Comparison between the claim results of other companies handled by your carrier or third-party administrator (TPA) and comparison with other companies in your industry, but handled elsewhere are a good place to start. Data is supplied by your TPA or carrier and is accessible on a state-by-state basis on NCCI’s website for industry comparison purposes.
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Some areas for benchmarking include:
- Rate of Injuries per 100 Employees (frequency)
- Total Cost by Year
- Average Paid per Claim (indemnity and medical broken out)
- Number of Lost-Time vs. Medical Only Claims
- Payments by Type (Medical, Indemnity, Legal and Expense)
- Lag Time in Reporting (how long it takes to report claims for handling)
- Litigation Rates (What Percentage of Claims Are Litigated)
Expense Costs – Legal and Other
These statistics break down in a variety of ways depending on what you want to consider or evaluate. Total annual costs can be broken down into how much went to medical only and lost-time claims and from there, how much went toward medical costs vs. indemnity costs. Further, the medical can be broken down to understand how much went to surgery, physical therapy, prescriptions, etc. and indemnity costs can be broken down into amounts paid in temporary total disability, permanent partial disability and permanent total disability.
Injury types can be measured to determine whether you have more back or knee injuries than other types and perhaps if one area or division of your company is producing more claims overall or more injuries or a particular type.
FREE DOWNLOAD: “5 Critical Metrics To Measure Workers’ Comp Success”
Once decide what you want to measure, compare your statistics to others with the data from your TPA or carrier and/or others in your industry to see how you measure up. Identify areas where you fall short such as with timely reporting or in claim expenses creates an opportunity for improvement and ultimately cost savings.
Benchmarking is an effective tool to measure your results against others including clients of your TPA or carrier and results with others in your industry. Use this valuable information wisely to detect areas for improvement and put plans into place to reach your goal.
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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.
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FREE DOWNLOAD: “5 Critical Metrics To Measure Workers’ Comp Success”