Economic trends can be a frightening obstacle for many companies. While many local businesses are feeling or anticipating the effects of a downward economic trend, some will undoubtedly overlook workers’ compensation and injury management as cost containment opportunities. Evidence shows that vigilance in this area can significantly help a business.
Researchers analyzing data among several states during the 1989 to 1991 recession found that total workers’ compensation system costs increased by 8.8 percent. The data pointed out that despite a 4.5 percent decrease in total claims, the cost per claim went up 13.9 percent. Looking deeper into these numbers, researchers found other interesting and disturbing trends:
- Temporary total disability (TTD) durations increased 1.8 percent, primarily occurring in the construction and manufacturing industries. Average durations of disability (TTD and restricted duty) increased from about nine to 23 weeks.
- Medical costs grew 1.6 percent.
- Permanent partial disability ratings rose 0.9 percent. Researchers noted some evidence to suggest that this increase did not correlate to severity of injury. They speculated that the increase might relate to shifting economic (dis)incentives for workers and others working in the system.
- Occupational disease and repetitive trauma claims increased almost one percent. Researchers noted these claims had a disproportionate number of unidentified problems.
Other research concurs. One study that used Illinois for its research found that recessions are “characterized by increased use of the system, longer duration claims and more frequent and larger lump-sum settlements.”
None of this should be surprising, at least in theory. The question that logically follows is: “What does an employer do to control these negative trends?” The answers lie in the same strategies that effectively manage claims when there is a neutral or growing economy.
First, do your homework when a claim is presented. This should be your first action for both real and fraudulent claims. Collect statements from the employee, coworkers and managers. Visit the work area. Analyze for both inaccuracies and impossibilities. Get you carrier involved to assist with the process.
Second, insist on immediate evaluation by a provider of your choosing. Do not allow a worker to state, “I’m OK, I do not need to see a doctor.” While that may be tempting to save costs, it is unwise. Although good workers are usually sincere in simply wanting to continue working without being treated, some will use the opportunity to see their first choice of provider. This often sets the tone for a contentious claim.
Finally, ensure that your choice of medical provider specializes in work-related healthcare. There are many well-intentioned medical providers who do not understand the nuances of modified duty, differential diagnoses for common work-related issues, or simple ways to prevent first-aid treatments from becoming OSHA recordable injuries.
Whether the economy is up or down, workers’ compensation and disability can be effectively managed. Consistent management of a claim from beginning to end is the key. IBI