Column: Workers' Comp

The Benefits of Change

By: | December 1, 2013 • 3 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

Looking across the workers’ compensation landscape going into 2014, the forces driving inevitable change include Obamacare’s unknowns, insurer combined ratios, vendor consolidation, and Oklahoma’s experiment with an alternative benefit delivery structure.

To steal from the comedian Gallagher, change is inevitable — except from a vending machine.

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Change is also afoot at Risk & Insurance®. I recently joined the R&I team to continue the magazine’s mission of helping workers’ comp professionals make sense of the numerous forces impacting the business world and your industry.

I have been fortunate to report on risk management for 19 years, with much of that time focused on workers’ comp topics. I say fortunate because I love workers’ comp and its richness of issues, stories, and people who shape it or get shaped by it.

Many of the issues and stories I see playing out in 2014 are already here today, including the Affordable Care Act’s impact.

Opinions have varied on how the health care law will touch workers’ comp, and on issues such as how a potentially healthier population will impact claims, whether medical provider shortages will emerge, and the way treatment costs might shift.

The law’s fumbling rollout isn’t making the murky waters any clearer. But it appears here to stay and whatever changes result won’t alter an employer’s mission of helping injured workers return to productive lives.

It also won’t eliminate the need for workers’ comp claims payers to focus on applying the right medical care and weeding out unnecessary expenses while reassuring injured employees and complying with complex laws.

Whether the economy gains strength in 2014 is another unknown. Fortunately, insurer combined ratios have improved several points from 2011’s troubling 117 percent, helped by rising rates and a stable, although low-growth, employment picture.

For now, observers say, combined ratio improvement means a tempering of ongoing insurance price increases. But future insurance prices will be impacted by the future economy.

Then, there is the continuing consolidation of workers’ comp service providers into the hands of private equity firms. That could narrow employers’ choices among service providers and perhaps boost the private equity owners’ ability to squeeze more revenue from employers.

Yet, the changes could also unleash opportunities, such as the potential for consolidated entities, with their economies of scale and larger financial positions, to push greater investment into new technology that improves claims management and reduces costs.

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But, as a neutral observer, events in Oklahoma present my favorite potential force for change ahead. The state’s recent law allowing employers to create an alternative to the traditional workers’ comp mechanism for delivering care and benefits could serve as a model for other states.

But that will likely depend on whether employers in Oklahoma succeed in truly helping injured workers while reducing their costs.

Obviously, it remains to be seen what good or bad comes from the forces shifting the workers’ comp landscape.

No matter the changes, though, you can count on finding me here writing this column and working with the staff at Risk & Insurance® to report on the changes ahead — to help you keep abreast of the emerging claims trends, the economic factors shaping insurance markets, and the legal and medical management news impacting workers’ comp.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]