Our OSHA Consultant – Safety Metrics Part 3 of 4 – The Lunch Numbers

June 6, 2019 By JL Risk Management Consultants

Safety Metrics, Keeping your Cool in a Hot Zone – The Safety Lunch

Safety metrics is the way we will measure our safety program. Without measurements we have nothing.

On our third install we will follow Nate and Fanta out to lunch.

Fanta ) “ So Nate what kind of foods do you like. “

Nate ) “ Oh, almost anything. I especially like hot and spicy.”

Fanta ) “ How about Mexican ? “

Nate ) “ You read my mind.”

Fanta ) “ You know the old expression, ‘ great minds think alike.”

Nate and Fanta arrive at the restaurant in about ten minutes. They are seated quickly. Imagine being a fly on the wall. Fanta is asking questions and Nate is dominating the conversation with answers, which he punctuates with chips and salsa.

Nate ) In my opinion, one of the most important numbers or statistics that can be used to track our progress would be OSHA’s incident rates. “

This author, taking the role of the fly on the wall will give a brief synopsis of the jargon Nate is spewing, between his tacos and burrito.

The key to the OSHA Recordable Injury and Illness rate is a constant of 200,000 hours. This translates to 100 employees working full time. With this number a 12 man shop, can compare its safety record to a similar company with 12,000 employees.

R.I.I.R = Number of recordable times 200,000/ Number of actual work hours

Nate ) “But without knowing what our claims were last year, we can not calculate the rate. “

Fanta ) “ lets use an imaginary claims number so I can see how it works. We have 375 employees, all full time. So that is 750,000 hour.”

Nate ) “ O.K. lets say we had 50 recordable. It would look like this.”

50 recordable times 200,000 / 750,000 hours worked = 13.33

Nate ) “ then we look at the SIC Standard industrial codes to see how our rate compares with other companies that are in our same field.

Beep, plunk, Fanta and Nate both get texts from Mr. Mony.

Nate ) “Thank you for lunch. It was really good. Next time, let me buy you lunch.”

Fanta ) “ Anytime you want, in fact why don’t you take me out for dinner. “

What was the text from Mr. Mony we will answer that in our fourth installment.

As for the food establishment, they may lose their four star rating. Waiter there is a fly on the wall, hurry and bring me a fly swatter.”

©J&L Risk Management Inc Copyright Notice

OSHA Consultant – Part 2- Keeping Your Cool in a Hot Zone

May 14, 2019 By JL Risk Management Consultants

Our OSHA Consultant Glen, CSP adds in another part of the Safety Metrics – Keeping Your Cool in a Hot Zone series

Public Use License Vitalov Muratov

“ As the company’s chief financial officer, what can you tell me about your companies experience modifier? “

Answer: “ I know that it is higher than it was last year. If memory serves me well I am 137. I have no idea how to reverse it, and our Insurance Broker seems to be of no help. If we hire you, can you get it turned around? In fact, whoever we offer this position, must have a game plan ready for management within ten days of being hired. You left the interview at 10:30 A.M. At 3:00 PM you get an e-mail with an offer letter.

Fast forward, one week later. You have spent a lot of time fact-finding, and you have put together a game plan for getting the EX.Mod down or below 100. The plan is really a rough draft because there are a lot of records that no one seems to be able to find. A very nice Receptionist who has been with the company for 19 years, shares with you the fact that XYZ has outgrown its corporate offices four times. She also, tells you that a lot of the records are in storage.

Two of the biggest issues is a lack of claims files, and there are no copies of the OSHA consultant logs. There is a way around this apparent impasse, like anything else, it will take a lot of work requesting records.

This is your agenda of topics:

Lack of records and what we can do to get duplicates,
What has been done in the past and why it is not working,
A centralized incident reporting system
Show the CFO and Fanta ( your supervisor ) how you arrived at the fact of $189,637 loss due to the elevated Mod.
And the need for the Safety division of HR to have its own budget.

This writer will only elaborate on topics B and C. For more than a decade, all workers comp reporting has gone through the job Superintendents. If there were ten different jobs going, and in multiple states, each job Super. Would have the authority to send his injured worker to the local Doc in the Box. If a clerical person or anyone else were to get hurt at the corporate office, the claim would go through the secretary for the V.P. of operations. Most of the claims were initiated by the Work Comp Doctors, from over a dozen different clinics.

The problem with this “system” is a lack of accountability, lack of accident info, unnecessary treatment by the Doctors. Management has agreed, that a centralized system makes sense. The CFO, Handson T. Mony wants to know about the Numbers.

Mr. Mony “ I’m a numbers guy, I want to know how we are going to

Track your progress on all of these initiatives. I don’t

Have a problem spending money to save money but

Without the numbers, how do we know if we are getting

What we are paying for.”

Nate “ You sir are a wise man, we will have a way of tracking our

Success but first we need to find our claims records.”

Mr. Mony “ Well I suppose I could have our insurance Broker put us

In touch with the claims Department.

Nate “ That Sir is an excellent idea. Might I suggest, that we have

The broker arrange for a file review with the claims supervisor.”

Mr. Mony “ I like the way you think young man, send me an email of some

Times you will be free, and I will set it up. “

Nate “ Once we have our claims numbers we can determine our

annual claims frequency. Then we can set goals. “

You go on to tell Mr. Mony and Fanta, that there are two ways to track progress. One would be to use our internal numbers. If for example, XYZ had 50 claims in 2018, it could be a reasonable goal to reduce the claims frequency to say 40, or a 20 percent reduction. The other way to set goals would be to compare our company’s claims frequency or severity with the industry average of companies with the same work comp class codes.

Mr. Mony was intrigued by your ideas but he had to end the meeting quickly because he had a lunch meeting. When leaving the CFO’s office, your supervisor says,

“ Nate, are you hungry? Let me buy you lunch, I want to hear more. “

By Glen DuLac OSHA Consultant

©J&L Risk Management Inc Copyright Notice

Safety Metrics – Keeping your Cool in a Hot Zone – Four Part Series

May 7, 2019 By JL Risk Management Consultants

Our OSHA Consultant Publishes a Four-Part Series on Safety Metrics

Safety metrics is the way we will measure our safety program. Without measurements we have nothing.

Safety Metrics measuring out powder with a ruler

Wikimedia Commons – Btmcclain

Every profession has ways of measuring the success and failure of their endeavors. Accountants, look at balance sheets, earning, and ( ROI ) return on investment. The Human Resources Manager will track turnover as well as the cost of recruitment. Finally, the Safety Director will measure Lost Time injuries, accident frequency, and the companies experience modifier; of course, there are other metrics to consider in Safety and Risk Management.

Throughout my professional life and my personal life, I have always hated bureaucracy or corporate inertia. That is why I have always focused on working with small to mid-sized ( between 10 and 100 employees ) companies. Nevertheless, the following fundamentals will have application for large companies, as well as their smaller cousins.

Let us recall those days of yesteryears, (2019 the big recession) and pretend you have been laid off from your job, along with 200 other persons. It has been six weeks and to date, you have yet to land a job in your chosen field. Your searches filter for, Safety, Claims, Risk, and CSP. One day you notice an ad that reads:

Human Resources Generalist needed for midsized company

We are a regional leader in our field, we are 375 employees and

growing. XYZ corporation has a sterling reputation in the

Field of Civil Engineering. Our Human Resources Dept. needs

A self starter who has a strong background in Safety, OSHA

Compliance. No prior Human Resources experience needed, as

long as you are a Work Comp Claims and Safety Guru.

A little bit of research and you soon discover that XYZ (The name has been changed to protect the innocent ) has been in business for twenty years and has had consistent growth for all of that time. Their home office is an easy commute, so you send them a Resume.

Three days later you are called for an interview.

As fate would have it the H.R. Manager Fanta Findgold, is very good at choosing twenty karat gold candidates. Before the interview, she gave our intrepid Safety

Candidate, Nathanial, a twenty question subject matter exam. On the topics of Work comp claims, Safety and OSHA Compliance.

Fast Forward, Nate (Nathanial) was selected to be the new company HR Generalist. He was selected because he aced the written exam, and Fanta, liked the fact that he was a CSP Certified Safety Professional. The CFO, who is in charge of Finance and the Human Resources department sat in on the interview, he was happy to learn that Nate, had been an Insurance Broker, and would be a tremendous asset, in helping with the annual bid process of the Companies insurance portfolio.

In closing this installment, Nate was asked the classic, “ do you have any questions for us? “ This is what Nate said ……..

Read the answer in our next installment to follow in one week Two at the most.

Article by Glen DuLac

©J&L Risk Management Inc Copyright Notice

Safety Program Evaluation Secret – Takes 5 Minutes Maximum

April 6, 2017 By JL Risk Management Consultants

Internal Safety Program Evaluation From A Non-safety Professional

Computer Safety Program Evaluation Hand Gesture

StockUnlimited

My safety program evaluation starts with a very simple process. This secret method has been used by myself and a few other non-safety professionals to examine a company’s safety program. Please remember this is from a premium audit, claims handling, and claim reserve expert.

I did receive a lifetime achievement award by the North Carolina Industrial Commission Safety Department. That was for my volunteer work to a local Safety Council, not my safety expertise.

The method is one that I give away only to Risk and Safety Managers when I do presentations on the subject. I stop first at the safety manager’s desk (can be on the phone or by email also). I ask the safety manager – What is your E-Mod or LDF (Experience Modification Factor or Loss Development Factor). The Loss Development Factors are calculated for Self Insureds. If you are self insured and do not have one, consult with an expert (such as J&L) to stop operating in the dark.

The responses I receive are from very bad to excellent are:

That is not my area – very bad – operating in the dark
I do not know – bad, but not as serious as #1
The LDF or E-Mod is X but I am not sure how it was calculated – well, at least they knew the number
I have the E-Mod Sheets or LDF calculation right here, but I do not know how they calculated the number – at least they asked for the report.
StockUnlimited
#3 or #4 above and the Safety Manager asks me if I know how it was calculated – cares about the number
The Safety Manager knows the number and how it was calculated, and what accidents caused the number to be where it is at the present. – Wow, impressive

The #6 Risk or Safety Manager situation rarely occurs. In my five minute Safety Program evaluation, I become concerned with response #1 or #2 from the above list – why?

The E-Mod or LDF represents that company’s safety program. These two factors produce hellish results often for Safety and Risk Managers. As with a personal credit report score, your company has one number that represents your efforts to provide a safe workplace.

Is it often unfair – of course, but so is your personal credit score. Running a safety program without knowing the how and why of that score is like trying to apply for a mortgage and not knowing your credit score. You may end up with a tragic surprise.

Woman Safety Program Evaluation Moving Boxes

StockUnlimited

Over the past twenty years, companies have terminated Safety and Risk Managers even though their current great efforts reduced the E-Mod or LDF but not in the current timeframe.

Safety/Risk Managers – listen up -you are judged on what happened four to 10 years ago when you were not even in charge of safety or Risk Management Once again, you are likely being judged on data that you are not responsible for overall.

Look back at #1 and #2 – those forecast a company operating in the dark. Schedule Rating Factors come into play. You can look that one up in the articles – use the Search Box above on the right or follow the link. Schedule Rating Factors operate in the present. E-Mods X-Mods or LDF’s operate in the past.

If a company or organization Senior Level Management asks me to evaluate their Safety or Risk Management Program on a brief basis – I ask – what is your LDF or E-Mod / X-Mod? The nature of the beast appears without a full evaluation of the current loss situation such as our Synth-Mods(c).

People chuckle at my Safety Program Evaluation sometimes, but not for long.

©J&L Risk Management Inc Copyright Notice

Five Things You Must Do To Have Very Good Safety Program

September 2, 2015 By JL Risk Management Consultants

Safety Program Five Things You Must Do

There are five things you must do to have a very good safety program according to our safety consultant, Glen DuLac.

Picture of Man Holding a Globe safety program Concept

123RF

A ) Have the best bulletproof ( IIPP) Injury and Illness Prevention plan that you can create or modify. This need not be expensive. You can take a template, but you must modify it to reflect the hazards that are inherent in your company’s operation.

In my business, three years ago, I stopped charging clients for writing an IIPP. The key is to identify the foreseeable hazards, and then put your IIPP into action. Without execution the best plan is of no value.

B ) Do have regular safety training for all employees. Low hazard or moderate hazard industries may need between 6 to 24 safety meetings per year. High hazards may need more, for example, OSHA’s mandate for the construction industry is a weekly tailgate Do not delude yourself into thinking that one meeting a year will be enough, OSHA states regular safety training.

C ) Do get your employees involved. This can be done in 100 different ways, here are a few that work: Safety committees, incentive plans, a blue card system, recognition lunches or dinners, a Safety Newsletter.f you do have a safety recognition lunch, the President or a high level V.P. should hand out the a

StockUnlimited

D ) Senior Management must get involved and lead by example. For example, if eye protection is required on the shop floor, no manager should be seen without his eye protection. Iwards along with an enthusiastic “ Way to go.”

E ) Make losing painful. There needs to consequences for the bad apples who violate your safety rules. Companies that issue Safety Citations to rule breakers will get compliance.

In my personal experience, companies that do not enforce the safety rules, are usually the ones with high Ex Mods. Speaking of high Ex Mods, did you know that the State of NC mandates a Safety Committee for companies that have high Ex Mods?

©J&L Risk Management Inc Copyright Notice

Risk Safety Pro Search Is Like Finding Good Plumber

July 30, 2015 By JL Risk Management Consultants

Risk Safety Pro Search – Leaky Pipes?

Finding a good Risk Safety Pro Is a Lot Like Finding a Good Plumber. It took me 36 semester hours i.e. twelve classes to earn my M.S. degree in Human Resources. But you don’t have to go thru all that time and expense.

Picture of Man and Woman Standing In Front of Business People Risk Safety Pro Portrait

StockUnlimited

Any company can greatly improve its H.R. Dept. by following what I call the ACES model. There are four parts and ACES is a mnemonic device.

The A is for accountability, the S is for science the C is for conscientiousness and the E is for equitable. Now let’s put it into a short paragraph.

Use science ( i.e. personality testing ) to hire conscientious individuals. Provide them with an equitable work environment, and hold them accountable to follow company standards.

It sounds simple, and it is, but in reality, most companies rely too heavily on job interviews for employee selection. The science is available but why bother making a good decision, when you can take your chances at the interview roulette wheel.

Graphic of Construction Worker Risk Safety Pro with Laptop and Tools

StockUnlimited

Most companies loose because they do not get the conscientious work warriors that can help them win the business wars. Almost as common are the companies that lack standards and do not hold employees accountable for their work performance.

Ask yourself, what metrics do you use to measure performance, both by quality and by quantity ? Here is something to think about, any company that does not hold employees accountable for their work place behavior, is essentially a social club where the members are paid for attendance.

So what does this have in common with picking a good Plumber or a good Safety Consultant ? Nothing much except that there are four parts to this puzzle, as well.

Last week my wife and I had our first clogged drain in North Carolina. It took a lot of phone calls and a lot of time, but after the Plumber left it occurred to me that a good tradesman must have four characteristics.

He must be dependable, i.e. show up on time, honest because you are depending on him to give good advice about how to fix your house, a skilled craftsman, he must know how to fix things skillfully and not create further damage, and his prices must be reasonable. After all, no one has money to waste.

StockUnlimited

Picking your Risk or Safety Consultant is almost the same; dependable honest and reasonably priced are mirror image to our Plumber. The only trait that is a little bit different is the skilled craftsman part.

In lieu of this we will substitute knowledge and experience. So when you pick a Risk, Safety or H.R. Professional, look for some credentials: ARM, CPCU, CSP, PHR or SPHR.

I sure love loading up the dishwasher after two days of not being able to use it.

Glen DuLac is our new safety consultant. His bio can be found here. We were going to do more on WC Apps. Check back next week for more WC App reviews.

©J&L Risk Management Inc Copyright Notice

Human Resources and Safety

June 10, 2015 By JL Risk Management Consultants

Human Resources and Safety

So what is the big deal about Human Resources ? One may ask, “ you said you were going to address safety, yet you start with some Human Resources articles, why ? “ Simple, because good Human Resources is the platform for smart safety. Think of it like a triangle, the base of the triangle is Human Resources, the next side is safety and the final side to our Risk Management Triangle is Workers’ Comp. administration.

by Glen DuLac, Safety Consultant

StockUnlimited

Several years ago, while working as a Regional Risk Manager, for a large staffing company, my V.P. made the following statement; “ We hire our own work comp claims.” This simple concept had a profound influence on my professional career.

At the time I had one last class to finish, the CPCU designation, with that completed, I decided to become certified in Human Resources, so I passed the PHR exam. A number of years later, I finished a graduate degree in Human Resources.

Controlled studies have proven that good employees will have fewer injuries and fewer claims. And of greater importance for Senior Managers, is that these employees are more productive. Greater productivity becomes greater profits. It has been shown that workers who score high on conscientiousness have only half of the injuries as employees with low scores on conscientiousness.

Graphic of Human Resources Connecting Icon People

123RF

Here are four steps to a stellar safety program. Here is a mnemonic device for remembering the four, STIR. This stands for the following: Science, Training, IIPP and Recognition or rewards. First we use the available science for all employee selection. There are a number of reliable personality tests for selecting employees, but the best will focus on conscientiousness and or honesty. Use science, not interviews.

Next, it is vitally important to have a bullet proof Injury and Illness Prevention Plan ( IIPP) . Many companies have poorly crafted IIPPs. Or they had a good plan but their operation has changed but the plan was never updated. In many states, an IIPP that is deficient, is OSHA’s most common employer violation. An important subpart of the IIPP is employee safety training. Lack of regular safety training is another common violation.

Picture Of Human Resources Training Of Employee On Computer

StockUnlimited

One safety training annually is an accident waiting to happen. Safety training that is regular and hazard specific will reduce accidents and save money in several different ways. Also, you must have written records of the training. Finally, rewards and or recognition help reinforce the safety culture. There are dozens of ways to approach rewards and recognition plans, for brevity, I will only suggest one.

Make safety part of the employees annual review process. No employee with a poor safety record shall be promoted or receive raises or bonuses. It is good business to reward the behaviors that management wants, and not to reward behaviors that are undesirable.

In closing, there are companies with good safety records that do not integrate safety and human resources, but if you want a superlative safety program and a distinct competitive advantage, which can translate into greater profits, it will only happen by using the science which is found in Human Resources.

SOME Initials

CPCU, Charter Property and Casualty Underwriter ( a Risk Management and Insurance credential )

PHR, Professional in Human Resources

©J&L Risk Management Inc Copyright Notice

NCCI – Post-Accident Safety Errors Cost Companies $$$

May 27, 2015 By JL Risk Management Consultants

NCCI – Post-Accident Safety

Post-accident safety glitches can be very expensive for employers. Post-accident safety can be thought of as risk management protocols in the next few hours after a Workers Comp accident occurs in the workplace.

Picture Of Seat Belt Post-accident safety In Car

StockUnlimited

The terms Loss Reduction or Loss Control are interchangeable with post-accident safety. In my presentations, I like to refer to not performing immediate protocol actions (within 24 hours) as failures in post-accident safety.

Keeping an employee safe does not stop at the occurrence of an accident. The First 48 hours set the tone and costs for the claim. I have covered post-accident safety in detail with other articles on this blog.

Six Keys or Secrets

The injured employee still requires a reasonable amount of post-accident safety. The Six Keys To Saving on Workers Comp $$ that I had written in the 1980’s have not really changed except for adding in two more keys.

StockUnlimited

The Six Keys (Secrets) are:

Timely Filing of the First Report of Injury – within 24 hours
Physician’s Network – where does the employee treat?
Return to Work Program – prevents large cases
Employee Treatment by Employer, Doctor, Adjuster – reduces malingering and fraud
Making Workers’ Comp a Priority – do you just write a check to the TPA or carrier?
Understanding The Premium Audit Process- how your final bill has been calculated.

NCCI Study

NCCI just published a study that agreed with what everyone in the WC community knows will cost employers dearly. The one area that astounds me to this day is the lag time on reporting injuries by employers. Lag time is likely the easiest to fix that will result in huge savings on WC for employers.

NCCI has said that employers that report claims that pay 51% more than employers that report timely. Post-accident safety involves the time taken to report a claim. Time is of the essence in reporting claims to a carrier or Third Party Administrator (self-insureds).

The two massive informal studies that I performed on public entity claims confirmed NCCI’s report. However, the number I came up with for long reporting lag times was in the neighborhood of 400%.

Injured Worker Post-accident safety Vector Image

StockUnlimited

Many employers will consult with me on claims that have gotten out of hand and are looking for any type of claims cost reductions. Some of the claims have the hallmark of late reporting. Some are setting in multiple brown folders on my desk.

Online first notice of injury reporting has become so popular over the last few years.

Over the last 30 years, the Six Keys have not changed overall. I had thought that timely reporting would be a non-issue by now. Timely first reporting was the first key as I had thought lag time would have been eliminated by 2015. That is not the case.

NCCI – Day of Accident Reporting

According to NCCI – (one anomaly of sorts is )”claims reported on the day of the accident are some of the most costly claims. This is expected because serious injuries often require immediate medical care, which triggers notification to the insurer.”

©J&L Risk Management Inc Copyright Notice

Work Comp Safety Week – DBM’s Continued

May 27, 2015 By JL Risk Management Consultants

Work Comp Safety Week

Our Work Comp Safety Week begins with DBM’s from our new safety consultant Glen DuLac. We began the discussion on DBM’s last week.

DBM’s (Dominant Buying Motivators) can be applied to the HR function in most companies.

______________

Based on my experience, the DBM of knowledge and experience is the least frequent of the four DBMs. The fact of the matter is that very few technical questions are asked in job interviews and even rarer are subject matter test given. In most cases, interviewers never took notes.

For the reader who wants to draw a line in the sand and stop wasting his or her time on dysfunctional interviews, I provide the following list of red flags. If a company refuses to do a phone interview, they may be dysfunctional, if the panel consist of more than three people they may be dysfunctional, if you are requires to go on more than three interviews, consider them dysfunctional, if the opening is continually in the newspaper or on the internet, consider them dysfunctional, if they have no time line as to when they will make the appointment, they are probably dysfunctional, if they have not written questions to ask they are dysfunctional, if they don’t make a record of your answers they are dysfunctional and they are stupid. Finally a company that only uses interviews for selection is very naive and probably dysfunctional.

Icon People Work Comp Safety Week in Three ways

123RF

One of the most profound changes in recruitment has been the internet. Twelve years ago, most help wanted recruitments were in the newspaper. The typical response was by mail or by fax. Now the Sunday classifieds is 1/3 of its former size. Most ads are on Monster or Hot Jobs. With e-mail it is easy to send your resume to scores of potential employers. However, this ease is really a curse.

In California, a recruiter will get 300 or 400 responses for a Safety Manager position. It is far too easy for an unqualified person to gin up a nice resume and send it to a thousand employers every year. Because the interview process is so inexact, many unqualified people get hired purely on their interview skills.

We live in an age of standards, ISO 9000, ISO 14000, TQM, benchmarking, best management practices and more. Despite all of these standards no one has devised a good model for recruitment and selection. Therefore, I will propose a reasonable model of hiring, it can be used by any company who is forward thinking enough to detach from the interview process.

First: All responses to ads must be returned to the hiring company

in the form of an individualized letter, stating why a candidate wants

the position and why the candidate feels that they are qualified.

The response would be by US mail and there would be a deadline give

in the recruitment ad.

Second: Responses would be screened for minimum qualifications and

for writing ability.

Third: The candidates with the minimum qualifications and best writing

skills will be invited to take a subject matter test. The test would be

held on a Saturday or in the evening to maximize attendance. At

the time of the exam, attendance will be given a Job application to

Benchmarking Work Comp Safety Week Concept

fill out.

Fourth The top three to five test takers will be sent a release form allowing

the hiring company to check past employment and

verify education. If any one has exaggerated their education or job

history they will be rejected.

Fifth: The top scoring two or three persons who pass the background

checks will speak with the hiring manager either by phone or in

person. He will rank them in order of preference and state reasons

for his choices based on knowledge and accomplishments.

Sixth: Someone in Human Resources will review the files on the top few

candidates and the notes of the hiring manager to help verify what

were his selection criteria.

Seventh: An offer will be made.

Man Holding Work Comp Safety Week Documents

StockUnlimited

Some of the keys to the process are deadlines and the subject matter test. What a novel idea, hiring someone who can objectively demonstrate knowledge about his or her profession. Another, element to this process is the option of doing a phone conversation with the hiring manager. In other words, if the candidate wants to do a phone meeting they are allowed to do so. This is positive because the hiring manager will not be distracted buy the physical appearance of the candidate.

The benefits of using this model for hiring mid managers are many: reduced turnover, increased productivity by hiring people who have demonstrable knowledge and reduced litigation because you have minimized poor employment selection practices.

________________

There will be more on this subject later in our Work Comp Safety Week.

©J&L Risk Management Inc Copyright Notice

Work Comp Safety – Our Clients and Blog/Newsletter Readers Were Right

May 21, 2015 By JL Risk Management Consultants

Work Comp safety

The subject of Work Comp safety is one of the areas that I have harped on for years. Assisting clients with reducing their premiums and Mods is something we have done for over 20 years.

Wikimedia Commons – Laura Knight

The one area that we are often asked questions on concerns Work Comp Safety. In other words, why do we preach safety as the ultimate way to Cut Workers Comp Costs but have no safety people on board our organization? We had a safety consultant on board five years ago for a brief period as part of our CompScreen Safety Program(c) . However, that did not work out as planned.

We now are going to add a Safety Consultant as I have been asked multiple times over the last five years if we provide advice in three areas besides premium and E-Mod consulting:

The Affordable Care Act – more of a random phone caller question
Work Comp Safety – which we should have gotten back to a few years ago
Sold polices – we do not sell insurance so that our advice is based purely on premium savings or lower self insured payments

I am going to attempt to cover safety in more depth next week in the blogs and newsletter as it is so crucial in cutting WC premiums or self insured budgets.

Our new Safety Consultant- Glen DuLac, CSP wrote this very insightful passage below on DBM’s:

Upper view Picture of Work Comp safety Brussels Airport Company Employees

Wikimedia Commons – Brussels Airport

First it is necessary to cover a concept called Dominate Buying Motivator or DBM. In ever buying transaction a person will have one or more DBMs. A DBM is a key desire or element that must be satisfied before a buyer will commit or go forward with a purchase.

Take cars for example, if I buy a car, my DBM is reliability, I will never buy an intro model and I will only buy cars with height levels of reliability. If the car is for my wife the issue of color is important. She hates black cars, but is very happy with blue or silver or red, her DBM is aesthetic. A third person might only buy a certain make or model of car, his DBM is status. In the same way that we are motivated in our buying decisions, we are also motivated in employment selection decisions.

What are the DBMs of most hiring managers? Obviously, this is no simple question to answer; and the DBMs may change from one job to another. For the discussion of this paper, we should isolate the following hypothesis to the selection of mid management positions.

The hypothesis is simple; there are four DBMs that dominate the selection decisions of managers who interview mid management candidates for open positions. Further, each DBM is two dimensional therefore a possibility of eight DBM subsets exists. It would be extremely naive of me to think that I have come up with all the DBMs involved in hiring for mid management positions.

To be continued next week in our Work Comp Safety Week………

©J&L Risk Management Inc Copyright Notice

Top 10 Challenges for WC – Expanded Part 2

June 19, 2014 By JL Risk Management Consultants

Top 10 Challenges for WC – The Next Five

Top 10 Challenges – part 2 of 2

6. 24 hour coverage – WC and health melding
7. No young workers in WC, Risk Management, or Safety Industries
8. Deflation of the dollar as a currency
9. WC carrier mergers
10. WC carrier failures
Bonus – Spiraling medical costs to even become worse

24 Hour Coverage

Picture Of Top 10 Challenges Mountain Trekking

StockUnlimited

There has not really been much success with 24-hour healthcare coverage. The concern is that 24 hour coverage would heavily affect the Workers Comp market. Claims handlers would have to be versed in health insurance and Workers Comp or a claim would have to be directed to a certain department depending on whether the accident occurred at work. The pricing for this type of coverage would be complicated at best.

Where Are The New Recruits?

This concern became apparent when I recently attended a large safety conference. Every year a large contingent of the attendees would gather at the hotel’s main nightclub. This year, the club shut down well before midnight. I then realized the crowd had been the same for 10 years with very few younger workers.

Hand Presenting Top 10 Challenges Health Insurance

StockUnlimited

Over the years, we have had numerous college interns work over the summer. Even though I/we tried to steer the interns towards WC or Risk Management, all of them took different paths. All of our interns have become somewhat successful, however, the success was in other industries, especially banking

A great Risk Management degree has been and is now supplied by Appalachian State University.

Dollar Deflation

The deflation of the dollar was covered very well in this article. The main concern here is the deflation of the dollar as a currency will only make the return of investment even more difficult for carriers. Once again, as in the previous list, the policyholders will make up the difference with higher premiums.

Even China has had its problems in the banking industry. A tidal-wave effect would be felt in the overall economy if China had to pull out of its US investments.

Workers Compensation Carrier Mergers/Failures

These two were combined to keep the article from being too long. As carriers merge, much like the airline industry, competition will sag and prices will increase. The basic supply and demand model shows that when the same demand (coverage) exists and the suppliers (carriers) shrink in number, prices will naturally rise.

Close up stethoscope Top 10 Challenges white background

Wikimedia Commons – Stethoscopes

The ULICO merger sent ripples through many markets. ULICO provided many lines of insurance that were hard to find elsewhere. This change will be felt for many years to come as the claims are worked through the WC system.

Spiraling Medical Costs – Bonus

One of the unique conundrums in WC is that when prices are reduced, suppliers of medical treatment and equipment tend to make up that price reduction with an increase in usage. I performed studies over the years for medical treatment vendors and found this to be true. NCCI and WCRI both verified this conclusion.

Bottom Line – One has to attain all the education possible in the insurance, Risk Management, and safety industries. Flexibility is the key. You may not be doing the same type of job in the near future, so be prepared.

Six Workers Comp Premium Saving Resolutions

January 2, 2013 By JL Risk Management Consultants

Workers Comp Premium Saving Resolutions

Workers Comp Premium saving resolutions are always a great way to start the New Year. There are six easy workers comp premium saving resolutions below. These will work for companies of all sizes. Six Workers Comp Resolutions for Self Insureds will be covered next time. The premium-saving employers always:

StockUnlimited

Have a current copy of their Workers Comp loss run. Having online access is the best and up-to-date way to track your reserves. Paper loss runs are satisfactory. Monitoring any changes in your company’s reserves can avoid a premium disaster in the future.
Have the most current copy of their company’s NCCI or Rating Bureau sheets. Rating bureaus may issue many different revised rating sheets during your company’s policy year. Your company needs to know the current status of your E-Mod (X-Mod) at all times. The Mod may not stay the same as the one your company was originally issued before policy renewal. The worst time to find out a Mod has changed is at premium audit.
Know their policy status. Is your company in or headed into an assigned risk pool? Are there better deals than the policy you are about to renew for another year? Are you changing to a different carrier? Are you expanding into other states?
Have a copy of the Six Keys to Workers Comp Savings handy. The keys are the same as they were 20 years ago. The keys are still current today. Follow the link for the list. These are proactive tried-and-true ways to reduce your Workers Comp costs on the front-end of an accident.
Understand the premium audit process. There are many employers receiving very large premium audit bills. The premium audit process has very defined rules in every state that must be followed by the carrier, premium auditor, employer, and rating bureau. Disputing an audit without justification is just as detrimental as writing a premium check without full justification of the amount. There are time limits placed on the carrier and employer on completing the audit process.
StockUnlimited
Know safety is the crucial element. The least costly accident is the one that never happened in your workplace. Workers Comp claims are called a “loss” for a reason. Post-accident savings are tough at best. The important Schedule Debit/Credits also directly result from your safety regimen.
Bonus – if you have any questions, make sure your company knows which entity or department to contact. This will save your company a large amount of time and money. Even contacting your agent does not necessarily preserve some of your rights as an insured.

These workers comp premium saving resolutions are a good start to reducing WC costs.

Safety Programs – EMods or XMods Take Time To Decrease

October 11, 2012 By JL Risk Management Consultants

EMods or XMods – Safety Programs Have A Cumulative Effect

The EMods or XMods safety programs take time to decrease your premiums. E-Mods also known as X-Mods in California are basically the same as a credit score for an individual. The main difference is you can fix your personal credit score in a few weeks. Mods take a few years to correct or reduce even slightly. If one looks at any EMod (XMod) reduction program, the first recommendation will always be to create or enhance your safety program.

123RF

I presented this concept at the NC Mid State Safety Council Conference day before yesterday. A safety program takes approximately 18 – 24 months to start appearing in your company’s EMod and will not appear fully for up to four years.

I am very concerned that safety professionals or complete safety departments in various industries were actually terminated as the EMod actually did not move or increased at the time of the first policy renewal.

One of our old clients went through this situation. He was working for a trucking company in South Carolina. He had worked night and day to get his company’s E-Mod down. The EMod ticked up slightly due to factors when he was not even working for them. The next safety person in the job was lauded for their efforts even though he had only been on the job for six months as the Mod started ticking down.

The EMod or XMod will actually decrease after the safety professional or department had been reduced or eliminated. After a brief period of time, the Mod will then increase sharply. As I have said very often the Work Comp rating environment operates on a delayed basis. You can go back 57 months into the past to calculate a Mod in certain situations.

Graphic of decrease Arrow Safety Programs On Bar Graph

In this economy, it is hard for a company to have patience as a virtue. My company had been called into more than one instance where the safety department needed an outside source to prove to management that their efforts were working overall. One such company was an oil and gas company in Oklahoma. Upper management was astounded that the safety program was working but would not show in the E-Mod right away.

There are many factors that figure into the E-Mod such as changes in:

Payroll
Classification Codes
Insurance carrier
Claims staff
Upcoming split point changes by NCCI
Audits

The bottom line is your safety program may be working for your company. You may just not see it in the numbers yet.

Safety and EMods – Highlights From My Presentation From Today

October 10, 2012 By JL Risk Management Consultants

Presentation Highlights – Safety and EMods Are Very Related

How Safety and EMods intermingle was the basis for most of the highlights from my presentation. The NC Mid State Safety Council was kind enough to ask me to do a presentation on how safety programs impact an employer’s bottom line from a Workers Comp standpoint. I am the Treasurer for the organization.

The highlights from my presentation were (you may want to print this one):

Safety Departments can be easily scored by their E-Mods. It is the same as a personal credit score but much harder to improve quickly.
Self Insureds do have an EMod, better known as an LDF (Loss Development Factor). If your company is self insured and does not have an LDF, you are operating a blind WC budget
Due to the economy, there are now temporary employment agencies that may not have their WC policy in force. In this case, the employer will often get stuck with the bill if a temporary employee is injured on the job.
Subcontractors that are operating without a valid insurance policy or with an expired policy actually become employees as the Workers Comp courts are going to go up the Ladder of Insurance (c) to make sure the injured employee will receive WC benefits
Calling the carrier (not the agent) that is listed on the WC certificate of insurance is a good idea just to make sure there is coverage in place for temporary agencies and subcontractors
Do not use your company’s Workers Comp funds to pursue a fraud prosecution.
Workers Comp supplements paid to an injured employee will only make them much more resistant to return to
123RF
work
The Four Ways To Cut Work Comp Costs from a claims standpoint are:
- Filing First Report of Injury to carrier immediately
- Medical treatment network in place
- Return to Work program in place
- Treat the injured employee as if they are still on the job as they are still your employee
North Carolina Scheduled Rating Plan – discounts are available if a great safety program is in place and your carrier understands your company’s safety measures
An example of how not having a medical network in place = $1.1 million dollar claim
The new NCCI split points can be a benefit or a curse to a safety program
- High EMod companies are going to take a hit
- Lower Emod companies will experience a benefit
- Safety programs and professionals will be worth their weight in gold for the next few years
Bottom Line – Safety is going to be heavily judged by their WC E-Mod even though the safety department may not be involved in some of the WC decisions

Safety Statistics Shows Failure of Basic Risk Management

August 9, 2012 By JL Risk Management Consultants

Basic Risk Management Failure Shown By Safety Statistics

A recent Safety Statistics article was not kind to basic risk management. I was reading through a large amount of workers comp publications over the weekend. I came across what to me were astounding statistics on safety and risk management. The survey was produced by Staples(r)

Picture of Businessman Safety Statistics Touch Screen Key

Staples had surveyed 412 different small businesses with less than 50 employees. The survey showed that:

70% of all managers knew an emergency communication plan existed in their company
50% of the employees were unsure if a plan existed or said their company does not even have a plan in place
19% of employees thought their company was prepared for a medical emergency
Managers were almost 50% more likely than non-managers to be able to locate their company’s defibrillators, eye wash, dust masks, and caution and wet floor signs.

This led me to the following conclusions:

Managers are not properly communicating their safety programs to their employees
Small companies are not ready to handle emergencies whatsoever
These companies are likely going to pay much more in Workers comp premiums if they do not know how to handle a medical emergency.

Picture Hands Presenting Safety Statistics Security Icon

StockUnlimited

There are many safety programs for smaller employers that are free or low-cost such as the Safety and Education Department for the North Carolina Industrial Commission. Almost every state has a department similar to this in state government. They are not OSHA related and do not report companies to OSHA or hand out fines.

One of the most disturbing statistics from the above list is only 19% of the employees feel they are ready for a medical emergency. One of the areas to consider is where does a company transport an employee to for emergencies? Keeping medical control of a Workers Comp claim is a critical key to workers comp savings in emergencies and non-emergencies.

I performed a study a few years ago on how much more expensive is a claim with or without medical control. I found that claims without medical control are 400% more expensive than claims with medical control.

Safety And Risk Management Departments – Are They Really Worth It?

July 18, 2012 By JL Risk Management Consultants

Safety And Risk Management Departments – Worth The Expense?

During workers comp premium and review audits, I have pleaded with companies to keep their risk management and safety departments as fully staffed as possible. Workers Compensation safety and risk management departments have been pared to the core during the great recession.

Picture of Safety and Risk Management Department Ways

123RF

One of the reasons is there are no tangible effects that can be easily measured. Workers Comp is a lagging system meaning that results for a great safety and/or risk management program usually show little effect for at least 18 months. The full effects will not be known for up to 54 months.

The bell is now going to toll for companies that greatly reduced or eliminated their risk management and safety programs. The NCCI has changed the rules of how Workers Comp E-Mods (Mods) are calculated for each insured.

The primary loss portion of the claims is going to increase from:

Rope Risk Management With Knot In The Middle

StockUnlimited

I pulled data from one of our clients and simulated what their E-Mod would look like under those circumstances. There are three articles on what their new E-Mod with the changes. It was not pretty. Click on each bullet point numbers to see the effects of the upcoming NCCI changes

Basically, the NCCI has sent a message to unsafe higher E-Mod employers that they are going to have a much increased E-Mod and will be paying higher Workers Comp premiums.

The easiest way to avoid being thrown into the coming E-Mod hurricane is by not having any accidents – plain and simple. The E-Mod systems are designed to not punish employers that have one bad accident. However, accident repetition is going to cause any employer to write massive premium checks in the future.

Any employer that reduced their claims or risk management staff should reconsider that tact. I do realize these are hard times. Safety and risk management departments are golden to employers for the next four years.

Workers Compensation Safety Programs – Are They Really Worth It?

June 22, 2011 By JL Risk Management Consultants

Workers Compensation Safety Programs – Best Way To Save $$$

Workers Compensation safety programs are always worth the expended funds. One of the areas that employers seem to sharply decrease their budgets during economic downturns is safety. As Treasurer of the NC Mid State Safety Council, I can attest to this fact. The number of safety personnel has shrunk heavily in the last few months

Graphic of Employee With Umbrella workers compensation Safety Programs Under The Rain

One of the main ways to reduce an employer’s E-Mod is with a good safety program. I have previously posted on how safety programs will reduce E-Mods quite a few times. One of the most misunderstood areas on Workers Comp safety program is the effect on Schedule Debits/Credits.

Employers will sometimes “throw in the towel” on their safety programs if it does not show immediate results. As I have posted very often, the E-Mod system and even the LDF estimations are delayed measurements. An excellent safety program may not show great results for up to four years after it is revamped or established.

The main goal of a safety program is to avoid or reduce repetitive accidents. Repetition is the killer of any decent E-Mod or LDF. The E-Mod/X-Mod system allows for one serious accident. It does not allow for a series of accidents that even cost as little as $5,000.

Businessman Embracing Workers Compensation Safety Programs Dollar Sign

StockUnlimited

For instance, 10 $5,000 accidents are much more detrimental to the E-Mod/X-Mod or LDF than one $50,000 claim. NCCI and the Rating Bureaus have established that when you have 10 accidents, there is a much higher risk of more than one of those claims becoming very large claims. I agree totally with this concept.

Safety programs have always been the best way to avoid a large number of accidents in a given period of time. There are many post-accident loss reduction strategies. Reducing a Workers Comp loss is a very difficult task. The old saying “A loss is still a loss” applies here.

The bottom line is the best way to lower an E-Mod or LDF is the accident that did not happen. Safety programs are very well worth the investment if allowed to work over a longer time span.

Safety Program – No Doubt Quickest Way To Lower E-Mods

November 9, 2010 By JL Risk Management Consultants

Safety Program Lowers E-Mods By Eliminating Accidents

A safety program will always be the quickest way to lower E-Mods. Recently, the subject of E-Mod/X-Mods surfaced in a few publications and on some of the social networks that I participate on Workers Comp. There were many discussions and posts on what would be the fastest way to lower an E-Mod.

Wikimedia Commons – Lamiot

There are many publications on how to understand E-Mods. The best one that I have read is the free videos that are on NCCI’s website under their education page. NCCI also has material that you can print that covers some of the areas of how E-Mods are calculated. The videos are not that long and are worth it if you are responsible for safety and risk management at your employer.

We have built up a large clientele from analyzing and projecting E-Mods for employers. There are a few techniques that can be attempted to lower on the E-Mod on the back-end such as checking for mistakes in the way the insurance company reported the claims data to NCCI or the State Rating Bureau . However, there is a more rapid E-Mod reduction technique.

Picture Finger Pointing E-Mods at Security Lock

StockUnlimited

The quickest way to reduce the E-Mod is most definitely involves safety programs. Keeping your employees out of the claims system will drop E-Mods like a rock if done properly. Patience with your safety program diminished too quickly in many situation. Reducing your risk factors takes time.

The very basic E-Mod or X-Mod equation is adjusted actual losses / adjusted expected losses. The expected losses are derived from your company’s payroll size and classification codes. The idea is to keep the top number in the equation (numerator) as small as possible.

This post is getting a little long. I will pick the subject up again in my next post.