Like employers throughout the United States, Rosendin is battling rampantly increasing workers' compensation costs. Because inflation in medical costs isn't going away, we must control that increase. And anytime you say you're going to save time and money, management will buy into it.
When I arrived at Rosendin in 1991, the company wasn't tracking workers' compensation costs in an efficient manner. Frequency and severity rates were soaring to worrisome levels. To get control of the situation, I teamed up with Rosendin's safety director and risk manager. We used CompWatch—a software program from Santa Barbara, California-based Benefit Software, Inc.—to track the type and total number of injuries, as well as dollars being spent in premiums to Industrial Indemnity, the company's insurance carrier. We discovered that approximately 50% of total claim costs were for back- and eye-related injuries.
The reasons for the high numbers of back and eye injuries were clear. Often, Rosendin's workers are assigned jobs at construction sites where they work 20 to 75 high-risk contracts at a time. They may have to work electricity hot with high voltage. Possible injuries include electrocution, shock and burns. Back strains also are involved when there's a lot of ladder and overhead work, which contributes to metal shavings in the eye.
Rosendin uses computer software to target problem areas.
Many of the injuries could have been prevented if they'd been tracked effectively. By spring 1992, we began to use the computer program more systematically and launched a safety campaign to increase awareness of the importance of safety regulations, as well as stabilize the cost of workers' compensation coverage. We began with these objectives:
- Streamline claims processing and save time
- Track and trend claims data and pinpoint all problem areas, including back and eye injuries
- Develop employee-safety programs.
To reduce costs, injuries had to be reported efficiently when they occurred. Rosendin's claims administrators were spending too much time inputting data and handling repetitive administrative tasks instead of analyzing claims information, finding problem areas and creating solutions. For example, in California, when an employee reports an injury that requires medical attention (beyond first aid), the employer and employee must fill out an Employee's Claim for Workers' Compensation Benefits. In addition, companies must keep a federally-mandated log at the job site that chronicles accidents and injuries, called the Occupational Safety and Health Administration Log, or the OSHA 200 Form. Both procedures can take hours to complete and leave little or no time for tracking and trending. At Rosendin, we weren't using any scientific means to improve our overall safety-management program.
The decision to completely automate Rosendin's claims-management program was astute. To save time and reduce duplicated efforts, claims administrators needed to be able to input the data once, then automatically produce the federal OSHA Log and state's First Report of Injury. In addition to simplifying these reports, management wanted the ability to generate a series of ad hoc reports to conduct a thorough study of their overall safety program and to analyze medical-care claims filed during any given time.
With the computer software, I was able to sort claims data by supervisor, department, job number, type of injury, body part and many other criteria. For example, we could ask how many people had reported more than one accident within a three-year period. We also could pinpoint where, when and with what frequency injuries occurred, which helped locate unsafe workers for counseling. Although the menu-driven program isn't connected to Rosendin's other information systems, I often transmit data via modem from my office to the insurance carrier, which is another time savings.
Tracking insurance claims helps reduce recurring injuries.
Supplied with reports, management first looked at their claims to find the problem areas in which they could improve. Back and eye injuries not only were high on the list of frequent claims, but also could be reduced through effective safety programs and equipment. So with the support of top management, I began a crusade to revise safety programs and change attitudes toward preventive practices.
Back injuries were costing the company between $15,000 and $20,000 each. Because they were recurring, the injuries were causing insurance premiums to be high and also were negatively affecting the company's Experience Modification Rate (the frequency and severity rates of accidents), which in turn affected their ability to obtain contracts. To remedy this problem, we initiated a back-support program. The program educated workers about the importance of back-support belts and taught them how to move and work with the least amount of stress to the back.
Initially, the company used safety reports to determine who should wear the back-support belts. It concentrated its efforts on employees who'd had a back injury of any kind. Rosendin offered to pay half the costs of the belts, and workers were invited to attend the program.
Today, Rosendin provides these belts to all employees free of charge. Since March 1992, we have spent approximately $10,000 on about 300 back-support belts. All long-term employees (about 75% of the total) wear them. By saving just two employees from experiencing a back injury that would result in surgery, we'll recoup our investment.
In addition, Rosendin invites vendors who offer back-support belts to describe their products to the workers. Giving our employees an opportunity to choose which belt they prefer gives them a sense of ownership. Back-support belts aren't mandatory, but foremen are encouraged to "push them" and monitor their use.
It's critical to supplement the free belts with a comprehensive safety program. Through brochures, employees learn that warm-up exercises and proper lifting techniques are the main deterrents to back injuries—back-support belts alone won't prevent an injury.
If an employee ignores safety regulations and is injured, he or she is issued a warning, and a disciplinary action is taken when necessary. For example, after the first and second accidents, the employee receives a written warning. After the third warning, Rosendin takes disciplinary action, and the employee may be fired.
Currently, management also is working on an eye-protection program using reports generated from the computer-software program. Employees at Rosendin are required by OSHA to use safety glasses, but we discovered that employees often weren't wearing their glasses, which were tossed in toolboxes or left lying near the work area. We needed to determine why this was happening.
We found that many of the glasses had become scratched with use and were difficult to see through. Also, employees often left their glasses at the bottom of ladders or on the ground when doing contract work. Instead of climbing down to get them when needed, many employees would work without them, which resulted in injuries. After discovering the problem, we found a simple solution: Employees needed something to keep their glasses around their necks when they weren't wearing them. Today, employees have cords that attach directly to their new glasses. Rosendin has reduced eye injuries by about 20% since the glasses and cords were made available.
Rosendin is happy with results so far.
Between October 1992 and October 1993, the frequency rate of Rosendin's workers' compensation claims decreased by 35%. In addition, the severity rate decreased by 10%, and we spent 27% less in claims dollars. And to further automate the process of tracking claims data, our insurance carrier has purchased the workers' compensation software program, too. Now when an injury occurs, I can enter data at my location or send it electronically to the carrier's "master" version. All transferred data is automatically merged for reports and analysis of injury patterns. Through the new safety program, we expect to reduce our overall medical claims. And by removing the burden of claims administration, HR can focus on the real safety issues. By making these changes, we can effectively design programs to produce a more healthy, productive work force and a safer working environment.
Personnel Journal, April 1994, Vol.73, No. 4, pp. 61-64.