Costs compensation

Successful managed care systems deliver high-quality healthcare to their members, while maintaining low operating costs through effective application of basic principles of managed care. Three key issues addressed by these managed care principles include provider compensation, cost containment and quality of care. 

Table 9.14 Index of Hourly Compensation Costs for Production Workers in Manufacturing 1974-1994 (United States = 100)...

Source U.S. Bureau of Labor Statistics, Monthly Labor Review, Index of Hourly Compensation Costs of Production, 1975-1994, Vol. 118, No. 10. October 1995, p. 6. 

Then there were Maine s high unemployment taxes and workers compensation costs. Quimby embraced numerous liberal causes and environmentally friendly practices, even when they might hurt shortterm profits, but she had also evolved into a hard-nosed businesswoman. She began to think there might be a better place for Burt s Bees to grow, where the cost of doing business might be lower. 

Quimby contacted the state economic development offices in North Carolina, Florida, and Maine—the first two because of their business-friendly reputation, and the third to be fair, to see if there might be some incentives available to relocate within the state. Both southern states overnighted full packets of material to Quimby, including a CD-ROM from North Carolina that allowed her to calculate her payroll taxes and workers compensation costs, which compared very fa-... 

As reviewed by Karwowski and Marras (1997), work-related musculoskeletal disorders currently account for one-third of aU occupational injuries and illnesses reported to the Bureau of Labor Statistics (BLS) by employers every year. These disorders thus constitute the largest job-related injury and illness problem in the United States today. According to OSHA (1999), in 1997 employers reported a total of 626,000 lost workday disorders to the BLS, and these disorders accounted for 1 of every 3 spent for workers compensation in that year. Employers pay more than 15-20 billion in workers compensation costs for these disorders every year, and other expenses associated with MSDs may increase this total to 45-54 billion a year. 

From the occupational safety and health perspective, the current state of ergonomics knowledge eillows for management of musculoskeletal disorders in order to minimize human suffering, potential for disability, and the related workers compensation costs. Ergonomics can help to ... 

Low-back injury is estimated to cost the U.S. industry tens of biUions annually through compensation claims, lost workdays, reduced productivity, and retraining needs (NIOSH 1997 Cats-Baril and Fry-moyer 1991 Frymoyer et al. 1983). Approximately 33% of aU workers compensation costs are for musculoskeletal disorders. Experience has shown that these injuries can be avoided with the proper ergonomic intervention. Biomechanical models available can be used for job analysis either proactively, during the design phase, or reactively in response to injury incidence, to help identify the injurious situations. The most common types of injury-assessment analyses performed using human models include low-back compression force analysis and strength analysis. 

Musculoskeletal disorders of the upper extremities (such as carpal tunnel syndrome and rotator cuff tendinitis) due to work factors are common and occur in nearly tdl sectors of our economy. More than 2 hUlion in workers compensation costs are spent annually on these work-related problems. Musculoskeletal disorders of the neck and upper extremities due to work factors affect employees in every type of workplace and include such diverse workers as food processors, automobile and electronics assemblers, carpenters, office data-entry workers, grocery store cashiers, and garment workers. The highest rates of these disorders occur in the industries with a substantial amount of repetitive, forceful work. Musculoskeletal disorders affect the soft tissues of the neck, shoulder, elbow, hand, wrist, and fingers. 

Harshbarger, D., Rose, T. (1991). New possibilities in safety performance and the control of workers compensation costs. Journal of Occupational Rehabilitation, 1, 133-143. 

To develop and implement an eye-protection program for all employees in order to reduce the number of incidents of eye injuries and thus reduce the workers compensation cost. 

The company incurred 50 eye injuries in FY 1996 with a workers compensation cost of 200,000. The frequency of eye injuries escalated in FY 1997 to 85 injuries at an estimated cost of 400,000. Additionally, the 6 percent increase in workers compensation benefits passed by the legislature in FY 1997 takes effect in January 1998, and the Occupational Safety and Health Administration regulations require this program. 

Other interactions with the community are also important, such as the relationship between the company and the local medical community. When a company maintains a positive interaction with the medical community, a bond of mutual trust and cooperation may exist. Thus, if the safety and loss prevention professional has a history of working with the medical community, an injured employee s workers compensation costs may be able to be reduced by returning the injured employee to restricted or light duty. If the image and reputation of the company are poor, the medical professionals may want to keep the injured employee away from work for awhile, thus increasing the workers compensation costs, because of the fear of reinjury or failure to follow the proscribed medical restrictions. 

In addition to the motivating factors, safety and health professionals should be aware that the safety and health function, unlike other operational functions, can be influenced by other factors beyond the safety and health professional s control, which can impact the safety and health function and motivation of the workforce. For example, if the operation is anticipating a reduction in the workforce (RIF), this anticipation could result in higher injury rates, increased workers compensation costs, and related factors. The safety and health function also possesses the seasonal or operational ebb and flow of the specific operations. For example, the number of slip-and-fall injuries increases during the months of November through February when snow is on the ground. Safety and health professionals should be keyed in to the unique features of the specific operations and workforce. 

In this book, we estimate how various HRM practices affect occupational safety which HRM practices lower firms workers compensation costs and whether their impact comes through changes in technical... 

This study goes beyond much of the earlier research and— following the approach of Hunt and Habeck (1993) and Hunt et al. (1993)—seeks to estimate the role of HRM practices in the determination of workers compensation costs in a multivariate framework. It uses a workplace safety model that incorporates a wider variety of HRM practices than has been previously employed. In particular, it analyzes the impact of the three important dimensions of HRM practices on safety employee participation in decision making, employee participation in financial returns, and the firm s management safety culture. In addition, this is the first study to consider file effect of each of these factors on claim frequency and claim severity, and to ask whether any observed change is file result of changes in technical efficiency or moral hazard (principal-agent) incentives. 

As workers and managers get more involved with firm safety (and as HRM practices increase within a firm), we generally expect that workers compensation costs will fall. Although participation in employee-owned firms yields inconclusive evidence, prior research on employee participation in decision making—aside from employee owner-... 

The safety effect of employee participation in financial returns is theoretically ambiguous and—except for employee-owned firms— there is little prior research on participation in financial returns. The financial return estimates derived from employee ownership are fraught with problems of interpretation, as discussed above. We focus on variation in the degree of involvement in financial returns, aside from employee ownership. If firm profitability increases by taking more employment risks, then accidents and workers compensation costs could rise. We don t expect, however, liiatthat will happen we expect that more financial participation by employees will lower workers compensation costs through either of the channels outlined in Chapter 1 technical efficiency will increase as workers have an increased incentive to raise output, or moral hazard (principal-agent) outcomes will improve as workers have an increased incentive to lower eosts. 

NOTE Based on 1996 average lost-time workers compensation costs per employee of 175.50 in our sample (12 percent of claims were still open). 

It is worthwhile to reemphasize that our estimate of the reduction in workers compensation costs from engaging in these HRM practices is probably a lower bound estimate of the potential benefits. To the extent that the workplace is safer, either because physical risks have been reduced or because workers are taking more appropriate safety precautions, then some other accident costs are likely to be reduced as well. Uncompensated wage loss and pain and suffering associated with... 

We have given three explanations for our findings of the last two chapters of why HRM practices reduce workers compensation costs ... 

In this study we analyze the impact of various human resource management practices on a firm s workers compensation costs. We partitioned HRM practices into two groups 1) practices that the firm ean imilaterally adopt that do not necessarily involve the workers in either... 

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