How to Reduce Injuries and ControlWorkers’ Compensation Costs byHolding EVERYONE Accountable
10/28/09
Joe Caracci, CWCA, ASCVice PresidentSOS ConsultingPH: [email protected]
1. What are your biggest safety concerns?
2. Most common injuries?
3. Biggest issues with Workers’ Comp?
My Main Point:
YOU can control injuries andhow much you pay for your
Workers’ CompensationInsurance
What would it mean to your company andto YOU if you could save 25% - 75% on
your Work Comp Expenses?
“I was immediately struck by Joe’s passionfor attacking root causes rather thantreating symptoms. It’s about positiveculture changes, which help companiesgrow.”
Michael Walmer,CEO/PresidentElectron Energy Corp
Landisville, PA
Injuries
“Zero Injuries”
Is This Your Expectation?
Or would you be satisfied with a % decrease?
“Let’s pick names now” Phil
Have you ever paid aclaim you thought was
NOT work related?
Before we worked with SOS & Synergy we started everyyear wondering which of our employees was going to“Get us” on bogus work comp claims.
Bob Zabady, CEOEllen Memorial Retirement Community
“SOS Consulting helped us drasticallyreduce work injuries and costs byholding EVERYONE accountable.”
Cindy Rouvre, Employee Health & SafetyGSV, New Holland
We see 40 - 90% Reductions in claimdollars, depending on level ofmanagement commitment.
Work Comp Claims HistoryYears with SOS Loss Control in Blue
$322,639
$536,545 $488,440
$106,469$56,345
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2000-2001 2001-2002 2002-2003 2003-2004 2004-2005
For best results EVERYBODY needs to beinvolved and willing to be held ACCOUNTABLE.
We’ve worked with safety consultants fromall the big insurance companies. They triedto re-engineer our environment with nosuccess.
SOS Consulting & Synergy Comp Insurancehas “re-engineered” our people with GreatResults!
Joe GallagherPine Grove Manufactured Housing
Pine Grove, PA
Mistake # 1:
Confusing Workers’Compensation Tax with
insurance
No “Shared Risk” (expensive finance mechanism)
Reserves are set by the insurance carrier and areASSUMED to be spent if not removed by yourevaluation date.
RESERVES CAN KILL YOUR BOTTOM LINE !
Mistake # 2:Not Knowing The System
Government
Nurse CaseManagerLawyers
Communication is Vital to Success
Government
Lawyers
Employer
LET’S TRY THIS:
Mistake # 3:
Delegating The Responsibility ToYour Typical Insurance Carrier
“Average’ Insurance Claims Adjusters have 200 – 400Files On Their Desks
No financial incentive for Brokers, Carriers or ThirdParty Administrators to reduce your losses
Usually HR & Safety Managers don’t have time orauthority to RADICALLY CHANGE THE CULTURE!
How the Mod Effects Your PremiumExample Mod of 2.011
$77,194
$155,237
$58,281
$96,956
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
Average Mod1.000
Current Mod2.011
MinimumMod 0.755
PotentialSavings
“Most CEOs & CFOs don’t understand this.”Mike Smeltzer, President, South Central PA Mfg. Assoc.
Mistake # 4:
Ignoring Problems All Year ThenTrying To Solve By Quoting
CAN I GIVE YOU A QUOTE?
DOES THIS PREVENT INJURIES?
DOES IT SAVE MONEY IN THELONG RUN?
$900,000 to play golf
Safety Tip to Eliminate Dangerous Blind Spot
Facts:
113,000 Unintentional Deaths Yr.
108,000 Happen away from work.
Most happen while DRIVING.
Disabling Injuries = 24,000,000
Mistake # 5:
Huge Claims Often Start OnDate Of Hire
Would youhire theseguys?
PRE-PLACEMENT SCREENINGS
Items donated by localbusinesses so potentialemployees can beobserved and evaluatedwhile lifting, climbingand handling prior tostarting work.
Controlling the Hiring Process:
Background checks
Credit checks
Call references
Drug screens
Post Offer / Pre Placement Screening Process
Job Specific Functional Capacity Evaluations
Mistake # 6:
Giving NonOccupational MedicalDoctor$ Free Acce$$To Your Checkbook
The number of injuries are down…
However, …Costs have skyrocketed
Due to mismanagement
5 Minute Break?
Rocks & Sand Demonstration after the break
1. Production (Sand)2. Quality (Rock)3. Efficiency (On Time & Profitable) (Rock)4. Minimal Waste (Rock)5. Presenteeism (Rock)6. Morale (Rock)7. Safety (Big Rock)
What should you expect fromyour Work Comp physician?
1. Determination of causality
2. COMMUNICATION
3. Minimization of Lost Time (TRTW)
4. Expectation of decreasing occurrence
5. Work towards to goal of 0 injuries
A PARTNER TO HELP YOUR COMPANY INCREASEPRODUCTIVITY AND IMPROVE YOUR BOTTOM LINE
MISTAKE # 7Not getting “buy-in” from
employees
You must love…(or at least genuinely care about)your employees.
Treat employees as adults and hold themaccountable for safety.
Lacerated finger.
Direct cost: Hospital Bill $106.41
Indirect costs:
Wages paid 3.5 hours off job
Transportation to hospital
Overtime to cover remaining 4 hours
15% decrease in production
Damaged product
Four employees assist for 15 min.
7 employees discuss - 70 minutes
Employee seen for follow up visits
Supervisor investigates and reports
Total indirect costs - $750
Total costs - $857
$107
For every $1 spent on injury, $3 - $54 is wasted in time &opportunities (National Safety Council Statistics)
$750
STEEL TUBEWork Comp Expenses 2002 - 2006:
$4,667,179
x 8
= $37,337,432
This does not include increased penaltieson past or future premiums
How Many Tons of Steel Shipped to Pay for
$5,000 Claim? 25 T Direct 200 T Total
1 Hr ½” 8 Hr
$50,000 Claim? 250 T Direct 2,000 T Total
10 Hr ½” 80 Hr
$500,000 Claim? 2,500 T Direct 20,000 T Total
100 Hr ½” 800 Hr
$5 Million Total? 25,000 T Direct 200,000 T Total
1,000 Hr ½” 8,000 Hr
Averaging ~ 200 8 Hr Workdays / Year or 2 Months 24/7
How many hours are you working to pay for WC?
Revenues Needed To Cover Costs
1% 2% 3% 4% 5%
$1,000 $100,000 $50,000 $33,000 $25,000 $20,000
$5,000 $500,000 $250,000 $167,000 $125,000 $100,000
$10,000 $1,000,000 $500,000 $333,000 $250,000 $200,000
$25,000 $2,500,000 $1,250,000 $833,000 $625,000 $500,000
$50,000 $5,000,000 $2,500,000 $1,667,000 $1,250,000 $1,000,000
$100,000 $10,000,000 $5,000,000 $3,333,000 $2,500,000 $2,000,000
$150,000 $15,000,000 $7,500,000 $5,000,000 $3,750,000 $3,000,000
$200,000 $20,000,000 $10,000,000 $6,666,000 $5,000,000 $4,000,000
Co
sto
fIn
jury
Profit Margin
MISTAKE # 8
No Accountability SystemFor Behavior
AccountabilityWho needs to be held accountable?
• Top Management: Policies, Procedures & Commitment
• Supervisors: Training & Enforcing Policies
• Employees: Behavior
• Insurance Industry: Claims Management (Victor)
• Medical Providers: Best Care & Communication (TRTW)
Zinc BurnCT / Liver
Rep Motion after 1 dayMarie PV construction
Ask Yourself …
Do More Accidents Occur in theWorkplace
Because of Unsafe Conditionsor
Unsafe Acts?
2006 NASCAR Champion: "Jimmie Johnson was horsing aroundand was on top of the golf cart when he fell off," spokeswomanKristine Curley said.
Swimming Pool
What’swrong withthis picture?
Where is hissupervisor?
Who trainedhim?
Middle School Report Card
Class Name Instructor Last Updated Grade GradebookClassNotes
Term 1: LA 7-2 Schober11/04/2005
12:26PMA+
97.3%
Bottom of Form
Term 1: Science 7A3 Mr. Mease10/31/2005
02:52PMA+99%
Bottom of Form
Term 1: MUSIC Miss Prussner11/04/2005
02:55PMA
100%
Bottom of Form
Term 1: KB Mrs. Meiskey11/04/2005
02:56PMA
97%
Bottom of Form
Term 1: Tech Ed Mr. Meier11/04/2005
04:01PMA
92.3%
Bottom of Form
32-54%
THE ACCIDENT REPEATER• Represents less than 10% of the workforce
• 50%-75% of total claim frequency
• 25%-95% of total workers’ comp costs
• Safety must be a condition of employment.
• “Door that was once wide open, slams shut!”
If you want to experience somethingyou have never experienced before,you must do something you havenever done before.
“Insanity: doing the same thingover and over again andexpecting different results.”
Albert Einstein
Are you afraid to let go of your nickels?
CHANGING YOUR CULTURE
Commitment & Sense of Urgency needed
The CEO must “get it”.
“Whole Nine Yards”
“Balls to the Wall”
Paul O’Neill (Alcoa 1987-1999)
Jack Welch (GE 1980–2001)
“Beat the Drums”
SOS Consulting
SYNERGY OF SAFETY
SOS MODEL CORE ELEMENTS:
Safety Culture Evaluation & Gap Analysis
Accident Repeater Program
Supervisor Training & Mentoring
Employee Training & Incident Investigations
Monthly Department Safety Audits
Review & Assistance with Safety Policies & Procedures
Help With Hiring Practices (Post Offer/ Pre Employment)
Claims Management Guidance
SAFETY FIRST
Asking me to overlook a simplesafety violation would be
asking me to compromise myentire attitude towards the
value of your life
This attitude doesn’t work!
This attitude does!
If you want to improve your safety culture…WE CAN GET YOU THERE!
I interviewed three other safety consultantsbefore hiring SOS. I had the feeling the otherconsultants just wanted everyone to holdhands and sing Kumbayah.
I was impressed when Joe started talkingabout holding everyone accountable, includingme!
Rick Merluzzi, PresidentPennex AluminumWellsville & York, PA
Did you learn anything today?
Questions?