To get the most for their money when buying insurance, some municipalities pool their workers' comp coverage. While in many states large municipal risk sharing pools help keep costs down, “they have gotten the prices about as low as they are going to go,” he observed.

MEDICAL DRIVES COMP PRICING
While many factors raise workers' comp costs, the number one cost-driver is medical expenses, Mr. Walls said. He noted that this is a trend that “isn't going anywhere any time soon.” In fact, he said, about 60 percent of all workers' comp dollars are medical.

“Medical inflation is higher than general inflation, and that seems to be even higher in the workers' comp environment,” he said. “That's an aspect that is very difficult for the average employer to make an impact on.”

While keeping injuries down is key, he said it's also important, in states where the employer has medical control, to select the best possible physicians to treat their workers, to get the best possible results and outcomes on claims. To accomplish this for its policyholders, he said Safety National “partners with a company that specializes in bringing medical expertise to injured workers.”

While they may need to prepare for the eventuality of higher prices, risk managers “can't lose sight of loss control/injury prevention,” he warned. “The biggest part of controlling claims costs that risk managers can do is to prevent the claims from happening in the first place. They have to keep that focus and not lose track of it.”

Unfortunately, however, when the economy is tough and “everybody starts cutting back,” it's not uncommon to see risk management—in both public and private sectors—be one of the areas to get cut.

“It's not producing income, so they sometimes combine HR [human resources] and risk management, which limits the focus on the risk management piece,” Mr. Walls said.

One thing risk managers can do is to make their case and let their employers know their value. Organizations, public and private, “definitely need to invest in risk management and loss prevention,” Mr. Walls said.

“I hope that as the economy starts to rebound we will see an increased focus on risk management from employers,” he added. “We did see some layoffs…over the last few years.”