Better Management Can Reduce Workers Compensation Costs

THE JOURNAL RECORD, July 28, 1993 | Go to article overview
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Better Management Can Reduce Workers Compensation Costs


In spite of the ballyhoo, even the changes mandated to take effect immediately will not have much effect on the ultimate costs for workers compensation claims in this first year.

The No. 1 issue of high claims costs remains labor-management relationship and job dissatisfaction. When communication breaks down between management and labor, or management and the medical providers, costs go up and injured workers suffer.

There are four traps that make workers compensation difficult to manage. Companies attempt to solve problems without understanding what the problems really are. This most often occurs when companies have not analyzed the costs of injuries. They need to know where to target their efforts. Companies do not use coordinated approvals among the claims manager, safety manager and personnel office. Ignoring these different viewpoints can result in ineffective problem-solving efforts. Companies need to look at the issues of workers compensation, including risk of injury instead of blaming claims managers, personnel managers, safety communicators and medical management. "You get what you pay for." Companies seeking low-cost medical vendors and products are not assured good medical management. This practice generates short-term workers compensation savings, but long-term cost escalation.

A skeleton plan for controlling workers compensation requires input from both the company and the clinical-medical vendor. From these discussions, a program can be structured to address the company's specific needs.

The first step is to analyze all of the data, including claims costs, absenteeism, accident investigation and first report of injury. From this research, a rank order listing should be developed comparing the type of injury, departments involved, length of absenteeism, total lost time and other related factors.

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