Is Your Workers’ Comp Problem Frequency or Severity?

When workers’ comp costs rise, most employers immediately look for solutions. But too often, they skip the most important step: diagnosing the real problem.

Before implementing safety programs, nurse case management, or litigation strategies, every employer must answer one critical question:

Is your problem frequency — or severity?

Get this wrong, and you’ll waste time, money, and energy fixing the wrong thing.

Two Problems. Very Different Solutions.

At a high level, workers’ comp costs are driven by:

• Frequency – how many claims you’re having

• Severity – how expensive each claim becomes

These are fundamentally different problems — and they require different strategies.

Yet many employers treat them the same.

When Frequency Is the Problem

If your organization is experiencing:

• Rising claim counts year over year

• Injuries concentrated among new hires

• TRIR above industry averages

Your issue is likely frequency.

This points to:

• Hiring and physical capability mismatches

• Inadequate onboarding or training

• Weak safety systems or supervision

Adding more claim management tools won’t reduce injuries that shouldn’t have happened in the first place.

When Severity Is the Problem

If claim counts are stable but:

• Average cost per claim is climbing

• Lost-time duration is increasing

• Litigation rates are creeping up

Your problem is severity.

This usually signals breakdowns in:

• Lag time and injury reporting

• Post-injury communication

• Return-to-work coordination

• Medical provider alignment

Here, prevention alone won’t help. You need stronger post-injury systems.

Why Employers Get This Wrong

Most employers jump straight to what’s visible:

• A big claim

• A frustrating doctor note

• A difficult adjuster interaction

But those are symptoms — not root causes.

Without separating frequency from severity, employers end up:

• Treating safety problems with claims tools

• Treating claims problems with safety programs

Neither approach works.

The Simple Diagnostic

Start with two numbers:

1. Number of claims

2. Average cost per claim

Ask:

• Are we having more claims — or just more expensive ones?

• Did workforce size change?

• Did reporting behavior change?

This clarity immediately narrows your focus.

The Strategic Advantage

Once you identify the real problem:

• Resources are targeted correctly

• Leadership buy-in is easier

• ROI becomes measurable

• Results accelerate

This single diagnostic question often determines whether a workers’ comp program stagnates — or improves dramatically.

Final Thought

You can’t fix what you haven’t identified.

Before launching the next initiative, pause and ask:
Is our challenge frequency or severity?

The answer will dictate everything that follows.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.