Zero Accident Culture

Workers’ Compensation

Overview for:

Hemaco Management

Wednesday September 8, 2004

Today’s Agenda

• Workers’ Compensation Overview

• Hemaco’s Historical Losses

• Zero Accident Culture

• Loss Prevention

• Claims Management

• Manager’s Roles & Responsibilities

• The Plan

Cost of Workers’ Compensation

Cost = [Payroll x MD Rate] x Experience Modifier

Ex Mod = Hemaco’s Losses

Avg. Industry Losses

3-Year Average

Losses for last 4 years, excluding most recent year

2004 Ex Mod

2000-01 2001-02 2002-03 2003-04

What is the one factor we can control to reduce cost?

Cost of Workers’ Compensation

Cost = [Payroll x MD Rate] x Experience Modifier

Payroll x MD Rate = $75,629

Ex Mod = Hemaco Losses = $108,149 = 1.43 Avg. Ind. Losses $75,629

Cost = $75,629Cost w/multiplier = $132,684

That’s an increase of $57,055!!

Manual Premium from the policy

Manual Premium from the policy

Mod from NJ WC Exper. Rating Data sheet

Mod from NJ WC Exper. Rating Data sheet

Add column I and J totals from last page of Rating Data

Add column I and J totals from last page of Rating Data

Co. losses/ModCo. losses/Mod

Historical Losses# of Claims

?

INJURIES BY YEAR

0

5

10

15

20

25

30

35

2001-2002 2002-2003 2003-2004 2004-2005

Injury Year

Nu

mb

er o

f A

ccid

ents

HEMACO LOSSES BETWEEN 8/1/2002-8/1/2004

14,500

61,500

1,200 1,0002,500

1,0001

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

STF'S STRUCK BY MV STRAIN CUT/PUNCT MISC

Type of Accident

Res

erve

d

CLAIM DISTRIBUTION

HEMACO'S # OF CLAIMS BETWEEN 8/2002-8/2004 BY LOSS SOURCE

8

13

1

3

6

2

0

2

4

6

8

10

12

14

STF'S STRUCK BY MV STRAIN CUT/PUNCT MISC

Type of Accident

Num

ber

of C

laim

s

Zero Accident Culture

A value and belief system within the total organization that considers all accidentsto be:

• 100% Predictable• 100% Preventable• 100% Unacceptable

Controlling Costs

There are 2 ways to control losses:

1. Prevent injuries (Zero Accident Culture)2. Control Claims Costs (IWIF-Integrated

Team Approach)

Injury Prevention

• Employee Training:– Employee Responsibilities & Safe Behavior Training– New (and transferred) Employee Orientation– Safety Meetings

• Hazard Elimination

• Injury Review Process

• Zero Accident Culture Development

Hemaco Four Loss Sources Frequency (2002-Present)

• Slips, Trips, Falls: Heaved rugs, mats, ice, rushing

• Struck By’s: Standing up, bending down, opening/closing, falling objects

• Cuts & Punctures: Box cutters, sharps in disposal cans, door frames

• Strains: pulling beds, laundry• red: severity source

Claims Cost Control

• Managing Medical Treatment - Use of Preferred Provider Network

• Transitional Return to Work Program

• IWIF Claims Integrated Team Approach

• Accidents reported to IWIF within 24 hours

• Manage treatment and costs from the beginning

• Effective accident investigation- cause not fault

• Employee benefits not delayed

Transitional Return to Work

• Controls costs reduce severity less impact on Mod• Therapeutic for injured worker• Employee receives full wages• Productive work vs. employee staying at home• Difficult to get workers back once at home

Supervisors Are the “Key” to an Effective Safety Program

• Set the “Safety Example”

• Communicate and plan with your workers

• Recognize and reinforce safe acts and behavior

• Identify and correct unsafe acts and conditions

Supervisor Claims Management

• Treat all claims as legitimate

• Report all claims immediately

• Preserve the scene (subrogation)

• Contact employee regularly

• Provide “bridge” jobs for TRTW

• Investigate and correct causesZero Accident Culture

Thank you for your time.