Five Big Ideas for 2013 That May Save You More Than Money
“A successful approach to controlling workers’ compensation costs must be based on sound analytics and integrated into a single risk management platform,” Risk & Insurance Magazine.
1. Start tracking “Total Cost of Claim.”
This is tricky, but worth the effort. Often times workers’ comp medical expenses are in one department’s budget and workers’ comp legal fees and claim payout costs are in a different department’s budget. Track both costs. Once you invest in higher quality and more tightly managed care up front, you’ll find your legal fees and claim payout costs go down and that your, “Total Cost of Claim,” goes down. Companies who do this are saving millions.
2. Start managing employee health.
In this hardening market you’re going to see a significant rise in workers’ comp premiums right alongside your group health premium increases. Start managing and tracking the health of your employees to save big on premium increases. Implement injury prevention measures including:
• Job analysis to identify the functional requirements of a job.
• Hold employees accountable to knowing and maintaining those capabilities.
• Hold your chosen medical team accountable to managing return to work plans around those functions.
• Post offer employment testing to make sure a prospective employee can do the job day in and day out.
• A comprehensive wellness plan that measures pre-to post biometrics for your group and provides meaningful, measurable interventions.
3. Pick your treatment team wisely – because you can.
In Kansas, Missouri and certain other states, employers can direct workers’ comp patients to specific doctors, physical therapists and other members of the treatment team. To save big, put together your own team of high-quality (not necessarily low medical cost,) providers. When selecting your team, ask each to provide you with outcome statistics on the patients they’ve treated the past three years and compare those outcomes to ODG (Official Disability Guidelines) standards. The California Workers’ Compensation Institute found that claims treated by providers with large workers’ comp caseloads were 56 percent less costly than the claims treated by providers with smaller caseloads. Choose providers who specialize in workers’ comp – they will save you money.
4. If you use a network, understand how it works and how it selects network providers. Go for a network of premium/high quality providers.
According to Risk & Insurance Magazine, TPA’s Broadspire and Sedgwick decreased total claim payments by 20% and lost time claims by 30%. Impressive. How? By partnering with the “highest performing providers” – providers who demonstrate the best outcomes. Both TPAs also selected providers who specialize in workers’ compensation. The Journal of Occupational and Environmental Medicine reported that a small premium quality network of medical providers brought injured workers back to work 45% faster, with claims costs that were 46% lower.
5. Watch out for TPAs that select providers based on “lowest cost per treatment” or “lowest cost per visit.”
That’s just shortsighted, and history illustrates it will cost you in both time and money. You want providers who get your patients back to work quickly AND with the highest level of function possible. Again, you need valid and detailed outcomes reports from your providers.
While your up-front costs may increase slightly, your total cost of claim will go down. In other words, get patients treated quickly, by high-quality treatment team and you will find patients return to work faster and with a higher level of function. Higher function translates directly to lower indemnity costs, lower claims payout, lower legal fees and a more productive and profitable workforce.