This is part 3 in a 3-part series. Here are parts 1 and 2.

Step 6 – Establish a partnership with your claim service provider

It is not the job of the insurer or third party administrator (TPA) to solve your workers’ compensation problems. That is something you do together. The insurer or TPA administers and manages your company’s claims according to relevant law and brings a diverse array of claims-related services to the table, including utilization reviews, intensive case management for catastrophic injuries and investigation of dubious claims. Your goal should be to develop a close working partnership. On your side, you need to report claims immediately, establish good documentation to serve as the basis for the insurer’s work and work with your adjusters and medical providers to bring injured workers back to work in any medically appropriate capacity as soon as possible.

Together, you and your insurer or TPA should maintain a steady and consistent focus on every open claim. Use all the tools and resources available to return your injured workers to the job; where this is not possible, work diligently to reach agreement on the appropriate way to achieve closure on the case.

Step 7 – Measure and track results

You know the drill – what you measure becomes important.

Be sure to establish clear objectives for what you want to accomplish and communicate them in concrete terms.

Here are three simple, but effective, ways to measure performance. These are measurements that senior management can readily understand and track on a monthly basis (we wrote about the need for simplicity in performance measurement recently here).

First, measure the total costs of losses per full-time-equivalent (FTE) employee (divide the total number of hours worked by 2,000 to get the number of FTEs). Doing so factors out both overtime and part time employment.

Second, measure the cost of losses per hundred dollars of payroll. Compare this to the premium classification rate at the time of the injury to find out if your loss costs are excessive.

Third, measure days lost due to injury per every 200,000 hours worked (equivalent to one hundred employees working 2,000 hours per year). This is the OSHA Severity Rate and is an excellent way to measure lost time.

With this data in hand, ask your insurance broker or carrier what the averages are for these metrics in your industry. They should be able to tell you. Then, benchmark yourself against your industry and yourself.

Track results and report them just as you would track and report production or quality objectives. Moreover, discuss the results with employees. If senior management pays consistent attention to the organization’s loss reduction performance, everyone else will, too.

Another measurement factor focuses on accountability: make support of and participation in your injury management system an ongoing part of performance reviews for management and supervisory staff. Not doing this sends a subtle message – safety and injury management are really not that important at your company.

Step 8 – Define and communicate responsibilities

In a well-coordinated injury management system, everyone knows his or her proper role and responsibilities. Each person must understand how to respond. Injured workers must immediately notify supervisors of any injury. Supervisors must respond in a caring manner and make sure that workers who sustain injuries are escorted quickly from the work site to the right medical provider. Supervisors also are charged with analyzing accidents and taking steps to ensure they don’t happen again. Supervisors should thoroughly document accidents and injuries with the assistance of injured workers. And senior management should follow through by making sure that corrective action identified actually does occur.
It is a truism of business that well-defined responsibilities go a long way toward assuring that objectives are met or exceeded. Workers’ compensation cost control is no different.

We recommend that, among other program documentation, you create a simple brochure that might be called, “What to do when you’re injured on the job.” The brochure should say what employees should do and what management will do. It should describe your Modified Duty Program and accident investigation protocols. It should hammer home the need for every injury to be reported during the shift on which it occurs.

Conclusion

Workers’ compensation is not an insurance problem. It is a management problem. Employers committed to taking control can reduce costs significantly. At the same time, their companies will benefit from improved morale and productivity. Like so many of life’s thorny issues, workers’ compensation can be managed if you only have the will to do it.

Yesterday, we began our Eight Essential Steps series with Steps One and Two, making a commitment and focusing on lost time. Today, we’ll tackle Steps Three through Five.

Step 3 – Develop an injury action plan

Many employers think that when an injury occurs responsibility for getting the injured worker back to work shifts to the claims adjuster. Nothing could be further from the truth, and it is this basic misunderstanding that causes many claims to deteriorate with oftentimes negative consequences for both worker and employer.

The claims adjuster’s job is to determine compensability, coordinate benefits, follow the law and work within it and the workers’ compensation insurance contract to resolve the claim satisfactorily. And while adjusters play a vital role in the process, they can never be your human resource director.

Misunderstanding the role of the adjuster creates an atmosphere in which injured employees are left to drift, groping their way through a quagmire of medical services, uncertain benefits and a cloudy future. In fact, a truism in workers’ compensation is, “When a claim goes south, costs go north.” As the employer, you need to structure a clearly defined path from the moment of injury through early return to work and back to full employment. What you do or don’t do in the first few hours after an injury has a significant impact on your ultimate costs.

Employers need to create a turnkey action plan – a clear set of policies, procedures and expectations with supporting tools and documentation. The plan must include a way to stay in continuous contact with injured workers throughout the recovery process, keeping employees connected to the organization and motivated to return to work.

Step 4 – Establish relationships with high-quality medical providers

A close relationship with medical providers of exceptional quality who understand work-related injuries is essential to managing costs. The pivotal emphasis should be on quality, not price. This sounds paradoxical in these times of higher and higher medical costs, where medical treatment now accounts for nearly 60% of workers’ compensation loss costs and where a bazillion companies unleash an army of people to reign in those costs in so many different ways (NCCI reports 13% of medical costs are devoted to lowering medical costs – go figure). However, ample research shows that doctors who specialize in occupational medicine with a sports medicine approach and who follow ACOEM (American College of Occupational and Environmental Medicine) guidelines, consistently provide injured workers with high-quality treatment while shepherding them back to the workplace in a compassionate and caring manner. Board-certified occupational medicine physicians know a worker should remain out of work no longer than is medically necessary. This leads to an active recovery and lower costs.

Take the time to shop for providers who offer the highest-quality care with an active sports medicine philosophy. Look for physicians who will take the time to understand your needs, perhaps through actual work site visits. Once you have identified potential providers, develop a written agreement that sets explicit procedures for handling workplace injuries. Be sure that each provider is willing to identify specific restrictions resulting from injuries and work with you to accommodate appropriate modified duty placements.

Now, admittedly, this approach can be difficult in the 21st century workers’ compensation medical environment. Large medical networks have enrolled more physicians than there are entries in the New York City telephone directory and have wrung out of each a discounted rate for service. This arrangement might be good for the networks, but not necessarily for you. In workers’ compensation, like in most everything else, you get what you pay for. So, our suggestion is that you should be prepared to negotiate higher payment for the good service you expect. We’ve found it worth it in the long run.

As with any valued vendor, you should provide positive feedback to physicians who take the time to care well for your injured workers. However, while everyone appreciates praise for a job well done, you should always remember a physician’s first responsibility is to the patient. The more the physician understands you have the same outlook, the more the physician will trust you and work with you to accommodate the injured worker’s needs appropriately.

Step 5 – Stress early return to work

Time away from work can be frightening and debilitating for injured workers. Their physical, emotional, and financial well-being are often in turmoil. They are worried about their job and how they will pay their bills, particularly so in today’s economic climate. They often begin to think of themselves as “disabled.” The longer they are out of work, the harder it becomes to get them back into the work routine. Consequently, it is crucial to speed recovery through the use of modified duty, one of the most important tools an employer has to reduce lost time and costs.

Modified duty is a bridge back to full duty, keeping workers active and part of the team. Instruct your medical providers to focus on what employees cannot do while injured, clearly delineating work restrictions.

For a moment, put yourself in the skin of the injured worker and imagine you are talking with your doctor about your injury. Would you want the doctor to list for you the potentially countless physical tasks you could actually still do while injured? Or, would you want the doctor to tell you the realistically few things you should not do? The latter approach is the one doctors prefer, too.

Once you have the medical restrictions, work with your supervisors to develop progressive, short-term transitional jobs and tasks. You don’t want the injured worker to sink roots into what should be a short-term job. Most important, make sure employees and supervisors carefully follow the physician’s restrictions. The goal is to speed recovery, not aggravate the condition and make things worse. As medical treatment continues and your medical provider gradually lifts restrictions, increase job demands to ease the employee back to his or her original job.

That’s it for now. We’ll be back with the last three steps Friday morning.