trouble at home. Dimmed are the glimmers of hope for 2012, an employee cannot be terminated due to a work-related
replaced by predictions of more economic pressure, down injury, it is critical to note that an employee may view a
60 | LitigationManagement | spring 2012

2. workers’ compensation claim as an avenue to keep their job. health cost containment company in Dallas, provides the follow-
ing guidelines on how to control a workers’ compensation loss:
Get Creative
How can a risk manager implement creative strategies to Compassion — Make sure that the employer has designated
prevent workers’ compensation claims and get a handle on someone (supervisor) responsible for creating and maintaining a
insurance costs? It is a difficult challenge to address. Yet it is continuous personal connection with the employee. It is impor-
one that is critical for the future of our economy. There are tant that the employee have a clear and reasonable understand-
two key areas that the risk manager must focus on: accident ing of worker’s compensation as well as employer expectations.
prevention and loss control.
Collaboration — The employer adjuster, employee and
Accident prevention focuses on strategies and techniques medical community must work together to achieve the best
that occur to avoid or minimize the risk of loss. There are outcome. Employers should invest time in advance of a
three key steps to accident prevention: claim to develop a resource network for doctor referrals that
will ensure the injured employee receives excellent medical
Employee screening — The first step in accident prevention is care from a provider who understands work-related inju-
matching the employee’s physical capacity to the essential func- ries and the employer’s culture and environment. Having
tions of the job. According to Louis Zuniga, president of Health the physician and staff tour the workplace in advance and
Masters in El Paso, Texas, and an authorized WorkSTEPS work on identifying transitional duty opportunities can help
Program provider, “Employers must ensure that they have the minimize the length of lost time as a result of an accident.
right employee performing functions that he/she is physically
capable of performing. An office manager would not hire a data Knowledge — Working with your broker and underwriter
entry clerk who can’t type. The same goes for our labor force. to ensure that your claims provider understands your busi-
By screening employees utilizing a program like WorkSTEPs, ness and is interested in developing a business relationship
the employer fulfills the need for reliable, medically safe, legally with you and your employees is critical.
defensible employment testing programs to assist in reduction
of work place injury incidence and associated costs.” Transitional Duty — Look for ways to accommodate mean-
ingful, productive transitional duty assignments for employ-
Employers must invest in functional capacity screening in ees injured on the job. Studies show that the ability to return
order to match the required level of physical activity with to work keeps the employee engaged and increases the heal-
the employee’s ability to perform. ing time while reducing costs of workers’ compensation.
Education and training — In a down economy two of the Benavidez also recommends becoming familiar and selec-
first things on the chopping block are safety and training. tive about the health care network (HCN) provided by your
Without training employees become inefficient and may carrier. Some of the benefits of an HCN include:
make mistakes resulting in rework. Doing something twice
is never a good way to save money. Safety management pro- u creened medical providers who are credentialed and con-
S
tects the life force of the organization and keeps everyone tracted to effectively mange medical costs and lost days of
working smart. According to Darren Woody, president of work exposure.
CF Jordan Construction LLC, a large general contractor,
“Safety is the litmus test of how our projects are performing. u xpedited care using effective medical utilization techniques
E
If there are issues with safety, it will not be long before there to limit exposure to unnecessary, expensive treatment.
are issues with quality, schedule and profitability.”
u reater employee access to communication and guid-
G
Continuous Improvement — When we accept the status ance. The employee will have access to telephonic case
quo, we accept failure. Keeping employees involved in pre- managers that assist in the coordination of care.
venting accidents, investing in corporate wellness, communi-
cating the value of our employees and helping them stay moti- Employers must take an educated approach when selecting a
vated in the vision of the organization is the key to successful workers’ compensation carrier that goes beyond the insurance
safety management and accident prevention. Recognizing purchase decision. By exploring the service provided by the car-
that the wellness of the workforce is one of the biggest ways to rier and the claims administrator the employer will ensure that
save money and improve productivity will result in a bottom their employees are treated fair and equally with better access
line profit improvement and lower turnover. to service. They will also ensure that they are receiving excellent
service, which can result in better outcomes and savings. LM
Loss Control
In the event a claim occurs, the next key strategy is loss control. Patricia Kagerer is the Vice President of Risk and Safety Management for
Catherine Benavidez of Injury Management Organization, a CF Jordan Construction, a Texas-based construction company.
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