A Little Care and Concern Goes a Long Way

Marcia DeWitt

Workers’ compensation is here to stay. In fact, each year America spends $250 billion on workers’ compensation, from insurance premiums to direct costs of hiring temporary workers to medical, legal and rehabilitation costs. As a legally mandated right given to employees, one would expect a real urgency on behalf of top-level management to gain an understanding of this esoteric fixture on their balance sheets.

Despite the permanence of workers’ compensation in today’s business world, the mindset of most employers is that they are helpless in their ability to control rising workers’ compensation costs. By failing to implement a well-managed workers’ compensation program, employers are destined for a continuation of increased premiums and payouts, and greater on-the-job accident frequency. It’s no use blaming the struggling stock market, inflationary healthcare costs, downsized insurance companies or negligent employees. Once companies come to realize that workers’ compensation is a management issue, the greater their chances for improving overall work conditions and saving big money for the company.

Whistle While you Work

Wise planning and effective management, fused with an ongoing, genuine concern for the health and well-being of the employees, is hands-down the best approach to drastically reducing workers’ compensation costs. That’s right. If you strip away all the negative connotations that workers’ compensation has earned over the years, this concept will begin to make sense. It is possible for an employer to improve balance sheets by taking control of workers’ compensation expenses, and at the same time make the company a more enjoyable place to work. The recommendations outlined below create a win-win business solution that ensures employee satisfaction and achieves long-term solvency for the company.

Safety and Loss Prevention

Clearly the most successfully implemented workers’ compensation program is the one that prevents workplace accidents from occurring at all. Establishing customized safety and loss prevention programs should be a management priority as it is a critical step that must be taken to reduce premiums and keep human resources free of injury. Internal data tracking and data analysis also go a long way in keeping costs under control. Having sound safety measures in place and gaining a company-wide commitment to adhering to those safety measures will also secure companies a more favorable rating in the eyes of the insurer. However, short-term savings result primarily from better management of the accidents that do happen.

Better Care for the Employees - At Less Cost

What does “better care” really mean? And isn’t “better care” almost always synonymous with increased costs? Not always. Eighty-nine percent of construction workers who are injured on the job are cared for at hospital emergency rooms, notorious for being one of the most expensive places to receive medical care.

All companies with high-risk work functions – especially contractors and construction companies – would be wise to compile a list of approved and experienced medical care providers who specialize in occupational injuries. Having this list on-hand and available to every manager and employee before accidents happen will ensure that injured employees seek appropriate medical care. This puts management in control of which doctors are being utilized and ultimately how much is being paid out for medical care.

Typically, the approved physicians or clinics are less expensive than ER doctors and also provide the follow-up necessary to properly supervise the injured employee’s recovery. A proven formula for success is a three-point approach by the employer, employee and medical care provider to address an injury or illness within 24 hours of the occurrence, followed by routine communication amongst the trio. Nearly 100 percent of the time, this approach leads to better and more complete care for the workers, and a more rapid return to work.

Don’t Be A Stranger – Stay in Touch

It is critical that management also makes a commitment to monitoring the status and recovery of injured workers from day one. Ongoing, one-to-one contact between employer and employee during that recovery period yields cost-savings for the company. By providing a support system for injured employees, this instills a greater sense of morale for both parties. It also provides an incentive for employees to hasten their return to work, thereby cutting the number of lost workdays.

Workers who are homebound or away from work for a long period of time often feel devalued if they receive no communication from their employer. One way to optimize the emotional well-being of an injured employee is to assign a staff member to stay in close contact with the worker who cannot return to work immediately.

This “caring” approach facilitates and reinforces a healthy employer-employee relationship. By incorporating a “team” concept, the employer emphasizes employee worth and open lines of communication as invaluable tools to keep employees healthy and happy. This encourages injured employees to return to work more quickly, and heads off combative litigation proceedings.

Modifying Job Responsibility vs. Creating a Couch Potato

Paying two people to do the job of one employee has a dramatic impact on costs. One of the best methods to reduce workers’ compensation costs is to return employees to work as quickly as possible. Unless the employee’s injury is catastrophic, chances are the employee can be brought back to the workforce sooner with some modification of his/her job responsibilities.

For every dollar spent on workers’ compensation, 40 cents of that dollar are allocated for medical expenses and 60 cents cover lost wages. If an employer simply focuses on cutting back on medical costs, the savings amounts to approximately 30 percent of the 40 cents. In contrast, a return-to-work program has the potential to save as much as 80 to 100 percent of the 60 cents in lost wages – making this the more cost-effective strategy.

According to a study conducted by General Electric, injured workers who fail to return to work within 90 days of an injury have less than a 50 percent chance of ever coming back. After 120 days, there is less than a 10 percent chance that the employee will return to work for any company. Yet a worker who is back by week three has a 97 percent chance of successfully returning to a full-function work capacity.

Companies are better off establishing a transitional-duty program under which the company finds another position or temporarily modifies the injured worker’s previous job responsibility until the individual can resume full duties. Employers can work with the employee’s health care provider to redefine or find a position that is better suited to the worker’s current physical condition. These actions increase the likelihood that the employee will eventually return to work full-time. It also eliminates the need to hire and train a replacement – a move that costs businesses millions of dollars each year.

The motivating factor for most CEOs and top-level management to implement a workers’ compensation system is the ongoing pressure to find ways to positively impact the bottom line. With the dollar sign fiercely driving those efforts, it can be very easy for employers to lose sight of the fact that workers’ compensation management is equally intended to develop and retain valuable human capital – the essence of the company. Employees are likely to respond much more favorably to an employer who is not only dedicated to on-site safety and loss prevention, but also facilitates a caring, employee-focused return-to-work program.

A non-adversarial, caring approach combined with good medical outcomes, is a surefire strategy to managing workers’ compensation care. By following these basic practices, employers will feel empowered to expedite injured employees’ return to work while simultaneously boosting productivity and improving the bottom line.