Wednesday, November 18, 2015

Getting Along

Show me a business that complains about workers' compensation, and I'll show you a business that's mismanaged with a whole lot more problems than just workers' compensation.

I was at a lunch with some adjusters the other day. One of them had a great comparison story about two mining companies (this was in Nevada) which accounts she worked. 

One was actively involved in their workers' compensation claims, to the point where the CEO took the time to visit injured workers, and they liberally provided their injured everything under the law. They did not dispute much of anything, and if there was a question about compensability, they erred in favor of the employee. They brought injured workers back as soon as possible, even if the usual and customary couldn't be performed, and even if there was no particular position - just get back to the work place. They didn't use work comp to cull their labor force; if an employee wasn’t good for the company then they just let them go. Their experience was very low, and ergo their premiums were very low. 

But the other mining company treated their people like the dirt they were digging, disputed everything (she said EVERYTHING), didn’t communicate with the workers, didn't communicate with the adjuster other than to complain about paying something, and ergo, their experience was sky high and of course they were upset about their workers' compensation program.

I always go back to the experience and great wisdom of Bill Zachry, Albertson/Vons/Safeway's chief risk officer who has managed that business' work comp experience to 40% below industry average, and feels he can trim it another 30% - all without cheating injured workers out of compensation and ensuring that good vendors are paid and utilized. His rules of operation - err on the side of the employee; go beyond the law to provide what is necessary to return an employee to health; deal with all of the issues, not just the work-related/caused issues, and never forget that there is a person at the center of a claim. He holds everyone along the injured worker interaction chain accountable.

It comes down to a very simple algorithm: call everyone to task to follow the rules. Hold them accountable.

Do that and the injured worker will receive the best treatment, and if the best treatment is rendered (including allowance for dealing with psychosocial issues - i.e. treat the "whole" person) outcomes are better, faster and more complete. 

And the great news is, if the employer does this, it will cost the employer less (in premiums) in the long run, AND the employer will experience greater productivity with less lost time for employees which means others don't have to be paid overtime to fill the labor gaps.

There is nothing wrong with the ‘System’. It doesn’t need to be fixed – it needs to heal itself. It is not going to be healed by those who make their living sucking the life blood from both the injured worker and the employer. 

There's no magic here. Carriers don’t pay for benefits. They collect the basis for benefits in the form of dollars via premiums from the employers. Employers collect that money, built into their goods and services, from consumers (except for the recalcitrant cheaters who deservedly should be put behind bars). 

The carriers are gate keepers, and dole the benefits out to everyone else – least of whom is the injured worker. In the process, they keep an amount for themselves to return to investors/shareholders.

Insurers collect capital and deploy it with the intent of earning a return on investment. They even take on a bit of risk – although not exactly with their money (remember, "their" money is actually the employer's, entrusted to the insurance company for reallocation upon the occurrence of certain events).

The answer to the problem isn’t in getting the Department of Insurance, the Workers' Compensation Insurance Rating Bureau, the carriers, the brokers, the providers, and the laws and regulations to do better. 

The answer is to educate the employers that they are the ones in charge. They are paying for a service - mandated, yes, but they are the ones paying.

If you paid for a car repair and it wasn’t fixed, you’d go on a tear and demand it be corrected immediately – OR ELSE! Legal action would pursue vendor inaction. 

Everyone in the chain is responsible – carriers, adjusters, providers, etc. - and should be held accountable.

And everyone already knows that. Carriers, government, defense attorneys, claimant attorneys, medical providers, ancillary vendors: everyone in this industry is well aware of where the money comes from and to whom the obligations are owed. 

When employers press that point to those in the chain of supply (as Zachry does), everyone seems to get along much better. The injured worker and the employer get what they need and are entitled to.

In California we have Section 3762 of the Labor Code. There are two very important mandates in that section: 1) disclose everything that affects the employer’s premium, and 2) provide the employer with sufficient information to design a Return to Work program for the injured worker.

Other states have similar provisions in their laws.

That's all an educated employer needs: did you make that call today and what did you say; did you not make that call; did you authorize a treatment or did you delay/deny it; did you pay benefits on time; did you use stress and duress to extort an injured worker into taking a lesser settlement, etc.?

When the employer knows and understands what is supposed to happen, when its supposed to happen, and why, then accountability follows and everyone gets along just fine.

And the employer can go about expertly managing the rest of its business.

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