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Rousmaniere: Sparking Better Employer Practices

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Public Citizen, a Washington D.C.-based public interest group, issued on May 6 "Aim Higher: New York Should Reform Its Workers' Compensation Laws to Reduce Injuries." The report zeros in on the state's requirement that certain employers implement formal comprehensive safety plans, as set forth in Part 59 of its workers' compensation laws. It recommends that New York's mandate be extended to more employers.

Public Citizen's vision goes beyond New York. It aims to induce every state to introduce or toughen existing safety improvement mandates, generically called “Injury and Illness Prevention Programs” and often referred to as I2P2s. The goal: zero work injuries.

I2P2s are in place in the laws of 34 states. Of these, 15 states mandate certain employers, such as those over an employment threshold and in a hazardous industry, to participate. The U.S. Occupational Safety and Health Administration issued in January 2012 a white paper describing how the programs work and summarizing each one.

I2P2s, sometimes called Safety and Health Programs, call for managers and workers to identify hazards, mitigate them, educate and train workers, and track safety performance. An outside consultant is typically part of the program.

Keith Wrightson, the author of the Public Citizen report, told me that the mandatory nature of the program is important to ensure "worker participation in hazard identification without fear of retaliation. Removing that fear is paramount for safety and health on the job. When you combine that with management participation, the culture of safety and health will drastically change on the job."

Stated another way, workplace safety climate is very important. The Integrated Benefits Institute found through a 2010 survey that only 5% of employees who reported a maximum safety climate score in its survey were expected to have experienced a workplace injury, compared with 33% of the employees who reported the minimum safety climate score.

States can make I2P2 programs very appealing to employers if they made three changes to OSHA's model to more closely match how business executives think and act. This could greatly expand the use of these programs.    

Firstly, states can expand the scope of an I2P2 to include the basics of best practice in injury response. I2P2s today deal exclusively with prevention. But this does not mirror how employers think. Chief executive officers, financial officers and operations officers focus as much on injury response and return-to-work tasks as they do on injury prevention. As designed today, I2P2 advocates are trying to sell shoes in singles, not pairs.

Secondly, states can create incentives for participating employers in the form of insurance premium credits. Massachusetts has had in place for two decades the Qualified Loss Management Program. It is 100% voluntary for employers, and is available in the assigned risk pool. Insurers grant participating employers premium credits which in effect advance the timing of an experience modification. The program is actuarially sound.

Massachusetts handed operational control of the program to the insurance industry-sponsored Rating and Inspection Bureau. New York State created a similar program, so-called Part 60, and gave it to a state agency to run, which promptly buried the program in bureaucracy.

Tom Lynch, founder of the firm, Lynch Ryan & Associates, and the chief private-sector advocate of the QLMP at its creation, refers in a recent blog entry to New York's I2P2 as "19 pages of mumbo jumbo" and to Part 60's rules as "mumbo jumbo written in Pig Latin." To Lynch, if these programs are leanly and carefully regulated, they can be very effective and popular.

Thirdly, states can spur I2P2 participation by making public the huge variances in workers' compensation claims costs within industries. Comparing yourself to your peers is one of the best triggers to action. It spurs better safety and injury management. Comparative studies in Michigan and Ontario found that if employers were to match the best performing 10% of their industry peers in work safety, workers' compensation claims for the entire industry would decline by half.

It seems odd that despite workers' compensation being mandated, an employer today cannot compare its safety performance and injury costs within the spectrum of its peers. Insurers are known to refuse to share this information with their insureds, despite their vast store of comparative data. Being in the dark about your standing among cohorts sounds more like 1984 than 2014.

If states decide to set up comparison sites, keeping employer identities private, they can expect objections from insurers. Their overt concerns will likely focus on statistical unreliability of the data. States need to be very tough minded to address these concerns, which are valid to a degree but also will likely mask resistance to the idea of giving employers a real crack at comparative analysis. We've seen this movie, such as when hospitals or other powerful interests show their distaste for comparative tools and try to cow the proponents into dropping the issue.

Public Citizen has a goal worth fighting for. It seeks, in effect, to tap into the proven potential for radical improvement in safety and workers' compensation costs. I hope it has the lasting power, political skills and friends to overcome inertia and roadblocks.

Further reading:

Integrated Disability Institute. Going Beyond Safety in Reducing Workplace Injuries. November 2010.

Michigan State University, College of Human Medicine. Reducing the Burden Work-related Injuries and Illnesses. Fall, 2006.

OSHA. Injury and Illness White Paper. January, 2012.

Upjohn Institute for Employment Research in Kalamazoo. Disability Prevention among Michigan Employers. Paper 93-18.

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