How to Manage Workers' Comp Costs
Without a proactive approach to managing employees' disability claims, companies often find workers' compensation costs also are a killer when it comes to the bottom line on their profit and loss statement. Fortunately, effective disability management programs create a win-win situation for both employer and employee by reducing workers' rights and productivity. After the first year of implementation, based on reports from self-insured employers, it is not unrealistic to expect a 25 to 35 percent drop in annual workers' compensation costs and a 55 percent savings on long-term or inactive cases.
While the Ohio Bureau of Workers' Compensation's reforms are containing costs and cutting premiums for many employers, companies without well-conceived disability management programs run the risk of not realizing those savings.
Negotiating and properly handling disability claims is a crucial component of containing workers' compensation costs. Outdated policies and approaches serve neither employers nor employees well. So, employers who encourage their risk or human resource managers to negotiate disability effectively will offer a variety of strategies. Among the steps employers can take to reduce their costs and foster more productive employer-employee relations:
Corporate strategic planning: At the heart of managing disability claims lies a strategic plan to define the employer's philosophy, policy and procedures to direct the company's economic and human resources to prevent disability.
Cooperative case management Companies must have an internal or on-site system to guide injured workers through their recovery and return to work. The process ensures appropriate care for the worker, provides ongoing contact between the worker and management and establishes work-related treatment goals to maintain realistic expectations.
Transitional work program: The historically ambiguous and confusing concept of "light duty" is supplanted by a more responsive program of transitional work. Transitional work programs clarify and direct, while unsystematic light duty assignments are confusing and offer little direction for either workers or supervisors. A "Work Prescription" program offers more appropriate alternatives that accommodate an injured worker's abilities and coordinate medical and work site issues within a prescribed time limit.
Supervisor training: Misapplying corporate policy, a mistake most often attributable to a lack of information, can be costly. Supervisors, managers and union stewards must be fully informed and prepared to serve as active disability managers. Supervisors must under stand transitional work goals and case management techniques. They also must know how to accommodate injured employees in the workplace and be sensitive to the physical and emotional impact injuries have on employees' performance and productivity.
Workplace injuries too often foster a defensive bunker mentality among employers who believe both the system and "bad" employees are taking advantage of their companies. In turn, such attitudes encourage injured workers to prolong their absences and remain off the job. An effective disability management program promotes more negotiation and a better outcome for both the company and its employees.
But a company must seek to control the process through a disability management program rather than allowing the process to control the company. Employers too often defer all coordination of treatment, case management and work return decision-making to medical providers or outside groups like insurance carriers and claims administration service groups. Enlightened managers move to develop philosophies and policies that direct medical resources and work site decisions to developing appropriate pathways for injured employees to follow back to work.
Excessive workers' compensation costs and poor rehabilitation outcomes for injured workers are not the byproduct of an unfair system, bad luck or sinister forces. Incomplete planning and programs and competing self-interests contribute to adversarial employee employer relations and additional, unnecessary costs.
No employer is immune from the economic and personal impact that injury, illness and chronic disability have on its work force. An effective disability management program protects not only a company's bottom line, but the work performance and productivity of injured or ill workers. The program also prevents personnel problems from becoming disability programs. Remember: An investment in a disability management program can offer a sound return for companies committed to helping both themselves and their workers.