CM makes top 10 cost-control list
Both field and telephonic CM named
Telephonic case management and field case management are widely perceived by risk management professionals as helping to curb workers’ compensation costs. The 1999 RIMS Benchmark Survey, a national survey of 816 corporate risk managers conducted jointly by the Risk and Insurance Management Society and Ernst & Young, both of New York, placed both types of case management among the top 10 most effective methods of workers’ compensation cost control.
"This is the first year we’ve asked respondents to make an assessment as to which cost-control methods were effective," notes Sue Anne Mitro, manager for risk and insurance for The Hillman Co., a privately held holding and investment company in Pittsburgh. "I’m hoping that organizations find this information useful for weighing which cost-control methods to try."
Jim Gamble, senior manager in the business risk solutions practice at Ernst & Young, also hopes organizations will use the information to control their own workers’ comp costs. "I think it’s very useful to know what other organizations are doing to control costs and what they consider to be effective. It’s information others can use to assess steps they may or may not already have tried themselves."
The survey was sent to RIMS members, select clients of Ernst & Young, and members of the American Society of Healthcare Risk Managers in Chicago. Respondents were asked to select the most effective, the second most effective, and the least effective methods for reducing workers’ compensation costs from a list of 19 methods commonly used in the workers’ compensation industry. (See box, above.) In addition, demographic information about the organizations was gathered, as well as general information about workers’ compensation costs.
The most commonly used method for controlling workers’ compensation costs was loss/accident prevention efforts, which were used by 600 respondents of all sizes. After loss prevention, light duty and medical bill review were ranked "most effective" by more than 500 respondents. Light-duty programs were popular regardless of respondent size. However, bill review was more popular with respondents with revenues above $50 million.
The survey also found that flat premiums and higher sustained losses have driven the average cost of risk in the United States up for the first time in six years. After reaching a low of $5.25 per $1,000 in revenue in 1997, the average cost of risk rose to $5.71 per $1,000 in revenue. Workers’ compensation costs rose to $1.96 per $1,000 in revenues in 1998, compared to $1.93 in 1997.
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