In the December 2011/January 2012 edition of Tracks, we discussed a more aggressive way to control the cost of your workers’ compensation program. In this article, we will explore how you can build upon the information you gather through a pre-hire screening process to gain greater control of your workers’ compensation program, and the benefits of “directing” care.

To review, in order to prevent your business from hiring an employee who is physically unable to perform the functions of their job, a detailed jobsite analysis should be conducted to outline the physical requirements and demands of the job. When coupled with pre-screening of your potential new hire, this analysis allows a business to match the physical abilities of a new hire to the physical demands of the job. The result is fewer claims and lower workers’ compensation costs.

As we dig deeper we see that a documented jobsite analysis, or physical job description, provides an important controllable link between the health care provider and employer of the injured worker. All too often I have found that the treating physician or health care provider does not truly know what the physical demands of the job are for the patient they are treating.

At first glance this statement is not that alarming – a physician’s job is to provide care. However, the treating physician is the person charged with determining when the employee can be released to return to work. If the treating physician does not clearly understand the physical requirements of the job, they will be conservative and keep the employee on partial or total disability longer. These disability payments are charged against an employer’s experience modification (for three years) and directly increase the cost of insurance premiums.

The message businesses send to health care providers should be clear. As an employer, we want our employees to be released for work as soon as they are physically able to safely return to work. Whether “work” be a light-duty return to work program, modified return to work program, or a full release to work, businesses need to deliver to health care providers documentation on the physical demands expected of their employees when they return to work. A detailed jobsite analysis provides this documentation and will help reduce your workers’ compensation costs by eliminating a barrier to your employee’s quick and safe return to work.

Many states provide employers with a second and extremely valuable tool in controlling workers’ compensation costs – the right of an employer to “direct” the care of an injured worker. This means employers have the authority to choose which health care providers will treat their employees, and it provides an important opportunity to control costs. For the employer, the key is to direct their employees to those health providers who deliver the best care and produce the best results for returning an injured worker to work.

So, how is this done?

For those with experience in the direction of care it is not that difficult. In fact, the insurance agency that manages a businesses’ workers’ compensation program should assign, at no cost to their client, a claims advocate to spearhead this effort.

Every year, the Official Disability Guidelines (ODG) provides a “Best Practices” benchmark outlining the expected number of visits and duration of care a person should receive for a particular workers’ compensation injury. The data is collected from more than ten million workers’ compensation claims and it creates an all important reference point for the selection of the health care provider that you will direct care to.

As an example, let’s take an employee who injured their shoulder and is in need of a rotator cuff repair. ODG indicates a rotator cuff repair for an injured worker requires a “Best Practice” average of 40 physical/occupational therapy (PT/OT) visits before they are returned to work. As you might imagine, different health care providers deliver different outcomes and we routinely find substantial variances in the number of PT/OT visits and duration of care required to treat the patient. In fact, 20 to 25 percent differences in the time and cost of care to return an employee to work are more common than not. What would a 20 percent reduction in the cost of your claims mean to the cost of your workers’ compensation program?

Significant cost improvements can be made to your workers’ compensation program by taking advantage of and controlling those elements of your program that drive cost. You should work closely with your insurance broker/consultant to identify the best health care providers in your area. By selecting the right health care providers and giving them the information they need, you can drive down the costs of your workers’ compensation program.

Haake Insurance Companies, A Marsh & McLennan Agency, LLC Company is the leader in insurance solutions. Our Manufacturing Niche Practice consists of more than 500 employees whose sole job is to understand and offer meaningful solutions to our clients with manufacturing exposures.

John Kerr is the author of this article and part of the Manufacturing Risk Practice. For more information about this article, contact John Kerr by e-mail (John.Kerr@Haakeins.com) or at (913) 529-3264.