Case Study # 3: The Large, Multi-Unit Fortune 500 Company

Problem: A Fortune 500 company with 17 business units contacted Amaxx Risk Solutions at LowerWC.com six months ago. The company is:

  • A research & development unit.
  • 15 manufacturing locations.
  • Sales force divided into 5 U.S. and International territories. Locations were widely dispersed within the U.S.

The newly hired risk manager had to analyze workers’ compensation cost issues for each of the sites, some of which were not doing very well, but it was unclear why.

  • The goal was to develop an overall cost reduction plan addressing individual issues for problematic sites.
  • The risk management budget allocated only $50,000 to fix the problem limited the project scope to:
    • Consultants traveling to only 3 sites to conduct onsite analysis.
    • Conducting written assessments.
    • Performing telephonic diagnostics, and
    • Writing a complete report of their findings.
  • Under those parameters, the project would have taken 4 – 6 months to complete. There were several flaws in this approach:
    • First, there was not enough money to assess every site leaving 70% of the sites without an assessment.
    • Secondly, there was not enough money to develop an implementation plan and roll out a program leaving the risk manager to do it himself in his very limited time.
    • Participants would likely become fixated on the assessment report rather than implementing report recommendations; implementation is the most difficult part of creating an effective program.

Solution: Using tools found at WorkersCompKit.com, the risk manager had each site take a comprehensive, web-based Best Practice Assessment and receive a National Workers’ Compensation Score™.

  • Our consultant scheduled assessments for each unit then guided them through the assessment process. Discussion was encouraged to bring out problem areas, as well as, areas they were doing well.
  • From this, specific Recommendations for Improvement were generated for each business unit.
  • Within two weeks all 15 locations received their score and recommendations!
  • Scores were ranked and responses were compiled into a Best Practice Profile.
  • From this, the risk manager learned which divisions needed the most help and what help they needed.
  • She pinpointed specific issues for problematic sites and shaped a centralized implementation strategy:
    • This included a comprehensive communication program that addressed the lack of uniform post injury response procedures and inconsistent return to work programs.
    • She learned that workers comp and medical personnel at many units did not know the company had a large deductible and were unaware the cost of workers’ compensation was paid by the company, not the third-party administrator.
  • With our guidance, the risk manager was able to develop a two-day training program:
    • This was attended by 35 injury coordinators, nurses and claims coordinators to ensure uniform implementation at all sites.
    • Rather than developing the materials from scratch, the risk manager customized materials which cut development time in half.
    • After training, there was a period of implementation.
  • Once implementation was underway, the risk manager was able to track progress throughout the process. For example, she monitored which tools each site downloaded such as sample emails, forms, and Supervisor PowerPoint Presentation by viewing the dashboard.
  • She substantiated the cost savings of transitional duty to senior management using the Cost Calculator and Transitional Duty Cost Calculator.
  • In addition, the companies hired a part-time medical advisor, a physician experienced in workers’ compensation and claim file review.
    • He helped evaluate the significance of the injuries and the appropriate duration of absence.
    • When this was exceeded, he spoke directly to the treating physicians to find out the reason for the extended absence.

Results: Within three months, this company’s best practice usage increased by 30% and 100% of sites showed increased scores in their problem areas. The risk manager was able to structure a centralized program that accommodated issues in all problem sites. This resulted in savings at all locations.

  • There was a 30% overall reduction in number of lost workdays.
  • Improvement in return to work ratios at 100% of the locations, resulted in a 25% reduction in loss costs within the first six months of the program.

Ongoing training was conducted via webinars. This enabled the risk manager to train staff remotely from her office and enhanced communication among injury coordinators at the locations.

The risk manager completed the assessment and implementation project for under the budgeted $50,000:

  • The scope of the project was broadened to include all 17 sites instead of only 3.
  • The assessment was completed in a fraction of the time it would have taken to do it the "old-fashioned" way.
  • Implementation rather than assessment became the focus of the project because training for injury coordinators was held within 3 months of the divisions receiving their individual National Workers’ Comp Scores™.
  • Each division learned to input their loss data and determine their own benchmarks. All units measure their benchmarks monthly using the National Workers’ Comp Score Tracker™ module. They upload the results to the risk manager for review.
  • Each unit was able to re-assess its performance under the watch of the risk manager and her designee to observe their National WC Scores™ increase and their Cost Per FTE decrease.
  • Monitoring was centralized to make it much easier for the risk manager to build a centralized project control structure.

Not only did the entire company become involved in using the tools and information we provided, but the employers took a more active role in controlling costs because they were included in the assessments and, based on the recommendations generated for best practices, they customized implementation, as well.

In the past, employers took a more passive role in their recovery. Now, we help employers take much more control over the scope of their workers’ comp management projects.

When utilized properly, the tools and information provided by Amaxx Risk Solutions, Inc. will save your large corporation money, just as it did for this one. For more information on how your company can reduce its workers’ comp costs, learn about our step-by-step guidebook: Workers Compensation Management Program: Reduce Costs 20% to 50%.

Do you have a specific workers’ comp related problem that you do not know how to handle like this mid-sized manufacturer. Amaxx Risk Solutions, Inc. and LowerWC.com can provide the solutions you need to control your workers’ compensation costs.

Note: All forms (bold / italics) and documents referenced are available at WorkersCompKit.com.

When can an employer expect to see 20% to 50% savings in workers’ comp costs?

Most employers see immediate savings. The savings is in lower loss costs year after year. For companies with large deductibles, these costs are all out of pocket and quickly begin to shrink once the employer exerts control over the claim process.

For example, instead of having $200,000 in costs of injuries per year out of pocket, your might be able to reduce that to less than $100,000 yearly, by reducing the number of claims and the duration of each of those claims. This increases impact to the bottom line.

Premiums based on the mod will also go down when claim frequency and severity are reduced as a result of “taking control.” Be aware, though, it takes several years to work the “bad” years out of the premium formula. The time to start is now!

Every one of our clients who have progressed through the full program – from assessment through implementation – have reduced losses at least 20%, usually closer to 50%, and in some cases even more.

Taking control halts the process of abuse and establishes best practices for how workplace injuries are handled.

An analogy: Taking control of the workers’ comp process in a company works much like a company establishing an inventory control system – the amount of inventory ordered is suddenly reduced by implementing a process that includes accountability and provides structure.

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