Workers Compensation

Rethinking Return-To-Work (Part 1)

10/1/2019 | Ray Gage

When it comes to lost-time due to a workplace injury or illness, there are many puzzle pieces that must fit together before you can get a true picture of everything that is involved in developing strategic policies and procedures that incorporate all the key considerations.  Before we can begin looking at those considerations, it is imperative to understand why they are important in the first place. 

Let’s review some of the statistics that go along with lost-time or days away from work.  It takes a long time to compile and analyze accurate data, while it is October 2019 and the Bureau of Labor Statistics does update this data annually, the 2018 data is not yet available.  According to the Bureau of Labor Statistics, rev. 11/2018:

  • The overall incidence rate of nonfatal occupational injury and illness cases requiring days away from work to recuperate was 98.0 cases per 10,000 full-time workers in 2017. 
  • In 2017, there were 1,109,270 days-away-from-work cases in private industry, state government and local government. 
  • The median days away from work to recuperate across all age groups, a key measure of severity of injuries and illnesses, was 9 days in 2017. 

In addition, the National Safety Council estimates the costs of workplace injuries.  These costs are in addition to and separate from the cost of worker’s compensation insurance.  Here is some key information from their 2017 study:

  • The total cost of work injuries was $161.5 billion.  This includes wage and productivity losses, medical expenses, administrative expenses and employers’ uninsured costs. 
  • The cost per worker was $1,100.  This includes the value of goods or services each worker must produce to offset the cost of work injuries. It is not the average cost of a work-related injury. 
  • Cost per medically consulted injury was $39,000 and cost per death was $1,150,000.  These figures include estimates of wage losses, medical expenses, administrative expenses and employer costs. 

Many employers only look at the costs associated with workplace injuries as a component of their insurance premium.  The primary reason is that it is easier to see the hard numbers associated with the cost of an insurance policy as opposed to soft costs that don’t show up under the insurance expense section of a Profit & Loss Statement.   

On a very basic level, employers need to understand that worker’s compensation insurance is an injury-finance mechanism.  Unless you are aggressively managing your own injuries to the best outcomes, you are going to pay the insurance carrier back at rates the government wouldn’t allow a bank to charge a criminal.  As a general rule, on a workplace injury where the insurance carrier pays $30,000 or less that includes indemnity (lost-time), you are going to pay the claim back in increased insurance costs associated with your EMR at a rate of $3 for every $1 that was paid in claim expenses by the insurance carrier.   

Keep in mind this is actual hard expenses that show up on a spreadsheet and the myriad of soft costs mentioned earlier in this article are not included.  As a reminder, some of those soft costs include lost productivity, hiring & training replacement workers whether temporary or permanent, time away for employees and supervisors to attend doctor visits, increased production costs, time lost due to OSHA inspections, document discovery and other costs associated with litigated cases and an overall loss of morale. 

At this point, it should be easier to understand the importance of mitigating or eliminating the impact of time away from work due to an injury or illness, whether you decide to look at the statistics or just the insurance premium factors.  Do you know how much your workplace injuries are costing you?  Are you considering the reasons to keep any injury as far away from lost-time as possible?  How do you feel about paying your insurance company back at interest rates approaching 300%? 

In future articles, we will look at other aspects involved in rethinking return-to-work, including what to call your program, who benefits, compliance considerations and actual ideas and strategies on putting everything into practice.  Until then, please feel free to reach out with any questions, comments or return-to-work thoughts provoked by the above statistics.

About the Author:

Ray Gage, Director of WalkerHughes Allen County Office, is a Master Work Comp Advisor who's passion and life's work is to help sophisticated, process-oriented businesses create safe, healthy, productive workplaces, and as a result, more profitable firms.  For more information on Automate Safety along with the other tools offered by WalkerHughes to assist in your quest for Zero Injuries, contact Ray at r.gage@walkerhughes.com or by phone at 260-627-3641 with any questions or inquiries.