Elkay Manufacturing: Building a Better Workers’ Comp Program With a Centralized Team

CENTRALIZATION IS KEY TO SUCCESS

Seven years ago, the company centralized its Workers' Comp and Environmental Health & Safety (EHS) functions in its Illinois headquarters under the watch of the newly formed Treasury & Risk Management department, which consists of Director Frank Hashimoto; Sfurm; Leslie Sherwood, treasury & risk management analyst; and Rich Lisac, environmental specialist. Previously, the Workers' Comp and EHS functions and responsibilities, including all claims-management activity, had been handled independently within each plant location.

"Now when an injury is reported, I'm notified within 24 hours, and there's quicker involvement" in not only handling the claim but investigating it as well, Sfurm says, adding that this approach has been essential to program improvements.

And those improvements have been substantial: Since this centralization effort was initiated, Elkay's Workers' Comp exposures have been reduced from $5 million to $1.5 million, and its total incident rate reduced from 7.8 in 2009 to 3.1 in 2011.

"When the [treasury & risk management] department was originally formed, we had several locations that had issues with the frequency and severity of claims," Sfurm recalls.

To address these issues, teams were formed at each plant location, consisting of supervisors, human-resources personnel, the plant manager and select other employees. Surveys were conducted that all plant personnel completed, and new policies and processes were developed and rolled out to all facilities.

She remembers one seemingly simple yet powerful example of how a single change in policy made a major difference.

"When the department originated, safety shoes were not mandatory in our plant locations," she says. Once the wearing of safety shoes was required at all of its facilities, the dollar loss for foot and toe injuries fell from an average of $297,917 per year to $75,575.

ACCIDENT INVESTIGATIONS YIELD BEST PRACTICES IN CLAIMS

A key policy in Elkay's Workers' Comp program is that every single reported injury, however small, is investigated to determine the cause and to help avoid future similar incidents.

"We mandate that all injuries—whether first-aid, medical-only or lost-time ones—be investigated [by the plant] and that the plant complete a thorough root-cause analysis," says Sfurm.

The Ishikawa diagram (or "fishbone" diagram, a causal formula used to identify the factors that produce a particular outcome) is utilized to dig deep into the claim-investigation process and determine all possible causes.

Once the cause analysis is completed, the onus is on the plant to review and rectify the issues identified. When an issue is reported at one of the plants, with or without an injury or near miss associated with it, all of Elkay's facilities are notified of the problem (and potential corrective action) and are tasked to identify whether their facility may have the same issue.

Employees must report any lost time on the job (due to even the smallest injury) within 24 hours; medical-only claims within three days; and incident-only claims within seven days. Those reports are then immediately sent to Elkay's third-party administrator, Avizent, for review, and the internal root-cause analysis and accident-investigation process begins.

If an injury has resulted in lost-time days, the plant has five calendar days to complete its investigation and report its findings and action plans back to the risk-management and HR departments, as well as the vice president of operations. Lag-time reports are reviewed on a quarterly basis to ensure that these timelines are being met; if there are injuries that have not been reported in a timely matter, follow-up occurs with that plant.

"Our process with [Avizent] is that within 24 hours of receipt of a claim, whether incident-only, medical-only or lost-time/indemnity, the adjuster will make contact with our location plant's HR," Sfurm notes. "If it is an indemnity claim, they also must make contact with the employee and physician during this period of time."

When an injury results in temporary total-disability benefits, Avizent, plant HR and Sfurm determine whether that employee will need to be assigned a nurse case manager. If a person is hospitalized, receiving at-home care or off the job for more than two weeks, a nurse case manager is generally assigned on a limited basis.

Any claim that is unwitnessed or reported late undergoes a thorough investigation, says Sfurm. As part of the TPA's initial assessment, this includes a recorded statement from the employee and potential witnesses. If facts of the case cannot be documented, additional steps are taken, including re-enactment of the alleged incident.

"We also have the adjusting company run all of our reported claims, no matter the type, through the Central Index Bureau (a division of the Insurance Services Office) for documentation on prior claims," she notes. "If we find during an investigation that a person may have been injured elsewhere but we are unable to document this, a medical canvas is undertaken for additional supporting documentation."

Claim-review meetings are scheduled through Sfurm's department on an as-needed basis but minimally on a quarterly basis. During these reviews all open files are discussed, whether they are medical-only or lost-time/indemnity files. Depending on the indemnity count, legal counsel is present for the review to discuss files or to give opinions on other matters.

On a monthly basis a detailed claim report is filed. This report is reviewed to ensure accuracy of reserves and plan-of-action development.

RETURN-TO-WORK ROUTE

Elkay's return-to-work process is one in which the physician's assessment of any injured worker is only the first step.

"We do not allow a physician to dictate return to work to a position," says Sfurm. "The physicians are to give restrictions, and the employee returns to the supervisor or HR with those restrictions." At that time it is determined whether an employee is able to return to his/her position and whether restrictions are applicable based on the job.

"In some situations, the restrictions may not affect the person's ability to perform their regular job," she explains. In other cases, the employee's tasks are modified. In certain situations, if the restrictions are severe and the job cannot be performed, other tasks are given to the employee to perform in a different part of the plant. The idea is to get employees back to work, even if it's temporarily in a separate capacity.

Elkay maintains relationships with established physicians and clinics in its various markets to care for injured employees; those physicians visit the plant at least once a year.

If an employee is treating with their own physician, "we rely on [our TPA] to work with the employee's doctor and our HR department to facilitate gainful return to work," Sfurm adds.

FULL SUPPORT FROM THE C-SUITE

As any risk manager will attest, a company's risk-management department can be only as effective as top management allows it to be—and Sfurm says the risk team enjoys the full support of Elkay's top brass.

"You've got to have the support of senior leadership," she says, adding that there's a lot of ongoing discussion between the department and the C-suite about continued efforts that need to be made. "Managing a program does not happen overnight—so to have support from senior management to help drive the message is more important than anything else."

Sfurm's group has regular meetings with the vice president of operations to discuss the needs of the plants and the needs of risk management, she adds; her team also meets with the CFO, comptroller, president & COO, and senior VP of HR to discuss projects, upcoming events, positives and complaints.

"We also have a really good relationship with HR and plant leadership to help drive the programs at the facility level," says Sfurm. "Our plant employees are gold. They want to do a good job. We are just showing them how to do it safely. It's their willingness that gives us our positive outcome."