Top Injuries Cost More Than $1 Billion a Week
Employers looking to reduce their overall costs may want to focus on ways to eliminate several basic injury risks. Injuries caused by lifting, pushing, pulling, holding, carrying, or throwing objects cost businesses $15.08 billion annually, according to a new report.
The 12th Liberty Mutual Workplace Safety Index includes the top 10 most expensive workplace injuries and accidents that cause workers to miss at least six days of work. It shows companies are spending a bundle on incidents that may be largely preventable.
“According to the 2016 Liberty Mutual Workplace Safety Index, the most disabling, nonfatal workplace injuries amounted to nearly $62 billion in direct U.S. workers’ compensation costs,” according to the company. “This translates into more than a billion dollars a week spent by businesses on these injuries.”
The latest ranking is remarkably consistent with earlier findings, according to company officials.
The ranking is based on 2013 injury data from the U.S. Bureau of Labor Statistics, the National Academy of Social Insurance, and Liberty Mutual. Researchers analyzed the BLS injury information to identify which events caused workers to miss six days of work or more, then ranked the events based on total workers’ comp costs.
Of the estimated $62 billion in “direct” costs, the top 10 causes accounted for $51 billion — 82.5 percent.
“We rank the top 10 causes of the most serious, nonfatal workplace injuries by their direct costs each year to help companies improve safety, which better protects both employees and the bottom line,” said Debbie Michel, general manager of Liberty Mutual’s National Insurance Casualty operation, in a statement. “Workplace accidents impact employees’ physical, emotional and financial well-being. They also financially burden employers, who pay all of the medical costs related to a workplace injury, together with some portion of an injured employee’s pay.”
Of the estimated $62 billion in “direct” costs, the top 10 causes accounted for $51 billion — 82.5 percent. “Workplace injuries also produce such indirect costs for employers as hiring temporary employees, lost productivity, quality disruptions and damage to a company’s employee engagement and external reputation,” Michel said.
The Costliest Five
The top five injury causes accounted for 64.8 percent of the injury cost burden.
Overexertion involving outside sources topped the list. According to the BLS, this involves “overexertion in lifting, pushing, pulling, turning, throwing and catching.” These injuries accounted for more than one-quarter of the overall injury cost burden.
The BLS reported late last year that musculoskeletal disorders comprised 33 percent of injury/illness cases in 2014, down slightly from the previous year.
Falls on the same level was the second most expensive cause of workplace injuries. The $10.17 billion in direct costs represented 16.4 percent of the total injury burden.
According to a 2004 report from the Washington state Department of Labor and Industries, these injuries involve “a slip, trip, or a fall in which the worker impacts either the surface or an object at the same level or above the surface on which he/she is standing.”
Falls to a lower level was ranked third on the list at a cost of $5.4 billion and 8.7 percent of the overall injury cost.
Being struck by object or equipment was fourth on the Liberty Mutual list. It cost employers $5.31 billion and was 8.6 percent of the overall cost.
Other exertions or bodily reactions was the fifth most expensive category at $4.15 billion and 6.7 percent of the total cost. Included in the category are injuries due to bending, crawling, reaching, twisting, climbing, stepping, kneeling, sitting, standing, or walking, according to Helmsman Management Services.
Compounding ‘Conspiracy’ Case Goes to Court
Six pharmacies that manufacture compound medications are suing Express Scripts, saying the pharmacy benefit manager is conspiring to drive the compounding pharmacies out of business. In a suit filed last month in U.S. district court in St. Louis, the pharmacies seek a jury trial on allegations the PBM is engaging in conduct that violates a portion of the Sherman Act.
The suit alleges Express Scripts and its “co-conspirators” have been engaged in a boycott of compounding pharmacies to drive them out of business.
“They have conspired with each other to boycott compounding pharmacies by eliminating coverage for compounding ingredients, cutting off network access, and through a specific set of other tactics discussed herein, certainly have caused and will continue to cause on an accelerated basis the significant financial decline (if not elimination) of the plaintiffs and other independent compounding pharmacies from the market for prescription drugs covered by plans,” the suit says.
“As a result of the agreement between Express Scripts and its co-conspirators to exclude plaintiffs and other compounding pharmacies from various prescription drug markets, competition in those markets has been reduced, the supply of medically beneficial compounded products has decreased and faces near elimination, and patients are purposefully being driven to inferior products at Express Scripts’ and its co-conspirators’ own pharmacies.”
Not the First Challenge
The suit is the latest action by the compounding industry against the PBM. In a separate suit that accused the company of violating Employment Retirement Income Security Act regulations by denying claims for compound medications, a U.S. appeals court last month upheld a lower court’s ruling that denied the compounding pharmacies’ request for an injunction.
The latest suit claims the PBM “and its co-conspirators shifted the filling of patients’ prescriptions to pharmacies in which the defendants and their co-conspirators hold an economic interest,” according to the suit. “This manner of horizontal group boycott is a well-established naked restraint of trade barred per se under the federal antitrust laws.”
But company officials dispute the allegations. “We believe the lawsuit is without merit, and we plan to defend ourselves vigorously,” the company said in a statement. “We remain committed to help our clients save money by lowering their spend on unnecessary compounds.”
According to the suit, compounded medicines “play a critical role in meeting the patients’ medical needs” and “serve as an alternative to opioid narcotics.” It says “mass-produced, commercially available drugs prescribed for pain management in pill or injectable form may lead to dependency issues. Compounding pharmacies can, instead, create topical creams that target the specific location of injury while minimizing opioid addiction concerns because the medicine does not enter the bloodstream.”
But many stakeholders in the workers’ comp industry believe the compounded medications are widely overused and drive up the costs of pharmaceuticals exponentially. Express Scripts is among several PBMs and other stakeholders that have taken steps to curb the unnecessary use of compounding medications for injured workers.
“This is a desperation move by these entities,” said Joseph Paduda, principal of Health Strategy Associates and president of CompPharma, a consortium of PBMs. “After charging huge prices for compounds with marginal if any benefits, many of these compounders have no business taking Express to task for a perfectly legal and appropriate move to end price gouging.”
The Doctor as Partner
Professionals helping employees return to work after being on disability or a leave of absence face many challenges. After all, there is a personal story behind each case and each case is unique.
In the end, the best outcome is an employee who returns to the job healthy and feeling well taken care of, while at the same time managing the associated claim costs.
Learn what most employers want from their group disability and life benefits program.
While many carriers and claims managers work toward these goals, in the end they often tend to focus on minimizing costs by aggressively managing claims to get the worker back on the job, or they “fast track” claims, approving everything and paying little attention to case management.
Aggressively managed claims can leave many employees and their doctors feeling defensive and ill-at-ease, creating an adversarial relationship that ultimately hinders return to work and results in higher direct and indirect employee benefit costs for the employer. Fast track or non-managed claims can lead to increased durations, costs and workforce productivity issues for employers.
Is it possible to provide a positive employee benefit experience while at the same time effectively managing disability and lowering an employer’s overall benefit costs?
A Unique Approach
Liberty Mutual Insurance’s approach to managing disability and absence management focuses on building consensus among all stakeholders – the disabled employee, treating physician, employer and insurer. And a key component of this process is a large team of consulting physician specialists, leading practitioners from a variety of specialties, highly regarded experts affiliated with leading medical universities across the country.
“About 16 years ago, our national medical director, Dr. Ed Crouch, proposed that if we worked with a core group of external consulting medical specialists – rather than sending most claims for Independent Medical Evaluations – we could do a better job making disabled employees and their attending physicians comfortable, and therefore true partners in producing better disability management outcomes and employee benefit experiences,” said Tim Kastrinelis, senior vice president, Distribution Partnerships at Liberty Mutual Benefits.
“In this way, our consulting physician and the attending physician are able to work with the disability case manager, the employee and the employer to deliver a coordinated, collaborative approach that facilitates a productive lifestyle and return to work.”
The result of Dr. Crouch’s initiative has produced positive results for the clients of Liberty Mutual Insurance. This consensus building approach to managing disability with consulting physician expertise has helped achieve industry leading client retention results over the past decade. In fact, 96 percent of Liberty Mutual’s group disability and group life clients renew their programs.
“By getting all stakeholders on the same page and investing heavily in consulting physician specialists, we have been able to lower claim costs and shortened claim duration for our group disability policyholders. …In the end, it’s a win-win for all.”
–Tim Kastrinelis, Senior Vice President, Distribution Partnerships, Liberty Mutual Benefits
A Collaborative Approach
In the case of complex disability medical health situations, Liberty Mutual’s disability case managers play a vital role in seeking additional expertise—an area where the industry’s standard has been to outsource the claimant for independent medical examinations.
However, Liberty Mutual empowers its disability case managers with the ultimate responsibility for the outcome of each claim. The claimant and the case manager stay together throughout the life of the claim. This relationship is the foundation for a collaborative approach that delivers a better employee benefit experience and enables the claimant to return to work sooner; which more effectively controls total disability claim and absence costs.
Sending a disabled employee with complex medical needs to an external specialist may sound like a cost-effective path, but it often comes at the cost of sacrificing the relationship and trust built between the employee and case manager. The disabled employee must explain their medical history to a new clinician, which he or she is often reluctant to do. The attending physician may be uncooperative as this move can appear to question his or her treatment plan for the employee.
As a result, the entire claims process takes on an adversarial atmosphere, building major roadblocks to the ultimate goal of helping the claimant return to a productive lifestyle.
Liberty Mutual takes a different approach. Nearly 100 physicians representing more than 30 medical specialties are available to consult with its medical and claims professionals, working side-by-side with case managers.
More than 95 percent of these consulting physicians are in active practice, and therefore up-to-date on the latest clinical best practices, treatment guidelines, therapies, medications, and programs. Most of these physicians are affiliated with leading medical universities across the country. “We recruit specialists from around the country, getting the best from such prestigious institutions as Harvard, Yale, and Duke,” said Kastrinelis.
These highly-credentialed physicians help case managers focus on providing the support needed for the disabled employee to successfully return to work as quickly as appropriate. Their collaborative work with the attending physicians provides the behind-the-scenes foundation that leads to a positive claimant experience, results in a better outcome for the claimant, and more effectively reduces total claim costs.
Coordinated Care Plan
When one of these consulting physicians reaches out to an attending physician, there’s an immediate degree of respect and high regard for his or her opinion. This helps pave the way to working together in the best interest of the employee, improving treatment plans and return to work results.
In this process, the claimant is not sent to yet another doctor; instead, the consulting specialist works with the attending physician to help fill in the gaps of knowledge or provide information that only a specialist would have. Although not an opportunity to direct care, these peer-to-peer discussions can help optimize care with the goal of helping the employee return to work.
The attending physician may have no knowledge of the challenges the employee faces in order to return to work. A return to work plan created in concert with the specialist, disability case manager, employer, and attending physician can set expectations and provide the framework for a proactive and effective return to a productive lifestyle.
“Our consulting physicians bring sophisticated medical expertise to the discussion, and help build consensus around a return-to-work plan, helping us more effectively impact a claim’s outcome and costs, and at the same time provide a better claimant experience,” said Kastrinelis.
“We can work more collaboratively with the attending physician, manage expectations, and shepherd the employee through the process much more effectively and in a much more high-touch, caring, and compassionate manner. Overall, we’re able to produce better outcomes as a result of this consensus building approach.”
“Our approach – including the use of consulting medical experts – helped us significantly reduce disability costs over two years for one large health service company,” notes Kastrinelis. “We cut average short-term disability claim durations by 4.2 days in that time, while increasing employee satisfaction with our unique disability management model and collaborative, partnership approach.
How did Liberty Mutual’s unique approach lower claim costs, reduce disability duration and improve the benefit experience for one customer?
“By getting all stakeholders on the same page and investing heavily in consulting physician specialists, we have been able to lower claim costs and shortened claim duration for our group disability policyholders,” said Kastrinelis.
“Plus, we, the employee, and the employer also get the bonus of creating a better employee benefit experience. This model has shaped our disability and absence management program to more aptly reflect our core mission of helping people live safer, more secure lives. In the end, it’s a win-win for all.”
How does Liberty Mutual provide a superior employee benefit experience?
Tim Kastrinelis can be reached at email@example.com. More information on Liberty Mutual’s group disability and absence management offerings can be seen at https://www.libertymutualgroup.com/business-insurance/business-insurance-coverages/employee-benefits.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.