Workers compensation payments have a large effect on any business. Right now, from twenty-five cents to fifty cents of every dollar of net profit earned by American corporations pays for employee health, workers' compensation, and disability costs. Those figures only include the tip of the iceberg, the direct losses of workers' compensation claims. There are also many indirect losses, which are up to five times as expensive. These losses include loss of productivity, training of new personnel, and overtime. In this highly competitive marketplace and with the tightening of the workers compensation insurance marketplace, the ability to control losses can make or break a company.
Starting your program
The first step in controlling losses is to develop a written outline to conduct the loss control program. This outline shows management's commitment to safety in the workplace. For any safety/ loss control program to be effective, management's willingness and efforts must be recognized by employees. The basic loss control outline should contain three main things: a written statement of safety policy, written rules and regulations for employees to follow, and a statement signed and dated by all employees indicating their willingness to comply with safety efforts. These rules and their enforcement provide the backbone of a company's efforts to prevent accidents and let employees know the limits within which to operate.
Training
Once the safety rules and regulations have been developed, employees must be instructed on how to comply with them. Lack of training and supervision are the most common causes of serious injury. If an employee is not trained properly, they will most likely perform their tasks incorrectly. Therefore, training is a major part of the loss control program.
There are five basic steps to training employees properly. First, break tasks down into their basic components. No step should contain more than one operation. Secondly, verbally explain how and why the step is to be followed. Next, demonstrate how to perform the task. Then, ask the employee to explain the procedure and why it is necessary. If either explanation is wrong, repeat step two. Finally, have the employee demonstrate the procedure. The steps should be reviewed twice during the overall training.
Once the training process is complete, the employee should be assigned to their task. The trainer or a supervisor should be present at first to make sure the employee follows the correct procedures. When confident the employee knows what they are doing, the supervisor can leave the employee alone for periods of time, checking on them periodically. In the next couple days the employee should receive two review sessions. Once sure the employee can perform the tasks properly, that employee can be allowed to work on their own. However, reviews should be conducted periodically to ensure the task is performed correctly each time and production is at an acceptable level.
Self Inspections
Once the loss control program is up and running, checkups are needed to assure that programs are designed adequately and are being followed properly as well as identify hazards before they can cause harm to someone. This can be achieved through the development of a safety inspection program.
An inspection involves a walk around the facility by qualified personnel to identify hazardous conditions and operations. Areas of concern can be found by reviewing previous injury records. This will assist the inspector in what areas should be given the most concentration. The inspection should be conducted at least monthly, and the day and time of inspection should be noted.
A brief checklist should be developed to assist in the inspection. This list should not be too long and prohibit the inspector from making observations in other areas. There should always be a spot for additional comments for explanation of hazards and naming hazards not listed. This way, completeness of the inspection is insured. This checklist should also provide a section for noting corrective action taken as well as when it was taken.
Controlling High Risk Behavior
High-risk behavior is responsible for a majority of accidents in the workplace. These are actions by the employee that cause or could cause an accident. Managing these high-risk behaviors is crucial. The most expensive ten percent of employees account for nearly seventy percent of an organization's disability costs. Inside most companies there are employees who tend to be injured more frequently because of their behavior and attitude. These are people who tend to take short cuts, horse around on the job, or believe that accidents are caused by bad luck or fate.
Since high-risk behavior varies in degree from employee to employee, the employer usually should target the root cause of the behavior. To do this there is three basic phases: gaining understanding, showing understanding, and targeting behavioral change. Gaining understanding is attained by reviewing records and workers compensation claims to identify behaviors that have been contributing to accidents. Sharing understanding is the sharing of the results with employees and managers to create an awareness of the problems. Targeting behavioral change establishes accountability and incentives to reduce risky behaviors.
It is important when completing these steps to not single out certain individuals. The attention should be focused on all employees as a group. The most common method of controlling high- risk behavior is a progressive disciplinary system for violating safety procedures or not wearing personal protective equipment. These systems usually start with a simple warning for a first offense, then progress to more severe punishment for repeat offenses. This method also should include some sort of accountability on the supervisors for their employees following safety procedures. The goal of using these methods is to change the attitudes that lead to high-risk behavior and promote the importance of safety.
Safety Incentives
One way many companies attempt to control workers compensation losses are safety incentives. These are monetary awards, recognition, merchandise, or a combination of these. The main purpose of an incentive program is to develop a safety conscious attitude amongst employees. Most accidents are caused by unsafe acts, so increasing awareness of safety can reduce these unsafe acts. Group awards are a good idea to get employees working safely. If the whole plant needs to achieve a goal for the workers to receive some reward, the employees will push each other to practice safety because they are dependent on each other. Recognition is also important, receiving attention for a job well done helps instill a sense of pride in a worker. This pride will motivate them to work hard at maintaining a good safety record. Monetary or merchandise awards, of course, are very motivational. When employees know they can receive raises or other career enhancing awards they will take a greater interest in safety.
However, incentive programs require much thought and care in setting up the program. Some safety incentive programs can encourage employees to hide injuries in order to obtain the incentive. This can lead to a small injury developing into a large one because it was not treated properly. Incentive programs that focus on safe behavior, participation in the safety program, and obtaining certain goals work better than ones that focus on zero injuries do. A properly structured incentive program can be a good compliment to a strong safety program. However, it should never be used instead of a safety program.
Accident Investigation
Accident investigations are an important part of reducing workers compensation losses once an accident has happened or almost happened. An investigation should be conducted not only when an accident occurs, but also when a near accident occurs. Conducting near accident investigations allows the employer to eliminate the hazard before someone does get hurt. Conducting accident investigations helps protect the company from fraudulent claims and prevent future accidents.
When an accident occurs, the investigation should involve the area supervisor. They are more familiar with the equipment and how it operates as well as more familiar with the injured worker. Getting medical attention for the employee is the most important priority, but the accident investigation should be conducted as soon after as possible. If too much time is allowed to pass the environmental conditions at the time of the accident will change. Something that caused the accident could be removed or cleaned up. Also, witnesses and the injured person's views will change as time passes. If they have a long time to think about the accident they may add or hear things about the accident they did not see. The time it takes to investigate the accident may also influence the employee's decision on how to handle a claim. Conducting the investigation soon after and showing a general interest in the employee may give that employee a feeling of good faith and discourage them from involving an attorney on the claim.
An employee must accept the fact that they are somehow connected to the accident. Conducting an investigation allows them to learn from their mistakes and correct the problem. There is no situation where new knowledge is acquired that does not result in some initial error of performance that requires an adjustment. This does not mean the employer should ever admit legal responsibility. That decision should be left up to the insurance company and if necessary the courts.
When conducting an investigation it is important to remember that that the purpose is to find and correct whatever caused the accident so that it does not happen again. Do not allow the investigation to become a witch-hunt attempting to assign blame. Gather just the facts and avoid making any assumptions. Witnesses will be more likely to tell you what actually happened if they feel that you are only trying to prevent it from happening again. However, if they feel you are trying to assign blame to the injured employee they will try to protect him or her by withholding information.
Once the facts of the accident have all be gathered, analyze the data to determine the cause. The two types of causes are unsafe conditions and unsafe acts. Unsafe conditions are environment conditions that caused the accident such as a wet floor or an unguarded machine. Unsafe acts are behaviors that contributed to the accident such as not using lockout tagout. Whatever the causes, do not blame someone for them. Simply take the appropriate steps to fix the problem to prevent it from occurring again.
Claims Management
If despite the efforts of the employer to control accidents an employee is still injured, there are steps to reduce the severity of the loss. How the claim is handled can have a drastic effect on how large it becomes.
The employer should file a report of injury within three days. The insurance company needs as much time to prepare and process bills as possible. Also, if payments are delayed an employee is more likely to seek an attorney.
The employer should file a follow up report five working days after the first report. At this point the employer should verify that the claims report was sent and received. The follow up report should include updated or new information that has been found. Also, the employer should check the progress of the claim at least every ninety days.
Employers also need to establish a treatment follow-up procedure. The employer should always contact the treating physician following initial diagnosis and treatment. The purpose of this is to find out what the injury is, how it is being treated, and the expected treatment time. Secondly, the employer should periodically contact the treating facility to make sure that the employee is making satisfactory progress, to see if treatment is complete, or return visits are necessary.
Staying involved and up to date on work comp claims can prevent some claims from ballooning into larger ones. Lack of attention to the claim and not staying in touch with the insurance company can let items slip through the cracks and add the cost of the claim.
Return to Work Programs
Implementing a return to work program is a necessary way to reduce workers compensation payments. The objective of such a program should be to get the worker back to work as soon as possible without re-injuring them. The longer a person is off the more money it is costing the company and the less likely that person is to return to work ever.
The first option in such a program is to bring the person in for their regular duties, but at half days. By this method the employer is saving a half days payments of workers compensation. A second option is to reassign the employee to another job until they recover. This may even include office work, which would be a good choice for a severely injured employee. Of course, any return to work must have the permission of the treating physician. Usually, a doctor will allow an employee to return for work that is unlikely to aggravate the injury.
Regardless of the method, the goal is to get the worker back as quickly as possible without re-injuring them. If the worker must stay home, it is a wise idea to have the worker occasionally come to the facility for a visit or if necessary go to visit the employee. It will be easier to get them back into the flow of things when they do return if they are kept up to date on what is happening.
Conclusion
In this time when ten to twenty percent increases are common on workers compensation insurance, the ability to prevent losses and keep claims low is more important than ever. Companies that have a high number of claims or several severe claims are seeing large increases in workers compensation premiums, sometimes as much as double. By taking a proactive approach to safety and staying involved in the handling of the claims that do occur, a company can take control of its workers compensation losses. This in turn will allow the company to gain some control on rising premiums, as well as save money associated with losses.