How Low Can You Go? Attaining a Perfect Score for Your Mod

Perfect and yet attainable scores apply to many areas of life: credit reports, bowling, the game of Yahtzee, and ACT college prep exams immediately come to mind. These are cases in which the higher the score, the better. Less commonly, an excellent score is represented by a low number: as our director of strategic consulting Lloyd Kelley would be quick to point out, golf is an example, even if it doesn't have a true perfect score.

If your mod was a game of golf, you'd want it to be under par - not just average. You also want to know what your company's perfect score can be - and then implement loss control and prevention measures to attain that perfect score.

Did you know that you can have a perfect score on your workers comp mod?

You can. But here’s the tricky part: the perfect score for your mod is unique to your company. It will be different from the perfect score of the company next door, or your competitor across town. It may change somewhat from year to year. The variability is due to the fact that the mod is based on your unique industry and payroll. But it is a real, attainable number, not just a theoretical best case scenario.

Many employers have the idea that a workers comp mod of 1.0 is, if not perfect, at least the goal that they want to reach. This is like saying a “C” on your grade school report card is good - or that you've shot par on the golf course. You may be pretty happy with it, but in truth, a mod of 1.0 is only average. If you want to beat that average, and thus lower your workers’ compensation insurance costs, you’ve got to know the value of your minimum mod - your perfect score - and your controllable mod.

Every mod value can be broken into two pieces: the minimum mod and the controllable mod. The minimum mod is that perfect score: the lowest possible mod if your business had no losses for the experience period (typically three years). The controllable mod is the difference between your actual mod and the minimum. This value is a direct result of the losses your company had during the experience period.

Attaining your perfect score directly impacts your work comp premium costs

The minimum mod and controllable mod are important for two reasons. For larger companies, these values highlight the savings that are possible by controlling losses. For example, as shown in the report example below, a large company with a mod of 0.98 may think they are doing quite well, however, since they have a controllable mod of 0.22, there is significant room for improvement - which in this case translates to a $44,000 cost savings!

For a small company, the minimum and controllable mod values can be used for setting realistic expectations; for example, a small risk that sets a goal of having a 0.80 mod will not be able to achieve it under any circumstance if the minimum mod is 0.85.

Here's a snippet of a sample WorkCompEdge Proposal Report that shows the minimum mod and controllable mod - and how much money this company could be saving!

No matter the size of your company, knowing the controllable mod is critical to understanding the possible savings achievable by reducing that controllable mod to 0 through loss control and loss prevention activities.

Ask your insurance agent to show you your minimum and controllable mod values – and estimate the premium dollars you can save by attaining that perfect score. A WorkCompEdge agent can do this using the WorkCompEdge Proposal Report from our ModMaster software. WorkCompEdge members can also use the WorkCompEdge QuickMod tool in the module Learn the lessons your experience mod can teach you to obtain this valuable insight.

http://www.workcompedge.com/
http://www.specificsoftware.com/

Maureen Steps Up (and Down!)

Our blog earlier this week about staffer Tony King's marathon training and intentionality seems to have started a trend: WorkCompEdge regular contributor Maureen Gallagher is also preparing for a big physical challenge ahead of her, and we're hoping WorkCompEdge readers might help. Maureen, who's also a partner with Neace Lukens, is going to be fighting childhood heart disease - and testing her own physical limits - in the grueling Carew Climb, part of the Skyscraper Vertical Mile challenge, on Sunday, February 22 at Cincinnati’s Carew Tower.

Specifically, that means she'll be climbing and descending the Tower’s forty-five floors ten times, with another eight floors and six steps thrown in just to round off the total distance to one mile up and one down—a total of 3,780 stairs in under three hours. And by auctioning off each one of those stairs, she’s hoping to raise enough money to send twenty kids to camp through Hope With Heart as well as raising money for the American Lung Association, the Climb’s sponsor.

Established as a summer camp experience, Hope With Heart provides year round support and friendships for its campers. The camp, now in its tenth year, is unique because it accepts high-risk children with limited life expectancies. The camp has children with varied heart problems such as valve replacements, pacemakers and transplants. Providing a recreation and social eight-day camp experience for children ages seven to fifteen, Hope With Heart has transformed the lives of more than 400 children with serious heart disease through the generosity of contributors.

Maureen, a fitness advocate who has run several marathons, has a personal interest in the Hope With Heart cause. Her nephew, Ryan, was born with a life-threatening heart defect similar to that of other children who attend the Hope With Heart camp. Ryan attended the camp along with other kids whose hart disease was so severe that other camps would not take them.

"We are all grateful for the experience Ryan had at the Hope With Heart camp,” said Maureen. “And we want to ensure that experience remains available for other children in the coming years."

The camp must maintain an emergency helicopter on standby along with doctors and nurse to monitor activities and dispense medicines to the children there. Everyone involved with Hope With Heart is a volunteer and the camp is free to all campers.

Maureen says that training for the Carew Climb is one of the more physically demanding challenges she has ever taken on. Those interested in making a contribution can do so directly to Hope With Heart at www.hopewithheart.com or to Maureen directly at
Maureen.gallagher@neacelukens.com. Any amounts are appreciated!

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

The Power of Intentionality, Part 1

As you may know, we have two affiliated businesses under one roof here at Specific Software and SIGMA Actuarial. Our actuaries hang out on the “south side” of the office, while most of our software staff is located on the north end of the floor. This provides us with the opportunity to kid each other about where the brain power resides. One of my favorite targets for this friendly ribbing is actuarial analyst Tony King.

SIGMA actuarial analyst Tony King has been very intentional about his marathon goals. At WorkCompEdge, we believe the components of his intentionality can apply to any goal, including a new vision for your company. Photo courtesy of Mike Stanfield.

Tony is mild mannered, humble, intelligent, highly disciplined, and focused. But, as he recently taught me by example, he’s also very intentional in working toward his goals. Tony has been a runner most of his life, although he took a break from it while his children were young. Now he puts in about 60+ miles per week. Last year he decided to step up his training in order to decrease his time and qualify for the Boston Marathon. Popping into his secluded south side office ever so often, I kept up with his progress and learned a lot that can apply to any goal:

Being intentional requires specific knowledge

Tony bought Lore of Running - and actually read it. (I have a copy collecting dust on my bedside table.) Gathering the knowledge one needs to effect change is a crucial first step that takes initiative.

Being intentional requires whole system intelligence

Tony then put the knowledge from his reading into practice. Knowledge is, in my definition, information and facts. Intelligence is a more abstract concept that involves applying knowledge to the whole system or “big picture” – in this case, Tony’s body and environment – to the challenge at hand. Intelligence includes a healthy dose of creativity, reason, and abstract connections between seemingly unrelated items to bring about change and improvement. It is one thing to read the Lore of Running, but is an entirely different level of functioning to know what the heck it means to you!

Being intentional requires quantitative measurements

Tony strapped on numerous electronic devices and gathered heart rate, distance, time, and speed data he needed to measure his progress. He then downloaded this data to a computer and gained insight that led to new questions and new measurements – and thus the feedback loop got tighter and tighter. Some of his insights – like how his heart rate correlated with his endurance – were new for him. They also led to new strategies, such as starting slow and ending fast. Some of his discoveries were not intuitive, thus proving the value of lots of measurements and an unbiased analytical approach.

Being intentional requires discipline

Tony used his knowledge, intelligence, and quantitative measurements to develop and execute specific action plans. Most of us can figure out what to do to a reach a goal – it is the doing itself that we struggle with. Discipline overcomes that emotional resistance.

Being intentional requires repetition

After going through the process above, Tony wasn’t sure he was where he needed to be, so he started the entire process over again. He reached out to new experts, identified road blocks, doubled his efforts, measured data again, tried new things. He persevered.

Being intentional produces results

Tony was shooting for a time of 3:15:59 to qualify for the Boston Marathon. He ran the Marshall University Marathon in West Virginia and finished with a time of 3:15:28, trimming about 30 minutes off his previous personal best!

So, when did Tony succeed? Would this have been a worthwhile effort if he finished with a time of 3:16:00? Certainly! The moment Tony decided – to the exclusion of all other options - that he would pour his heart and soul into creating a new level of performance, he created a new reality for himself. Which brings me to my final point:

Being intentional requires a vision

I don’t use the word decision lightly. A true decision leaves no alternative because it’s based on a vision of where we want to be. Arguably, the vision – of qualifying for the Boston marathon – is the first thing Tony had in this process. But he also kept that vision foremost in his mind. A solid vision guides our decisions and provides opportunities for the future.

So what’s your vision as an employer? What’s your “Boston marathon” goal?

This year, employers are facing unbelievable challenges. If, combined with economic challenges, you have workers compensation issues, you may feel very overwhelmed. I believe that the power of intentionality can make a dramatic difference for any employer that wants to change their business, address their workers compensation challenges and significantly reduce costs. In the weeks ahead, I will explore how an employer can use Tony’s model of intentionality with the knowledge and tools in WorkCompEdge to make dramatic reductions in workers compensation costs. But your first job is to make that decision and develop a vision of being a more successful company.

http://www.SpecificSoftware.com
http://www.WorkCompEdge.com

Can You Plan for the Unforeseen?

In our local area, a radio commercial for a life insurance company seems to run about ten times a day. In a dramatic voice, the announcer explains that we all need life insurance for the “unforeseen.” It is exactly the “unforeseen” that causes so many of the severe and tragic workers compensation losses that our actuarial firm sees in the the analytical consulting projects we do.

You CANNOT “punt” on planning and training for foreseeable emergencies and catastrophes – because this is what is going to save you or mitigate damage when the significant unexpected event occurs.

While I sat in traffic recently and heard this commercial for what must have been the 1,000th time, I quickly ran through some of the “unforeseen” things that I’ve personally experienced in my lifetime. Have you ever done this? It is amazing how many things we all must confront in the normal course of life. Here are a few of the highlights for the ones that worked out well for me:

• Being a passenger on a Southwest flight that ingested a bird, ran off the runway, down a hill and caught on fire. The evacuation was not orderly, but we all survived. (There were a few broken bones.)

• Being in a sailplane on tow when the tow plane’s engine died. Landed safely in a field. (My Dad was the pilot on this flight.)

• Having at least 6 trips to the emergency room for injured kids (broken bones, car wrecks, head injuries – oh! the joys of parenting).

• Being the passenger in a high speed car crash. (The car was totaled – I was lucky to survive with recoverable injuries!)

• Having the doctor tell my wife and me that our unborn child had a 0% chance of being born. (The doctor was wrong – the kid is awesome.)

• Living through a house fire. (The house didn’t fare too well, but family did.)

• Confronting a home intruder. (I used my most intimidating primal scream!)

• And my personal favorite, which goes back a while - being chased by the neighborhood German shepherd when I was 8 years old!

Thoughts of these could-have-been disasters brings me to the question: How do you prepare for the worst possible scenario, the unexpected, and the catastrophe that could threaten your business? Some employers believe you can’t prepare and therefore don’t bother. However, I recently got another perspective on this when I had the opportunity to hear Rudy Giuliani speak.

Rudy is a great speaker. Watching him live is very inspiring. He is an effective story teller and, as you might guess, has some pretty amazing and powerful stories to relate. Rudy asked the question, “How do you prepare for the unknown?” Obviously, there was no way the city of New York could have prepared for the 9/11 catastrophe. While I am sure the volumes of studies done on the response find areas for improvement, the city of New York can be proud of how it dealt with this unimaginable scenario.

Rudy shared his theory on this: “Prepare for everything known and you will be prepared for the unknown.” He goes on to describe how the city had action plans for specific disaster scenarios. Each plan was divided into components and each component was then well researched, planed, and rehearsed. One example might be setting up a triage near a large industrial accident. Despite the extensive preparation that the city had undergone for various disaster scenarios, there was no plan for the collapse of the World Trade Center twin towers.

When Rudy arrived on the scene, he began to direct all the city’s departments to pull components of other emergency plans together to create, on the fly, a custom response to the emergency at hand. Because they had planned for everything they could imagine and had their plans compartmentalized into specific function areas, they were able to respond to the unimaginable. While I cannot do this story justice as Rudy so passionately does, I can relate this to the importance of disaster planning for an employer. You CANNOT “punt” on planning and training for foreseeable emergencies and catastrophes – because this is what is going to save you or mitigate damage when the significant unexpected event occurs.

In more recent news, the US Airways captain who successfully protected the lives of his passengers and crew after losing both engines on his Airbus 320 after takeoff probably never trained specifically for so masterfully using the busy Hudson River as an alternative runway. But, if you read his resume you will notice that Captain Chesley B. “Sully” Sullenberger III had, in addition to his training as a pilot, extensive experiences related to safety and risk management. He had practiced, without doubt, thousands of emergency situations over his 40 years of flying. He had studied safety and participated in accident investigations. His training and experience also included glider flying – a handy skill when your Airbus becomes a 160,000 lb glider over one of the most densely populated cities in the country. So what was the payoff for the untold hours of training and emergency drills for theoretical situations that never actually happened? A miracle!

As part of your safety goals for this year, take time to develop focused and compartmentalized action plans to deal with what you can imagine. Then when the unimaginable happens – as our actuarials often see in the data we analyze - your organization just might survive. And if you’ve trained diligently, you might even experience your own miracle.

Editor's note: On a related note, this week's (January 24) issue of Newsweek features an excerpt of the new book The Survivors Club: The Secrets and Science That Could Save Your Life (Grand Central Publishing, January 2009) by Ben Sherwood. While this is more about personal than corporate response to disaster, it's still very interesting reading - and should give you pause to think about the psychological factors in identifying and training the leaders who can help your organization in a disaster scenario.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

WorkCompEdge: Perfectly Executed, Entertaining, Best of Show!

If you'll indulge us a moment of shameless self-promotion, we're excited to share with you that WorkCompEdge has been awarded Best of Show for "distinguished technical communication" in the 2008 Technical Communication Competition sponsored by the middle Tennessee chapter of the Society for Technical Communication (STC).

The judges particularly mentioned this WorkCompEdge video from the Avoid Low Bid Mentality module about "you get what you pay for." If you have trouble viewing the video above, try this link.

We received top honors from the judges, whose written statement about the site included the comments:

• "extremely well-planned"


• "intelligently thought-out"


• "design planning that accounts for all learners"


• "concise, clear and useful topics"


• "entertaining and impactful visual ideas" (our videos also won an award for excellence in the "promotions" category)


• "perfectly executed"

Other organizations in the competition were from a tri-state area and included Lexmark, Square D, Schneider, and the DOD. As best of show, WorkCompEdge now goes on to the STC international competition!

But it's all about you...

Doesn't all this talk make you want to delve into one of the modules right now?

Seriously, while we're thrilled to have impressed our peers in communication, it's you, our agent and employer subscribers, ModMaster clients and blog readers, who we really want to make - and keep - happy. Remember that we're always glad to hear your ideas for blog topics, your questions about content, your suggestions for where we can improve.

http://www.SpecificSoftware.com
http://www.WorkCompEdge.com

Immigrant Labor and Legislation: Trends and Effects on Employers

A few years ago, employers in the state of Virginia were initially gratified by the Virginia’s Supreme Court’s ruling to exclude illegal immigrants from the protections of workers compensation. But in an almost immediate demonstration of the law of unintended consequences, the onslaught of litigation had employers clamoring to amend state law to explicitly include aliens, both legal and illegal.

Without the remedy of workers comp - and the careful adherence to changing state and federal obligations regarding immigration, an employer may be sued.

Many employers seem to forget that employees deprived of the remedy of workers compensation may pursue a tort liability suit against the employer. When that happens, the employer loses the protections under the workers compensation act and can be sued for pain and suffering, in addition to the medical costs and lost wages as a result of the injury, neither of which applies under workers compensation. Admittedly, workers compensation is an imperfect system, and its imperfections vary from state to state. Nevertheless most workers compensation stakeholders would argue it is certainly better than the alternative…an injured worker as a plaintiff in a civil tort suit in front of a jury of his or her peers. Instead of statutory limited benefits, the employer is exposed to open tort award.

According to the National Conference of State Legislatures, more than 1,500 pieces of legislation related to immigration have been introduced in state legislatures in the last year. Much of this legislation creates significant new obligations for employers. Depending on the state, the penalties may include:

• fines
  
• loss of business license
  
• allowing illegally employed workers to pursue tort cases against the business
  labeling non-compliance as a felony
  
• loss of workers compensation exclusive remedy, and
• voided workers compensation insurance coverage entirely (requiring the employer to pay the medical and lost wages) for illegally hired workers.

As the immigrant population—both legal and illegal—continues to grow in the United States, their numbers will continue to expand among the American labor pool. This increases the chances that employers will hire aliens and suggests that their potential involvement in issues dealing with workers compensation related to these employees will also increase. As the old adage goes, “Ignorance of the law is no excuse,” and the trend in most states is to echo that sentiment with tougher laws against employers who would hire illegal aliens—perhaps to circumvent the need to pay for benefits such as workers compensation. Unfortunately, as states scurry to catch up through the legislative process, many variations make up the rugged terrain of workers compensation. Employers and their insurance advisors need to be informed and vigilant to be able to negotiate this territory successfully.

Three primary issues arise in workers compensation cases involving illegal aliens:

1. Are illegal aliens included in the definition of “employee” under state workers compensation law?

2. Does the Federal Immigration Reform and Control Act (IRCA), as interpreted by the Supreme Court’s decision, preempt state workers compensation laws?

3. If an illegal alien is an employee, does his illegal status deprive him of certain compensation benefits?

Employers must follow a checklist to determine the legal status of new hires, and follow up in writing with any new hires who cannot be verified through the Social Security Administration.

A full article addressing these areas and examples from many states is available to WorkCompEdge members on our wiki in pdf format. The "Legal status of new hires" checklist and sample letter is also new content available in the More Depth section of the Avoid Hiring Your Next Workers Comp Injury module.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

In our last blog before the holidays, I was telling you about the materials in Jim Rohn’s Weekend Leadership Event. I wanted to mention Mr. Rohn one more time, in view of the resolutions that some of us may have made for the new year. Let’s talk about some of Mr. Rohn’s suggestions related to personal growth. What? Do I hear you groaning? No, I’m not trying to talk you into some new fitness or sales goal. I’m suggesting instead that the principals and observations that Mr. Rohn makes about personal growth easily translate to challenges employers face - and to the work comp resolutions you've made for the new year. You have made some resolutions, right?

Successis nothing more than a few simple disciplines, practiced every
day.- Jim Rohn

Disciplineis rememberingwhat you want.- David Campbell Founder, Saks Fifth Avenue,quoted in 100 Ways to Motivate Others by Steve Chandler and Scott Richardson

Will these changes get you to success overnight? Most of the time, no – but as with personal goals, if you change your thinking and your habits, your world will change!

First, he says, you have to study how to stay healthy

If you’re an employer struggling with work comp costs, it’s critical that you decide to engage in the study and practice of business processes that will eliminate your work comp issues. This is a commitment to read the latest blogs, journals, and books (and all that handy WorkCompEdge content, if you're a member) and to understand what a “healthy” business with low work comp costs looks like.

Second, you have to actually do what it takes to become and stay healthy

Of course we all know that only reading about good business and work comp practices isn’t enough. One employer recently told me that if they conducted a drug test on every job applicant they wouldn’t be able to hire anyone! Now, that seems like a problem to me – did I miss something? I wanted to ask if they had considered the liability cost of a deadly accident. To use the personal health analogy, you can’t be slamming back the junk food at lunch every day and not expect to eventually pay the price… which leads me to my next thought.

Daily habits matter

It may not happen until your forties or fifties, but a daily lunch of junk food will catch up with you. Conversely, let’s say you’re 30 pounds overweight and switch that junk food lunch to salad and fruit. Changes won’t happen overnight, but changes will occur. The point is, you can get away with errors in judgment for a while and fall into a false sense of “it doesn’t really matter.” But, as Mr. Rohn says, “everything matters.” Eventually, sloppy business practices – such as ignoring good hiring methodologies, expecting that a perfect safety rating is not realistic, or failing to train supervisors on their “soft skills” when dealing with injured employees - will cost an employer an enormous amount.

Do the disciplines

The daily, weekly and monthly business processes which we describe within WorkCompEdge will begin to transform a business and lower work comp losses. Will these changes get you to success overnight? Most of the time, no – but as with personal goals, if you change your thinking and your habits, your world will change!

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com