Some public entities may not have any or enough loss control (LC) experts to help them eliminate or reduce the losses that arise from unsafe acts and conditions. The public entity leaders may believe that they cannot afford an LC expert, even though the costs of incidents that lead to claims against the public entity are usually many times the cost of an in-house or contract LC expert.
Whether your public entity has an LC expert or not, a claims organization can often provide information to support a safety/loss control program and can point the program in the right direction based on the losses which have already been reported. The claims adjusters, whether from a self-administered program or a program administered by a third party administrator (TPA), can also provide useful information regarding the level of cooperation between department heads and supervisors whose actions have a direct impact on reducing incidents and related costs.
All public entities need to watch their budgets. For example, you could put your resources to work on targeted areas based on data. LC efforts using an untargeted approach may cause you to work with departments which have few losses, leaving inadequate time for those departments needing it the most.
The Pareto Principle, more commonly referred to as the 80/20 rule, states that approximately 20% of events generate 80% of the results. Based on my experience, this principle can also apply to workers’ compensation claims. A public entity may not have the luxury to have an LC expert work with all departments. However, the LC expert can focus on those 20% that contribute 80% (or sometimes much more) of the direct claims costs and other indirect expenses (e.g., substitute workers, overtime pay for those filling in but are less efficient in their work, delayed project completion and related expenses, supervisory time managing the outcome of a loss).
The way to hone in on the departments needing LC attention is to create meaningful summary reports that account for objective data. While data may show that the expected departments fit the 80/20 mold, the data may lead to other departments which need LC expertise. These could be departments which have received little LC support in the past, departments which have had leadership, staffing or procedural changes that have taken the departments in the wrong direction, etc.
You should work with your claims operation, TPA, risk management information system (RMIS) provider, or in-house IT department to create meaningful reports. The information you obtain may not provide a solution, but it should point to the appropriate questions or problems for which solutions must be found.
Reports should be created so that they roll up to the departments. Reports should also gather results for several years so you can easily identify any trends or “hot spots” within a department or with the public entity as a whole. Some of my favorites are:
By department by year
- Number of lost time (LT) claims, number of medical only (MO) claims, number of report only (RO) incidents and total incurred costs for the indemnity, medical, legal, and other expense categories (if legal and other expenses can be accurately segregated).
- Number of LT claims, total incurred cost (indemnity and medical categories only) , litigated cases, legal expenses, the ratio of litigated cases to LT cases and the ratio of legal expenses to total incurred costs
- Claims by highest total incurred cost. This may help to identify where serious injuries occur and which departments disallow light duty work. These factors increase indemnity costs or claims handled by a specific adjuster/claims team that is not sufficiently assertive in its management.
By claims within a department
- Claims by highest total incurred cost and type of injury
- Claims by highest total incurred cost and part of body
- Claims by highest total incurred cost, part of body, and type of injury
- “Frequent flyers”, which are employees with multiple claims over a specified period
- Lag times between the date of injury and the date the claim was reported to the claims organization and total incurred cost (ranked by highest lag time)
These are just a few reports that can help you to hone in on the departments, conditions, and employees to reduce their impact on the entity. This focus may allow you to eliminate some dangerous conditions or reduce the frequency or severity of the resulting injuries.