Workers' Comp Profile

New Dawn for Ohio

Staff and stakeholders share perspectives on the turnaround of Ohio’s workers’ comp system.
By: | November 2, 2015

The Ohio Bureau of Workers’ Compensation, by far the largest of the country’s remaining four state-run workers’ comp monopolies, has endured some turmoil in its century-long history.

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Only a decade ago, the Bureau struggled under the weight of harsh criticism for high rates, poor claims handling and medical management, and excessive administrative costs.

To add a little salt to the wounds, the “Coingate” scandal broke in 2005, revealing that most of the Bureau’s $50 million investment in rare coins had vanished, stolen by a former Toledo coin dealer.

Since 2011, the Ohio BWC has reduced private employer average base rates, bringing rate levels down by 21.4 percent, and reduced average rates for public employers to their lowest level in more than 30 years.

With pundits insistent that it was time to close the book on monopolies for good, it may have seemed to most observers that Ohio would be next in line to succumb to calls for privatization.

Fortunately for Ohio, though, the story took a different turn.

Since 2011, the Ohio BWC has reduced private employer average base rates, bringing rate levels down by 21.4 percent, and reduced average rates for public employers to their lowest level in more than 30 years.

The BWC has also returned $2 billion to Ohio private and public employers in the form of two publicly lauded rebates, made possible by careful management and investing.

“When you think of $2 billion dollars in Ohio’s economy, particularly small businesses, that’s a huge shot in the arm,” said Roger Geiger, vice president and Ohio Executive Director of the National Federation of Independent Business (NFIB).

“We’ve heard about folks being able to expand operations, we’ve heard about a more aggressive commitment to workplace safety, new equipment purchases, those kinds of things.”

“Two billion in premium rebates is pretty significant to the employers of the state.” — Eric Burkland, president, Ohio Manufacturers’ Association

“Two billion in premium rebates is pretty significant to the employers of the state,” agreed Eric Burkland, president of the Ohio Manufacturers’ Association.

“I have friends and counterparts around the country and they’re saying, ‘What are you guys doing in Ohio?’ ”

At the same time, the Bureau has tripled funding for safety grants, increased commitment to workplace safety by up to $35 million over the next two years, and also saved the state $80 million by shrinking the Bureau’s budget from its 2010-2011 allocation.

And there’s more. A lot more. What a difference five years can make.

Chasing Rabbits

This remarkable turnaround began in January 2011, when Ohio Gov. John Kasich appointed Steven Buehrer as CEO and administrator of the Ohio BWC. Buehrer, a lawyer turned legislator with deep knowledge of the state’s insurance and workers’ comp legislation, had his work cut out for him. Where to even begin?

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“Every day was like coming into a room full of rabbits, and they’re running all over and you have to decide which one you’re going to try to catch,” said Buehrer, “because if you try to catch them all — you don’t catch any.”

Rate stabilization was at the top of the to-do list right off the bat, Buehrer said. Ohio employers had been suffering from rate turbulence for years.

“Low rates are good … . If we surveyed employers in Ohio we’d probably get a unanimous vote for lower workers’ comp rates. But another key is stability, so that employers know what their cost of doing business in Ohio is going to be across a three-year or five-year period.”

Reining in claims costs was also at the top of the list, and Buehrer’s team tackled that from a number of angles. But part of Ohio’s claims woes stem from legislative hurdles and what some call a “benefit-rich” workers’ comp system.

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Steven Buehrer, CEO and administrator, Ohio Bureau of Workers’ Compensation

“We came to see that we couldn’t easily change the statutes,” said Buehrer, “but there were a number of behaviors we could fix.”

That meant moving to a claims triaging system in the BWC’s local offices. Buehrer said that when claims reps were all acting as generalists, “they would tend to sort of forget it. If it wasn’t a new claim and it wasn’t urgent it would kind of sit on the back burner.”

Under the new system, intake reps process claims through the first steps — typically for the first 30 days. Claims are then handed off to a return-to-work specialist, who coordinates efforts to get the person back to work as quickly as possible.

Another group handles long-term cases, working to determine what will help get the employee back to work or possibly into a rehab or retraining program. The system also includes remain-at-work specialists, said Buehrer. Once a person is back on the job, these specialists stay in contact, make sure they’re doing well and fully re-engaged with the workforce.

“The idea is to keep the claim rep fresh and focused on the claim development and hopefully on the claim recovery,” said Buehrer.

Investing in Safety

The Bureau has made safety one of its top priorities. Buehrer credits Kasich with leading the charge and making safety an emphasis for Buehrer and BWC’s board of directors. Buehrer said that when the governor suggested tripling the safety grant program to $15 million, he had concerns about being able to get enough employer take-up on all of it. He needn’t have worried.

“The first two years since we tripled it, we got nearly every penny of it out the door,” said Buehrer. At least 570 employers accepted grants. He says the BWC is already on pace to get all $15 million awarded for the new fiscal year.

“We hear from our members that it doesn’t take a lot of money to make some significant improvements, particularly for small businesses that don’t have either the in-house expertise or the understanding of what they need to do,” said NFIB’s Geiger.

“Many of them operate with older equipment that needs to be updated or upgraded … . We’ve seen a significant number of folks taking advantage of that program.”

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The BWC has also taken its safety commitment to the next level, with a research grant program that’s funding work currently underway in institutions across the state.

“I wanted to get on the offensive side of safety and not just respond to accidents or injury types,” Buehrer said.

“We sent out a competitive RFP to all the research institutions in Ohio and said, come in and propose something … and tell us what vexing problem in workers’ comp you’d like to look at … and what are the solutions for it.”

The RFP specified that projects should be in the $500,000 to $1 million range, and be able to be completed in 12 to 18 months. BWC received 26 proposals and ultimately funded nine in January 2015. The first of the completed projects are expected at the end of this year.

“We’re going to fund this kind of thing every year,” said Buehrer, “and our hope is that each year we’ll be rolling out a half dozen to a dozen sets of results that we can share with the employer community, taking on some of the problematic workers’ comp challenges and really getting ahead of the issues.”

With progress being made on multiple fronts, the Bureau is now actively looking for ways to improve the delivery of medical care. In 2014, BWC, in partnership with Ohio State University, hosted an ongoing summit of about 100 stakeholders including business and labor leaders.

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Jeremy Jackson, chief of public policy and strategy, Ohio BWC

One of the fruits of that effort is a pilot program called the Enhanced Care Program. Jeremy Jackson, Ohio BWC’s chief of public policy and strategy, said that the program attempts to assure providers they’ll be paid for care, even if a claim is being adjudicated or litigated. It also seeks to address obstacles posed by non-occupational conditions or comorbidities.

“What we said to our physicians, was … in those instances where you see something that is broader than the work comp injury, let’s reach out — let’s see if the patient has health insurance, if they have a primary care physician. Can we get whatever parallel issues dealt with, so that the care for the work comp injury can resume and we can ultimately get them back to work,” he said.

The pilot program gives physicians accepted into the program more discretion and a broader set of responsibilities, in exchange for reduced paperwork and additional pay.

Secret Sauce

The privatization debate may never go away completely, but employer groups tend to have a practical perspective about it.

“We take the viewpoint that [public vs. private] is a secondary question,” said Ohio Manufacturers’ Association’s Burkland.

“The question is, is the system designed well? Is it the right benefit mix, the right rating mix, the right medical management mix? Whether it’s public or private, that’s kind of the key.”

What there is no debate on is whether Ohio employers and employees are better off now than they were five years ago.

“There’s more predictable pricing, rate setting — predictability of the insurance function,” said Burkland.

“There’s much better claims management, both on the indemnity side and on the medical side. That leads to the desired result — that our injured workers are getting the care they need more quickly, so they can get back to work in a timely and safe manner. It really has created better workplaces.

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“They’ve also upped their game in safety. There are some cool programs that my members can avail themselves of in safety, different grant and loan programs. All those things you want in a good insurance company, we’re now getting from the Bureau.”

He said the “secret sauce for Ohio, in my opinion, is we’ve got a real strong governance model that’s been put in place. The insurance operation that’s in place has good management and more transparency. … That just makes for a healthy decision-making process.”

The governor is equally gratified to see what the Bureau has been able to accomplish in such a short period of time.

“The secret sauce for Ohio, in my opinion, is we’ve got a real strong governance model that’s been put in place. The insurance operation that’s in place has good management and more transparency. … That just makes for a healthy decision-making process.” — Eric Burkland, president of the Ohio Manufacturers’ Association.

“When I appointed Steve head of BWC, I asked him to find ways to turn Ohio’s workers’ compensation system from an economic roadblock into a partner for economic growth, while maintaining the safety of Ohio’s workforce,” Kasich said in an email.

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Governor John Kasich, Ohio

“He’s done exactly that, reducing workers’ comp costs for employers, returning $2 billion in rebates, and modernizing operations, all while ensuring safer workplaces and better care for injured workers.”

Buehrer identified a few of the basic elements driving the forward motion at Ohio BWC.

“You’ve got to have good people,” he said.

“It’s not always about people who have technical expertise — although that matters — but it’s people who want to make your organization better. We’ve been blessed with a good group of people, some of whom were here when I came and some we’ve brought on board.

“You have to innovate. You have to try new things. We’ve had a couple of pilots and a couple of ideas that didn’t pan out so we didn’t pursue them and we went in different directions. But if you’re afraid to try in the first place, you’re never going to find the innovation — you’re never going to find the victories that we think make the most difference for our customers.”

Transparency and constant communication are vital, he added.

“We need to make sure that whatever it is that we’re doing in the workers’ comp space, that we’re doing it right, and that we’re transparent about it and communicate about it.”

Buehrer has personally given 275 speeches across the state. He has also appointed a regional business development manager in each of the four regions of the state to go out and interface with business groups, answering questions and spreading the word about what the Bureau is working on.

If Ohio does have a “secret sauce,” as Burkland suggested, the reason it works is because Buehrer is the one stirring it, said BWC’s Jackson.

“He is very genuine about wanting to do his best by the customers that we serve every day,” said Jackson.

“The humility that he has, and the natural leadership that he espouses, have been very beneficial to the organization and to the customers that it serves.

“One of the things that Steve has done better than anyone I’ve had the privilege of working for in my 15 years at BWC is he takes the time to listen and be inclusive,” he added.

“Rather than trying to come up with the solution in an insular manner … he gets everybody involved in the conversation.”

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That approach, which includes stakeholders and customers, he said, nurtures respect and trust. And it has helped build the kind of stable foundation needed in order for innovation to occur.

It also offers BWC the opportunity to take risks, knowing that all initiatives may not be successful, he said, because “suddenly it’s not an ‘us-or-them’ thing, it becomes a ‘we’ thing.”

Buehrer said he will continue the push for progress by encouraging senior leadership to identify the best practices of other companies and build strategies around how to emulate those best practices.

“We’ve set our sights pretty high,” he said. “I want us to be the best workers’ comp carrier in the country.”

Michelle Kerr is workers' comp editor for Risk & Insurance. She can be reached at [email protected]

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