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How to Cut Workers' Comp Costs: 115 Proven Ways.

ARE YOUR WORKERS' compensation costs bleeding you dry? If the answer is "yes," then prepare for a transfusion. William Rogers' How to Cut Workers' Comp Costs: 115 Proven Ways is a handy looseleaf binder full of 115 ways to reduce the number of worker injuries and better manage claims. Long on practical example and short on theory, the work encourages a hands-on approach to improving safety and cutting costs. The author, who is a risk management consultant for small and midsize businesses, finds these companies often have no full-time risk manager and little clout with insurers. He therefore urges managers to take an active role in averting a workers' compensation nightmare.

The first two sections of the book, which deal respectively with reducing employee injuries and managing claims, are geared toward those risk managers who may be less familiar with workers' compensation issues. The final section of the book is the one that may prove to be the most interesting to risk managers who wish to hone a workers' compensation cost reduction strategy already in place.

Section I lays out the foundation of the book. Of particular interest to risk managers are ways to establish cost-effective programs to reduce the number of employee injuries, The author advocates soliciting management support, setting a positive example and rewarding employees who exhibit safe behavior. Workers can be part of the solution, Mr. Rogers argues, not part of the problem. Safety training, safety teams and safety contests can involve employees in the overall process. There must also be systems in place to evaluate any workers' compensation cost reduction effort that is put into practice. Follow-up is crucial: Why implement a system and never check its progress?

Claim management is the subject of Section II, a howto look at managing medical costs and reducing indemnity costs. Risk managers should take action themselves rather than passively relying on the insurance company to manage claims. Be sure to encourage employees to report claims promptly and take positive action when a claim occurs. The author cautions not to accuse workers of fraudulent behavior. An offensive attitude can backfire and may inspire workers to try to cheat the company. Risk managers should audit medical bills for excessive charges, use independent medical exams to reduce costs and use a good occupational medicine clinic. They must also deal with employees' fears of returning to work and implement modified work programs. Mr. Rogers encourages managers to understand indemnity payments and the way waiting and retroactive periods work.

The final section of the book is what separates the work from run-of-the-mill workers' compensation studies. Devoted to insurance and financing strategies, this third section contains advice for managers who may not be insurance experts but who wish to actively examine their workers' compensation coverage. The author explains such terms as experience modification and retrospective and dividend plans, as well as how to evaluate an insurance program to avoid being victimized by insurance policy red herrings. He advocates making sure present systems are broad enough to cover potential exposures and ensuring that payroll is assigned to applicable classifications with the lowest premium rates. Managers should evaluate the claim service provided by the insurance company rather than just accepting what is offered. Above all, managers should not be afraid to invite insurance quotations and obtain a more favorable program at renewal. The message throughout is action: making the effort to understand even a little about workers' compensation insurance can produce big results.

In keeping with the book's theme of getting involved and staying involved, the appendix contains blank forms that can be copied by the reader. As Mr. Rogers concludes: "This book isn't intended to look good sitting on a bookshelf; it is meant to be reviewed regularly to make sure your program to cut workers' compensation costs is on track."
COPYRIGHT 1992 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Kehl, Joyce L.
Publication:Risk Management
Article Type:Book Review
Date:Sep 1, 1992
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