Protecting the Peacekeepers
A decade ago, the City of Knoxville paid an annual workers’ compensation bill of over $5 million. In recent years, the bill has averaged less than $2 million, thanks to professional risk management and top-down buy-in to the safety culture from the entire municipal government.
Knoxville is one of the many municipalities, counties and states to cultivate safe work environments for the nation’s 18.5 million full-time public employees. “The cheapest and most effective risk management is avoiding the risk in the first place,” said Chuck Wright, president of Travelers Public Sector Services. Risk management is itself the product of a deliberate and coordinated effort by a lot of smart people, including engineers, risk managers, ergonomists, purchasing managers and health care providers, Wright said.
Still, the public sector is an area where risk managers rightly fear the workers’ compensation exposures. And just as all politics is local, so is the most acute public sector injury risk.
Full-time local government workers reported the nation’s highest rate of work-related illnesses and injuries (6.1 percent) in 2011, according to the Bureau of Labor Statistics. State workers clocked in at 4.6 percent and private sector workers at 3.5 percent in 2010.
The Affordable Care Act, which stresses the kind of health and wellness programs public entities are adopting, will probably not affect workers’ compensation programs significantly, according to Steve Wurzelbacher, research industrial hygienist in the National Institute for Occupational Safety and Health, Division of Surveillance, Hazard Evaluations and Field Studies.
“Most sensible people don’t rush into burning buildings or run toward a bad guy with a gun.”
— Jim Bueermann, president, Police Foundation
Police and firefighters, who do inherently dangerous jobs, incur the most frequent and severe workers’ compensation claims of all public sector workers. “Most sensible people don’t rush into burning buildings or run toward a bad guy with a gun,” said Jim Bueermann, president of the Police Foundation. Police are almost 100 percent guaranteed to get hurt on the job, he said, because of the physical nature of their jobs and because they work around people who want to hurt them.
However, many workers’ compensation claims, even among the superhero class of workers, are for “ordinary” injuries and conditions, such as car accidents, repetitive motion and joint injuries, as well as stress- and obesity-related conditions.
Gary Eastes, Knoxville’s risk and benefits manager and a 2012 Risk & Insurance® Teddy Award winner, attributes much of his city’s drop in workers’ compensation claims to safety’s recent visibility on the municipality’s collective radar screen. Over many years and in small increments, Knoxville adopted many of OSHA’s workplace safety recommendations. Now, it performs routine safety inspections, including weekly spot inspections at intersections for seat belt use.
Knoxville now boasts almost 100 percent compliance for seat belt use, even among police, who are notorious for dissing the law they are charged with enforcing, according to John Chino, area senior vice president and member of the Public Sector leadership team at Arthur J. Gallagher.
The bulky hardware on officers’ service belts — baton, sidearm, radio, cuffs, Taser — can make buckling up awkward, uncomfortable, and slow at a time when speed counts, said Rich Roberts, director of special operations and public information at the International Union of Police Associations, AFL-CIO.
Cops Don’t Wear Seat Belts
The National Highway Traffic Safety Administration reports that more officers died in traffic incidents in 2010 than from any other cause, and 42 percent weren’t wearing seat belts. Many of the other 58 percent may have been left gravely injured and possibly, disabled. This is a tragedy for the officer and a huge financial burden for the insurer, Roberts said, especially for young, otherwise healthy officers who can expect many years of disability.
“Officers should always wear seat belts,” Roberts said.
“Seat belts are our most visible safety rule,” Eastes said, and officers who flout this rule are likely to flout others.
“Police started to take safety rules seriously when Knoxville’s civilian management put its foot down about seat belts,” he said.
Knoxville’s new wellness culture also helped tame workers’ compensation claims. The city employs three full-time certified ergonomists and a physical therapy team, which works with firefighters on safe ways to perform emergency medical services, such as carrying people down stairs and moving them out of crushed cars. Its on-site physical therapist works with the city’s medical team, which aids complex treatments, such as that for a diabetic with a knee injury.
Technology also offers some solutions, Eastes said, such as single-driver automated sanitation trucks that replace “the two guys hanging off the back of the truck,” who are subject to shoulder and back injuries from repeatedly lifting heavy loads. The technology will pay for itself in reduced workers’ compensation costs, he said.
As a matter of due diligence, said Travelers’ Wright, public entities should always perform routine checks on employees, such as confirming that those who drive for their jobs hold current licenses and have maintained clean driving records.
Unions and Politics
Contrary to the expectation that unions and municipalities are naturally at odds, Wright said, they actually share a common interest in employees’ well-being. This applies even in potentially explosive return to work cases for injured workers. Lost time from work costs municipalities dearly, both in overtime costs for other workers to pick up the slack and in medical benefits.
“For the city’s sake and the worker’s sake, everyone’s goal is getting workers back to work at the right time.”
— Chuck Wright, president, Travelers Public Sector Services
“For the city’s sake and the worker’s sake, everyone’s goal is getting workers back to work at the right time,” Wright said. Coordinated medical treatment and careful case management, combined with proactive risk control services, can determine the “right time” in each individual case.
“What helps this formula be successful is selecting the right partners to coordinate medical care,” said Joe Boures, president of managed care company Healthcare Solutions. “Research has proven that over time, not properly managing care leads to significantly increased medical costs and delayed return to work.”
In states with particularly generous workers’ compensation laws, such as, Illinois, Florida, New York and especially California, workers may have a financial disincentive to return to work promptly, said Dan Guth, an area vice president at Arthur J. Gallagher.
Police and firefighters who belong to the Public Employees Retirement System can collect 100 percent of their salary, tax free, for up to a year for each industrial injury; other public sector workers generally can collect two-thirds of their average weekly salaries. Some public entities try to return compromised employees to light duty or part-time work to save costs and hasten recovery, but many simply keep them out of work until they get medical clearance to return to their jobs.
Even though the cop or firefighter wins financially for a year by protracting their disability leave, said the Police Foundation’s Bueermann, most prefer to return to work as soon as they’re able, since a long furlough often heralds the end of their careers, especially for older workers.
California’s generous workers’ compensation laws also produce a slew of “additional body parts” claims, especially, as the statistics suggest, for teachers.
“An attorney may expand the original back or knee injury claim to include a sleep disorder, internal injury, stress or psych claim or sexual dysfunction,” Guth said. Municipalities and their insurers should scrutinize the claim for legitimacy.
Although it happens rarely, unions can be an obstacle to workplace safety in the area of safety incentives, said Chino.
“Some public agencies consider a reward system of money or extra time off for individual employees who use personal safety equipment, but the unions object on the grounds of special treatment for a few employees.”
When Self-Insurance Works
The Mesquite, Texas, School District meets the criteria for self insurance. It employs 5,400, so it has a sufficiently large pool of insureds. It has a strikingly low incidence rate — 1.11 of every 100, far below the 6.1 percent of its national cohort. Almost all of its 182 to 200 claims per year are from slips, trips and falls, plus violence from the occasional agitated student, said James Huckaby, the district’s administrative officer of operations and risk management. Those are the kind of injuries that inevitably slip through the district’s fine net of safety education; careful housekeeping; low-cost, easy-access medical facilities; wellness programs; and safety best practices. Its workers’ compensation costs have been stable for several years, averaging about $700,000 per year.
Like Knoxville, which is also self-insured, Mesquite’s top-level elected officials support the safety programs that minimize on-the-job injuries. Both entities have the support infrastructure to administer their self-insured programs and cash reserves to pay claims.
These attributes — strong infrastructure, a sufficiently large insured universe, top-level support, safety buy-in from the workforce, predictably low claims and fiscal discipline — point to a municipality in a good position to self-insure, said Victoria Nolan, risk and benefits manager for Clean Water Services in Oregon.
“Public entities may want to self-insure because it’s cheaper than commercial insurance, or they can manage their programs better or both,” Nolan said, but they should scope their readiness to take on the considerable financial and administrative responsibilities first.
“An entity that hires a third-party administrator can give up any cost savings on the claims side to administrative fees,” she said. “A feasibility study will show if it’s a good choice.”