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1 Lynn R. Talford Marsh Risk Consulting Benchmarking Show Me the Metrics Money! July 2005.

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Presentation on theme: "1 Lynn R. Talford Marsh Risk Consulting Benchmarking Show Me the Metrics Money! July 2005."— Presentation transcript:

1 1 Lynn R. Talford Marsh Risk Consulting Benchmarking Show Me the Metrics Money! July 2005

2 2 Benchmarking Characteristics of Companies: Those That Benchmark  Not Afraid to Admit They can Improve  Competitive  Proactive  Fear of Being “Second”  Leader - Search for “Best Practices”  Continuous Improvement Philosophy  Performance Based Compensation And Those That Don’t  Lead by perception  Fear of change  Perceive lack of competition  Lack of clear goals, expectations  Reactive  Complacent, comfortable with status quo Change the thought process: Not better or worse …..but rather Is there money to save?

3 3 Levels of Benchmarking Best Practices V Process Analysis A Competitor Analysis L Trend Analysis U E Informational Analysis C O M P L E X I T Y

4 4 Informational Analysis  High Level  Quick Pulse  Data Dump  Carrier data  Single point in time  Frequency / Severity, Stratifications, Large Losses,  Report Lag (accident to supervisor, supervisor to carrier)  Percent indemnity claims (avg: pd, inc, duration, lag)  Percent of open claims (all, indemnity, by jurisdiction, categorize)  Claim duration (accident to close, to assignment, managed care, rtw)  Medical/Indemnity/Expense trends  Repeat claimants  Cost drivers - what body parts, causes, natures Trend Analysis  Multiple points in time  Equalize (same time, valuations)  Add base lines (fte, payroll, rev, sales)  Dissect claim components  Geographic drill down (region, state, location) I d e n t i f y O p p o r t u n i t y

5 5 Competitive Analysis  Add new perspective  Is it us or an industry trend? Jurisdictional issue?  Is there money to save?  Where? How? Avoid Inappropriate Peers / Correlations :  Compare like industries / processes  Similar activities  Consistent Time periods  Related Jurisdictions  How Do You Report Claims?  How Do You Rehabilitate Workers?  How Do You Implement Integrated Disability Management?  How Do You Park Your Car? Process Analysis After Change Before Change

6 6  What goes into Safety Manuals/Training Programs?  When does 1-800 Claim Reporting work?  How do you implement a Return-To-Work Program?  What reports provide a basis for measuring effectiveness?  What is the safest way to leave a parking lot? Best Practices Industry Avg Client Avg Measuring Best Practices  Your cost per claim is $8,000.  How does that compare to average?  Compare to Best of class?  What is your savings potential?  Is it worth pursuing?  Break down by job, state – find ROI potential

7 7 Benchmarking Pitfalls  Provide Clarity (definitions (indemnity) venti, grande?, subjects, etc) Minority Business Owners Recently Complained that They Received Only 6% of the contracts for the $600 million Stadium Project. [ 6% of All Contracts? 6% of What They Bid? Or 6% of $600 million? What percent of contractors were minority?, What is a minority contractor?]  Insufficient sample sizes  One-time comparisons  Irrelevant comparisons  Forcing results About 6 Billion People Live on the Earth World Population Growth is Under Control, at Only 1% per Year We Must Do Something! Each Year the World Has 60,000,000 More People on it  Keep a constant ground floor (baseline, time moves to right)  Unknown data / unreliable data  Numbers are only one “dimension ”

8 8 CONSULTATIVE Benchmarking  RANK - WC Program to Industry Peers How are my WC costs compared to Industry Peers?  QUANTIFY: Place Dollar Value to Rank: Industry Position = Financial Advantage / Disadvantage  IDENTIFY RETURN ON INVESTMENT: Savings Potential Where? Identify location and/or job classes  IDENTIFY STRENGTHS & WEAKNESSES How do I compare to my peers? What programs should be better? Where can I make improvements? What are my loss causes?  STRATEGY – CONTINUOUS IMPROVEMENT Develop cost savings strategy and next steps for improvement Putting it together… tell a story.


10 10 Wellness Programs A Critical Step in Managing Workplace Health Marie Potty RN Marsh Risk Consulting

11 11 Wellness Objectives, Impact and Value*  Major Employer Wellness Objectives: Attempt to control rising healthcare costs Assist senior management in addressing employee health issues  Employer / Employee Wellness Impact: Improve overall employee health and productivity Reduce incidence of injury / illness and fatalities Reduce sick days and unscheduled absences  Wellness Priorities and Value Proposition: Employers offering employee incentives to participate in wellness programs for sustained, positive outcomes Employee health is crucial to the overall business success ROI: Employer uncertainty of continued employee success * American Association of Occupational Health Nurses AAOHN News (Vol., 25 – June 2005)

12 12 Absence and Health Care Costs Comparable and Related Direct absence costs are 14.2% of payroll 2.9%4.0%7.3% Unscheduled Absence (Incidental Absence/Sick Days, STD, SC, WC, LTD) Fixed Holidays Vacation/PTO/Personal Days/ Floating Holidays Cost for employees’ coverage is typically 50-60% of the total Active employee health plan costs: 14.8% of payroll* * Active employee health care costs are for 2003 for employers with 500+ employees, from the 2004 Mercer National Survey of Employer-Sponsored Health Plans Equivalent to: 26.6 scheduled days off +10.4 unscheduled days off per year

13 13 Employer Structured Lifestyle Risk Modification Program Options 0%10%20%30%40%50% Exercise Classes Smoking Cessation Program Nutritional Counseling Stress Reduction Classes 25%16% 29%9% 21%18% 9%16% Currently offer to all/most employees Piloting

14 14 Periodic Employee Medical Screening Percent of Participants Currently Have at Some or Most LocationsConsidering 0%10%20%30%40%50%60% Blood Pressure Cholesterol General Health Risk Appraisal Diabetes 50% 18% 44%21% 34%24% 25%29% 70%

15 15 Employee Disease Management Percent of Participants Currently offer to all/most employees Piloting 0%10%20%30%40%50% Diabetes Cardiovascular Disease Hypertension Low Back Pain 28% 6% 21%27% 18% 4% 13% Assess employee health risk demographics Employee validation of risk / Wellness Programs Pilot targeted Wellness Program Measure ROI

16 16 85% members = 15% cost 15% members = 85% cost Disability Management Prevention Screenings Plan Incentives Examples:  Ergonomics  Exercise classes  Smoking cessation  Stress reduction Well Life Style Modification Health risk assessment Targeted risk reduction programs Risk modeling Examples:  Blood Pressure  Cholesterol  Diabetes At Risk Periodic Screening Nurse advice line Web tools Consumer driven health plans Examples:  Out-patient visits  Benefit Plan Site / Web MD  Health Savings Accounts Acute Illness/ Discretionary Care Doctor Visits Emergency Visits Incentive design Self management training Examples:  Diabetes  Cardiovascular disease Chronic Illness Disease Management Case management Decision support Predictive modeling Example:  ABI – Acquired Brain Injury Catastrophic Life Care Planning 2005 Total Health Continuum An Employers Guide


18 18 POST INJURY MANAGEMENT What You Need To Know About Modified / Transitional Work Programs Rick Poirier, M. A. R.C Knox & Company Risk Management Services Division

19 19 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Overview Understand our goals Establish a collective approach Set benchmarks Evaluate program on a periodic basis Educate workforce, medical provider(s), and insurance company Take advantage of managed care

20 20 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Benefits Gives the employee an opportunity to return as soon as medically possible Provides the best medical care in a timely fashion Emphasis is on abilities not disabilities The injured worker benefits and so does the employer

21 21 MORE BENEFITS  Contributions to the Workforce  Reduces Impact of Claims Reserves  Reduces Fraud  Contributes to Controlling Rising Insurance Costs  Other Benefits

22 22 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Preliminary Steps Educate the workforce Establish good communications with medical provider Strengthen job descriptions Develop job bank Try it

23 23 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Employee in a temporary position Communications with “Gatekeeper” Follow up with medical provider Monitor performance / evaluate medical progress & abilities Communications with insurance company claim / rehab representative Return to normal job

24 24 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Manager’s Responsibilities Investigate the incident / notify HR, Payroll, Ins. Co., etc. Fax job description to medical provider Ensure that medical treatment was provided in a timely fashion Determine ability level Initiate Temporary Modified Duty Program

25 25 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Manager’s Responsibilities Notify claim representative of employee’s temporary assignment Ensure that employee works within their medical restrictions Determine if program should be extended Return employee to their original position, if possible

26 26 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Gatekeeper’s Responsibilities Educate management / workforce Develop bank of temporary positions Ensure job descriptions are task oriented and meet ADA guidelines When informed of an injury requiring lost time, send appropriate letters to medical provider / employee Meet with employee on first day

27 27 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Gatekeeper’s Responsibilities (cont.) Meet with employee on a weekly basis Monitor performance and medical progress If no temporary position available, determine if they can be placed in a non- profit organization

28 28 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Employee’s Responsibilities Report all on the job accidents to their manager at the time of injury Obtain medical assistance when necessary Respond to letters or calls from employer Return to work based on temporary assignment and medical abilities

29 29 HOW TO IMPLEMENT AN EFFECTIVE POST INJURY MANAGEMENT PROGRAM  Employee’s Responsibilities Stay within level of medical restrictions Meet with “Gate Keeper” when requested Get well

30 30 SOME SUGGESTIONS  Have a written policy  Make sure everyone understands  Invite medical providers to your company  What the employee can do  Make sure everyone knows that modified duty is temporary  Monitor performance / medical progress  Be creative


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