A Proactive Approach These seven practices will help you improve workplace safety and reduce worker's compensation costs. by Alan Smith and Henry Kaplan Just because everything looks normal does not mean you are controlling your worker's compensation costs. Injured employees often become invisible. We have not seen them for a while, so we forget they are there, especially if our program is fully insured. Ultimately, employers, whether fully insured or self-insured, must face the consequences of not managing their worker's compensation program. If you are fully insured in your worker's compensation program and you start to see your experience modifier increase, or if you are self-insured and start to see your ultimate costs increase, then you may need to ask yourself: "How well is my worker's compensation program working?" This article contains a list of seven practices to help you get control of your program in a way that will reduce the severity and frequency of injuries, reduce costs, and maybe even improve morale. If your risk management function is separated from your safety function, you must try your best to get them working together. These practices come from research and personal experience. The practices combine strategies from the safety profession and from risk management. While each may seem familiar, combining them into an overall, integrated framework gives them a powerful effect on your worker's comp program. If within your organization your risk management function is separated from your safety function, when implementing these practices, you must try your best to get these two functions to work together. These practices are: Management support Medical provider network Early return to work Recordkeeping Injury investigation Injury review Mitigation Practice 1: Management Support This practice has been so recognized by the profession that it has become a mantra risk managers and safety professionals repeat at every conference seminar. Yet, are we really getting what we ask for? What CEOs won't say they support our safety efforts or sign their names to a policy letter? In fact, a written statement from the CEO followed by written policies is the necessary and vital foundation of any worker's compensation program that seeks to reduce the frequency and cost of injuries. However, if that is as far as it goes, the organization is missing a major opportunity. The CEO, managers at every level, and first-line supervisors must agree safety is important. They must take the initiative and speak out to employees at every opportunity in favor of safety. They must hold their subordinates accountable for promoting safety, and they must enforce safety policies. Without sincere management support, one that demonstrates involvement, safety has a hollow ring. Safety must be a corporate value, not just a priority. Priorities can change, but a value is part of the individual and the corporate culture. Practice 2: Medical Provider Organization How many risk managers and safety professionals rely totally on their third party administrator or insurance carrier to take care of the medical needs of their injured employees? There is a tendency to let access to the medical system remain the prerogative of the insurance carrier or third party administrator, but there are proactive actions the employer can take, even when fully insured. A basic action is to set up a local Medical Provider Organization. This is a simple, informal organization of local medical providers. Take the initiative: Interview local medical providers and explain to them the objectives of your worker's compensation program. Get them to agree to provide care to your injured employees. Publish a list of all providers who agree to the program and distribute the list to all employees. Encourage injured employees to visit these providers. It is important to encourage these medical providers to give fair, honest, and appropriate treatment with the objective of returning injured employees to work. Medical providers must be willing to communicate with you and call and tell you what is happening medically with your employees. Practice 3: Early Return to Work An early return to work program is the one single practice that can bring the greatest reduction in direct costs for your worker's compensation program. When employees lose time from work, they cost the employer and the carrier (and there is some reason to believe healing takes longer). It is important to return employees to work just as soon as they are medically able to do so. This may mean they may have to work at their job with restrictions, which often is referred to as light duty. If an employee is injured seriously enough that he is unable to return to work, he should not be forgotten. Supervisors should call or visit all lost-time employees at least once every six weeks. Ask doctors to identify work restrictions in writing, then try to accommodate the restrictions of the injured employee. Look around the workplace. Identify tasks that need to be completed that the injured employee can do. Not every supervisor favors light duty. The concept of light duty must make sense to them. In today's economy, few employers have the full complement of employees they need. If an employee is missing work, someone else must pick up the slack. In every organization, there are tasks, projects, and jobs left undone because no one has the time to do them. An employee on light duty provides a great opportunity to get these projects completed. Encourage medical providers to give fair, honest, appropriate treatment with the objective of returning injured employees to work. Managers and supervisors should keep in mind that if an employee is losing time from work, in most states, they receive a disability check in the amount of 60-75 percent of their normal pay--just to stay home! That money is being paid out whether the employee is working or not. So, consider that for just 30 percent more, you can have a productive, full-time employee. Here is an example of how much an early return to work program might cost. For an employee who normally earns $10 an hour, the extra cost may only be $3 an hour. That is, while they are at home watching television, they may be receiving a disability check that is equivalent to $7 an hour. The difference between the disability check and their normal paycheck of $10 an hour is only $3. In effect, for $3 an hour, you can have an active, productive employee back at work. Early return to work is not just good for economics, it is good for morale, and there are those who say it promotes healing. A Comp Cost Reduction Checklist It is important, however, to be creative. If you cannot find a suitable job task in one part of your organization, look for it in another part of your organization. Of course, in a unionized organization, an early return to work program may need to be negotiated in the contract. Regardless of where an employee is placed in the organization while in an early return to work program, his time should be charged to his home department. By doing this, you will find it amazing how soon the home department will find job tasks for employees with restrictions. Practice 4: Recordkeeping In order to manage any program properly, it is important to know what is going on. A good recordkeeping system is essential to this task. A recordkeeping system also provides analysis of the data and then summarizes the data in reports to management. Try to keep the reports simple so they can be continuously produced without complication. The first phase of this process is to make injury reporting a requirement, no matter how minor the injury. Employees must be encouraged to report all injuries. Policies may provide consequences for not reporting. At first, encouraging everyone to report all injuries seemingly increases the number of injuries. However, in the long run, accurate reporting will give management a better understanding of injury trends and allow it to take actions to prevent a catastrophic injury from occurring. Recording injuries in a computer database lends itself to ease of analysis and summary. These summaries then can be placed in a report for management's review. Organize the reports by work group so those groups have accountability and do not become lost in the global corporate statistics. The keys here are to keep the reports concise and frequent. An added advantage of summarizing and reporting injuries is that the process creates an informal system of accountability. What is measured is what is accomplished; when managers see how their operations compare to others, they may become more motivated to pay attention to safety programs in their area of responsibility. Practice 5: Injury Investigation Once an injury is reported, the next logical step is to conduct an injury investigation. Typically, the employees' immediate supervisor should conduct the injury investigation as soon after the injury as possible. The supervisor should personally visit the injury site, interview the injured party, and interview any witnesses. Asking for written statements and taking photographs of the scene can be helpful. The initial investigation should be objective, unbiased, and should not assess blame or speculate on root causes. Include all evidence that would lead to a determination of root cause. Without this information, you don't know how to stop injuries from happening. The best way to cut worker's compensation costs is to not have them in the first place. Practice 6: Injury Review The practice of injury review is performed to determine root causes and suggest actions to prevent recurrence. Injury review should be a formal and frequent practice. A panel of supervisors and workers, formally appointed, should meet at least monthly to review all injuries that occurred during the previous period. Their task is to review the evidence from the investigations of each injury. They may question the injured person, witnesses, and supervisors. They also may review suggestions made by employees, other loss control efforts, and hazard identification documents. The role of the injury review panel should not be that of a disciplinarian. However, based on the panel's findings, the injured employee's supervisor may take disciplinary action. The findings and recommendations of the injury review process should be in writing and circulated to employees, supervisors, and managers. Practice 7: Mitigation The injury review panel should not be a disciplinarian. Based on its findings, however, the injured employee's supervisor may take disciplinary action. The process of mitigation can also be called prevention. It consists of four parts: administration, engineering, equipment, and education. It is at this step that management support must be clearly evident and demonstrated. Management must be willing to take the recommendations of the injury review panel and transform those recommendations into actions. Examples of turning recommendations into actions include re-engineering a task or equipment, providing personal protective equipment, developing new policies and procedures, administering discipline, scheduling training, and improving communications through flyers, memos, training courses, one-on-one instruction, and incentives, to list a few actions. Education and training may be frequent recommendations from the injury review process. Identifying injury trends and then providing training in those areas is an obvious but often overlooked action. Employees must know that action was taken to correct safety problems by seeing it, hearing it announced, or, better, becoming involved in the solution. There you have it: seven proactive practices you may already have known about. There are no magic formulas here, just solid practices that work. But you already knew that, so why don't you try them out? References 1. Brickman, Jr., Charles P., "Safety Forum, 10 Myths of Safety Management," Safety + Health, June 1999, p. 106. 2. Earnest, R.E., "Characteristics of Proactive & Reactive Safety Systems," Professional Safety, November 1997, p. 27. 3. Huckaby, James E., "5 Steps to Take Control of Your Workers' Compensation Program," Texas Association of School Business Officials Conference, February 26, 1998. 4. Hyman, Allen, "Communicating Risk Management," Public Risk, March 1999, p. 12. 5. Petersen, Dan, "What Measures Should We Use, and Why?" Professional Safety, October 1998, p. 37. 6. Texas State Office of Risk Management, "Return to Work Program," Volume III, Workers' Compensation Exposures, Section One, Workers' Compensation Program, Chapter 5, December 6, 1995. 7. Texas Workers' Compensation Commission, "Action Prevention Plan Program Guide," revised August 1997. 8. Veazie, Bob, "Foundation Principles," Professional Safety, April 1999, p. 24. A Comp Cost Reduction Checklist Management support Do you have a written statement signed by the CEO supporting the safety program? Are there written policies that define responsibility for reducing injuries? Does the CEO speak out to employees about the importance of safety? Do the CEO, managers, and first-line supervisors set the example? Is there a formal process of safety accountability? Medical provider organization Have you set up a local physicians provider organization? Have you recruited local doctors to participate in your occupational safety and health program? Has a list of all doctors who agree to the program been published and distributed to the employees? Are injured employees encouraged to visit these doctors? Are medical providers encouraged to give fair, honest, and appropriate treatment? Early return to work Do supervisors call or visit all lost-time employees once every six weeks? Are medical restrictions on each injured employee identified in writing? Do you accommodate injured employees in the workplace? Injury reporting and tracking Are employees encouraged to report all injuries, regardless of how minor? Are injury incidents recorded and tracked in a computer database? Are periodic injury summaries provided to management and employees? Injury investigation Do supervisors personally visit the injury site? Do supervisors interview the victim and the witnesses? Are photographs made of hazardous conditions? Are written reports on injuries submitted by supervisors? Injury review Has an injury review panel consisting of supervisors and employees been appointed? Does the panel meet at least monthly to review injuries? Does the panel publish written findings and recommendations? Mitigation and prevention Administration: Does management review recommendations from the injury review board? Does management review employees' safety suggestions? Does management review facility inspection reports? Are safety policies, procedures, and discipline implemented fairly and consistently? Engineering & equipment: Are corrective actions scheduled and implemented? Is personal protective equipment made available to all employees? Education and training: Are safety training courses scheduled and delivered? Are other safety interventions, such as flyers, memos, and incentives, used to communicate the safety program? Alan Smith, CPCU, ARM, is currently the risk manager for the Garland Independent School District, Garland, Texas. He was Safety Manager of the Year for Texas Safety Association and Risk Manager of the Year for Texas Chapter PRIMA. Henry Kaplan, ARM, ALCM, is the risk management specialist for the Garland Independent School District. Copyright 1998, 1999 Stevens Publishing Corporation 5151 Beltline Rd. 10th Floor Dallas, Texas 75240