More tips to ensure your RTW program is worth more than the paper on which it's written

Last week we wrote a post about ways to measure the effectiveness of your return to work (RTW) program.  As you may recall, the prior week's post gave some tips to measure the effectiveness of a newly implemented RTW program.

Let's discuss the more mature RTW program.
For employers who have had more experience with modified duty and lost time claims, the methods to evaluate the effectiveness mentioned in the prior post will also apply.  If you're looking for more targeted or "next level" metrics, there are some simple ways to accomplish this.

• The window of opportunity to positively impact the outcome of a workers' compensation claim is very short and it begins closing the day the injured worker is taken out of work. Employers must create a sense of urgency with regards to RTW.  Most of our insured employers feel that they are "pretty good" "in most cases" at identifying modified duty.  Assuming this is how you perceive your company, and this judgment is factually substantiated, you may want to start measuring the days until a RTW opportunity is found/offered.  Measure the days that pass between the time the claim representative or injured worker provided a RTW note and the date they received an offer to RTW.  Employers can be even more aggressive in their standards and measure from the actual date the injured worker was released to modified duty until the day they returned.  This would assume that the expectation is for any release to modified duty to be reported to the employer as soon as possible, likely by the injured worker.  These "lag time" days are wasted days of productive, meaningful work -- and days where temporary total disability are unnecessarily being paid.  Setting a goal and starting the clock will create that sense of urgency that is essential in an effective RTW program, and give you something to measure against.
• If you're an employer who really wants to challenge themselves, take a look at the Occupational Disability Guidelines (ODG) return to work recommendations. These are evidence-based guidelines for expected RTW targets based on diagnosis and categories of work (light, heavy, very heavy, etc.).  Holding your RTW outcomes to these standards gives you a benchmark to measure against.  Obviously there are going to be scenarios that don't comport to a set of guidelines, but it gives you an opportunity to look at a benchmark and investigate what the deviation stemmed from -- was it due to complications with treatment, or lack of a modified duty offer?  Another benefit of using guidelines is that it gives realistic projections for various timeframes of when an injured worker reaches different levels of work.  The guidelines also consider certain comorbidities (things that will impact recovery times).  Here's an example:
• ODG Treatment and Return to Wellness guidelines: 724.2  Lumbago
• Severe, manual work:  14-17 days
• Severe, heavy manual work:  35 days
• Obesity comorbidity (BMI >= 30), multiply by 1.31
• Because this particular injured worker was considered obese, ODG projects their recovery time to take about 31% longer than an injured worker who has a BMI of 29 or lower.

While it is sometime difficult to measure results, it's best to measure something -- and be sure to do it consistently.  Put some thought into what your goals are and how you're going to measure them.  Communicate these goals (repeatedly -- we mean it, every chance you get!) and share your progress.  The gold standard would be to find a way to make managers/supervisors accountable for their results.  As "they" say, you manage what you measure.

A RTW Case Study: How a $500 wage loss claim cost this employer thousands

Five hundred dollars if $500, right?  Not for this Indiana employer. 

Using actual claim figures and premium calculations, this post will demonstrate how $500 in indemnity (wage) payments resulted in a premium increase of more than $4,000.

Each year, an employer’s experience modification factor is calculated based on prior years’ losses. 

In some states, such as Indiana in this example, medical-only claims are reduced by 70%.  Medical-only claims are claims in which only medical costs were paid, and no indemnity (wage) payments were made under the claim.  So, for explanatory purposes, if an employer has a $1,000 medical-only claim, it is reduced (for the sake of calculating their experience modification factor) by 70%, to $300.  The claim still cost $1,000, but only $300 of that will be considered in their “mod” calculation.

So, how does $509 end up costing the employer $4,000?

If the employer would have brought the injured worker back to modified duty without incurring any wage payments under their policy, it would have reduced the costs of their indemnity claims dollars paid to $0.  They would have also counted as medical-only claims.  However, because these claims in their loss history were not kept as medical-only, the employer loses the benefit of the 70% reduction in claims.

Think of keeping claims as medical-only like a discount coupon at the grocery store.  You must return all injured workers to modified duty to get 70% off your [medical] claim costs.

So, how does $509 end up costing the employer $4,000?

What's the ROI on RTW?

It’s no surprise that claims-people like to use acronyms and abbreviations.  It’s as if we’ve got our own language…TTD, IME, PPD, IRE, RTW, ABC…just kidding with that last one, but it’s plausible.

The knee-jerk response of any business owner when asked to bring someone back to modified duty is typically, what’s this going to cost me?  It is important that employers understand what their potential return on investment is with a return to wellness (or, as others call it, return to work) program, but that is only part of the picture.  Examining the opportunity costs associated with modified duty will help an employer/business owner make the best decision, for their business and their employees.

What’s the return on RTW programs?
A 1993 study conducted by Crawford & Company estimated returns ranging from $8-10 for every $1 invested in a RTW program.  This same study noted an overall reduction in WC costs of 54%.

Roto Rooter Services Co. experienced a reduction in incurred WC losses from $1.4 million to $356,000 in one year, which was largely attributed to their RTW program¹. 

Gibson Greetings’ RTW program reportedly reduced their incurred WC losses from $400,000 to less than $50,000 the following year¹.

The RAND Institute (2010) published a working paper which examines the effectiveness of RTW programs.  The study suggests that for large employers, RTW programs are highly effective at reducing duration of absences due to work injuries, resulting in about a 3.6 week reduction in the median number of weeks away from work for an injured worker.²

Obviously, individual companies will experience varying results.  These statistics represent case studies that are likely not applicable to every industry nor every employer. 

What is the cost of doing nothing?
Without going into the nitty-gritty of calculating experience modification factors (if you’re a glutton for punishment, you can learn more on this by going visiting your state’s compensation rating bureau), the higher your experience mod is, the higher your premium calculation will be.  A credit score is used to assess a creditor’s risk when lending you money.  Similarly, an experience modification factor is used, among many other factors, to determine an insurer’s risk of insuring your company for workers’ compensation insurance.

The impact of a RTW program, or not having one, will depend on what type of policy you have.  If you’re an employer with a large deductible, you will see more “immediate” savings than someone on a guaranteed cost policy.  If you’re an employer who has a retrospective rating plan, then you have an incentive to lower your claims – a dividend! 

These are the direct costs associated with insurance premiums.  Consider your profit margin.  Think about how much more you would have to sell to offset a WC premium increase of $10,000.  Now, reconsider the cost of offering a few hours of modified work per day for 6 weeks.  There’s an opportunity for even greater savings in some states when a claim remains medical only as opposed to becoming a lost-time claim in regards to your experience modification factor.

We haven’t even discussed the indirect costs associated with having an injured worker out of work…lost productivity, decreased employee morale, increased potential of illegitimate claims, increased turnover, increased injury rates, increased costs of overtime, increased health insurance costs…  We’ll save that for another post.     

References:
1.   Friedman, S. (May 8, 1995).  Back-to-work WC programs pay big dividends.  National Underwriter, 99(19), 3;26.
2.   McLaren, C., Reville, & Seabury, S. A. (March, 2010). How effective are employer return to work programs? (Working Paper No. WC-745-CHSWC).  Retrieved from RAND http://www.rand.org/content/dam/rand/pubs/working_papers/2010/RAND_WR745.pdf.

Meet JAN, your new best friend

Who is JAN?

The Job Accommodation Network (JAN) is the leading source of free, expert, and confidential guidance on workplace accommodations and disability employment issues.  Working toward practical solutions that benefit both employer and employee, JAN helps people with disabilities enhance their employability, and shows employers how to capitalize on the value and talent that people with disabilities add to the workplace.

JAN’s Workplace Accommodations:  Low Cost, High Impact  reports  the results of a recent survey of 723 employers who utilized JAN’s services.  We’ve provided some of the most relevant findings below.

An astounding 57% of accommodations didn’t cost anything.  Zilch.  They were free.  The average cost of a one-time expenditure was $500 for employers.   Do the accommodations work?  76% of employers reported they found the accommodations to be “very effective” or “extremely effective.”

What benefits have employers utilizing JAN received?

Direct Benefits
 

39% reported a savings on workers’ compensation or other insurance costs

90% reported the retention of a valued employee

71% reported increased the employee’s productivity

60% reported the elimination of costs associated with training a new employee.

Indirect Benefits

66% of employers reported improved interactions with coworkers

61% cited an increased overall company morale level

45% reported increased workplace safety

57% reported increased overall company productivity

99% of employers stated they would use JAN again.

There’s a Searchable Online Accommodation Resource (SOAR) database which provides information, suggestions, examples and resources for employers interested in implementing a job accommodation.  These suggestions are sorted by impairment or by industry.

 

References:

Job Accommodation Network (Original 2005, Updated 2007, Updated 2009, Updated 2010, Updated 2011, Updated 2012). Workplace accommodations: Low cost, high impact. Retrieved August 12, 2013, from http://AskJAN.org/media/lowcosthighimpact.html

 

Have an injured worker out of work? The meter is running.

If you're an employer with an injured worker who is currently out of work, the temporary total disability (TTD) meter is running!  Whether it's staring at the meter at the gas pump, silently praying that it will soon stop, or imagining dollars going out the door everytime the air conditioning kicks on and you see your electric meter hypnotically spinning in circles...cha-ching, cha-ching, cha-ching, most of us have at least felt the pain at the pump or cringed when reviewing your summer-time electric bills.

We can blame the meteorologists and global warming, or grumble about the price of oil, but it's unlikely that we're going to stop using gasoline or electricity.  The same goes for workers' compensation (WC) insurance.  It's a requirement for the overwhelming majority of employers, and while there's little you can (legally) do to avoid having WC coverage, there are many ways to avoid overpaying.  Don't worry, you won't have to start biking to work or start adopting the ways of the Amish life.

One of the most influential ways to reduce workers' compensation claim costs (and resulting impact on premium calculations) is to offer modified duty.  If you have an injured worker who has restrictions that you [think] you cannot accommodate, the TTD meter is running.  As a claim representative I was often outraged at the number of employers who didn't seem to be alarmed by this statement:  "Each week that you do not offer modified duty, your policy is paying out $422 per week!  Over the course of 12 weeks, that is $5,064!"  It's not Monopoly™ money, it's real claims dollars.  Dollars paid to an injured worker, who is capable of performing productive work. 

Out of sight, out of mind? 

RTW: Everybody’s doing it

…or at least for the majority of cases.

According to the Bureau of Labor Statistics (BLS), nearly "60% of the most severe cases in private industry include at least some days of job transfer or restricted work, with the remainder resulting exclusively in days away from work." (2013, p. 31). So what's the big deal? Well, in 1970, less than 5% of severe cases involved job transfer. We've come a long way, baby.

In 1985, only 8.6% of all lost-workday cases involved restricted work (2013, p. 32). In 2001, this number rose to 39.9% (2013, p.32). That is good news! BLS classifies restricted work cases as cases where the injured worker returns to work with restrictions, without losing time from work. In other words, injured workers return to modified duty without losing more than a day of work. 

Does business size matter?
According to the BLS: somewhat. Their research has found that establishments increased in size, the proportion of restricted work days also increased, measured at years 1985, 2001, and 2009, until employer size reaches about 1,000 or more employees where it levels out and drops off slightly.
While peer pressure is typically not a good basis for doing something, particularly when it involves important business decisions and employees, it's clearly not just us who believe RTW is beneficial.

Exciting news!
Well, I find it exciting. In their future surveys, the BLS plans to capture more worker characteristics such as:

• Occupation
• Age
• Race or ethnic origin
• Gender
• Event or exposure leading to injury or illness
• Nature of injury or illness
• Part of body affected
• Source of injury
• Number of days of job transfer or restricted work
• Number of days away from work
• Length of service with employer
• Day and time of event or exposure
• Amount of time on shift when event or exposure occurred

It is expected that the BLS will release the results of their most recent survey sometime in 2013.

For more information, you can access the original article here, or visit www.bls.gov
 
Reference:
Ruser, J. W. & Wiatrowski, W. J. (2013). Restricted work due to workplace injuries: a historical perspective. Monthly Labor Review, 136(3), 31-43.

The Dollars and Sense of RTW Programs

According to one study on worker absenteeism, the costs of a worker who is out of work for 2 weeks costs their employer 133% of his/her wages.  So, if an employee earns $500 per week, it will cost the employer $665 per week, or an extra $330 over a two week period. 

Various studies have been conducted on the cost-benefit and ROI of RTW programs.  In an article from the American Society of Safety Engineers, RTW programs can return $8 to $10 dollars for every $1 invested in a RTW program. 

In the same article, the authors cite another study which found that the direct costs associated with a WC claim (wage benefit payments, medical payments, and legal expenses) make up only 28% of the costs associated with WC claims.  The other 72% is comprised of indirect costs such as lost productivity, training, replacement worker costs, and other costs not covered by insurance.

A RTW program doesn’t have to cost you big bucks.  Many things can be done by making small changes.  When creating or identifying modified duty job opportunities, employers should look at the job tasks that other employees already perform.  This will help to ensure that the modified duty work is productive and serves a legitimate purpose, thereby helping reduce any costs associated with RTW.

Reasons Injured Workers Return to Work

In a 2010 study of 168 individuals who sustained non-life-threatening orthopedic injuries, it was found that participants who reported "high social functioning" two weeks post-injury, were roughly 2 1/2 times more likely to return to work (Clay, et al., 2010).  This same study reported that financial security and perceived ability to return to work were not statistically significant. 

Clay et. al, (2010) also found that "Ninety-three percent of respondents who reported the need to use work "to fill the day" were back at work by three months, compared to 66% who indicated other reasons" (p. 7).

The psycho-social factors and environment are equally important as the physical injury in the return to work process.  While we cannot influence the injury we can influence the socialization of injured workers. 

What amount of effort does it take on behalf of an employer or coworker to make a phone call to chat with the injured worker, keep them apprised of any developments at their workplace, or even to send a "get-well" card?  Very little.  The ROI on a 99 cent get well card is potentially tremendous.

So when an employer feels as if they don't have control over the WC claim, and that all power rests in the hands of the injured employee and their treating physicians, remember this post, and it might be a good idea to reference this post as well, oh and this one is probably useful, too. 

When we discuss the concept of Return to Wellness as opposed to return to work, we’re focusing on all aspects of a workers’ compensation claim.  Not just the financial impact, but how we need to treat the injured worker as a person who has sustained an occupational injury and not as a claimant. Returning injured workers to wellness using a bio-psycho-social approach -- treating the injury, treating the individual and acknowledging the positive impact that returning to the workplace (environment) after an injury can have on recovery.

Source:  Clay, F. J., Newstead, S. V., Watson, W. L., Ozanne-Smith, J. & McClure, R. J.  Bio-Psychosocial determinants of time lost from work following non life threatening acute orthopaedic trauma, Bio Med Central Musculoskeletal Disorders 2010, 11:6. http://www.biomedcentral.com/1471-2474/11/6


 

If WC were a family, RTW would be Subrogation's long lost cousin

While RTW and subrogation are part of worker's compensation claims, it's easy to treat them like olive oil and balsamic vinegar. Two immiscible ingredients that go on the same salad.  However, just like making vinaigrette, with some work, RTW and subrogation can emulsify and yield a delightfully popular result.

Think of it as a family get-together where Subrina shows up to the [third] party, in her suit, hungry.  Some family members see Subrina as a person who only looks out for herself and is at the table to gorge upon as much as she can, and stuff her pockets with whatever else she can just because she doesn't want anyone else to have it.  The other guests fail to recall that she paid for a nice portion of the food being provided.

Meanwhile, Rhett T. Wellnest (RTW), the long lost cousin, is in the kitchen preparing the food.  He decides that he is going to help everyone with their New Year’s resolutions to get healthy by making up everyone’s plates as opposed to a buffet-style meal.  Rhett limits the amount of food on the table, thereby reducing the amount that Subrina will get.

Subrina may be upset at first, because there’s less food on the table, but realizes that she can only eat so much.  She leaves the table feeling glad that she didn’t over eat. She thanks her cousin Rhett, as it has helped her fill her up (make her whole) and not overindulge.

The Numbers of RTW

Decision-makers want facts.  They want numbers.  While numbers cannot tell us everything, they can certainly provide valuable information.

Here are some numbers to help put the costs and figures associated with RTW and WC claims into perspective. 

1,191,100 the number of non-fatal occupational injuries/illnesses in the U.S. in 2010

50% the likelihood of an injured worker returning to work after 8 weeks away from work

34%  the percentage of Waste Management employees who felt that they could have returned to work sooner than their full duty release (but didn't since their doctors kept them off work)

15% the likelihood of RTW after 6 months away from work

3 the number of years a claim will impact an employer's experience modification factor (impacting the premium calculation)

I've never seen (or counted) a million of anything, but I do know what a 50% probability looks like.  Simply flip a coin (repeatedly).  Most people are familiar with the duration of three years.  Take the following numbers and ask yourself how they are impacting workers, insurance costs and the future of your business.