Lost time is a term used by OSHA to describe the number days an injured employee is away from work, but lost money is what OSHA should really call it.  Each and every day an employee is away from work because of an injury or illness leads to greater losses to the employer and employee. 

Costs to the employer originate from reimbursing the employees for lost work time, medical expenses, making up for lost productivity, training new workers, increase in insurance workers’ compensation premiums, and sometimes litigation.  On top of being extremely costly for any business, these employee injury and illness scenarios usually include physical and emotional pain for both the employee and employer. But, business owners do have an ability to manage these open-ended costs, as well as the employees’ moral and desire to get well.

The first order of business – be prepared and prevent what is within your control.   Workers’ compensation claims are frustrating and difficult to control in exposure and cost once they occur.   Returning a worker back to full duty is the number one way to keep a claim at bay and eliminate the associated costs.  Having a robust Return to Work (RTW) program that is centered on a plan Zero Days Off objective will focus both you and your employees on a stronger safety culture, and help eliminate uncontrollable claim costs.

Many companies believe they have a solid RTW program. In reality, most programs are not dynamic enough or detailed enough to truly impact the total cost of workers’ compensation claims.   This article is intended to provide you with a better understanding of how a RTW program can be set up, how to engage your employees’, how to assess and improve your current culture, and formalize a program that includes everyone.  The plan should begin with a focus of lowering claims, eliminating needless time away from work, incorporating an over-all wellness attitude within your workplace, and creating a more positive culture that benefits everyone involved.  This article will also demonstrate the benefits to implementing a RTW program with some statistics that shows the financial impact of a successful RTW program.

Basics

Plain and simple, RTW programs are created to get injured employees back to their full duty jobs as soon as possible.  Return to work might also be known as Modified Duty, Light Duty, Limited Duty, Alternate Duty, Restricted Duty, or Transitional Work.  The common thread in all these titles is accommodation of an injured workers’ limitation by finding a way to let them provide meaningful contributions to your business while they recover.  An ideal RTW Program involves building up your data base of job descriptions to include as much detail on the required tasks and physical demands.  An all-inclusive approach will allow a generous pool of options for getting an injured employee back to work.  One of the chief accommodations must include the offer of sedentary work options!  As a basic, treat all employees in a similar manner before an incident happens, after an accident happens, and consider all open options in the event they are injured.

Assessing Your Culture

The success of any RTW program will always vary based on the employer’s industry type and size of employee pool. More import, building a positive safety culture focused on elimination of risk and injury will also build a culture of trust and positive participation.  A sustainable business culture should focus on examining both short and long term needs of the employee that include returning the employee to work as quickly as possible, and  helping  the employee feel productive in the long term.  Many companies will place tremendous emphasis on getting their injured or ill employee back to work, but this does not mean they are doing it the most positive and productive way.  Improvements to medical treatment plans, alterative work options, and utilizing the restricted worker in a positive manner that focuses on inclusion will impact all aspects of the work injury challenges.

If your company does not have written policies or procedures to properly guide employees into an early return to work, you need to reassess the program. In addition, today’s work environment focuses on wellness and injury elimination.  The cost savings are clear, but employers also gain in employee retention, multiple training exercises, as well as lowered insurance premiums.  Insurance costs, for both worker’s compensation and employee benefits are two of your largest cost drivers in your pool of financial risk – why not take control of those costs and reap the rewards.

Formalization

Formalized RTW programs require written plans, policies, as well as continual improvement. The process should also include education on the RTW policy and ongoing training.  The goals of these programs will speed up the individual’s recovery and return them to productivity by instructing employees to follow procedures regarding referrals, counseling, coordination of medical care, or modifying the work space or duties.  Zero days out of work should be the goal for each and every injury!  We strongly recommend that you coordinate the RTW program with your local clinics. Providing clinics with identification of daily job tasks and physical requirements for each job will give clinics an ability to understand that you have work available for injured employees.  Written job descriptions will take away any doubt the doctor might have about whether your company can accommodate injury restrictions.  The job descriptions will provide options to the physicians, and give them examples of the physical labor requirements of each position available. Armed with that information, your employee will be placed into the transitional duty plan and return them to work while they fully recover.

Statistics of Savings with Insurance

By implementing a formal RTW program you will allow for substantial cost savings with your insurance.  If your company has a self-insured retention and your employees are returned to work on a “Zero Lost Days” basis, you can avoid out-of-pocket indemnity, medical and expense costs.  This is also true with fully insured programs where having a formal RTW program helps provide the opportunity to promote your RTW to insurance companies, making your company more attractive in terms of risk. It will also keep your insurance Modification lower and enable you to bid on more jobs.

Here is a real life example of how much those numbers can potentially play out: A typical lost time claim for a “Comminuted Fracture of Shaft of Tibia” can cost $84,593 (includes medical expenses and administrative costs).  A formal RTW program that exercises best practices could bring that cost down to only $28,281.

A typical medical only claim for a “Comminuted Fracture of Shaft of Tibia” can cost, for example, $47,487 (includes medical, expenses and administrative costs).  A formal RTW program that exercises best practices could bring that cost down to only $15,545.

More Key Statistics

To get the big picture, according to the Bureau of Labor Statistics, there were nearly 3 million private industry non-fatal workplace injuries in 2015 – resulting in the equivalent of 3.0 cases for every 100 full-time-equivalent employees, not including non-workplace related injuries.  Over half of the nearly 3 million private industry injury and illness cases reported in 2015 involved days away from work, job transfer, or restriction (DART cases), occurring at a rate of 1.6 cases per 100 full-time workers.  These statistics directly impact the employer, the employee, and the economy as a whole.  We have a solution. If every single organization implemented a formal RTW program, we would see those numbers go down significantly.  Is it realistic to think every company will institute a RTW program – No. But, if you approach it individually, institute a strong program, and examine the cost savings, you will not be able to argue against it as a credible business plan. RTW programs are one of the leading methods of controlling your insurance costs and financial exposures. Ignoring employee medical accommodations is an additional soft cost that can be blended with a RTW/Wellness initiative that all businesses can leverage as a strategic financial advantage. The stronger the decision to change or improve your business culture, assist your employees in managing their health and well-being is a benefit to everyone. You will see your numbers go down – in costs – and your cash-flow go up. The increased financial benefits will allow you to reinvest in your business.

Consider these statistics: In 2015, there were 1,153,490 days-away-from-work cases in private industry, state government, and local government.  The median days away from work to recuperate—a key measure of severity of injuries and illnesses—was 8 days.

The severity of the injury or illness often correlates to the number of days an employee will be out of work, and the longer the employee is out of work, production, hiring and training replacement, and lost administrative all continue to add up and be major cost drivers–not to mention litigation always being a possibility.  Typically you will see your employee contact their attorney after two weeks of being injured, driving up more costs associated with lawsuits.  Implementing a RTW program will help eliminate these costs and give you plenty of other ways to save money. That’s a win for everyone.

Benefits

Financially speaking, RTW programs can be incredibly valuable to your organization.  RTW programs can produce dramatic claim cost savings by:

• Improving productivity
• Limiting loss wages
• Modification Rating
• Marketability to General Contractors and Owners
• Ultimately reducing the cost of workers’ compensation insurance

From an employment standpoint, avoid other cost driving attributes such as:

• Preventing employee fraud
• Hiring temporary help
• Overtime
• Training
• Interviewing/hiring replacements
• Retraining

A well-executed RTW program will not only produce financial benefits, but it will also help provide benefits to employees such as promoting better morale, faster recovery and reducing financial impact to employees.  Managing your employees’ attitude after an injury is crucial and RTW is the best way to achieve this emotion-driven task.  Consider getting started by first assessing your culture. If your decision is to enhance and strengthen your culture, start to examine ways to improve your current program or begin a fresh one.  Bottom line, control what you can control. It starts with effective process and a decision to improve the company from the top down.

ABOUT THE AUTHOR

Mike McGowan is an Area VP Loss Control Consultant at Arthur J. Gallagher of Chicago. A.J. Gallagher is the broker for CFA’s member-only insurance program for complete and individualized business insurance lines specific to the cast-in-place concrete industry. You can reach Mike at Mike_McGowan@ajg.com.

Sources:

1. Return-to-Work Best Practices

https://www.irmi.com/articles/expert-commentary/return-to-work-best-practices

2. Catalyst RTW

http://www.catalystrtw.com/return-to-work-statistics/

3. Bureau of Labor Statistics

http://www.bls.gov/news.release/osh.nr0.htm

http://www.bls.gov/news.release/pdf/osh2.pdf