Impact of Return to Work ProgramsImpact of Return to Work ProgramsPresented by: Landry, Harris & Co.

Agenda

Statistics Essential Components Benefits to the Employee Benefits to the Employer Potential Abuses Medical Providers Hidden Costs Financial Impact

Statistics

Why is a Return to Work program important? According to the 2009 National Return to Work Week press

release:

◦4.1 million employees experience work-related injuries or illnesses in America each year.

◦1.1 million have lost work days as a result of their injury or illness. According to the Bureau of Labor Statistics (BLS), the average time

away from work per injury was nine days.

◦Employees who are off work for more than 16 consecutive weeks rarely return to work at all.

ATTITUDE – ATTITUDE – ATTITUDE

A recent poll found:◦ 70% of quick returners do not let their condition consume

their thinking

◦ 76% of quick returners refuse to feel victimized by their injury

◦ 90% of quick returners report having a good relationship with their supervisor

◦ The longer an employee is out of work, the less likely he/she is to return to gainful employment

Statistics

Identify a coordinator◦ Develop modified duties / transitional work assignments

◦ Facilitate entire process

Develop a formal company policy◦ Ensure it is communicated to and understood by employees

Designate medical providers◦ Develop a relationship and make sure they understand your

business and its physical demands on employees

Be consistent!

Essential Components of a Return to Work Program

Essential Components:

Identify a Coordinator

Appoint one central coordinator of the programEmpower the coordinator to:

◦ Enforce the written policy

◦ Make changes to policy when necessary

Coordinator should oversee entire program◦ Implementation

◦ Monitoring

◦ Coordination/communication between supervisor, employee and physician

Essential Components:

Coordinator’s RoleShould take a proactive approach

◦Maintain a modified duty job bank

◦Establish primary contact with medical providers

◦Clarify work restrictions

◦Facilitate the return to work process

◦Ensure all parties understand their roles

◦Monitor experience and progress

◦Ensure recovery is progressing towards full duty work

◦Keep top management informed of successes and problems

Essential Components:

Develop a Formal PlanDevelop a written policy

◦ Policy should be approved/supported by management

Ensure employee understanding of policy

Explain thoroughly during new employee orientation program◦ Also, review periodically with current

employees

Obtain employee sign off – their agreement to follow program in event of an injury

Essential Components:

Designate Medical Providers

Identify qualified occupational medicine facilities

Invite physicians to tour your facilities and view the physical components of your employees’ work

Provide physicians with modified duty job descriptions

Establish expectations of accommodating restrictions

Establish main contacts at facilities

Essential Components:

Designate Medical Providers

Prevent lack of cooperation when injury occurs: Develop a relationship with medical providers and explain

your RTW program Produce functional capacity form and job description for

modified work If there are problems, have your carrier’s nurse case

manager provide “standards for practice” for the particular injury◦ Compare it to the treating physician diagnosis and treatment◦ Initiate dialogue regarding inconsistency of treatment

Essential Components:

Designate Medical Providers

Prevent lack of cooperation (continued): Send written notice to treating physician indicating modified

duty is available◦ Physicians may tell employee to stay home until they can return to full

duty, not realizing modified work is available

◦ Generally, restrictions short of complete bed rest can be accommodated as employee recovers

◦ Send copies to the president of your company, the director of the doctor’s clinic or hospital, the insurance carrier claim adjuster and the insurance carrier nurse case manager

Emphasize your concern of employee well-being, so doctor understands that you want what’s best for his/her patient

Essential Components:

Be Consistent

Enforce equally from:◦Location to location

◦Supervisor to supervisor

◦Employee to employee

Set employee expectations, and always follow through on them

Build sense of pride with goal of zero days off

Benefits to Employee

Maintains full earning capacityMaintains productive mindsetKeeps them on the “biological work clock”Prevents them from becoming dependent on a

disability systemProvides sense of security and stabilityReinforces management’s commitment to

employee’s well-being

Demonstrates a consistent procedure

Establishes solid communication all around

Improves ability to manage the claim/restrictions

Places experienced employees back on your premises (less time/money spent on recruiting and hiring)

Enhances employee’s self-worth

Discourages abuse

Reduces financial impact

Benefits to Employer

Potential Scenarios for Abuse

Employee anticipates layoff or downsizing

Attempting to use “injury” off time as supplemented vacation

Employee already demonstrates poor work ethic

Employee struggles with day care, transportation and other expenses

Depression, drug problems, alcoholism or other personal problems

Financial Impact

Manage experience mod factor◦Medical-only claims = less impact

◦ In states that use the NCCI to calculate mod factor, medical-only claims are reduced by 70%

Lost wages substantially higher than medical costs Return to work program can help:

◦Control hidden costs

◦Address indirect costs

◦Mitigate via loss prevention

◦ Improve loss ratios

“HIDDEN” COST

“REAL” COST

Financial Impact:

Hidden Cost

Financial Impact:

Hidden Cost of Employee Injuries

Costs not covered by insurance:◦Lost efficiency of injured employees◦Impact on other employees at the accident site◦Cost of hiring and/or training replacements◦Investigation time◦Overtime of other employees to make up for lost

production◦Extra supervisory time◦Clerical time for paperwork, etc.

Financial Impact:

Hidden Cost of Employee Injuries

Costs not covered by insurance, cont’d◦Wages not compensated◦Downtime◦Legal fees◦Negative public image◦Building damage◦Tool and equipment damage◦Product and material damage

Financial Impact:

Indirect Costs

Indirect Costs Affect Profitability ◦ Per OSHA Statistics: One $2,300 claim costs your

company $12,650

Assume a 10% profit margin◦ Additional sales required to offset one $2,300 claim:

$126,500

Financial Impact:

Indirect Costs

Another Example:Assume Company A has annual sales of $10 million with an 8 percent pre-tax profit margin. The cost of a single injury due to an amputation (a very possible injury found in facilities using any type of power press machine) is estimated to be:

◦ Average Direct Cost: $21,718◦ Average Indirect Cost: $23,890◦ Estimated Total Cost: $45,608

The additional sales necessary to cover:◦ Indirect Costs: $298,625◦ Total Costs: $570,100

In this example, the next 6 percent of sales growth will go solely to pay for the total cost of the accident. If business is slow or your pre-tax margins are less, the sales impact is even greater!

A Return to Work program…

Boosts morale Keeps injured employees productiveDiscourages abuseCan anticipate and control hidden costsReduces financial impactProvides a proactive approach to Cost Containment

Working Together to Achieve Success:

Landry, Harris & Co. and

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