Identify Real Cost Drivers in Post Loss Workers Compensation

Best Practices Approach to Post-Loss Costs Containment.

A solid workers’ compensation cost control program requires an employer to first identify the key cost drivers; i.e., those company-specific factors causing workers to stay out of work too long.

Many companies that take a hit or misidentify the causes of their workers’ compensation costs. They start by looking at what their vendors are doing, rather than at their own internal company practices. Employers need to follow a systematic method to diagnose the key real-cost drivers within their company, based on a best practices approach to post-loss (not pre-loss) cost containment. Employers would be wise to write an assessment of their own internal company practices to address post-lost costs containment.


Items to Consider Before Writing Your Assessment:

  • What can managers learn from an assessment?
  • What methods could assess a company’s workers’ comp process?
  • What are the benefits of each?
  • What areas should be reviewed?
  • Who should do the assessment and what are the benefits of each?
  • What should a company do AFTER the assessment?

After an assessment, employers need to decide the next steps in reducing workers’ compensation costs.



Do Not Wait to Take Action


Some companies wait until they are in serious trouble before taking action. They think of workers’ compensation as a cost of doing business and do not realize there are things they can do to control costs. Do not to have a perfect system in place before beginning. Often the process of doing the assessment is the start of the process of change.



Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:


Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. Contact:





Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.


©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at:


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