GAWDA Professional Compliance Seminar 1. 2 Workers Compensation Loss Prevention.

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GAWDA Professional Compliance Seminar

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Workers’ Compensation Loss

Prevention

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Safety as a profit center

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• What is the single most important factor to prevent employee injuries and vehicle accidents?

Stop Injuries

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• Overt management commitment

• When the employees believe that you are committed to their safety, they will stop having accidents…Uncomfortable?

Stop Injuries

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• Case studies• Fatality investigation• Fingers crushed• Internal audit response…

disappointed• Steel• Pigment manufacturer• Eastern Region… post fatality

Stop Injuries

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• Tommy Brubaker• Machinist • Midnight shift• Lathe• Warnings? Jackets• Accountability?

Case History #1 – Fatality

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• Trailer manufacturer• Punch press operator• Dual actuator buttons• Three fingers crushed• Warnings? • Accountability?

Case History #2 – Crushed Fingers

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• Bhopal tragedy• UCC internal audit• Cleanup• True commitment?

Case History #3 – Audit Response

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• High quality rail road wheels• Poor labor relations• Emerged from bankruptcy• Projection of $1.1 million in

workers compensation losses per year.

Case History #4 – Steel Company

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• $38M sales, $3.5M W/C premium

• Significant evidence:• Exaggeration • Misapplication of benefits …

workers’ compensation was used in lieu of health or unemployment benefits


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• The Solution• Successful proactive loss

prevention program• Supervisors trained in

accident investigations, modified duty, and profit consequences

• Safety committee was refocused from complaint evaluation to injury prevention


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• Results…• First year:

• 50% reduction in injuries• 66% reduction in costs• $1M premium reduction


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• PA company bought similar VA company

• Due diligence – W/C insurance

• Zero reported injuries• True?

Case History #5 – Pigment Manufacturer

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• Facility inspection• FX, floor holes, open vats,

bicycle chains/gears, housekeeping, machine guarding

• Owner interview – 0 injuries


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• How was injury rate so low?• Onsite owner impact, owner

attention• Remote owner… prediction


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• Fatality• New safety consultant• 12 months (training,

investigations, STOP, etc.)• Worst to first

Case History #6 – Eastern Region

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• The maximization of profits comes from the minimization of losses

• Proactive Loss Prevention

Peter Drucker

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• Proactive risk management vs. traditional loss control

• Applies to • Workers’

Compensation• Vehicle Liability

Two Safety Paradigms

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• Security Services • Grocery• Delivery Fleets• Temporary Service Employers• Restaurants• Iron & Steel Manufacturing• Hospitality & Healthcare Institutions• Welding Gas Distributors

Where proactive risk management works?

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The Complete Risk Management Program

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• Loss Control (Traditional Approach)• Manages Costs After Loss

Experience• In Short, “Reactive”• Insurance company responsibility

• Risk Control (Alternative Approach)• Manages Performance Before

Experience• In Short, “Proactive”• Your responsibility

Loss Control vs Risk Control

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If Common Today

•Poor Planning

•Lack of Training

•Unsafe Conditions

Possible Tomorrow

•On Site Accidents

•Injury/Death

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• Client – Midsize Welding Gas Distributor

• Problem • 30 vehicle units - 6 months• 9 preventable accidents • 2 non-preventable accidents

• Solution - A structured program • Outcome

• 0 preventable accidents • 2 non-preventable accidents

Case Study #1

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• What made the difference?• Commitment!• Accountability• First Executive Safety

Committee meeting – all OK• Second meeting –

commitment• Third meeting -

performance

Case Study #1

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• Preventing losses IS possible!• Always less expensive than

traditional loss control approaches

• Less equipment damage and downtime

• Fewer customer issues• Professionalism rises• Profit is improved

Why Practice Prevention???

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1. Management leadership2. Assignment of responsibility

and accountability3. Maintenance of vehicles,

equipment4. Pre-employment checks5. Establishment of effective

safety committees and training

10 essential elements

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6. Accident record keeping system7. Medical and first aid systems8. Acceptance of personal

responsibility by employees9. Post loss management activity10. Results monitoring and

program evaluation

10 Essential Elements

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• Systematic accident investigations• Major, minor, near miss

• National Safety Council guidelines for determining preventability

• Operator and driver/supervisor training

• Personnel and vehicle safety incentives & communication

• Discipline & accountability

Management Techniques

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• Humanitarian• Less pain

• Regulatory Compliance• Avoid OSHA/DOT hassles,

citations• Financial

• Lower costs, liabilities, down time• Business/Officer Protection

• Documentation, manual, program

Benefits of Prevention

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• How to measure the company’s real safety performance?

• Whose performance?

How to measure…

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• Your performance• You (owners, line managers)

are accountable … or can become accountable

• Case Study – Temporary Service Employees

• Case Study – Fraud, Pasadena, CA

How to measure…

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Industry Comparison

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• How to measure your real safety performance?• Long term – W/C rate

• Professional, unbiased numerical appraisal

How to measure…

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• How to measure your real safety performance?• Short term

• Non-injury incidents (near misses)

• First Aid Cases• Recordable injuries• Lost workday cases

How to measure…

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Unsafe Behaviors/Unsafe Acts

Fatalities

LostTime Cases

Recordable Injuries

Medical Visits/First Aid Cases

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• Insurance company structures (policy, rent-a-captive, captive, self)

• Premiums adjust for 3 years plus 1

• Do some insurance companies care about your performance?

W/C Insurance

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• Insurance companies are designed to make more money when you have more injuries

• Case Study - Rapid City

W/C Insurance

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• Experience Modification Factor (XMod)• Frequency – each injury

counts as 1x• Severity – Lost workday

cases count about 10x

W/C Insurance

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• Control your frequency by stopping accidents• Accountability• Measurement• Training• Overt commitment

W/C Insurance - Frequency

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Dupont STOP Program

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STOP For Employees Concepts

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STOP Safety Cycle

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• Control your severity by managing the case:• Assertive return-to-work• Professional medical

treatment• Trusted doctors (2-way

trust)• Fight suspected fraud

W/C Insurance - Severity

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• The maximization of profits comes from the minimization of losses

• Proactive Loss Prevention

Peter Drucker

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Q&A

GAWDA Professional Compliance Seminar 1. 2 Workers Compensation Loss Prevention.

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Transcript of GAWDA Professional Compliance Seminar 1. 2 Workers Compensation Loss Prevention.