In hard times, employers are forced to
look at their bottom line in an attempt to
identify places within their company
where they can reduce costs. Many times,
employers look at benefits or staff first. One
area employers should look to that can have
significant impact is workers’ compensation
costs.
A well-managed company will take the
steps now to align itself with professional
assistance. This can lead to desired results
for properly managing workers’ compensation claims, says Dan Slezak, vice president
with ECBM. For many companies, their
workers find that the workplace is akin to
an extended family. Employees need to
know that you care about them by providing
a safe workplace and having a comprehensive claims management program in place
that will help them to get well and back to
work. This is a win-win for companies
because it increases productivity and
reduces claims.
Smart Business spoke with Slezak about
the effects workers’ compensation claims
can have on businesses and how to manage
these claims to reduce costs and claims
while increasing productivity and morale.
How do workers’ compensation claims affect
businesses?
When an employee is injured at work,
workers’ compensation pays for necessary
medical treatment and lost wages. There
can be a substantial cost associated with
these expenses. If an employee misses
work, then productivity suffers. The morale
of the employee group is also affected if an
unsafe condition existed. Employees want
to know that someone cares about them
and that is especially true in the workplace.
The longer lingering effect is that these
claims add to a company’s loss experience
and will adversely affect the modification
factor with the state rating system that will
end up costing that company more money.
How do you recommend business owners
manage workers’ compensation claims?
Business owners must recognize that
claim management cannot be delegated to
an insurance carrier or a third-party administrator without someone providing oversight. If the business does not possess that
expertise, then it becomes critical that it
has a broker who can provide that oversight for it. That broker must play an active
role in managing the costs in workers’ compensation. If you can get the best people
and best program oversight, then you will
be leaving nothing to chance.
Provide a safe environment; fill it with the
best people for the functions needed and a
company’s return on that investment will be
forthcoming. Make working in a safe environment an important part of your culture.
Each company can enjoy the benefits of
reducing their workers’ compensation
costs. But there is not a one-size-fits-all
approach. The demographics of the work
force and the jurisdictions of workers’ compensation law will play an important part in
the program structure. Business leaders
should meet with a broker to discuss
options and plans that meet the individual
needs of their company.
How can you achieve cost savings through
management of such claims?
When claims are managed properly,
employees receive proper and immediate medical treatment, which means the
employee will return to work sooner, thereby minimizing lost workdays that significantly add to a claim cost. If you analyze the
component costs of a workers’ compensation claim management program, you will
find ways to reduce each cost without having an adverse impact on the claim results.
Companies have experienced as much as
a 35 percent reduction in workers’ compensation costs with proper management. The
first step is to have an experienced consultant/broker analyze current processes, then,
with management’s commitment, establish
guidelines that will positively affect the program going forward.
Does investing in prevention lead to cost savings for employers?
A safe work environment leads to fewer
claims and shows your employees that you
care about their well-being. Many processes and procedures can be addressed to positively affect the number of claims.
Prevention creates a safe workplace with
the proper training and instruction. Both
areas can be addressed without major
expenses. The key is to identify the past
trends in a company’s losses and establish a
cost/benefits analysis of areas to be
addressed.
How important is record keeping in the successful reduction of claims?
Record keeping is important for a couple
of reasons. First, you can identify trends
and note where you need to expand your
resources. Second, proper documentation
from the onset of a claim would help to
determine if it was an unsafe act or unsafe
condition that led to the claim. In either
case, the injured employee and all co-workers can learn from the incident. Third, some
claims can go bad, which can lead to litigation. This becomes very costly. If you have
the proper documentation from the onset,
including the medical management files,
this will ensure that the correct facts
appear in court.
DAN SLEZAK is vice president with ECBM. Reach him at [email protected] or (610) 668-7100.
