What's More Important? Reducing Frequency or Severity?
Workers compensation losses are measured by their frequency and severity.
Which is the most important to focus on if you want to reduce workers compensation costs? It may appear that the severity of a large shock loss will impact your costs more than several smaller losses. However, when experience modification factors are calculated, the frequency of smaller claims can have as much influence, if not more, than large losses or a shock loss.
The bottom line? Focus on both. Reduce frequency and control severity. It's all about loss prevention. Claims will occur, though. When they do, you can take steps to control their severity.
Medical Costs
Good communication is key to controlling medical costs.
- Make sure managers know that prompt reporting of all injuries and accidents is mandatory. Research consistently shows that delayed reporting increases medical costs.
- Have a plan for regular communications with the injured worker and your insurance company. Make sure your employee is getting the appropriate care.
- When you talk to your injured employee, make sure you convey your concern for her health. Make her feel like a valued member of the team so she wants to get back to work, rather than malingering.
Early Return to Work
Getting employees back to work reduces indemnity payments and can also have a positive impact on the employee’s overall recovery by improving her morale and self-worth. It also improves the morale of co-workers. Return-to-work programs need structure, including:
- Job descriptions and analyses.
- Return-to-work agreements that state the responsibilities of the employer and the injured worker
- Light duty assignments — tasks that are modifications of the usual job.
- Work schedules — full time or part time.
If you would like more information on how to control post-injury costs, give us a call.
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What's More Important? Reducing Frequency or Severity?
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