Workers’ Comp Leaders Embrace Progressive Thinking to Reduce Medical Spend

The 2018 Workers’ Compensation Benchmarking Study suggests leaders are shedding the confines of traditional thinking as they strive to offset continued growth of medical costs.
By: | January 11, 2019 • 5 min read

What’s changed: Since 2013, the annual Workers’ Compensation Benchmarking Study, conceived and directed by Rising Medical Solutions, has taken a broad look at the drivers of workers’ comp claims outcomes. The 2018 edition features a notable shift in focus, taking a deep dive into the most critical claims outcome driver identified in past years: medical performance management.


The timing is apt, as health care costs continue to grow unchecked. Over the course of this year, it’s expected that the cost of medical care will reach a new milestone, making up two-thirds of workers’ compensation claim costs. National health care spending overall is expected to reach 5.7 trillion by 2026.

While employers have made great strides in improving workplace safety and reducing injury frequency, those gains are too often eclipsed by steady increases in medical claims costs.

Through think-tank sessions and focus group research, study researchers distilled the input of a diverse group of industry executives to compile their ideas on the most promising and realistic medical management strategies of interest for employers, insurers, TPAs and government entities, as well as brokers and consultants.

It’s notable that with respect to medical management, industry leaders demonstrate an evolution of thought, moving past traditional notions of what it means to rein in costs, and embracing a more expansive, more inclusive way of thinking about how to influence medical spend.

The Three-Legged Stool: If you’re still measuring program success based on percentage of savings, it’s time to think about a foundational shift in approach, to a new definition of value. Leaders surveyed suggest that organizations must align their goals around quality and outcomes in order to move what has proved to be a tough-to-budge needle.

Researchers identified three core goals shared by industry respondents:

  • Investing in health outcomes
  • Encouraging employee engagement and empowerment, and
  • Promoting population health and injury prevention

Similar to the Triple Aim framework developed by the Institute for Healthcare Improvement, the intent is to attack all three goals at the same time, recognizing that a focus on any single goal alone will not achieve the maximum level of impact.

The organizations surveyed are actively employing or evaluating a spectrum of strategies for meeting these goals, from the familiar to what once might have been seen as fringe.

The ‘N Factor’: Executives surveyed ranked the use of nurse case management as the #1 most critical medical management program for impacting claims outcomes. (Followed by return-to-work services and nurse triage.)

Study after study backs up the ranking. A 2016 Helmsman report used a set of 4,000 claims normalized for injury, patient and biopsychosocial factors, with half having nurse involvement. The nurse-involved claims had 16 percent lower future medical costs, 15 percent lower overall costs and 12 percent faster claims resolutions. A similar Helmsman study done for a single employer showed nurse-involved claims having 57 percent fewer disability days.


The use of clinical resources throughout the claims life cycle is an industry standard practice. But some are taking the strategy further than others. Two survey participants report using nurses as claims representatives, or embedded within the claims team. This decreases handoffs and builds a higher level of trust and satisfaction with employees. Both participants reported reduced litigation rates and more than 30 percent reduction in overall claims costs.

Be Well, Stay Well: The mindset shift driving the move toward injured worker advocacy is also carrying over into thinking about comorbidities, population health and their relationship to medical management.

In the past, the “Us vs. Them” employer-employee paradigm put the focus on fighting tooth and nail to avoid paying for any comorbidities. It also fostered a belief that worker health is of no concern to workers’ comp programs unless a workplace condition was the cause of a specific health problem.

Over the course of this year, it’s expected that the cost of medical care will reach a new milestone, making up two-thirds of workers’ compensation claim costs. National health care spending overall is expected to reach 5.7 trillion by 2026.

Times have changed, largely with the growing body of research showing a substantive connection between conditions like diabetes and obesity and claim cost/duration. A growing number of employers are recognizing how healthier employees are less likely to be injured, and recover faster and with less complications if they do get injured.

Wellness programs are nothing new on the personal health side. But their value for workers’ comp outcomes is only recently receiving recognition. Smoking cessation, weight loss and stretching programs are popular but some employers are taking things to the next level.

One large employer surveyed offers employees an exercise program with personal training for three months. Employees who participate fully can opt to extend the program up to a year. The ROI? Reduced temporary disability days, reduced repeat injuries, improved overall health, weight loss, decreased medication use and increased employee retention.

Two national carriers surveyed are also partnering with a wellness service provider to improve safety and health and reduce costs, with reported reductions in temporary total disability and permanent partial disability claims.

Data diving: Employers are also coming at comorbidities from a different angle, using predictive and prescriptive technologies to identify the claims most likely to achieve high costs or poor outcomes.

Embrace Technology: Executives surveyed report they are leveraging technology to improve communication with both providers and workers. One large employer surveyed is using FaceTime to meet with injured workers and providers and to speed recovery by approving treatment decisions on the spot.


Alternative delivery models using technology are also opening new doors, especially for those with workers in remote locations. One large TPA with marine and remote workers uses a combination of telemedicine and drones to deliver necessary care quickly, speeding recovery.

The availability of things such as app-based physical therapy and health coaching allows more flexibility for both employers and employees, putting the necessary tools for a positive outcome literally in the hands of the injured worker.

Trusting Employees: Once a rare practice, employee self-reporting is gaining traction among employers, with large employers such as Starbucks embracing it as an extension of its employee advocacy philosophy. Those employing such programs report decreased litigation and increased employee engagement. But another strong argument in favor of self-reporting is the ability to decrease lag time and reporting errors made by supervisors, and speed time to triage and treatment.

And while fear of increased claims frequency is often cited by those who use traditional reporting structures, at least one large employer surveyed said that the program has absolutely not resulted in increased claims frequency.

To read the rest: The Workers’ Compensation Benchmarking Study is a national research program designed to advance claims management. As in prior years, the 2018 Report will be available to all without cost or obligation as a contribution to the workers’ compensation industry. The 2018 Report as well as prior reports may be requested here.

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

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.


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.


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]