Workers Compensation Trends: Heading into the Unknown with

advertisement
Workers Compensation:
Take control of your pool funding
in an uncertain market
What we’ll Cover
• Developing Workers Comp issues
• Emerging issues to watch
• Steps you can take to reduce claims and protect
your bottom line
Workers Comp Issues
• Claims frequency is expected to rise as the
economy recovers
– 20 years of declines are slowing
• Frequency declines in a recession,
and increases as employers add workers
– Severity increasing during past 30 years
• Indemnity tracks opposite the economy; medical doesn’t
- NCCI
Workers Comp Issues
• Injured employees are staying out
of work longer
– Mean duration for injuries increasing:
• 123 days in 2006
• 141 days in 2009
– Unemployment nearly doubled in the same period
• Impact of:
– Economy
– Litigation
– Cultural mindset
Workers Comp Issues
• Medical costs continue to rise
– They are 58% of total claims
– Medical treatment costs are rising
– Prescription costs are 18% of total
• Use of compound drugs skyrocketing in many states
• Repackaging or physician dispensing
increases cost, usage, and duration
Workers Comp Issues
• Narcotics abuse rampant
– 25% of all prescribed drugs
– Claims costs rise along with litigation, lost time
– Workers treated with narcotics stay away from
work up to 69 days longer
• Most jurisdictions require payment for rehabilitation
Workers Comp Issues
• Mental stress claims are compensable in a
growing number of states
– California and Oregon mental/mental claims
may be a spreading trend
– Medical marijuana legislation being considered
in several states
Workers Comp Issues
• More claims being litigated
• Economy reduces job options
• Additional consequential injuries
– Stress, sleep disorders, sexual dysfunction
– Ability to compete in the labor market
Emerging Trends
• Presumption legislation
– More jurisdictions eliminating need for medical evidence
– May reflect the influence of unions
– Do you need to fund for change?
• NCCI expects an increase in comp legislation this year
Emerging Trends
• Medicare set asides
– Actuarially difficult to determine
• Difficulty settling claims
• Claims taking longer to close
– Legislation not likely to help make this easier
Summary
• Cost trends on rise
– The number of claims is rising slightly
– The cost of those claims is raising slightly
• Medicare set asides are a growing issue
• Funding for pools must increase
– Base funding decisions on your state’s political
pressure points
Impact of Health Care Reform
• Health care reform
– Will comp claims decrease because everyone is insured?
– Will the cost of claims decrease because of medical
fee schedules?
– Community health centers and wellness
Opportunities
• Wellness programs
– Multiple benefits to promoting wellness
• Benefit plan savings
• Healthy workers heal more quickly
• Improves employee morale
Your Greatest Opportunity
• An engaged workforce will reduce
the cost of claims
–
–
–
–
–
Frequency
Severity
Duration
Medical costs
Litigation
Why this Matters
• Municipal employees have more reasons to be
disengaged
–
–
–
–
Layoffs
Furloughs
Pension reforms
Public criticism
Why Engagement is Critical
“The Relationship between Engagement at Work
and Organizational Outcomes” - Gallup 2009 study
– Difference between the top quartile of employers with
engaged workforces vs the bottom quartile of disengaged
workforces
• 18% gain in productivity
• 37% reduction in absenteeism
• 49% reduction in safety incidents
Why Engagement is Critical
• American Society for Training and
Development report
– Engaged employees 5x less likely to have a safety incident
– 7x less likely to have a lost time incident
– Cost per claim of disengaged employees was 7x higher
Employee Engagement
What you can do to help improve employees’ level
of engagement
• Your role as leaders in the process
• Result:
Combination will save your pool’s money
•
Improving Engagement
• What front line employees care about
• 4 most important responses for engagement
– Best friend at work
– Someone cares (supervisor)
– Praised on my performance in past 7 days
– Supervisor discussed performance in past 6 months
What You Can Do As Leaders
• Engagement comes from leaders
– Mediation effect
• Frontline employees are 59% more likely to be engaged when
supervised by highly engaged managers
- Gallup
– Spend more time leading people, not managing tasks
- Clint Swindoll, Engaged Leadership
– Focus on two areas:
• Mission
• Purpose
What the Pools can do
• Large group meetings
–The level of engagement skyrockets when
employees representing all parts of an organization
gather together to give input…
– North East Human Resource Association
• Train managers
• Assign a point person
• Promote awareness
–Everyone wants to like their job
Employee Engagement
Summary
•
Creating and maintaining an engaged workforce
– Improves productivity, retention
– Reduces sick time, claims
Summary
Is it really so grim?
• You can reduce your pool funding needs
•
–
–
–
–
•
Return to work programs
Medical cost containment
Wellness
Culture
Improving these areas benefits everyone,
from the pool to the worker
Resources
• Engagement:
–
–
–
–
“Drive” Daniel Pink
“The 8th Habit” Steven Covey
“Integrity” Henry Cloud
Gallup Organization and the Gallup Management Journal
• Wellness:
– Welcoa.org
– Limeade.com
– Gallup-Healthways Well-Being Index
Download