WHY Work Comp Cost Containment

To compete in today's global economy as a manufacturer, you need EVERY edge you can get.


Technology, such as robotics and artificial intelligence, now have a significant, and increasing, impact on manufacturing processes and profits.


You're faced with a whole host of global competitors and suppliers. Most all of these competitors have a big labor cost advantage that squeezes your profit margins.


New regulations and case law are emerging and developing regarding privacy of data, data protection, and transmitting data securely. Protecting your intellectual property such as trademarked designs and processes are now a major concern.


One of the biggest challenges facing manufacturers is attracting and retaining skilled workers in today's tight labor market.


The ONE thing 

you can count on

is Constant Change.


So, where do find that edge to grow profitably and compete?


It's in controlling one of your biggest costs: Your Work Comp Program.


You see, your Work Comp Insurance and related costs can either be a crippling expense...


Or your competitive advantage.


Let's explore three areas of your Work Comp Program here today:


  1. The Real Cost of Work Comp
  2. 5 Steps to Work Comp Cost Containment
  3. Working with the RIGHT Team of Professionals

Are you ready?


Let's jump in.

work comp change


The Real Cost of Work Comp

For many manufacturing firms, Work Comp Insurance is not only legally required...


It's the largest single business insurance expense.


And here's the reality about Work Comp Insurance:


Insurance Companies don't pay Work Comp claims.


They simple finance and process them. You, the employer, pay your Work Comp claims.


Since Work Comp is a big expense for nearly all manufacturing firms, it has a significant impact on your business.


It impacts your cash flow.

It impacts your ability to compete and grow profitably.

It impacts your ability to attract and retain skilled workers.


Your direct Work Comp Insurance cost is determined by the following factors:


  • The Classification Code of Your Operation
  • Your Payroll for each Classification
  • Rates for the Classification Code in Your State(s) of Operation
  • Your Experience Modification Factor
  • Insurance Carrier Discounts or Surcharges

In addition to your direct Work Comp Insurance costs, all workplace injuries have indirect costs. While difficult to pinpoint, many times the indirect cost of a workplace injury or illness exceed the direct costs of Work Comp insurance.


Indirect costs are lost productivity of the injured worker. Lost productivity of co-workers and staff who provide immediate response and follow-up care and communication with the injured worker. Or, potentially lost productivity to document and provide legal defense of an indemnity related claim.


Workplace injuries impact the culture for all the workers. If a fellow employee is injured and has time off work with pay, it entices others to potentially file a work related injury and seek time off with pay.


Finally, workplace injuries mean lost time. Time that can never be recovered when production deadlines must be met. Not only is the injured workers time lost, but again, all the related staff time to respond to the injury, file the claim, the follow up communication is gone too.


 In light of both the direct and indirect costs related to workplace injuries, your ultimate goal is simple:


Create a Safe, Healthy, Productive Workplace


Turn your Work Comp costs from a business crippling expense into a competitive advantage. 


It's a simple concept.


Yet it requires leadership, systems, communication, and teamwork.


Let's move on and look at the 5 Steps involved in a Work Comp Cost Containment System.

5 Steps to Work Comp Cost Containment





As mentioned, to create a safe, healthy, and productive workplace, and contain Work Comp costs takes leadership, sound systems, effective communication, and the RIGHT Team.


Here's an brief outline of the 5 Step Work Comp Cost Containment System.



Step 1- Build Program Foundation


This includes an understanding of Work Comp Insurance Basics, how your Experience Modification Factor is calculated, and Premium Audits work.


In addition, the Fundamentals of Cost Containment create awareness of the real direct and indirect cost of workplace injuries, how to calculate these costs, and how these costs impact cash flow and business profits.


Leadership is required to assign roles and responsibilities for managing Work Comp claims and the claims process.


Step 2- Injury Prevention


written, documented Safety/Loss Prevention and Management Training System is then created, and commitment is built at supervisory and staff levels. Lines of communication are established. 


In addition, a formal Wellness Program helps create a healthy workplace and work force.


Injury Management Best Practices Roles & Responsibilities are spelled out for all levels:


  • Staff Employees
  • Supervisors
  • Middle Manager
  • Risk Manager
  • Senior Management
  • Medical Director

Workplace Claims Reporting Procedures and Processes are created, documented, and roles and responsibilities communicated and assigned.


Step 3- Post-Injury Systems


Post-Injury Procedures, Processes, and Worksheets are built, and roles and responsibilities assigned.


Proactive communication with the injured worker is essential.


All communications and meetings with the injured worker must be documented to show care and concern for the employee and reduce potential attorney involvement.


Step 4- Claims Management


Working with Claims Adjusters, TPAs, and Medical/Occupational Therapy professionals is required to return the injured worker to duty and minimize the cost of the claim.


Open claim reserves are reviewed for accuracy and ultimate costs to determine impact on future Work Comp costs.


Return to Work and Transitional Duty Programs are established and communicated to also minimize costs of claims.


Finally, directing and selecting Medical Care and Providers is needed to keep medical costs under control.



Step 5- Controlling Medical and Pharmacy Costs


An awareness to combat Employee Claims Fraud, and programs to prevent fraud, prescription drug use and abuse is vital to manage Medical and Pharmacy costs.


Now you have an idea of the Work Comp Cost Containment System, let's look at the Team you need to have in place to help you.

work comp injury report


Working with The RIGHT Team 





It takes a full Team and the RIGHT Team Members to have an effective Work Comp Cost Containment Program.


In most cases, your Insurance Carrier offers Loss Prevention Specialists and Claims Adjusters and Claims Specialists.


But be aware, not all Insurance carriers are created equal. The depth of knowledge and specialty service required for your unique needs often is found lacking with your Insurance Carrier.


Independent Loss Prevention Specialists, OSHA Specialists, Claims Management Specialists, Occupational Specialists, such as Return to Duty Nurses can make a huge difference is both preventing and minimizing Work Comp claim.


Finally, to implement an effective Work Comp Cost Containment Program you'll want to seek out and work with a A Different Type of Insurance Agent.


You see, most insurance agents consider Work Comp an afterthought.


They know you must have it. In addition, the commission rates on Work Comp are typically 25-50% lower than other lines of insurance that the agent handles.


As a result, finding an agent who will roll up his or her sleeves, and work closely with you on all the moving parts required to build and implement an effective Cost Containment Program is rare.


What's more only a SELECT few have the knowledge, experience, and training to truly help you do it.


It's simple.


You want to work with a Certified Work Comp Advisor who has the ability to "Quarterback" your Work Comp Cost Containment Program.

 

 Your Next Step:


Call 260-726-9345 and arrange an appointment to see if we're a fit to help you
Build and Implement Your Work Comp Cost Containment Program.


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