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FORT LAUDERDALE, Florida – Engaging workers in improving their own emotional and physical health lowers the cost of workplace injuries and illnesses – a critically important factor for companies that cover their workers comp exposures in a captive, experts say.
“If your health is not good, your chances of having an accident are so much greater,” Dr. Ann Hawkins, president and chief information officer for 24hr Virtual Clinic, told attendees of Business Insurance’s World Captive Forum on Thursday in Fort Lauderdale, Florida.
But silos exist in many corporations and can be a barrier, she said. “HR doesn’t talk to risk or talk to safety or talk to ergonomics and why aren’t we, especially in the captive marketplace, looking at all those and pulling those different departments together because … all the money goes to the bottom line. It doesn’t matter where that starts.”
For example, having a nurse triage program that employees can access to immediately report injuries and illnesses saves the captive money, with the costs of claims 10% higher if the injury or illness is reported seven days later or 50% higher if reporting is delayed by 30 days, Dr. Hawkins said.
“Captives reward for good behavior,” she said, adding that nurses can intercept claims that are “truly not comp claims. They can be taken care of with ice.”
“But your employees need to know the rules,” she continued. “Employees need to know those are programs in place to be used. How many of your employees go to the doctor and assume the price to go to the doctor was their $50 copay? They don’t realize that that other $250 for that doctor visit is literally coming out of their pocket. They’re so used to that old insurance paradigm, not understanding that in that captive market, all those unnecessary doctor visits, all those unnecessary trips to the emergency room for non-critical work comp claims are costing the company and the employee money.”
Overexertion involving outside sources ranked first among the leading causes of disabling injury, according to the 2016 Liberty Mutual Workplace Safety Index, with these injuries costing businesses about $15.1 billion in direct costs.
“A back surgery doesn’t happen because you overexert your back one time,” Dr. Hawkins said. “It happens because you did that overexertion 100 times and nobody stopped it at the beginning through some preventive ergonomic tools. Now this $90,000 back surgery could have been stopped the second time you tweaked your back.”
Other factors that could influence workplace injuries and illnesses include a lack of focus due to personal or family concerns or other illness conditions such as the flu, she said.
“If employees aren’t healthy, they need to be at home getting better, and the ability to provide services for them to be able to do that virtually can be embedded into your captive,” Dr. Hawkins said.
These types of programs can have immediate impact in lowering workers comp costs in a captive, experts say.
Kristy Balthazor, chief operations officer, Assurance Partners in Salina, Kansas, worked with an unnamed client whose workers comp losses and premiums were “out of control” in 2015, so the company moved into an alternative risk financing arrangement for the following year. Claim activity declined 100% with claims cost down 95% to about $14,000, she said. In addition, claims litigation declined 100%.
“That’s the biggest piece that reflects what the impact of telephonic triage can be,” she said. “Injured employees no longer felt that the only way they were going to receive the care and benefits that they deserved was by hiring an attorney.”
But programs embedded in a captive can also take a more proactive approach to engaging workers and keeping them healthy, experts say.
Donna Defalco, president of health and wellness consultancy Health Enhancement Co. in Brooklyn, New York, worked on a pilot program that saved a West Coast power line company more than $800,000 by directly addressing musculoskeletal health. The participating employees self-assessed where they experienced discomfort, with seven employees identified as at-risk and ergonomic solutions geared toward addressing their back, wrist, elbow and shoulder injuries. For example, a $770 chair saved thousands of dollars in injury-related costs, but employers often do not engage in such purchases because they must come from the budget of a department such as facilities that do not have line items for such costs, she said.
“When you send them to the doctor, that chair just cost you more money than the chair should have cost,” she said.
Currently, workplace safety is 80% the employer’s responsibility, 20% the responsibility of the employee, Ms. Defalco said, but she would like to flip that to make employees more engaged in and responsible for their own health.
“They’re not empowered to do anything because they always have to ask for permission,” she said. “That becomes a reactive program because you make them report to get anything that might make them feel better. This weak engagement drives more risk and drives up your cost.”
Tennessee added 52 captives in 2017, surpassing $1 billion in written premiums for the first time, the Tennessee Department of Commerce & Insurance said Wednesday.