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By ANGELA CHILDERS, a freelance writer based in Chicago

CHICAGO---Companies are being forced to do more with less in this economy, and there has been increased pressure to effectively manage workers' compensation claims. However, workers' comp directors from several global companies state that they aren't changing their ways much in this economy but rather have been using tried-and-true strategies to lower comp costs.

"The revenues at most companies are down ... that puts pressure on everybody to scrutinize where everything goes and look at how you can save money," Noonan said. "Recessions are associated with downward pressure on claims frequency, but in a continued recession, that pent-up claim frequency may appear. If that decreased frequency starts to go the other way, we have a lot of work to do to control costs."

Wynn said that at Aramark the company's approach has been a "back-to-basics" approach by finding ways to improve efficiency and focus their energy on quelling medical costs. She said taking a consumer approach and demanding transparency has been critical to achieving this goal.

"Encourage everybody to demand transparency in the industry and understand what the component costs are in the program," she said. "It's really up to us to ask questions and have the data presented in a few different ways so we can begin to understand what's driving the cost of the program."

Wynn sought ways to benchmark Aramark's comp costs against other companies and discovered that it wasn't pursuing subrogation actively. Now the company has found savings by carefully reviewing all contracts to remove the waiver of subrogation, to the extent possible, and ensure that indemnification clauses are in its favor.

The company has also scrutinized its medical management to find savings. In 2003, Aramark had 100 percent of its cases processed through telephonic case management (TCM), but after an analysis, the company realized that 45 to 50 percent of the workers had an acute injury that required just one doctor's visit and they were back to work. The company ultimately developed a proprietary predictive modeling system, which acts like a credit score, considering age, gender and state, to determine whether the claim will be going to the TCM or not.

Dulich said investigating incidents has helped Marriott reduce injuries. The company tracks accidents by time of day, day of the week, etc., and places accidents into two categories: behavioral issues and environmental issues. With tight controls on budgets, environmental issues may not be high on a company's agenda, and behavioral issues can be difficult to change.

Wynn said that Aramark had to find ways to change workers' perceptions of normal behaviors after it discovered that employees thought water on the floor in industrial kitchens was normal. The company knew that slips and falls constituted about one-third of its losses, and set to change this perception and hopefully reduce accidents.

"The safety team did a good job of driving the message home that it's really not normal behavior, and it helped us with respect to the elimination of slip, trip and fall claims," Wynn said.

(Click here to read all of our other coverage from the Annual National Workers' Compensation and Disability ConferenceŽ & Expo.)

November 18, 2009

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