Economic subjects | Human resource management » Fry-Rajkowski - The Changing Landscape of Workers Compensation and The Implementation of Cost-Saving Techniques

Source: http://www.doksinet Transportation Lawyers Association 43rd Transportation Law Institute (TLI) Kansas City, Missouri Friday, October 22, 2010 The Changing Landscape of Workers’ Compensation And The Implementation of Cost-Saving Techniques Kenneth R. Fry, MS President/Principal Consultant Safety Management Resources, LLC 23 Mays Landing Road Suite 1 Somers Point, NJ 08244 Thomas Rajkowski Senior Operations Manager Distribution The Philadelphia Coca-Cola Bottling Company 801 E. Erie Avenue Philadelphia, PA 19134 1|Page Source: http://www.doksinet The Changing Landscape of Workers’ Compensation And The Implementation of Cost-Saving Techniques Introduction With the current state of our economy, the transportation industry can benefit from investigating avenues and taking greater steps to reduce operating costs and sustain growth and profitability. Unfortunately, employee safety and health is typically targeted as a cost reduction. Warren K Brown, President of ASSE

stated in a 2008 news release that “workplace safety processes must be implemented at all times. They are even more critical during business downturns” 1 Cutting employee safety & health processes and mismanagement of insurance claims can surely set the stage for increased injuries, medical & indemnity costs and experience modification rates. Lost time claims are the most costly to your company, therefore, focus must be placed on reducing claims severity. Out of control workers’ compensation cost can result in a negative financial impact on a company’s bottom-line. Executing comprehensive employee safety & health and claims management processes can maximize a company’s ability to control workers’ compensation expenses. When managing these processes effectively, a company can create a culture shift that results in a safer workplace, reduction in injuries and cost savings in claims. Injury Statistics 1. In 2007, delivery truck drivers experienced a rate of 177

musculoskeletal disorders (MSDs) cases per 10,000 workers. The overall national average is a rate of 35 MSDs case per 10,000 full-time workers. 2 2. According to the Bureau of Labor Statistics, the transportation and warehouse sector accounted for 579 fatalities, a 27 percent decrease in 2009. Transportation had a 32% decrease in fatalities in 2009. 3 3. In the second year of implementation, an airline reduced its indemnity claims by 45% through safe lift training, transitional early return to work and supervisory training. Developing and Managing a Safety & Health Process 1 American Society of Safety Engineers News-“Reducing or Ignoring Workplace Safety During Business Downturns Costly, ASSE Notes”, December 18, 2008. 2 Work Truck Feature, “How to Spot and Avoid Potential Ergonomic Injuries”, Richard Alaniz, November 2009 3 Bureau of Labor Statistics 2009: www. blsgov 2|Page Source: http://www.doksinet William C. Pope wrote, “Sound management of industrial safety

programs will depend on innovative people who are willing to shed the blinds of tradition.” 4 Managing safety by the “flavor of the month” approach will only lead to failure with safety & health and injury reduction. Nor can companies rely on shopping insurance rates to lower their costs For a company to be successful with injury reduction, commitment to safety & health initiatives must start at the top executive level down through management & supervisors to the employees. The managers & supervisory staff are the “key players” in assisting the executive management staff with the execution of the safety & health plan. Some effective safety & health initiatives implemented by organizations are:  Establish a Safety Culture that is based on Values. Values state how important safety is to your organization. One example of a safety value is “Nothing we do is worth getting injured”. These Company safety values should be an integral part of your

company operations and should never be compromised for short-term objectives that place efficiency and production numbers above the safety your employees.  Implement a safety & health vision statement signed by the highest-level corporate officer and communicate the vision to all company employees to fix safety accountability. The safety & health vision statement should be shared with employees during new hire orientation; department stand-down meetings and general meetings held by the management team.  Include safety responsibilities in job postings and newspaper advertisements when searching for job candidates. This approach communicates to the job candidate even before the hiring process begins that your company has a high regard for their safety and that safety will be an integral part of their daily work activities.  Everyone in your company needs to understand their role and responsibilities for managing your company safety & health process. Establish safety

& health roles and responsibilities to address the safety & health expectations for all managers, supervisors, and employees so they understand what is expected of them, how they will be held accountable and how safety & health will be managed.  Establish future activity and results oriented safety & health goals that are defined, attainable and reflected in annual performance reviews. Target completion dates and assignment of responsibilities should be set and communicated to your company from the top down. Every year, each department should be required to submit annual safety improvement goals.  Develop written action plans to be implemented for achieving desired results in injury reduction and safety & health driven activities. The action plans should outline those 4 William C. Pope, “Managing for Performance Perfection-The Changing Emphasis”, 1990, page 95 3|Page Source: http://www.doksinet safety & health initiatives to be implemented and

managed, target completion dates and assignment of responsibilities. This action should be communicated to everyone in the company from the top down.  Maintain an open channel of communication between employees, management and supervisors regarding safety and health matters. Managers and supervisors should include safety as an agenda item in operation meetings and discussions with employees. Engaging employees in safety & health matters will empower the employees to take ownership in their safety. Employees must understand that the safety & health process is about them. The main objective is to send employees home the same way they arrivedinjury free.  Conduct Safety Stand Down meetings to identify, evaluate and control At-Risk work practices and conditions through ownership, management and employee involvement.  Define and implement “Safe Behaviors” and “Best Practices” into job procedures and training.  Develop written loss control policies, procedures and

safe work practices that address company expectations for injury reduction and compliance with various safety, health, and OSHA related issues. These documents along with the safety & health training should be evaluated by the company to assess their effectiveness. Revisions should be made where necessary to ensure the written documents are current and meet operational and loss control needs.  Review OSHA 300 logs, workers’ compensation claims loss runs and investigation reports to determine the effectiveness of overall loss control efforts and opportunities for improvement.  Conduct timely review of auto, accident, near-miss and property investigation reports; job safety analyses (JSA); self-inspection checklists; supervisor safety observation reports and employees suggestions for: • • • • Possible changes in operations, work practices or safe operating procedures. Need for safety & health programs or safe operating procedures. Need for protective device or

equipment. Need for Stand-Down Safety meeting or additional training.  Review and analyze auto, accident, property and near-miss investigation reports for: • Accuracy and completeness (recommending follow-up investigation if necessary). • Corrective action and consistency throughout the organization. • Identification of incident trends and determination of what order they should be given attention.  Establish procedures for self-inspections for the purpose of identifying, evaluating and controlling safety & health At-Risk behaviors and conditions. Conduct follow-up with 4|Page Source: http://www.doksinet employees to communicate actions taken to correct safety-related suggestions and hazards.  Establish Ergonomic engineering controls, procedures, stretching programs and training such as safe lifting to reduce musculoskeletal disorders (MSDs). Insurance Program Here are several questions to ask regarding your insurance program         

    Is there a partnership between your company and the insurance agent and carrier? Do your insurance agent and carrier understand your needs? Do your insurance agent and carrier visit your worksite? Do your insurance agent and carrier understand your operations? Do your insurance agent and carrier understand the hazards associated with your operations? Are the proper or most current industry classification codes being used? Misclassification can result in an overcharge to your company. Are fee schedule compliance reviews, audits of medical and hospital fees and utilization reviews of all hospital admissions performed? Do you use pre-selected occupational physicians? Are Case Nurses assigned to lost time cases? Do your insurance agent and carrier and treating physicians understand your transitional duty early return to work program? Are questionable claims (fraudulent) reported to the insurance carrier and investigated by a professional investigator? Has settlement

authority been given to the insurance carrier for workers’ compensation claims? If so, what is the dollar amount? How often do you have face-to-face meetings with the insurance representatives and treating physician to discuss open claim files and reserves? Open claims with reserves are costly and count against your experience modification rate. Claims Cost Containment The implementation of a Transitional Return-to-Work Program can provide your company a huge opportunity to “take control” of lost time cases and costs. The insurance carrier, treating physician and Injury Coordinator/Human Resources representative should be involved in the design and implementation of a Transitional Duty Early Return to Work Program that is tailored to meet the specific needs of the injured employee and your organization. Building a partnership with the insurance adjusters and medical providers is an essential component with managing workers’ compensation claims and your company transitional

duty program. The insurance adjusters and medical providers should understand your company’s needs and operations and be able to identify specific restrictions to accommodate the appropriate placement of injured employees. In addition, it is of the utmost importance that managers and 5|Page Source: http://www.doksinet supervisors understand the Transitional Return-to-Work Program and that they along with the injured employee follow all prescribed restrictions so that the employee is not reinjured. Advantage Specialty, a Managing General Agency for workers’ compensation, assists its policyholders with controlling injury costs through the implementation of their six steps to a successful Transitional Duty Early Return to Work Program. 5 Step #1 Create a policy reflecting your company’s dedication to Return-to-Work Program. 1. Develop a policy announcing your Return-to-Work Program and management’s commitment to the process. 2. Position the new policy as an employee benefit 3.

Sponsor an event to announce and communicate the policy to employees 4. Conduct separate training sessions for managers and supervisors 5. Include the policy in personnel manuals and new employee orientation material. Step #2 Designate one person to manage the program. 1. When return to work is left to chance, staff may perceive a lack of appropriate duty for the injured employee and safety personnel. 2. Appoint an Injury Coordinator with appropriate authority to drive the program and coordinate the collection of physical demand job descriptions. 3. The process will run more smoothly with one person in charge of establishing transitional duty, communicating expectation and ensuring a win-win situation for everyone, including the injured employee and the employer. Step #3 Adopt an Empathy Program. 1. Studies show that frequent contact with injured workers increases early return to work and decreases the likelihood of claimants seeking legal assistance. 2. The immediate supervisor

should contact the injured employee within 24 hours of the accident and at least once a week until the employee returns to work. 3. Injury Coordinator and/or HR representatives should also make regular calls to injured workers. 4. Assure employees they are missed and explain workers’ compensation benefits so employees know they will be taken care of. 5 The Six Steps for a successful Transitional Duty Program were developed by Advantage Specialty, a Managing General Agent, who provides workers’ compensation services to policyholders. 6|Page Source: http://www.doksinet Step #4 Establish a guaranteed transitional duty period. 1. Guarantee transitional duty for a set period of time Although 60 days is average, some employers use 120 days or more. 2. The length of time may be altered to conform to average diagnostic recovery time frames. 3. If an employee is unable to resume regular duties after transitional duty ends, enlist your personnel department’s help to ensure

compliance with the Americans with Disabilities Act (ADA). Step #5 Stipulate the goals of the transitional duty. 1. Transitional duty should have agreed-upon therapeutic goals 2. Your medical panel physician can help outline the employee’s abilities to ensure tasks are meaningful and promote recovery. 3. The employee and the employer must both adhere to any physical restrictions. 4. Your Return-to-Work Program is an employee benefit and privilege; in return, expect employees to be productive during the process. Step #6 Evaluate and improve the program. 1. When the employee achieves full-duty status, take the time to hold a brief discussion with the employee, the supervisor, physician and anyone else key to the program’s success. 2. Find out how well your program worked 3. Are there areas that could be improved? 4. Address actual and potential problems to make the next scenario even better. The Philadelphia Coca-Cola Bottling Company (PCCBC) The Philadelphia Coca-Cola Bottling

Company (PCCBC) has a service territory that covers the Philadelphia metropolitan and Tri-State areas. The job duties of a PCCBC route driver involves repetitive lifting and handling of product through the workday. PCCB is currently searching for alternative methods of delivery. Until such methods are implemented, PCCBC continues to expand on its safety & health process and make updates to its equipment and operations to reduce the frequency and severity of back and shoulder strains. Statistical Data 1. Route drivers travel on average of 65 miles 7|Page Source: http://www.doksinet 2. 3. 4. 5. 92 total routes per day (side loaders) Average of 20 stops per route Average of 431 cases per route 431 cases are handled multiple times throughout the course of the day loading, unloading and packing out on client’s display shelves. 6. Average of 23 cases handled per delivery by hand truck 7. Average of 39 cases handled per hour 8. Coca-Cola products handled can weigh 40 to 60 lbs Back

in 2008, The Philadelphia Coca-Cola Bottling Company, after assessing its current safety performance, developed and implemented a plan to make a step-change in the safety culture of their entire organization. Through increased leadership floor presence and communications, safety awareness, behavioral safety, management involvement and employee empowerment, Philadelphia Coca-Cola Bottling Company has created a culture shift resulting in employee engagement. 6 Objectives • • • Establish a Safety Culture based on the Coca-Cola Core Safety Values. Promote Safety & Health within all operations. Create the mindset that Safety & Health is a continual improvement and not a stand-alone program. Results • • • Reduced Total Incurred Costs by 88% from 2008 to 2010 YTD for the Route Delivery operations. Reduced shoulder claims by 73% from 2008 to 2010 YTD for the Route Delivery operations. Reduced Total Insurance Claims by 68% from 2008 to 2010 YTD for the Route Delivery

operations. Accomplishments/Implementations 6 Objective, Results and Accomplishments/Implementations are from a 2009 case study “ Jump Start a Safety Culture-The Philadelphia Coca-Cola Bottling Company, USA” written by Kenneth Fry (Safety Management Resources, LLC) and Jim Wood (The Coca-Cola Company). 8|Page Source: http://www.doksinet 1. Conducted a Safety & Health Assessment to include review of the Safety Culture and Philosophy, Loss History, Incident Investigation Reports, Post Incident Controls and Existing Written Program & Procedures and Training. 2. Developed and Implemented a Safety & Health Plan: a. To identify hazards associated with the operations and tasks to be performed; b. To identify Safe Operating Practices for each component of the work; c. To plan training to communicate the Safe Operating Practices and Safe Behaviors to be applied in all job tasks; and d. To plan inspections for monitoring the compliance with the Safety & Health Plan 3.

Implemented and publicized a Safety & Health Vision Statement to communicate Leadership’s expectations for Safety & Health, to fix accountability and to eliminate any confusion concerning the direction and assignment of Safety & Health roles and responsibilities. 4. Documented and communicated Safety & Health roles and responsibilities to Managers, Supervisors and Associates so they understand what is expected of them, how they will be held accountable and what safety activities must be managed. 5. Composed a Safety Team, sponsored by the Executive Leadership, to function as an advisory body and provide a forum for Managers, Supervisors and Associates to come together, discuss and proactively promote Safety & Health. 6. Developed and implemented a system for identification and correction of At-Risk Behaviors and Conditions. 7. Developed and implemented Teams consisting of Managers, Supervisors and Associates to complete Job Safety Analyses (JSA’s) and Safe

Operating Practices for work tasks. 8. Hold monthly safety & health meetings with Route & Bulk Drivers where topics are covered with the drivers to address safe practices for transport, loading and unloading of product. 9. Conduct ergonomic assessments and daily stretching programs to reduce shoulder and back injuries when off-loading cases of product. 10. Supervisors conduct route rides to audit driving skills and evaluate the employee’s safety performance and to ensure all safety guidelines are followed. The supervisors are in the field once a week to complete the route rides. 11. Each year 15 to 20 delivery vehicles are selected and placed through the vehicle refurbishment program. Safety is an integral part of the program in which the following updates are made to the delivery vehicles: a. Rear vision cameras are installed in each unit to reduce the backing accidents b. Added pull out steps on all long bay trailers to reduce slips & falls and shoulder injuries when

retrieving product from the bays. c. Waist high lifting panels are installed to prevent drivers from bending over to open the bay doors, reducing back injuries. d. Anti-slip is applied to the outer edge of the bays to prevent slip and falls Conclusion 9|Page Source: http://www.doksinet The cost of workers’ compensation is not a part of doing business. It is a cost that is controllable. When a company executes safety & health as a process where continual improvement is a part of the culture, the underlying sources of injuries can be identified and controlled, reducing lost time claims and costs. Safety & health must be managed like all other aspects of your business. 10 | P a g e