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By SUSAN GUREVITZ, a frequent contributor who lives in Philadelphia

When Los Angeles Unified School District employees are off work on workers' comp for more than three weeks, the Department of Integrated Disability Management sends them a get-well card that a return-to-work specialist generates.

The get-well card also gives employees a phone number to call the return-to-work specialist with any questions, offers assistance with understanding the workers' comp program and tells the employees how many sick days they have left. LAUSD wants to remind the employees that their employer still values them, Watkins says.

"We send them through the general mail, and we get responses such as, 'How nice of you to send this.' It aids in a speedy recovery, and sometimes they have questions," says Watkins. A typical concern Watkins has received: "My doctor said he'd release me in two weeks, but I still use a cane (or a walker), so I think I need to get a stool so I can work."

The whole idea is the built-in flexibility of LAUSD's return-to-work program, or what's known as "reasonable accommodation." So for example, the employee can return to a job that used to require standing by using a stool instead. Granted, state and federal laws dictate that employers must accommodate disabled workers, but LAUSD's definition of disability and reasonable accommodation is more expansive than what's required.

For a massive urban school district that hadn't shown much promise a mere five years ago, the Los Angeles Unified School District has taken a big step forward just by sending a simple get-well card to those employees out of work collecting workers' comp benefits. After all, these employees weren't accustomed to being contacted by the LAUSD workers' comp office for any particular reason at all, other than to collect their benefits checks.

But all that changed when Dave Holmquist arrived at LAUSD as the risk manager in 2003. Watkins credits Holmquist as the visionary who surveyed the workers' comp landscape and all its problems.

"The short answer is that when I was recruited, the workers' comp program was just raising costs," recalls Holmquist, who later was named chief risk officer and was promoted to chief operating officer in July 2007. "I had to look at where all the money went," he says. "They did not have any return-to-work or stay-at-work programs. There was no holistic approach."

And the workers' comp system was bleeding money. That's why he and his team had to work quickly to get their workers' comp programs up and running, adopting whatever kinds of creative tools they could think of to remain in contact with their employees who were sitting at home collecting workers' comp benefits when they could easily be back at work with a few tweaks to the employee's job requirement.

That focus on quickly luring an employee back to work has helped LAUSD reduce its average cost per claim nearly in half over the past five years. Costs ran $10,357 in 2003, $8,283 in 2004, $6,377 in 2005, $6,114 in 2006 and $5,887 in 2007.

The strategy helped improve the net asset value of its workers' comp fund from a negative of $164 million in fiscal year 2005-2006 to a positive $72.9 million in just one year. The frequency of workers' comp injury claims have also declined by 9 percent to 4,434 in 2007 from 4,860 in 2003. In fact, all the costs and frequency of LAUSD's workers' comp programs have declined.

At that time the average disability lasted 60 days, and California's workers' comp law allows employees to receive full salaries for 60 days, on top of any additional workers' comp benefits.

What probably makes LAUSD's workers' comp achievements even more impressive is the vastness of its physical operations, the common difficulties associated with urban school districts, the broad variety of "customers" and the sheer number of people covered by its workers' comp programs.

Plus, urban school districts, especially LAUSD, aren't exactly known for their creative workers' comp programs, especially return-to-work programs.

Said one Theodore Roosevelt Workers' Compensation and Disability Management Award judge, "Their problems were so extensive, I was very surprised (at its successful workers' comp program)." That's why LAUSD was selected as the nonprofit winner of the 2008 Theodore Roosevelt Workers' Compensation and Disability Management Award.

For fiscal year 2007-08, the second largest school district in the nation employs nearly 84,000 regular employees, plus 20,000 temporary employees. It educates 680,000 students who speak 90 different languages. The district serves more than 20 different cities, covering 750 square miles, with 1,200 locations, including 900 schools. Fire fighters and water service workers are the only occupational risks the school district doesn't have.

Unlike other smaller urban school districts around the country, LAUSD's employee risks go well beyond a teacher falling down the stairs. Of course, their employees include a range of certified teachers and administrators, classified maintenance, transportation and food service workers, as well as 327 school police officers, (the fifth largest police force in the state) who must confront the same risks that plague city police officers, such as individual or gang-related violence, auto accidents suffered during pursuits and physical injuries arising from student altercations.

Chief Operating Officer Holmquist calls the district "the employer of choice for people with disabilities" because the district employs literally thousands of disabled workers (though due to privacy laws they can't accurately count the disabled).

"We have a huge number of disabled people and a lot of kids with disabilities," says Watkins. "With the adults, (the disabilities) range to those whose disabilities are not visible to those in wheel chairs or who are missing a limb," she says. "For the disabled kids, it's a wonderful example to see the adults working with disabilities."

Watkins has had to keep all the diversity of employees in mind while she's been developing their workers' comp, return-to-work/stay-at-work and reasonable accommodations programs. Some have taken a great deal of research and cooperation with other departments. Many of the reasonable accommodations are simple common sense.

For example, if an office employee has to frequently bend over to place documents in a file cabinet's bottom drawer but has a back injury, a reasonable accommodation to get that employee back to work quickly might be simply giving the employee a stool to sit on to easily reach the bottom file drawer, or to just switch the file drawer to the top of the cabinet.

Also, if a teacher temporarily needs a cane or walker and can't maneuver the stairs to her classroom, say, located on the second or third floor, Watkins might give that disabled teacher a key to the elevator, if available, or even move the entire classroom to the first floor.

"Our stay-at-work and return-to-work programs are designed for injured or ill employees who the doctor has given work restrictions to," says Watkins. "Our job is to help them to return to work as a meaningful and gainful employee."

Called educational strategies, these programs have formed the bedrock for cutting LAUSD's workers' comp costs, and continue to do so. "To make it successful, we communicate to our employees, managers, supervisors and all stakeholders, everyone who's part of the workers' comp progress," says Watkins.

"This initiative started under Dave to preserve assets," says Watkins. He approached the LAUSD's board to pass a resolution to convince the employees to go work every day as long as it's possible to do so. But he ran into resistance. There were 1,300 schools (now there are 1,200), and the administrators were reluctant to take the employees back unless they were 100 percent. Instead, they wanted to cling to their old methods of using substitute teachers, who did not do the job as well.

"During their (teachers) time away from work, we were paying them and we'd have to pay the replacement worker, so we were paying two people," says Watkins. "That's the hidden cost to every absence."

Another way of looking at the issue is what Watkins calls the "opportunity cost."

"If you spend a dollar for A, you can't have (the opportunity) for dollar B."

Plus, there's the productivity loss. As Holmquist points out that, frequently, when a substitute teacher shows up, the students see this as a "play day." "It affects the core function: educating the children," he explains. "Students of frequently absent teachers lag their peers."

A study conducted by Dr. Steven M. Cantrell of the California Program Evaluation and Research Branch of the California Public Employees Relations Board, based on student performance on standardized reading, math and language tests in 2002, showed that students whose regular teacher was absent three or fewer days per year were, on average, three months ahead of students whose regular teacher was absent 13 days or more.

Holmquist says that, due to this major connection, the school district needed to develop a "large scale approach," calling it an "aggressive stay-at-school approach."

It's not unusual for the human resources department to handle workers' comp responsibilities and he applauds their efforts in hiring workers with physical disabilities. But it just made better sense to bring those programs together--early return-to-work, stay-at-work and reasonable accommodation.

"There's a connection between having the teacher in the classroom that's best for the kids," he says, as the study indicated. The judges of the Teddy Awards agreed, with one judge saying he was "very impressed" that LAUSD had made a connection between teacher absenteeism, getting teachers back to work and goals for the students.

At the core of LAUSD's absence management program is accurate tracking of employee absences so the district can analyze patterns of absences, target abuses that need to be fixed and provide better information to both administrators and employees. Holmquist says their total absence-related costs, including paying the salary for the out-of-work person as well as the temporary employee, had been running about $400 million a year. Since then, while the payroll has continued to grow, absence-related costs have been trending downward due to their efforts.

"We're an 85 percent people budget," he says. "When you see those kinds of numbers, historically, you have not done nearly enough and have not drawn the connections enough."

To get a handle on employee attendance, the Integrated Disability Management program first studied employee attendance records by combing the payroll system and separating out the bereavement, jury duty and similar absences. Then they measured the data by dollars, days and hours.

For at least five years starting in fiscal year 1999-2000, the absence rate had steadily increased, peaking at 6 percent in 2003-2004--the first year of the absence management program. By 2006-2007, the absence rate had dropped to 5.3 percent, lower than the original goal of 5.5 percent. They credit this to the return-to-work program. "To us, when an employee's not at work, it's bad business," says Holmquist.

LAUSD's next hurdle: budget cuts. Due to the state's finances, they have to shave $300 million off their $7 billion annual operating budget, meaning they've already had to lay off 500 people and will have to cut services where they can.

(Check out the profiles of the other Teddy Award winners.)

November 1, 2008

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