First, do you have a Safety Committee that meets at least once a month? The main goal of an effective Safety Committee is to provide open, two-way communication between management, safety team members and employees as respects the organization’s injury prevention activities. As such it should be a forum for the generation and discussion of ideas between management and employees as it pertains to safety and health issues. It should not be a decision making body per se. The Safety Committee should provide an open forum where employees can take part in any discussions involving their safety and welfare in the workplace. It should have the full support of upper management. Otherwise it will “die on the vine” and lose its potential. And, because representative Supervisors are on the committee, their interest in the injury prevention program will be undermined as well.

Second, does your Safety Committee review injuries, causes of loss and safety inspection reports during its monthly meetings? One of the key agenda items for the Safety Committee should be a careful review of worker injuries that have occurred. This will include a review of the accident investigation report and the supervisor’s determination of the root cause of the injury. Lessons must be learned in order to prevent a reoccurrence of the injury. Also, a copy of all department inspection and “near miss” reports should be sent to the Safety Committee for its review and comment as well. These reports will reflect exposure to potential worker injury. They also will reveal any problems or deficiencies on the part of the inspector. All reports should be discussed openly and recommendations should be made to management where appropriate. By effectively involving the Safety Committee in the injury prevention program the Safety Director will effectively access a broad spectrum of expertise which will help correct unsafe acts or conditions in the most practical manner. Also, claim management problems can be addressed and resolved as the need arises. Once consensus is reached, the Safety Director will have enlisted members of the Safety Committee who will serve as advocates of the injury prevention program throughout the organization.

Third, do you have written safety rules and procedures that have been communicated to all employees? There should be a written policy statement designed to express top management’s commitment to safety and health in the workplace. Senior management should be directly involved in making sure that it is written properly and that it expresses the true intent of top management. The success of the organization’s injury prevention efforts, and the decisions made about it, are just as important to the financial success of the organization as major capital equipment expenditures, suppliers the organization will purchase from and at what price, etc. Therefore, it is recommended that all decisions in the area of safety and health policy be made with the same degree of care and have the same level of involvement and support by top management. The Safety Director should be charged with the duty to develop the safety and health policy and secure total management commitment of it before it is communicated and implemented. It is also recommended that the organization’s safety and health team be highly involved in the development of the safety policy since they will be ultimately charged with the responsibility to carry it out. The ultimate success of the organization’s safety policy statement hinges on how well it is communicated to Supervisors and the workforce in general. Too many times organizations merely “hand out” the policy statement without taking the time to explain and promote it in a positive way to their employees. As a result, the document simply gathers dust and the intent of the policy is not carried out or enforced.

Fourth, do you have clear and written procedures for enforcing safety rules? Once safety rules have been developed and communicated, they must be fairly and consistently enforced. Irrespective of how well the organization’s safety and health policy has been designed and communicated, there still will be infractions and violations from time to time. Supervisors should be charged with the responsibility of identifying infractions and issuing safety warnings. Depending on the background, training, and personality traits of supervisors and other safety team members this may be a difficult task. Therefore, the rules should be carefully explained and training in these rules should be provided where necessary. All safety rule violations should be in writing with a clear explanation provided to the employee involved. There must also be a mechanism to handle repeat violations, including warnings, performance actions, and potentially termination. Otherwise the employees will view the organization’s safety rules to be meaningless and their safety behaviors will not change.

Finally, do you have a Safety Suggestion Program that encourages workers to report hazards and suggest ways to improve safety? As will be discussed in Chapter 8, an effective Employee Safety Suggestion Program represents a sincere attempt on the part of management to encourage employee participation in the process of identifying unsafe hazards and conditions. Encouraging and responding to employee suggestions is one of the most effective ways to demonstrate management’s sincere interest in the safety and welfare of its employees.

First, do you have a Safety Director who is accountable for the implementation of your injury prevention program? The Safety Director should have overall responsibility and authority for implementing the safety and health program in accordance with company goals and objectives. The Safety Director’s responsibilities should be in writing and clearly communicated throughout the organization. Also, it is extremely important that the Safety Director report directly to the President, at least on a quarterly basis, on all safety activities and indicate results accomplished. On-going access is critical.

Second, do you have a formal safety team comprised of individuals who have clearly defined levels of authority and responsibility? The organization should assemble and properly train a safety and health team comprised of a Safety Director, Accident Prevention Officer, Claim Coordinator, Safety Committee and supervisors. There should be written responsibilities for each job function with the full support of management.

Third, have you established and communicated clear goals for your injury prevention program via a written annual plan? A serious commitment to worker safety deserves serious and thorough planning in order to accomplish the ultimate goal of maintaining “zero injuries.” Otherwise, the employer’s collective injury prevention efforts will fall short of expectations and will waste valuable time and resources. To make matters worse, employees will view the employer’s efforts as “just another management fad,” and the overall effort will not be taken seriously. In short, the injury prevention plan is the safety team’s road map to accomplishing its goals with the full support of upper management.

Fourth, do you have a written safety and health policy and has it been communicated to your employees? A comprehensive safety and health policy, clearly written and communicated by management, and fairly implemented and enforced, is a critical step establishing an effective injury prevention program. This policy sets the tone and direction for all injury prevention efforts. Many firms have experienced problems implementing their injury prevention program because their safety policy has not been communicated, implemented or enforced.

Finally, does top management regularly attend safety and health functions in order to show visibility and interest? Once again, one of the key indicators of management’s interest and visibility in the organization’s injury prevention program is their willingness to allocate the necessary time to attend key safety and health functions. In order for the safety and health program to be successful the President of the company (or in the case of a multi-plant company, the plant manager or highest managerial individual) is expected to be personally committed to and visibly support the Safety Director, as well as other injury prevention team members. Otherwise, the injury prevention team members, as well as employees, will view the safety program as “just another management fad.” The end result will be wasted effort, the continued existence of unsafe acts and conditions at the facility, and continued work-related injuries. This is clearly the opposite result the organization is trying to achieve. In addition, pressures push Supervisors and employees to ignore safety and health procedures and policies. The only thing that can counteract this pressure is consistent, visible management support for the injury prevention program. Management commitment “on paper” means very little. On the other hand, management’s visible support, both in encouraging safe, healthful behaviors and in standing behind the enforcement of safety policies, is vital to the program’s success.

This video provides some ideas on how to do this. You will also be able to download in Adobe pdf a brief article that provides more information for your reading pleasure.

Go to http://www.mywcsolutions.com/benchmark_prompt_response.asp and enjoy.

Let’s assume that your organization averages 20 medical only claims a year and that every medical only claim pays workers compensation benefits of $550. This means that your workers compensation adjuster is paying $11,000 a year. However, using the OSHA estimate of indirect costs, your organization also incurs $49,500. This reflects the financial waste and inefficiency throughout your organization. As a result, these 20 medical only claims actually cost your organization $60,500. Assuming a 5% pre-tax profit, this also means that your organization must sell $1,210,000 each year to pay the total cost of these 20 medical only claims. How many employees must you hire to produce goods and services to generate these sales?

Workers compensation disability claims produce more amazing results. According to OSHA, for every $1 of workers compensation disability payments the organization insures between $2 and $10 of uninsured, indirect costs. To be conservative let’s assume that the ration is 2:1. Also, let’s assume that your organization has 10 workers compensation disability claims and each averages $12,500. Your workers compensation adjuster would pay $125,000 for these workers compensation claims. Also, using the conservative OSHA ration of 2:1 your organization would also sustain $250,000 in indirect, uninsured costs. This additional cost reflects the waste and inefficiency throughout your organization. Again assuming a 5% pre-tax profit, the total cost of these disability injuries ($375,000) requires your organization to generate $9,375,000 in sales to pay for these 10 workers compensation disability injuries. Again, how many employees must you hire to produce goods and services to generate these sales?

I invite you to take five minutes to estimate your TOTAL COST of worker injuries using OSHA estimates in the privacy of your office. It is on-line and available 24-7. To find out more go to www.comperaser.com. These resources also include injury prevention, OSHA compliance, safety training, prompt injury response, workers compensation disability management, plus more. These resources are available 24/7 and used irrespective of which workers compensation carrier you select. Its patent-pending technology also provides unique financial reports for monitoring the effectiveness of your safety and health program on an on-going basis.

Reduced workers compensation claims equals increased productivity

The flip side of this equation is that, when a workers compensation claim occurs, product/service quality will suffer. An example, one the CompEraser customers experienced a workers compensation claim recently. The employee was working in a department that assembles the final product and incurred a serious back injury. This particular customer, in order to minimize inventory and reduce operational costs, was operating very lean. Their raw product and in-process inventories were maintained at low levels. Also, their finished product inventory was maintained based upon customer demand. Man-hours were managed very carefully so that labor costs were also maintained based upon consumer demand. Everything was running fine until the workers compensation claim occurred. But here is what happened after the injury. First, the assembly department immediately fell behind in meeting its orders. In this case the employee was off work for 2 ½ months. At first the department attempted to make up the shortfall in production by paying overtime but once it because clear that the employee would be off work for an extended period of time they had to bring in a temporary worker. According to the customer this temporary worker was working, at best, at ½ the rate of the injured employee. Quickly seeing this, they then brought on an additional temporary worker. So now you have overtime payroll and two temporary workers to pay for.

Second, the organization’s ability to ship products to waiting customers became a problem. Because finished good inventories were kept low, there was no buffer here. As a result, customers began to complain and some even went to competing companies to fulfill their needs.

Third, product quality itself began to slip. The customer reported an 18% increase in product return rate over the next three months. No only did this add to the strain already placed on the organization, it drove up manufacturing costs.

Finally, according to the customer, once the injured employee came back to work it took that employee approximately 60-days to get back to full capacity and for the department to get back to its pre-injury production/product quality levels.

All of these costs eventually found their way to the customer’s bottom line – and none were paid for by workers compensation insurance. The ripple effect of a worker workers compensation claim can be quite significant. In this case it was calculated using CompEraser’s patent-pending system that the workers compensation claim itself was $22,225 and the indirect, uninsured costs were 4.1 times this figure, or $91,125. In short, the total cost of this injury to the customer was $113,350. This customer operates in to today’s competitive economic environment at a 4% pre-tax profit. Therefore, they must produce $2,833,750 in sales to pay for this workers compensation claim.

Second, more and more organizations are taking a fresh look at the concept of productivity throughout their organization. If this were only a matter of investing in new technology this challenge would be relatively straightforward, although not always easy. But what makes this productivity evaluation so difficult is that it involves PEOPLE, and this imposes strain and complexities on the employment relationship. As I talk to owners and managers I get a real sense that they are struggling with this issue every day and it often keeps them up at night. As one manager said to me recently – “It is more than just displaying leadership and expecting employees to follow your lead. I must convince all of my employees that we have a common interest in operational efficiency, open up channels of communication, and earn their trust that we will truly listen to them and make the right decisions.”

While employee safety is just one component of a successful strategy here, there is no longer any doubt that it impacts these issues every day. The equation is simple:

Reduced workers compensation claims equals increased productivity

Every day that an injured employee is off work has two devastating effects on the organization. First is the impact on the bottom line. For every $1 of insured workers compensation claim costs the organization incurs between $2 and $10 of uninsured costs. In fact, CompEraser’s clients are averaging $3.80 of indirect, uninsured costs. These uninsured costs result primarily from the reduced productivity of the injured worker and fellow employees. Second, a workers compensation injury is a test of the employment relationship. Not only has a valued employee gotten hurt. It is a breakdown in the organization’s efforts to prevent injuries. Unless the organization has Prompt Injury Response and Temporary Duty Programs which are embraced by all employees and implemented consistently with compassion the trust that management is seeking to earn will quickly evaporate.

Safety is no longer a standalone “silo” within the organization. It truly must be an integral part of its effort to compete profitably in the world marketplace. It touches the hearts and minds of your employees every day. If successful your organizational productivity will increase. If unsuccessful the opposite will occur.

I invite you to take five minutes to estimate your TOTAL COST of worker injuries using OSHA estimates in the privacy of your office. It is on-line and available 24-7. To find out more go to www.comperaser.com. These resources also include injury prevention, OSHA compliance, safety training, prompt injury response, workers compensation disability management, plus more. These resources are available 24/7 and used irrespective of which workers compensation carrier you select. Its patent-pending technology also provides unique financial reports for monitoring the effectiveness of your safety and health program on an on-going basis.

A major goal of the Privacy Rule is to assure that individuals’ health information is properly protected while allowing the flow of health information needed to provide and promote high quality health care and to protect the public’s health and well being.  The Privacy Rule strikes a balance that permits important uses of information, while protecting the privacy of people who seek care and healing.  Given that the health care marketplace is diverse, the Rule is designed to be flexible and comprehensive to cover the variety of uses and disclosures that need to be addressed.

Healthcare providers vary as to their privacy procedures in order to comply with HIPPA. These regulations require covered entities to establish privacy policies but provide no standard guidelines. As a result, there can be as many different privacy policies as there are doctors, hospitals and health plans. There is no guarantee of uniformity. Therefore, employers must increasingly make an effort to understand the privacy standards the health care provider will use in treating their injured employees and make a determination as to whether their privacy standards pose insurmountable problems. In fact, this evaluation may lead to the employer limiting or avoiding the use of their medical services.

“I was injured a month and a half ago by my employer. I have not received anything from the workman’s comp claims adjuster. Now my cell phone is disconnected and I sent her an email yesterday. And now she tells me she needs a phone number on file. However she has not tried to call me since this claim started. I have always called her. My email asked her to simply leave me information about the claim and she never responded to that. She just said I need a number on file. What should I do?”

Initially I was reluctant to respond to this email. You never know if it is a prank or if there was more to this workers compensation claim than was being told. But there was something in the message that motivated me to respond with a few more questions.

“Are you certain that you were hurt on the job?”

“Have you tried to contact your employer for help?”

“Have you tried to contact another adjuster for help?”

The person emailed back the following response:

“Thanks for your prompt reply. Yes, I feel this is a workers compensation claim. I was working at the hotel when I slipped and fell while leaving at the end of the day. I reported my claim right away but felt that human resources treated me very strangely. At first nothing happened but after three weeks I was told the claim had been reported to the insurance company. I wanted a while longer but did not hear from the insurance company. Since I could not work and was not being paid I could not pay for my phone and it was disconnected. My employer is not helping me and is still acting strange. I do not know what to do and need help.”

So I emailed her back and asked for the name of the adjuster. Once this information was received I called the adjuster. She was not in that day so I talked to her supervisor. I told her that I had nothing to do with this case but was only trying help. The senior adjuster then said:

“You know, the adjuster is new and probably did not know how to tell this person that the claim is still being investigated. I will contact her myself right away.”

Now I will have no way of knowing what will ultimately come of this claim. For all I know it will not be viewed as compensable. But the point is that the employer, whoever it is, treated their employee very poorly. As a result, the employee (who did not even know they had the right to get an attorney…believe it or not) was afraid and insecure. It also took 3 weeks for the employer to report the claim to the adjuster, who then totally dropped the ball. But let me ask you. What if the claim is, in fact compensable? What do you think the chances are that this individual would eventually retain an attorney? How do you think the state industrial commission will feel when they find out that the employee fell into financial trouble and even had their phone disconnected as a result? What do you think the chances are that they claim will eventually be paid because of this poor treatment?

Communicating with an injured employee with compassion is extremely important. Also, responding promptly to the event, investigating the facts quickly, and promptly reporting the injury to the adjuster is critical. In this case the employer did none of these. While in this case the injured employee had not yet retained an attorney (that absolutely amazed me) the odds are high that eventually they would…and all this could have been avoided. Relying on a claim adjuster completely to manage the claim will often cause enormous harm to the employment relationship and weaken the employer’s position before the state industrial commission. No one wins here.

So let me leave you with a few more questions:

“How would you feel if you were treated this way?”

“How soon would it be before you retained an attorney?”

“How many other employees would you tell your problem to?”

“Is it worth the risk?”

“Is this the proper way to treat any injured person?”

In this example, where the injured employee accepted the temporary duty offer, the following occurred:

• Virtually all states permit the use of temporary duty in workers compensation claims. However, the specific workers compensation law should be reviewed as the application of temporary duty strategy does vary by jurisdiction.
• Under ADA temporary duty is a possible accommodation but the employer need not create temporary duty or make temporary duty permanent. Also, the “reasonable accommodation” must not impose an “undue hardship” on the organization. Once the employee returns from temporary duty the employee can be reassigned to a different job if the employee is qualified.
• Under FMLA temporary duty is permissible but the employer cannot make the employee take light duty in lieu of FMLA. The time spent in a light duty job does not count against the 12-week allotment of FMLA leave but may count against the employee’s return-to-work restoration rights. A fitness-for-duty examination is permitted if it is required of all returning employees from similar leave and the employee was informed that this certification would be required when their leave began. Once the employee returns from temporary duty they must be reassigned to an equivalent position with equivalent pay and benefits as the former job permitted.

While workers compensation laws vary, as a general rule workers compensation benefits can suspended or reduced if there was a bona fide, medically approved temporary duty offer. It is critical that you document this to the injured employee and attempt to get them back to work in a temporary duty status. Then your claim management team can rightfully argue before the administrative body that the offer was bona fide, made in good faith, and communicated in easy to understand language in accordance with the organization’s leave of absence policy.

Under the ADA, an employee can refuse a temporary duty made as a reasonable accommodation. If the employer can show that the temporary duty job is a reasonable accommodation an employee who rejects the accommodation may be deemed unqualified under ADA.

While this fast-track approach works well for the vast majority of medical-only claims, a small percentage (3.8%) that are medical-only claims 90 days from the date of injury but evolve into lost-time claims. In fact, studies have shown that one out of every six lost-time claims were medical-only in nature after three months.  Also, medical-only claims that become lost-time claims cost, on average, 40 times more than those that remain in medical-only status. To put this in perspective, an average medical-only claim that stays a medical-only claim costs $500. A medical-only claim that transitions to a lost-time claim cost, on average, $21,100.

The National Council On Compensation Insurance (NCCI), in its study “Medical-Only Claims That Become Lost-Time Claims-A Study Of Characteristics” revealed many of the characteristics that create a transition from medical-only to lost-time status. This study analyzed the probability of medical-only claims transitioning to lost-time after 90 days of injury. It evaluated 10 combinations of body part/nature of injury/cause of injury with the greatest probabilities of transitioning from medical-only to lost-time. It found, for example, that carpal tunnel claims transition from medical-only to lost-time far more often that other types of claims. In fact, the average transition probability among the seven carpal tunnel categories is 34%, meaning that medical-only carpal tunnel claims at three months are roughly seven times more likely to incur indemnity losses that the average medical-only claim at three months.

In additional, there were additional factors that increased the probability of a medical-only claim transitioning to lost-time, including:

The larger the incurred value (paid plus case reserves) the greater the probability of the claim becoming a lost-time claim. In fact, for claims greater than $20,000 the probability is nearly 50% that eventually there will be a disability payment.

The probability of the medical-only claim transitioning to lost-time increases with the age of the claimant. For an example, the probability of a medical-only claim transitioning to lost-time for a 55-year old claim is approximately 8.1%. The probability for a 20-year old worker is approximately 1.8%.

What all this means is that the claim management team must be able to quickly identify claims with these characteristics and remove them from the “fast-track” process. It also means that the Claim Coordinator must be extremely pro-active in finding temporary duty work and monitoring the injured employees work status in these situations.