Managing workers comp

January 1, 2006 By    

If you take the humanity out of the process, employees are a lot like equipment. When bulk trucks need repair, fix them promptly and hopefully you won’t lose too many productive days when it’s in the shop.

 Jay Johnston
Jay Johnston

If only it were that easy with employees.

A majority of the cost in workers compensation claims can be attributed to lost-time injuries. This means injuries where an employee cannot perform the duties of their job. The indemnity portion of your workers compensation policy begins to work overtime and weeks of recovery can equate to burdensome and excessive costs.

They are burdensome and excessive because they add to your experience modification rate. The average rate is 1, but significant claims dollars paid out can increase that rate up to 1.5, and a particular problem year will stay on your record for three years.

In addition to prevention strategies, the key to avoiding these financial time bombs is to manage each lost time injury with passionate concern for rehabilitation and light duty activity during the recovery process.

Years ago, I worked for a very large propane company and they had a 1.5 experience modifier. My goal was to lower that number to below 1 in three years. In the end, my work saved them over $1 million.

Here’s how we did it.

First, we put on face-to-face seminars and safety meetings with every employee in the company outlining the new workers compensation accident prevention and claims management process. In four months we covered 15 states and made sure everyone in the company bought into the plan.

The process included designating preferred medical providers in each community that were central to each branch. Each medical provider was given a letter by corporate officials stating they wanted employees to receive the best care. They also required the medical staff to specify what the employee can physically do during the recovery period.

No propane company that I know has a great deal of light duty work available, yet this company made plans for such work to be available during recovery from an injury. They did it because, in addition to being the right thing to do, it would save them big money.

Another part of our program included the hiring of an occupational nurse to assist with all lost-time injuries. She was from Latvia and her name was Bonita. When we hired her she made us a promise, “They vill go back to verk.”

Bonita was pleasant and caring, yet firm and unyielding when it came to excuses for not adhering to the company’s procedures. She had heard every excuse in the book, and dealt with medical providers who promote lingering and chiropractors who padded the case. She was a key component in accomplishing our goals of returning injured employees to work.

We also utilized her services on old cases where the claim reserve was high. She had the medical provider list what the employee could do and we provided a job that fit the criteria. The employees began to be productive as they recovered and most eventually returned to their old jobs. The large reserves were reduced and the experience modification rate came down.

It can be just as important to manage these issues before you have problems. After the fact, it takes three years to recover.

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