The frequency of employee injuries is trending down but the cost -- or severity of these injuries -- continues to go up, according to the National Council of Compensation Insurance (NCCI) 2008 research brief, Workers' Compensation Claim Frequency Down Again in 2007.

The drop in claims frequency is due in large part to successful primary prevention and safety programs. Employers have embraced and communicated safety initiatives and hired safety professionals to implement them, and these investments have paid off in the form of safer workplaces.

An increase in claims costs while fewer claims are occurring spells trouble in the injury management process. To reduce the number, cost and duration of employee injuries, organizations need to add secondary prevention strategies to their primary prevention programs. Secondary prevention means identifying and reducing cost drivers by improving injury management processes and practices.

Secondary prevention starts in the hiring process. A very positive survey result was that 82.9 percent of the respondents had written job descriptions detailing the physical demands and essential functions of the job. Medical professionals can use these job descriptions to determine the candidate's ability to perform the functions in post-offer/pre-placement medical screenings. These involve taking a medical history and doing a check-up, essentially performing a physical inspection of the employee. Scars may indicate prior surgeries or accidents and the potential of physical limitations. If the medical opinion finds that a candidate cannot perform the essential job functions without reasonable accommodations, employers can and should withdraw the offer. Roughly half of the survey respondents utilized post-offer/pre-placement medical screenings prior to hiring employees. It would be good to see this number increase.

The most alarming finding in the results was that nearly 60 percent of the respondents did not know how their third-party administrators (TPAs) or managed care organizations (MCOs) were compensated for services. They don't know how the physicians' fees were discounted or the structure of the deal with the MCO.

This is critical because some payment methods, such as the seriously flawed percentage-of-savings model, often produce unintended consequences, including over-utilization. I heard of a case in Florida where the managed care company was paid more than the hospital that cared for the injured employee because of a misaligned percentage-of-savings arrangement. The industry is full of systemic problems like this and employers have a right and an obligation to know how physicians, other providers and vendors are being paid.

Requiring deep discounts from physicians is a particularly bad tactic because eventually these doctors may quit treating workers' compensation cases. Patients and payers then lose the benefit of their experience, and medical costs soar. Studies routinely show that physicians who treat a high volume of workers' compensation patients have much better medical and financial outcomes than providers who see a handful of workers' compensation patients a year. The cost of treatment for the higher volume doctors was half that of their colleagues in some cases.

"Getting the right care from the right doctor at the right time" is the mantra of workers' compensation managed care. The "right" doctor is one who treats according to evidence-based guidelines, such as those promulgated by the American College of Occupational and Environmental Medicine (ACOEM). They do not over-prescribe or require more office visits than evidence-based medicine suggests.

The right doctor also treats a large number of occupational health patients and adheres to the return-to-work philosophy. Sadly, a little less than half of the employers surveyed even knew if their physicians were committed to following evidence-based medicine guidelines.

Employers need to focus on controlling the medical side of their workers' compensation costs. Over the past 20 years, the medical component of a workers' compensation claim has grown dramatically, from 46 percent of total benefits for injuries occurring in 1987 to a startling 59 percent today. While slightly more than half of the increased medical costs is due to medical and wage inflation rates, the rest is due to the growth of medical and indemnity utilization. It goes without saying that poor medical care results in higher indemnity rates.

Probably the best result of the survey centered on return-to-work. More than 78 percent of the employers had written and communicated return-to-work programs for injured employees. Fifty-six percent reported that injured employees returned to work within four days.

Studies show people recover better on the job due to the social interactions, sense of productivity and the positive physical effect of just moving around. Employers can bolster return-to-work stats by having a roster of modified duty positions in place before any injury occurs and training supervisors to work closely and supportively with injured employees.

Keeping employees at work or returning them to work as soon as medically advisable saves money on injuries and other employment costs, and could very well save the employee's sanity. If someone stays on the couch for a couple of weeks, muscles begin to atrophy and the person begins to feel depressed, isolated and sick. Once a patient develops the mindset that he will never recover, he usually doesn't.

Statistics show that when employees do not return to work within 12 weeks, there is only a 50-50 chance they will return at all. Employees who are out of work tend to over utilize medical services, and, if seeing the wrong doctor, may become dependent on narcotics. This leads to a downward spiral of reduced income, permanent disability, domestic stress and even abuse and divorce.

To reduce the cost and duration of an injury, sound injury management processes must be imbedded into everyday business life. Guiding an injured employee to the right doctor should be as automatic as breathing. The doctor, empathetic supervisor and transitional duty arrangements should all in place before injuries occur.

We need to remember the ultimate customer: the injured worker. We spend millions of dollars a year on networks, claims management, pharmacy, nurse case management, tests, physical therapy and other treatment, but we rarely bother to ask the claimants how well the process worked. More than half of the employers surveyed said their TPA/MCO did not conduct satisfaction surveys, and another 32 percent were not sure.

In addition, how does an employer know if he is getting a return of investment for his "cost containment" expenses? Employers are pitched a wide array of "cost containment" services that promise to save money and improve injury outcomes.

Are there benchmarks and metrics in place to evaluate whether or not these "cost containment" services are actually decreasing costs? Or, are "cost containment" services actually driving up costs and increasing disability durations? Without the right guideline and benchmarks, employers may actually be rewarding failure instead of success.

This is simple: Ask, identify the problem areas, and address concerns. Primary prevention (safety) programs have done a great job on the first half of the injury management equation, and employers should bask in that victory. Now it is time to solve the second part of the problem by assessing current injury management programs, benchmarking, determining what needs improvement, and implementing a strategic secondary prevention plan.

Susan S. Toussaint is the founder and president of Injury Management Partners and the creator of The Employer's Step Advantage^SM. She may be contacted at susan@injurymanagementpartners.com.

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Secondary Prevention: The Next Frontier in Workers&#039; Compensation Savings

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