Transcript Understanding and Controlling Workers Compensation Costs

Understanding and
Controlling Workers
Compensation Costs
Michael Housley M.D.
Intermountain Workmed
February 2008
[email protected]
(435) 716-5478
Disclaimer
I am a physician
Cost of an Injury
• Direct costs
– Workers Comp
premium
• Medical costs
• Lost time costs
• Indirect costs
– Decreased productivity
• Absent/impaired
employee
• Training
• Employee turnover
• Morale
– Cost to society
• Effect of injury on
employee’s life away
from work
The Anatomy of a Workers
Compensation Insurance Premium
• Classification of Operation
• Payroll
• Experienced Rating (emod)
Classification of Operations
• National Council on Compensation
Insurance (NCCI)
• Rates based on loss experience from Utah
accompanies
• Proper classification is critical
– Classification list is dynamic
– Rates can vary dramatically
Does it make a difference?
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•
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•
Example:
$ 100,000 X 11.98 = $ 11,980
$ 100,000 X 8.49 = $ 8,490
Premium difference
$ 3,490
This is the initial rate difference. Additional
factors influenced the final premium.
Who sets rates?
• NCCI develops rates
• State Insurance Department accepts,
declines, or modifies rates for insurance
carriers in Utah
• Rates generally accepted as presented
• State Insurance Department occasionally
adjusts rates for specific classifications
Payroll
• Initial rate determination (see previous
slide)
• Factor in experience modifier calculation
Experience Modifier
• Minimum premium amount
• 3 years of data
• Carriers submit payroll and claims data for
each company
Experience Modifier Calculation
(Simplified)
• Expected loss rate X payroll = expected
loss
• Actual loss compared against expected
loss = experience modifier
Comparison of Mod Change to
Company X
•
•
•
•
•
•
Employees: 10 drivers, 1 dispatch
11.98 X
500,000 =
$59,900
.30 X
20,000 =
$
60
Total
$59,960
$59,960 X
1.25
=
$74,960
$59,960 X
.92
=
$55,163
Difference
$19,787
Experience Modifier
• Accurate payroll data
• Accurate claims data
– Trend towards lower claims desirable
Improving Emod
Insurance Data vs OSHA Data
•
•
•
•
•
Death
Perm total
Perm partial
Days away from work
Restricted/transfer
days
• Medical treatment
• First-aid when bill
generated
• Death
• Loss of
consciousness
• Days away from work
• Restricted/transfer
days
• Medical treatment
• Specific diagnoses
Using OSHA Log as a Tool to
Improve Emod
Improving Emod
Insurance Data vs OSHA Data
•
•
•
•
•
Death
Perm total
Perm partial
Days away from work
Restricted/transfer
days
• Medical treatment
• First-aid when bill
generated
• Death
• Loss of
consciousness
• Days away from work
• Restricted/transfer
days
• Medical treatment
• Specific diagnoses
Minimizing OSHA Recordables
• What
– Days away from work
– Job restriction/transfer
– Medical treatment
• How
– Ready access to experts in occupational
medicine, workers compensation, OSHA
Maximizing Non-Recordables
• What
– First-aid
– Injury prevention
• How
– Ready, convenient to access to trusted health
and safety personnel.
– Appropriate administrative and health care
support
First-Aid per OSHA
• CFR 29 Part 1904.7
• (ii) What is “first aid”? For the purposes of Part 1904,
“first aid” means the following:
• (A) Using a non-prescription medication at
nonprescription strength (for medications available in
both prescription and non-prescription form, a
recommendation by a physician or other licensed health
care professional to use a non-prescription medication at
prescription strength is considered medical treatment for
recordkeeping purposes);
• (B) Administering tetanus immunizations (other
immunizations, such as Hepatitis B vaccine or rabies
vaccine, are considered medical treatment);
First-Aid per OSHA
• (C) Cleaning, flushing or soaking wounds on the surface of the skin;
• (D) Using wound coverings such as bandages, Band-AidsTM, gauze
pads, etc.; or using butterfly bandages or Steri-StripsTM(other
wound closing devices such as sutures, staples, etc., are considered
medical treatment);
• (E) Using hot or cold therapy;
• (F) Using any non-rigid means of support, such as elastic bandages,
wraps, non-rigid back belts, etc. (devices with rigid stays or other
systems designed to immobilize parts of the body are considered
medical treatment for recordkeeping purposes);
• (G) Using temporary immobilization devices while transporting an
accident victim ( e.g., splints, slings, neck collars, back boards, etc.).
• (H) Drilling of a fingernail or toenail to relieve pressure, or draining
fluid from a blister;
First-Aid per OSHA
• (I) Using eye patches;
• (J) Removing foreign bodies from the eye using only irrigation or a
cotton swab;
• (K) Removing splinters or foreign material from areas other than the
eye by irrigation, tweezers, cotton swabs or other simple means;
• (L) Using finger guards;
• (M) Using massages (physical therapy or chiropractic treatment are
considered medical treatment for recordkeeping purposes); or
• (N) Drinking fluids for relief of heat stress.
• (iii) Are any other procedures included in first aid? No, this is a
complete list of all treatments considered first aid for Part 1904
purposes.
Injury Prevention Goals
• Promote safe work environment
• Promote employee health
• Promote company culture of safety
Injury Prevention Ideas
• Proactive safety program with support
• Job description, job demand and ergonomic
analysis, appropriate employee screening
• Evaluation of “frequent injury environments”
• Near-miss reporting program
• Encourage employee suggestions for
improvement
• Employee health and fitness promotion
• Etc.
Noitatneserp sdrawkcab
• Proactive prevention
• First aid
• Appropriate medical care with appropriate
restrictions when necessary
• Goal ZERO
• Let OSHA and the claims data be
• Indirect cost reduction will naturally follow
• Stand clear of the lightning rod
Acknowledgments and Thanks
• Howard Leaman M.D. Intermountain
HealthCare
• Eric Torgersen WCF of Utah
• Joyce Sewell (Retired) Utah Labor
Commission
• The great health & safety staff at several
Cache Valley Businesses