Clueless employers don't understand that they can control their workers' comp costs -- and not just complain about them.
Despite the brouhaha over the ProPublica articles that say companies are unfairly denying treatment to injured workers to save on costs, I still regard the high cost of workers' compensation (for those companies that do have high costs) mostly as a management problem.
The companies I see -- which are the ones that have huge problems -- are clueless about workers' comp. They turn their claims and injury process over to their claims administrator or carrier, hardly participating in the process, then they blame the TPA or carrier when costs go up even though they have done nothing internally to manage safety or injuries.
These companies never budget for workers' comp management, don't staff the risk department (if there even is a department) properly. THAT would cost money, and our headcount would increase, they say. Often, if they do have staff, they do not allow the staff to attend conferences or seminars, join organizations or purchase resources. THAT would cost money, they say.
Sometimes, their brokers offer to help by providing consulting resources, but the companies with high workers' comp costs do not see the merit in such an approach. I worked with a major entertainment facility, speaking with them once per week, on behalf of their broker, hoping to gain insight. I offered to consult with the staff because I am a consultant: Getting to the root of the problem, finding the cost drivers and fixing them is what I do. They did not need a consultant. Then, one day I said I could "help them develop their training program," and they accepted instantly! I had used the wrong word -- they needed "training help" not "consulting help." Within months, the high cost of their workers compensation program went down to almost zero. Problem solved.
Several things employers can do, but usually don't, are:
1. Contact employees within a week or two after the injury to do a survey of their medical and claims adjuster experience. Speak to them via phone, just as you would ask a good customer about her experience. Jennifer Christian, chief medical officer at Webility, contacts employees to find out if each injured worker felt that care was poor, fair, good or excellent. Often, poor treatment by medical providers and callous indifference by adjusters causes employees to become angry, seek counsel or even delay recovery because of lack of expertise during the initial treatment experience.
2. Have claims reviewed periodically by an independent auditor with a medical provider on the team. Only an MD is qualified to read the medical reports to determine whether treatment was appropriate and sufficient, whether alternate causation has been considered and whether aggressive and excellent (yes, perhaps more expensive) treatment has been provided. Make sure adjusters are not using utilization review (UR) to deny care. Audit, audit, audit. Care, care, care.
Do weekly roundtables with your third-party administrator (TPA) -- for instance, every Friday discuss 10 claims, etc. Don't wait until claims reach $25,000. Discuss them when they are small, BEFORE they get astronomical.
3. Retain an MD to be part of your claims team. This can be an on-site MD part-time or full-time who also speaks with treating physicians and injured employees. Adjusters and nurses do not know "medicalese." Applause to those insurers who have MDs on staff BUT employers still need to have their own medical advisers on the team. Employers often forget we are talking about medical injuries, not simply "claims."
4. Assess the key cost drivers of your workers' compensation costs. Nine out of 10 times, employers misdiagnose the cause of their high workers' compensation costs. In one case, the employer was ready to fire the insurance company because "they thought" there was too much nurse case management. Upon more detailed analysis, including an independent review by claims experts and an MD, we found the claims were handled well 98% of the time. The cause of the problem was misidentified.
The REAL problem was a lack of a post-injury response -- employees and supervisors did not have steps to follow within the first 24 hours after the injury. We then held 19 training sessions over three weeks to improve best practices related to rapid medical care and RTW/SAW (return to work/stay at work) in this mega-entertainment theme park. The workers' compensation costs dropped 20% in a year-over-year comparison of total incurred losses with the previous 12-month period.
5. There are no tools to guide employees and supervisors. In the above case, we provided: employee brochure, physician brochure, wallet cards in English/Spanish for supervisors and employees, and other tools.
6. And, most importantly, provide the best quality medical care available. Yes, even if it's more expensive. Pennywise is pound foolish. Get the best, not the cheapest. Pay the doctor more to spend more time with your injured employees, not less time.
7. Establish bundled pre-approval of care in account instructions so UR is not necessary -- e.g., "All PTP (primary treating physician) treatments and as many as five visits to specialists are pre-authorized by insured. All testing requisitioned by PTP and specialists including physical therapy (PT) and MRIs is to be approved; do NOT submit to UR. If you strongly believe treatment or testing is unwarranted, contact the insured's medical director before denying request."
If you don't manage and monitor it, the process (any process, not only workers' compensation) will not work well.
It's time for employers to become involved in their own business! The first step is assessing the problem at your company, not the industry in general or another company. Get that mirror out and have a look. You are most likely looking at the problem.