Monday, September 24, 2012

Morass - Managing the workers' compensation system


“The workers’ compensation system takes care of our injured employees. We should let the system take care of itself. This is an ethical/moral issue, not a financial one.” 

The other side of this argument is, “There are millions of dollars tied up in this morass. We can treat the injured employees fairly and still manage the system in a fiscally responsible manner.” 

Upon becoming the corporate safety manger for a Fortune 50 consumer foods company with 10,000 production employees across dozens of states and hundreds of annual injuries, the $37 million question/debate described above became my reality. In the end, we used two approaches:

  • Eliminate the injuries from the workplace and thereby eliminate the cost associated with managing our injured employees 
  • Develop a business system approach to fairly manage the cases once they occurred
Our business culture was one of “world-class excellence” in all functions, except safety. So we began the continuous improvement process in safety. This led to a very well defined safety accountability system for hourly and salaried personnel at all levels of our organizations. In this manner, we were able to reduce lost time injuries by more than 80 percent in two years. But what about the thousands of open workers’ compensation cases that existed?  There were some in almost every state in the union “with all the local laws thereto pertaining.” 

We started off by meeting with our nationwide comp carrier in the office closest to our own headquarters. They had more than 100 open cases, some of which were more than six years old. Many of the people in our local facilities had never even met the employees involved with the cases. The local office proceeded to bring out their own personal “nightmare” cases. These were files that were three or four inches thick. Every month they had to review the data and every month they added to the pile, but never got any closer to closure.

So we agreed to begin a continuous improvement team with the compensation carrier. There was so much baggage that had accumulated over the years that it was difficult to get out of the “accuse-denial” mode that had been a part of our dealings for so long. We finally got around to agreeing to “let bygones be bygones” and started focusing on what we could do to solve the mess that we were both in. We began by listing all the complaints that both sides had. Next we combined these into logical categories (or “buckets,” as the accountants would say). We then focused on the low-hanging fruit, the easy ones to solve. We set up a twice monthly meeting routine that focused on legal and ethical closure of all these easy issues. A parallel sub-team began developing a process and associated flow chart to handle all previous cases in a rapid, legal, ethical manner. This is the same approach our continuous improvement teams in the plants used and it was just as effective for the workers’ compensation difficulties once we got out of “shame and blame.”

The process and associated flow chart is shown below.


If you need to break out of the workers’ compensation morass why not consider a similar approach?


The Doc

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