Abstract
Introduction: A retrospective analysis evaluated the effectiveness of an insurance carrier's flexible loss control service strategy in reducing workers' compensation policyholders' reported injury and illness claims.
Objectives: To assess the effects of a loss control service strategy on workers' compensation claim frequency rates, on medical-only claim rates, on severity-claim rates, and on claim cost among a group of California employers.
Methods: Eighty-two small- and medium-sized companies with workers' compensation policies expiring in 1999 were randomly selected from a population of policyholders assigned to loss control consultants for two or more years. Claim performance data were obtained for each company's first expired in-force policy year and its 1999 expired policy year. The retrospective design was combined with a control component based on a randomly selected comparison group of 45 companies whose first policy year with the insurer expired in 1999 and who received safety services from the loss control staff.
Results: The flexible loss control consultation service strategy was associated with lower average claim rates and costs. Companies assigned to a loss control consultant for two or more years (the “outcome group”) had an average claim rate of 1.24 per $10,000 premium, compared with a rate of 1.62 in the “initial group” and a rate of 1.60 in the “comparison group.” The average severity-claim rate of the outcome group was 0.32, compared with the initial-year and comparison-group means of 0.48 and 0.46, respectively. The average medical-only claim rate was 0.92, compared with the initial- and comparison-group means of 1.14 and 1.14. The outcome group's average loss ratio was over 10% lower than that of the initial and comparison groups. Statistical analysis indicated that differences among the groups' claim rates and severity-claim rates were [
F=(2,206) 4.938,
P=0.008] and [
F=(2,206) 8.208,
P<0.001], respectively.
Conclusions: A loss control service strategy that provides service flexibility and develops partnership between employer and consultant can help reduce the frequency and severity of workers' compensation claims. Barriers to consultation service flexibility, both internal and external, should be identified and removed to enhance service efficacy.