3 ways to minimize workers' compensation claims in the healthcare space

Nursing homes and healthcare facilities have some of the highest injury rates in the country, and subsequently, some of the highest rates of workers’ compensation claims.  A review published in the American Journal of Public Health found that the healthcare industry ranks highly with construction, trucking and meatpacking in nonfatal injuries reported. What’s more, the injuries healthcare employees can suffer range from costly (in cases like chronic low back pain from lifting) to catastrophic (in cases like bloodborne infections and workplace violence).  

Maintaining a safety culture with employee buy-in is key to almost any business’s risk management strategy, but in healthcare, it can truly pay dividends. Below are three ways in which administrators and business owners in the healthcare industry can profit by keeping an eye on their workers’ comp claims and taking an active approach to preventing personal and mass violence in the workplace.

Related: 4 ways to create a strong workplace safety culture

1. Have a violence prevention plan and a liability policy

Workers in the healthcare space put themselves at risk daily for incidents of personal and mass violence. According to the Occupational Safety and Health Administration (OSHA), approximately 75% of nearly 25,000 workplace assaults reported annually occurred in health care and social service settings. Further, workers in healthcare settings are four times more likely to be victimized than workers in the private sector. Active shooters are an increasing threat to healthcare workers, and given that patients may not be able to evacuate, planning for an attack presents extra challenges.

According to the National Safety Council, there are a variety of behavioral warning signs that employers should take note of. These signs include excessive alcohol/drug use, unexplained absenteeism, depression, resistance to change, violation of company policies, emotional responses to criticism, and paranoia. If employers notice these types of behaviors in employees, it’s important to carefully address them and have a plan in place to deal with issues before they become crises. Consider offering paid-time off, counseling services, or other mental health resources as a company-wide policy.

Additionally, the ALICE Training Institute provides guidelines for employers aiming to determine policy and conflict resolution procedures before any of the causes of workplace violence can take root. ALICE (which stands for Alert, Lockdown, Inform, Counter, Evacuate) provides the following list:

1. Create a harassment prevention policy which includes input from all levels and distribute it widely.
2. Diffuse tensions between co-workers by holding regular meetings and encouraging open communication.
3. Prepare an Emergency Response Plan and provide training for staff based on that plan.
4. Establish a “zero tolerance” code of conduct.
5. Teach employees to value diversity.
6. Resolve conflicts between employees quickly.
7. Create an expectation of mutual respect by assigning all employees meaningful work.
8. Define unacceptable acts (of physical and verbal abuse) under your code of conduct and the consequences of violating the code.
9. Ensure the confidentiality of all code of conduct reports.
10. Minimize the number of assets available at the workplace location to prevent robbery and /or use electronic payment systems.

Finally, it may be wise to consider an active threat solutions insurance policy. In addition to liability coverage, these policies provide remote or on-site training, immediate hotline assistance, and additional, qualified personnel assistance if a violence incident were to occur.

Related: Domestic violence in the workplace: Minimizing the risk

2. Work to lower your experience modifier through safety and planning

An experience modifier, or e-mod, is a formula and term used in insurance underwriting that provides a gauge of how risky a particular business is to cover. Essentially, it acts as a numeric representation of a business’ claims history and safety record as compared to other businesses in the same industry, within the same state. E-mod is calculated on a basic level by dividing actual claims by expected claims. An insurance underwriter will take into account data reported to the National Council on Compensation Insurance (NCCI).

An e-mod greater than 1 indicates that a business is riskier than normal, where 1 is equivalent to no more or no less risky than normal. Businesses should always aim to keep their e-mod below 1. Why does this matter? Because insurance is, of course, priced based on risk. If a business’ annual frequency (number) of claims and severity (costliness) of claims is consistently high or is rising, that business’ workers’ compensation premium will also rise.

Instituting proactive risk management practices like holding regular safety meetings and having a workplace violence prevention program in place can greatly lower the risk employees face at work, while policies like return-to-work programs, light/modified duty, and early accident reporting can lower claim costs. Such efforts can in turn lower e-mod and annual premium costs. Lower premiums mean more capital available to reinvest in the business — or in additional safety training and workplace violence prevention efforts.

Related: Workplace violence assessment and response

3. Employee retention — a major key

Finding the right hire for a particular facility or position is already a significant task for managers in a busy healthcare setting. Once the perfect employee is found, administrators should do everything they can to retain that talent. One way to do this is by building and maintaining a safety culture that makes employees feel valued and secure in the workplace.

If and when an accident does occur, return-to-work programs and light-duty options emphasize the healing power of work and help to make sure that the employee feels valued and taken care of. Such programs also reduce claim costs because the employee is still being paid through the employer rather than through an indemnity check from the workers’ comp insurer. Remember: lower claim costs contribute to a lower e-mod and lower premium in the future.

Investing in workers’ comp diligence through safety and management of claims may seem like a large upfront cost with no reward, but as the above examples indicate, claims are much more than a nuisance — they can make a big difference in your bottom line.

For more coverage like this, explore Workers’ comp Instant Insights page. 

Eric Bossard is the CEO of Commonwealth Insurance Advantage, an insurance and risk management provider based in the Greater Philadelphia Area. He can be reached at ebossard@commonwealthinsure.com.