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Workers' Compensation & Return to Work Programs: 3 Reasons for Failure and How to Overcome Them (Part 1)

Posted by Gary Jennings on January 25, 2017 at 10:04 AM

Running a successful Return to Work Program (RTW) is hard work.  However, it is critical to reduce workers’ compensation claims costs.  I have worked with public entities with superior RTW programs while simultaneously working with other public entities who said they couldn’t set them up.   These were sometimes public entities with similar operations and employee characteristics with widely varying attitudes and outcomes.

If RTW programs are beneficial, then why aren’t more public entities using them?   There are three primary reasons why many Return to Work programs are not successful, the first of which will be discussed in this blog.  The three reasons are:

  1. The leaders  who can make it happen are not willing to lead,
  2. The program lacks incentives and rewards for the people most responsible for its success, and
  3. It is treated as a “shiny object” program rather than a behavior change.

REASON # 1:  THE LEADERS WHO CAN MAKE IT HAPPEN ARE NOT WILLING TO LEAD

To avoid RTW program failures, leaders must be willing to make the hard decisions and require the hard work needed.

Why wouldn't they make the hard decisions?  Some will say:

  • “We won’t save that much.”
  •  “Our jobs or circumstances are different / too strenuous.”
  • “Our supervisors don’t have time for this.”
  • “The doctors won’t go along with it.”
  • “Human Resources doesn’t think we can do it.”
  • “The unions won’t allow it.”
  •  “We don’t have the people or expertise required.”
  • “Our claims people/TPA should already be doing this.”

While it is safe to say that a Return to Work program cannot eliminate all lost time (LT) claims payments, the Pareto principal, also sometimes referred to as the 80/20 rule, applies in workers’ compensation also.  In my experience, 15 to 25% of the claims will generate 80%, 85%, 90% or even more of the claims costs. The following pie charts display this data:

If you sort your claims by highest total incurred cost, you will probably see that the most costly claims are not those that had the most severe injuries, although these obviously can be very costly, but those in which the employees’ time off from work has continued on and on.   If these costs are allowed to linger, then the current and subsequent budget years will have a growing layer of costs on top of new claims costs that must be budgeted and funded into the future. 

This data will clearly show that you need a RTW program.  When this is understood, senior management must work on understanding and overcoming the typical objections mentioned earlier and utilize creativity to unearth solutions. Senior management, once it is willing to lead, will then realize that many of these objections are simply barriers erected by people who do not understand the importance of addressing this issue or who are reluctant to change the status quo.

We all work hardest on the things that will benefit us, so Part 2 will focus on the benefits to different people and departments that will help drive success.