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Workers compensation's place as Safeway Inc.'s costliest risk is a big reason William M. Zachry and the company's risk management team devote considerable efforts to reducing claim frequency and severity.
There's another equally significant reason from Mr. Zachry's perspective, however: It's the right thing to do.
“It all comes back to a basic philosophy, and that is that we take great care of our injured workers,” Mr. Zachry, vice president of risk management at Pleasanton, Calif.-based Safeway, said. “One of the things that I always talk to my claims staff about is that their job is to bend over far enough backwards that they have a rug burn on their forehead. If they do it that far then it's just about right in terms of providing care and substance and benefits to the injured workers.”
“Everything we do is really focused on getting people healthy and back to work because our workforce is really what makes our business,” said Anita Weir, Safeway's director of medical and disability management.
The Safeway risk management department goes about meeting that goal of getting injured workers healthy and back to work in a variety of ways ranging from uncommon to innovative. Among the latter is a program focusing on early identification and intervention in cases of injured workers at risk of delayed recovery because of psychosocial issues.
The program stems from an understanding that for some injured workers recovery is delayed by ability to cope, not severity of the injury, Mr. Zachry said.
“So what happened was seven years ago we started a pilot program with Kaiser (Permanente). And they were wonderful,” Mr. Zachry said. The program basically involves a nurse working with Safeway reaching out to an injured worker two weeks after the injury to ask questions aimed at indicating whether the worker might be at risk of delayed recovery. If the questionnaire indicates the employee is at risk, that information is shared with the treating physician, and steps are taken to get the employee counseling.
“When the ability to cope with an injury or illness on top of the stress of work, family and finances is not addressed, some employees will decompensate and not recover enough to return to work or normal life,” said Juanita Hayes, Safeway's director of workers compensation.
Focusing on employees who'd suffered acute back injuries, the pilot program identified 88 over the past seven years at risk of delayed recoveries. “And to this day, we have 88 people back to work and zero litigation because what we did was we intervened with psychosocial counseling, positive support from the claims examiner, positive support from the store manager and very positive support from the treating physician,” Mr. Zachry said.
Based on the success of the pilot, Safeway expanded the delayed recovery intervention program last year. “The biggest delay between the pilot program and rolling it out was finding the infrastructure, the support, the people who could do the psychosocial counseling because there literally wasn't a vendor out there when we started looking,” Mr. Zachry said.
“I think that's how to change how comp is handled in the United States: early identification and intervention,” he said. “It's so logical. But nobody else has done it.”
“We're doing as much educating physicians as we are employees in this process,” Ms. Weir said. “Physicians have been so brow-beaten about not addressing psychosocial issues in the recovery process.
“It's a huge new idea. It's being talked about a lot in the industry but very few people are really implementing it effectively,” Ms. Weir said. “Even if you only identify one in 100 (patients), the cost of that one if you can avoid over medical utilization ... is a huge amount of savings, not only dollarwise but in people's lives, the employee and their family.”
“Bill's going to try to sell this program to the nation,” Ms. Hayes said.
Safeway's risk management department also focuses relentlessly on closing open workers comp claims, even if it means claims adjusters will have a smaller case load.
“We sit down with our claims adjusters and we say, "If you do a great job, we're not going to fire you for doing a great job,' “ Mr. Zachry said. “So if you settle cases, I'm not going to fire you because you now have a lower caseload. It may mean that if somebody leaves we're not going to replace them. And we have far fewer claims adjusters than when we started. But we don't fire people for doing a great job. And they know it.”
“With communication, cooperation and team effort we get quicker resolution of claims and a reduction of claims costs,” Ms. Hayes said.”The average claims examiner case load is 100 open claims, and a lot of times it's lower than that.”
Safeway also has taken the step of electronically linking its workers comp utilization review and bill review processes, allowing the company to more easily identify unauthorized or inappropriate treatments.
“And it dropped our medical payments,” Mr. Zachry said. “The reason it's gone down pretty regularly is once the doctors know they're not going to get paid for it they stop doing it.”
In an effort to rein in workers comp litigation costs, in November Safeway implemented an alternative dispute resolution program in Southern California, and Mr. Zachry plans to expand the program. “We're exploring Northern California, and we expect to be able to roll it out in many other states throughout the United States once we show the success of it in California,” he said.
“A lot of the people here like being part of a unique, special place where we get these kinds of results,” Mr. Zachry said. “At the same time though, I have hearing representatives who go in front of the various judges in California or other states, and we're known for taking good care of our injured workers. We're known for being fair and so we get the right kind of respect when we go in front of them, because we're not trying to take advantage of the injured workers. We're known for doing the right thing.”
Often in discussion about his risk management successes, William M. Zachry, vice president of risk management at supermarket chain Safeway Inc., interrupts the conversation to credit his department's staff — a staff that includes numerous industry experts and a very engaged group working to thrive in an environment where risk management is highly valued and innovation produces results.