Top 10 most widely applied workers’ compensation cost-control methods

Respondents were asked to select the most effective methods to control workers’ comp costs from a list of 19 possible methods. To compute the perceived effectiveness of the listed cost-control methods, researchers compiled an index in which selections for "most effective" were weighted twice as heavily as those for "second most effective." Using this method, loss/accident prevention was considered to be most effective overall.

Methods are listed in order from first most effective to tenth most effective:

1. loss/accident prevention programs;

2. light duty programs;

3. medical bill review;

4. preferred provider organizations;

5. telephonic case management;

6. telephonic claim reporting;

7. field case management;

8. utilization review;

9. claim administration audits;

10. cost allocation.

Cost-control methods that did not make the top 10 list include:

• capitated medical costs;

• on-site nurses;

• job requirements analysis;

• industrial hygiene reviews;

• job placement services;

• fax claim reporting;

• safety rewards;

• vocational testing and counseling.

Source: 1999 RIMS Benchmark Survey compiled and published by the Risk and Insurance Management Society and Ernst & Young, both of New York. Cost of the survey is $395 for RIMS members; $445 for RIMS associates, and $495 for nonmembers. To order, contact Insurance Publishing Plus at (317) 843-2523. Organizations that complete the 2000 Bench mark Survey receive a free copy. For details or to complete a survey, visit www.rims.org/general.