How can companies prepare an open claim inventory?
An open claim inventory is available from a company’s carrier or third-party administrator. They can provide a report annually or semi-annually to look at the percentage of total claims that are currently open. If that percentage is growing, that can be an indicator that the long-term cost projections may need a second look. Ideally, the open claim inventory is shrinking, but it should be at least maintained at a relatively steady level.
What are some examples of better, more meaningful accident reports?
That is tough to measure quantitatively, but certainly qualitatively, someone in management can review the accident reports that are coming in from time to time and ask whether the corrective action will address only the reported specific situation, or if it will address the cause from a system standpoint.
In other words, if the correction was, ‘I told the employee not to do that again,’ that’s not really a systemwide fix. If the correction was, ‘We changed the procedure and the tooling so that it’s not necessary to do that again,’ that is a system fix.
What are some indicators that your organization may have discrepancies in safety, claim and retained loss costs?
- Claim counts exceed recordable incidents by more than 10 to 15 percent.
- An increasing number of claims are reopened from closed status.
- Incentive programs report success, with rewards delivered consistently, but there is no reduction in incurred costs.
- A growing percentage of the work force is working with accommodated duty due to restrictions, or has been awarded permanent restrictions If this number is higher than about 5 percent, it may indicate overaccommodation of restrictions.
- The average claim duration — time the claim remains open — is steadily increasing.
How does the data disparity between OSHA rates and claim costs happen?
Many companies have used OSHA rates because they are easy to compare across locations. However, in the last six to eight months, there have been some fairly critical reports from academic and government entities specific to workers’ compensation and OSHA data. OSHA has taken notice; it launched a directive in March to begin an investigation into these recordkeeping issues because of the disparity. We are now seeing effects of OSHA’s recognition of the discrepancies with investigations and recordkeeping audits.
How can disparities in measurements be prevented?
Claim and safety personnel should be evaluated on consistent measures. Cost factors and loss reduction efforts should be integrated, with prevention efforts expressed in terms of reduction in expected loss or exposure. To prevent the disparity in OSHA recordkeeping, one needs to ensure that the OSHA log is accurate and is cross-checked from time to time for that accuracy. If that is done, then the OSHA records and the claim records should align within a reasonable percentage — probably 80 to 85 percent. If there are swings of 40 or 50 percent between reported claims and the log, that should raise eyebrows.
Deborah E. Weigand is a strategic director for Aon Global Risk Consulting. Reach her at (248) 936-5217 or [email protected].
