Possible 75% Savings – Study Results Below 

It’s possible to experience a 75% Savings according to the results of my WC studies.

Yesterday, I blogged on predictive modeling in Workers Compensation.  I had mentioned there were two studies that I performed in the recent past on a group of 7,000 and 5,000 claims respectively.   

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The results of the studies were:

• Predictive claims modeling relies on psychographics and the healing time of the human body.  These two stats were so variable, no statistical conclusions could be drawn
• Fraud in workers comp claims could not be predicted as claimant fraud was seen to be a random variable, there were no solid “red flags”
• How the employer functioned post-injury did show some relationship to the cost of the claim.  The correlation between the action of the employer and the cost of the claim was related

The keys to Workers Comp savings lies with the employer.  I came up with the first three on the list over 20 years ago.  They saved employers a large number of claim payments.  The following is a list of the keys to Workers Comp savings proven by the two studies:

• First Reports of Injury need to be filed ASAP.   I used to understand delays due to paperwork flow, but that has virtually been eliminated as almost all insurance carriers and TPA’s have online filing of claims.  
• Treatment network needs to be in place.  This does not mean having a PPO network from your bill review provider.  Even if you are in a state that does not allow the employer to control the medical treatment, most employees with still go to your physician recommendation
  

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• Return to work program is very critical.  The communication between your company and medical providers is very important.  Medical providers are not just physicians.  Physical therapists are also important providers.  Providing a PT with your return to work program can save you a large amount of claims $.  
• Employee treatment has improved.  When I first came up with this list over twenty years ago, many injured employees were treated as outsiders.  This area has improved over the years as many employers have come to realize an injured employee is still an employee. 
• Top management consideration was the latest addition to the list.  If an employer’s top management does not take their Workers Compensation seriously, the aforementioned four keys will never be taken that seriously.  This is a 100% related statistic.  

The first four keys will save an employer 400% each.  That is a 75% total savings.   They are for the most part all controllable by the employer.  I have seen an improvement in those areas over the last decade, but there is still room for more attention to those areas.

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