The One Number That Tells You If Your Workers’ Comp Program Is Actually Working

How do you know in workers’ compensation if things are going well or not?

Hello. My name is Michael Stack. And if you don’t know me yet, I’m the CEO of AMAXX. And since 2008, what I do is I help make the complex simple for employers in workers’ compensation and stakeholders that serve employer clients.

We have our certification training program. We have our data analysis metrics suite tool, as well as our tracking tool.

How Do You Know If Your Work Comp Program Is Going Well?

In that question, how do you know how do you know if your work comp program is going well or not? I wanna give you a really cool, very simple, very robust indicator that can let you know that things are going in the right direction by this one particular leading indicator. What I call it is the return to work ratio.

What Is the Return to Work Ratio?

It’s also called your indemnity rate. What this means…

is what percentage of your claims have indemnity paid out on them. So what percentage of your claims have indemnity paid out on them?

Understanding Indemnity on a Loss Run

So you’ve got indemnity. This is what a typical loss run from what looks like. Medical and then expenses…

And then you’ve got total incurred. What percentage so these zero indemnity is zero. This is have, you know, a ten thousand dollars. This has a thousand dollars of indemnity out of these five cases, whatever your medical is, whatever your expenses are, and those add up, of course, to your total incurred.

Calculating Your Return to Work Ratio

So out of these five claims, two of them have indemnity on them.

So in this instance, your return to work ratio or your indemnity rate would be forty percent. So forty percent of your claims have indemnity on them.

Why This Is Such an Important Indicator

Why is this such an important indicator? Why is this a very robust number that you know if this number is going well, everything else is probably going in the right direction.

Where I wanna see this number, I’d love to see this number at ten percent or less.

What a Good Return to Work Ratio Looks Like

Meaning, ninety percent of your people are getting back to work before the state waiting period. That’s a little bit of a different conversation, but the state waiting period is typically gonna be three days, five days, seven days, nine days in some cases. Most of the time, it’s within a couple of days afterwards.

So what you want is you want this number to be very low. If you’re at forty percent, fifty percent of your claims have indemnity on them, even if you’re at thirty, thirty five percent, That is the indication that your return to work program is not going very well and there’s room for improvement.

What This Number Tells You About Your Program

If you focus on this number, focus on your indemnity rate, focus on your return to work ratio, focus on getting people back to work, that means your lag time is going well. That means your relationships with medical employers are going with your medical providers are going really well. That means your supervisors are engaged. That means you have good job descriptions. That means you’re getting your work ability right at that first medical visit to be able to get people back to work very quickly.

If This Is Going Well, Everything Else Is Going Well

Your return to work ratio, your indemnity rate.

If that number is going well, everything else is going to be going in the right direction.

Again, my name is Michael Stack CEO of AMAXX Remember your work today in workers’ compensation, can have a dramatic impact on your company’s bottom line, but it will have a dramatic impact on someone’s life. So be great.

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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