assessing the cost of preventative measures against the
TRANSCRIPT
Assessing the cost of preventative measures against the cost of illness and injury Psychological Injury
Manager, Injury Management and Workers Compensation
Julia Cohen
Agenda
› 1. Key aspects of your company’s culture
› 2. Preventing late Reporting
› 3. University of Sydney story
› 4. Example of prevention – psych claims
› 5. Claims Prevention Database
› 6. Basic Method to Calculate cost (spend) of prevention against premium
payable (ROI)
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Your company’s culture
› How many potential injuries you have
- This year? / Last year?
› How many of potential injuries converted to lost time illness or claims?
› Your reporting lag.
› How to read your HR / Workers Compensation data?
- What was your total cost of claims last year? / Year before?
- Your LTIFR?
- Where are your biggest injury costs coming from?
› What is the next injury you are worried about?
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Do you know
Your company’s culture
› We have an easy to use incident
notification system for ALL
employees
› Injuries are reported / managed as
soon as an incident is notified
› Discomfort action
› I get (& understand) my claims data
› Suitable duties plans are created
for all injured employees
› Psych claims are manageable
› Employees have to notify their supervisor in person for an incident process to begin
› Claims reported once medical certificate / claim form received
› Discomfort first aid
› My broker gets my claims data
› Suitable duties plans only if employee fit for less than full hours
› All unfit employees are referred to Rehab
› Psych claim instant Rehab referral
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Which column describes you?
Workers Comp Risk Management Funding
› I get Risk management Funding
› Develop a prevention plan at the
beginning of the year for how I will
use the funding
- Analyse my hotspots
- Set targets
- Discuss with my insurer
› I don’t get Risk Management
Funds market your policy!
› Get to November and realise that I
have not claimed it all Rush to
find relevant invoices to claim the
money
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A source of funding?
Do you know how much money you waste?
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Reporting Lag : Hartford Study
0%
18%
29%
45%
99%
0%
20%
40%
60%
80%
100%
120%
1 - 6 days 8 - 14 days 15 - 28 days > 5 weeks >13 weeks
Impact on cost of claim of reporting lag
Reporting Lag
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When Day 0 is included
13%
0%
18%
29%
45%
99%
0%
20%
40%
60%
80%
100%
120%
0 days 1 - 6 days 8 - 14 days 15 - 28 days > 5 weeks >13 weeks
Impact on cost of claim of reporting lag (0 days included)
Do you know how much money you waste?
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Incurring excess | Reporting Lag
61% 56% 55% 67% 64%
70% 72%
0
0.2
0.4
0.6
0.8
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2006/07 2007/08 2008/09 2009/10 2010/11 2011/12Target
2011/12Actual
KPI 2: Claim Reporting Time lag (0 - 7 Days) Target: 70.40%
This still means that 28% of our claims are incurring excess:
Total claims 2012 = 151
Therefore 58 claims incurred excess.
If that is $1000 per claim = excess impact of $4050 per claim in costs
Faculties paid $58000 of that directly out of their budgets
PLUS $175009 additional premium paid
Prevention strategy for 2013?
Developing a charge-back system and faculty
reporting and communication plan for each late report
The Nitty Gritty
› Knowing your costs allows you to set goals
› University of Sydney story:
› 2011 : Review team structure (within greater HR structure)
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Identifying ways of reducing cost and increasing staff wellbeing
Identify costs to enhance wellbeing
› Sending all lost time claims to Rehab
› Costing >$3500 per claim
› Set a target to limit that to $<1500 by end of year (from August)
› EOY = $<1200 per claim
› Reduced costs reflected in end year adjustment – dropped from ~$800K to
$80K (90%!)
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University of Sydney Process : Importance of Triage
› Earlier the better
› No-one owns the case
› We are all responsible for
the issue
› Communicate
› Communicate
› & document
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When a psych issue hits our radar
Cases
Meetings
Case
Management
Group
OHS
Incident
Notification
System
HR Advisor
Group
Injury Management Group become aware of “hotspot”
Start feedback loop; issue becomes a case to discuss at any of the above fora
Prevention
Training
(Mental
Health &
Ergonomics)
NOTE: use
of Risk
Management
Fee
Document Case
on Injury
Connect
Collect
documetation
already available
Coach HRA and
local manager in
documetation of
issue
Collaborate with
CMG if it is a
health / RTW
case
Maintain email
link to all
documentation
Does not develop into a claim
Saving of $21k ($63k to premium
RPL; $147k traditional method) Notified as a
workplace injury
Monitoring
› Keeping it updated can be arduous
› It is fabulous for reporting purposes
› Can show premium saved by potential injuries that never became claims
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Claim Prevention Database
Triage
› Ergonomic assessments can save real money
› Excerpt from Annual Report:
› Injury Prevention:
› The University maintained an active injury prevention program focussing
on areas of need; specifically ergonomics, manual handling and
psychological injury prevention. A total of 124 individual ergonomic
assessments were carried out in 2012 saving a potential $2.5m in
workers compensation premium had these progressed to injury.
Manual handling training was delivered to 14 work groups (covering 151
staff members in total). Psychological injury prevention training was
attended by 165 University staff members during 2012 saving another
potential $1.9m in workers compensation premium.
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How early is too early to know a claim is on the way?
Assessing the costs of making a workers compensation claim against the cost of prevention
› Do you know your most common
- Claim type?
- Cost?
› Do you know your most costly
- Claim type
- Cost per claim?
- And if you do what are you doing about it?
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Burden of Illness Profile | Early Days
› Research shows that 70% long
term illness absence due to
musculo-skeletal and psychological
illness combined. (Maastricht Cohort Study)
› Therefore aim wellbeing at these
areas
› University Initiatives 2013:
- Walking Challenge
- Move more, sit less
- Mental Health Skills training
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University of Sydney Claims Profile
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Injury Categorisation by Mechanism
This chart shows the categorisation of 281 injuries.
Patterns
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Hitting
Objects
With A
Part Of
Being Hit
By
Moving
Objects
Heat,
Electricit
y And
Other
Chemical
s And
Other
Substanc
Mental
Stress
Vehicle
Incidents
And Other
0 0 0 0 0 0
1 1 0 0 0 1
0 0 0 0 0 2
3 0 0 0 1 1
0 0 0 0 0 0
0 1 0 0 4 3
0 0 0 0 0 0
1 0 0 0 0 2
0 0 0 0 0 0
0 0 0 1 0 0
0 0 0 0 0 0
1 0 0 0 0 0
1 0 0 0 1 1
2 1 0 0 1 0
3 2 0 0 2 3
1 0 0 0 0 0
4 2 0 1 0 1
7 20 1 3 2 4
0 0 0 0 0 1
0 0 0 0 0 3
0 1 0 0 0 0
0 2 0 0 0 0
1 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 1
1 1 0 0 0 0
1 0 0 0 0 1
12 8 2 4 4 2
0 0 0 1 2 0
4 5 2 0 2 1
1 0 0 0 0 0
44 44 5 10 19 27
1
4
3
3
50
6
8
2
17
2
20
44
1
6
1
5
1
3
1
9
4
10
4
14
1
18
1
Total
1
4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Biological
Factors
0
0
0
0
0
0
0
0
9
1
59
0
0
0
28
2
274
0
1
1
0
10
1
3
0
1
0
5
7
0
1
0
1
0
1
1
3
0
4
1
5
1
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
1
0
0
0
0
0
0
0
Sound
And
Pressure
0
0
Body
Stressing
0
0
1
2
0
1
8
2
3
1
6
1
7
0
0
2
0
1
0
1
0
4
1
2
Falls,
Trips And
Slips Of A
Person
1
1
1
4
0
8
1
Sydney Nursing School
University Library
Vice Chancellor's Office
Total
5
0
64
0
0
2
Pharmacy
Procurement Shared Services
Provost & DVC
Sydney College of Arts
Sydney Conservatorium of Music
Sydney Medical School
Human Resources
ICM: Investments
ICT Operations - Core Services
Faculty of Dentistry
Faculty of Engineering &
Information Technologies
Faculty of Health Sciences
Faculty of Law
Faculty of Science
Faculty of Veterinary Science
HR Operations
DVC (International)
DVC (Research)
DVC Strategic Management
Faculty Education & Social Work
Faculty of Agriculture Food &
Natural Resources
Faculty of Arts
Alumni & Events
Business School
CFO Operations
CIS: Ops & Commercial Activities
Development
DVC (Education) & Registrar
So what is it that the data is telling us?
› Mental Stress = 7%of claims by frequency. (23% of costs)
› Slips Trips and Falls = 23%
› Body Stressing = 22%
ARE ALL OF THESE
ARE PREVENTABLE?
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YES!
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Once you know your hotspots and costs leakage
› You can set strategies to measure their impact:
› Body stressing Ergonomic
› Slips Trips and Falls Facilities Management Critical Infrastructure
Review
› Psych Injury
- Mental Health education
- leadership/management skill
- Psychological Health and Safety
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Spending Money on Prevention
› Body Stressing
› Ergonomic intervention
- Physio on staff for intervention in any case where there is not yet an injury but there is pain/discomfort
- $100K
› RTW
- Job Dictionaries
- $10K
TOTAL: $110K
› Psych
› Mental Health Essentials – 2012
- $60K
› Interpersonal Dynamics & Complex Personalities in the workplace – 2013
- $60K
› Psych job dictionary
- $20K
- TOTAL: $140K
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You need to be able to establish a basic business case STEP 1: Add up the costs by intervention type
Adding up the costs
› TOTAL COSTS
› $110+$140 = $250K
› PREMIUM PAYABLE
› 2011 : $5.7m
› 2012: $1.5m + $1.2m = 2.7m
› DIFFERENCE:
› $3.0m
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Method : STEP 2 : Compare total costs to Current Injury Liability
Return on Investment
› Over two years spent $250K on prevention
› Over same period paid $3m less
› ROI is expressed as “how much spent returns how much saved”
› For every $1 spent $12 was returned in savings on premium
› Also note: significant cash flow benefits which a more complex calculation
would show too.
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STEP 3: Compare costs against CHANGE of liabilities
Thank you
› JULIA COHEN | Manager
Injury Management & Workers Compensation Group | Human Resources
› THE UNIVERSITY OF SYDNEY
Level 5, J12- School of Information Technologies Building | The University
of Sydney | NSW | 2006
T +61 2 9351 4175| F +61 2 9351 5458 M: 0401 669 525
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