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The Workers Compensation Crisis: An Effective Business Response

California's Workers Compensation system is in crisis. Most people in business agree that healthcare costs are skyrocketing and it is difficult to keep these costs under control. Insurance companies, lawyers, healthcare providers and the injured worker have all been blamed for the rising costs. It is startling to realize that costs associated with an average workers compensation claim can be $60,000+ and repetitive stress injuries are costing industry $20 billion per year.

First it is necessary to understand this problem. Workplace injuries, workers compensation claims and costs must be defined. It is important to understand that injuries and claims are not the same thing. Valid injuries happen at California companies everyday. These can be an acute injury like a slip and fall or a cumulative trauma injury like carpal tunnel. Some of these injuries, however, do not occur from an accident but develop over time from repetitive motion and static postures. This is where it gets confusing because it is harder to define when the injury actually occurred and what were the causes of the injury.

An example would be office workers that sit and work on computers all day. The employees develop carpal tunnel and file workers compensation claims. They are frustrated because they are in pain and want to rest their wrists. The employees blame the company for making them type so much each day. The company is frustrated because the injured workers want to be off work to rest their wrists and productivity in that department will go down. The company may also feel the injury is because the employees are overweight, sit awkwardly at their desks, or strain their arms further by playing computer video games at home every night.

In this situation the employees see their problem as injuries and file a claim. The employer sees their problem as claims that will have costs attached to them. Neither is right or wrong- this is just a perception of each side's reality. When emotions get involved, the situation can get worse. If the employees are having problems with their managers or the managers are not responsive to the employees' initial request for help, they are more likely to file a claim and the costs of the claim will go up regardless of the severity of the injury. If the managers and employees have good relationships and the managers respond to the employees' initial request for help, the employees will still get the treatment they need, but will be much more likely to stay at work and be productive. The biggest factor affecting the costs of a claim is not the severity of the injury in most cases, but the relationship between the employees and the management of the company.

This is why injuries, claims and costs need to be addressed in three different ways. Most injuries can be prevented. Providing a safe work environment is a good start, but companies must go beyond that by providing opportunities for their employees to become educated and empowered to keep themselves safe and healthy. This is important for the employee and the company. By providing ergonomic assessments, seminars, stretch programs, on-site healthcare, gym memberships and safety teams, companies empower their employees to stay healthy and work productively. When an injury does occur, the right processes must be in place to handle the injury appropriately. This includes offering a light duty program, on-site treatment and letting the employee know the company values them and cares about their well being.

Companies and insurance carriers care most about claims. How much is this claim, not injury, going to cost? Injuries can be very subjective, but claims are objective and can be quantified by costs and lost work time. Companies are in business to make a profit and expensive claims can affect the bottom line. Fortunately, most companies do care about their employees too and realize that a company is successful because of their employees.

Many companies discourage reporting of injuries to keep the workers compensation claim rate low. This works if there are no injured workers, but if employees are working with an injury and do not get treatment, it will get worse. The resulting claim will be much more expensive than prevention or early treatment would cost.

The best way to implement a prevention program is to get buy in from the top levels of the corporation/business. It is also recommended that external professionals in corporate wellness look at the company from an objective point of view. Senior management must believe in this process for it to work. Managers must be trained and employees empowered to be responsible for their own health. The costs and implementation process will vary from company to company but the upfront costs will be returned 10 to 1 in reductions of expensive claims and lost work time. Another way to start this process is to pick one department as a case study. Start with a small implementation in that department and track results.

The California Workers Compensation system, companies and injured workers are in a crisis. It is time to start working on the solution. Prevention, education, empowerment and attitude are the key ingredients. Commit to those ingredients and your employees and your bottom line will be enhanced!

Sharon Hebert MSPT, CEES, ACE
Workplace Wellness