1. Zero Accident Culture Workers’ Compensation Overview for: Hemaco Management Wednesday September 8, 2004

2. Today’s Agenda Workers’ Compensation Overview Hemaco’s Historical Losses Zero Accident Culture Loss Prevention Claims Management Manager’s Roles & Responsibilities The Plan

3. Cost of Workers’ Compensation Cost = [Payroll x MD Rate] x Experience Modifier Ex Mod = Hemaco’s Losses Avg. Industry Losses 3-Year Average Losses for last 4 years, excluding most recent year 2004 Ex Mod 2000-012001-022002-032003-04 What is the one factor we can control to reduce cost?

4. Cost of Workers’ Compensation Cost = [Payroll x MD Rate] x Experience Modifier Payroll x MD Rate = $75,629 Ex Mod = Hemaco Losses = $108,149 = 1.43 Avg. Ind. Losses $75,629 Cost = $75,629 Cost w/multiplier = $132,684 That’s an increase of $57,055!! Manual Premium from the policy Mod from NJ WC Exper. Rating Data sheet Add column I and J totals from last page of Rating Data Co. losses/Mod NOTE! These comments will print unless you go to “View” and click on “Comments” to hide them before printing

5. Historical Losses # of Claims ?

7. CLAIM DISTRIBUTION

8. Zero Accident Culture A value and belief system within the total organization that considers all accidents to be: 100% Predictable 100% Preventable 100% Unacceptable

9. Controlling Costs There are 2 ways to control losses: 1. Prevent injuries (Zero Accident Culture) 2. Control Claims Costs (IWIF-Integrated Team Approach)

10. Injury Prevention Employee Training: –Employee Responsibilities & Safe Behavior Training –New (and transferred) Employee Orientation –Safety Meetings Hazard Elimination Injury Review Process Zero Accident Culture Development

11. Hemaco Four Loss Sources Frequency (2002-Present) Slips, Trips, Falls: Heaved rugs, mats, ice, rushing Struck By’s: Standing up, bending down, opening/closing, falling objects Cuts & Punctures: Box cutters, sharps in disposal cans, door frames Strains: pulling beds, laundry red: severity source

12. Claims Cost Control Managing Medical Treatment - Use of Preferred Provider Network Transitional Return to Work Program IWIF Claims Integrated Team Approach

13. Accidents reported to IWIF within 24 hours Manage treatment and costs from the beginning Effective accident investigation- cause not fault Employee benefits not delayed

14. Transitional Return to Work Controls costs reduce severity less impact on Mod Therapeutic for injured worker Employee receives full wages Productive work vs. employee staying at home Difficult to get workers back once at home

15. Supervisors Are the “Key” to an Effective Safety Program Set the “Safety Example” Communicate and plan with your workers Recognize and reinforce safe acts and behavior Identify and correct unsafe acts and conditions

16. Supervisor Claims Management Treat all claims as legitimate Report all claims immediately Preserve the scene (subrogation) Contact employee regularly Provide “bridge” jobs for TRTW Investigate and correct causes Zero Accident Culture

17. Thank you for your time.