State Safety Initiative

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  • 1. Statewide Safety and Wellness Leadership Initiative Risk Seminar Oregon Department of Administrative Services-Risk Management Salem Oregon October 23, 2006
  • 2. Historical Perspective Leonard Sweet, Historian, Futurist
    • “ If we do not learn from history, we shall be compelled to relive it.
    • True.
    • But if we do not change the future, we shall be compelled to endure it.
    • And that could be worse.”
  • 3. Safety as a State Business Function Pre-1980
    • State Safety Manager - Executive Department
      • Accident Prevention Model –
        • Post-1972: OSHA compliance focused
      • Position eliminated in 1978-82 recession
    • SAIF – state’s insurer by statute
      • Loss control services to each agency
      • Claim handling by local office
      • Set “payroll rate” that was deducted monthly from agency budgets
  • 4. Safety as a State Business Function 1980 to 1987
    • Safety is managed by the Agency Head
      • Agency option to designate safety position
      • Some agency safety staff addressed claims
      • WC budget set for biennium
    • SAIF
      • Appointed a State Agency Account Rep
      • Claims and Loss Control handled locally
      • SAIF designated payroll rates annually
  • 5. Safety as a State Business Function 1980 to 1987
    • Safety perceived as responsibility of safety staff or committees, SAIF or OR-OSHA
    • Safety positions and program funding often cut in budget reduction exercises
    • OSHA compliance model did not align with causes of claims
    • Once injured, employees were SAIF’s responsibility
    • SAIF business model did not align with agency needs
    • “ SAIF” costs regularly exceeded budget
  • 6. Costs Exceeded Budget
  • 7. and Costs Attract Attention
    • Hard insurance market for work comp drove costs nationally
    • Oregon had 6 th most expensive system in nation
    • On the radar screen of the newly elected Governor and others
    • Legislature directed agencies to study the cause of wc costs exceeding budget, so…
  • 8. Statewide Safety Initiative
    • Issue: Work comp costs were rising rapidly.
    • Charge: Learn the cause and develop a plan to bring costs in control.
    • Areas of Focus:
      • Perception and Opinion of Key Stakeholders
      • Management Systems to address safety and work comp
      • Data analysis
  • 9. Risk Management Surveyed Agencies’ Perceptions
    • Oregon laws prevented management of claims and allowed “abuse”
    • SAIF overcharged state agencies to balance losses from small policy holders
    • Work comp claimants “malinger” because many “injuries” had no “accident” cause
    • Managers could be sued if they called injured workers at home
  • 10. Risk Management Surveyed Agencies’ Perceptions
    • Injured workers had to be “100%” before they could return to work
    • Agency safety efforts made no impact on the “rates” SAIF charged
    • Safety was not on the “front burner” for agency head performance expectations
    • Agency executives did not know what good performance looked like
  • 11. Risk Management Looked at Safety/WC Management Systems
    • Accident Prevention/OSHA Compliance model
    • Safety staff “averaged” SR 19 – many layers to executive staff
    • Injured Worker management and claim oversight in HR, few experts, always an “additional” duty, RTW late and spotty, attention to claim reserves
    • Policies related to injured worker rights or legal compliance not management duties or expectations
    • Premium Charges were “automated", not understood and not responsive to agency action
  • 12. Risk Management Examined Claims Data
    • 80% of claims and costs came from twelve agencies
    • Nature and cause of most injuries had not changed, except
    • Agencies, like the rest of Oregon, had rapid rise in stress claim filing
    • Time loss occurrences were 25% of agencies’ claims and caused 95% of costs
  • 13. 1980s State Experience: Serious Claims per 100 FTE
  • 14. 1987 Statewide Safety Initiative Key Elements
    • Executive Order to reduce injuries and, thus, reduce WC budget impact
    • Agency Heads continue to be responsible for safety and managing WC costs
    • Partner with SAIF and DIF (now DCBS) to address program, training, system and process needs
    • Focus resources on the Top 12 agencies to improve performance
  • 15. 1987 Statewide Safety Initiative Key Elements
    • DAS-Risk intervened with WC finance model
      • Risk established work comp component of Self-insurance fund
      • Risk negotiated insurance terms and conditions with SAIF on behalf of all agencies
      • SAIF bills Risk Management for all costs
      • Risk bills agencies through annual Risk Charges and biennial budget process
  • 16. Workers’ Compensation Costs
  • 17. 1987 Statewide Safety Initiative Key Elements
    • Time Loss Occurrences became the Performance Measure
    • Goal: to reduce serious injuries by 50% over a four year period
    • Agency heads given data and reports that tracked progress
  • 18. Environmental Changes in Oregon
    • SAIF reorganized its business model - 1989
    • Major legislative changes to work comp statutes
      • 1987 changes Occupational Disease (“stress” claim) compensability
      • 1990 Mahonia Hall - Labor / Management Advisory Group
      • 1990 Special Session
  • 19. Safety Initiative 1987 to 1992
  • 20. Statewide Safety Initiative 1987 to 1992
  • 21. Statewide Safety Initiative 1992-2005
    • Safety Advisors – lead internal agency programs
    • Injured Worker Management systems
      • Timely claim filing
      • Early RTW at Temporary Transitional Duty
      • Return to Work
      • Claim resolution
      • Coordination with Employment Claims
    • SAIF’s Oregon Claims Team, Return to Work Consultants and Loss Consultants
  • 22. Statewide Safety Initiative 1992-2005
  • 23. What we are seeing in 2006
    • Claim frequency is flat
    • Medical costs are increasing about 10%
    • Temporary disability payments are based on wages that are increasing
    • Legislative changes increases the state’s risk related to compensability, disability awards and vocational services
    • State is now paying on 10 full open plan years
    • Actuaries’ claim cost projections for past years are increasing rapidly
  • 24. Costs are rising
    • Work Comp Risk Charges Increasing
    • 55%
    • for 2007-09 biennium
  • 25. We remember…
    • If we do not learn from history, we shall be compelled to relive it.
    • True.
    • But if we do not change the future, we shall be compelled to endure it.
    • And that could be worse.”
  • 26. What are we doing to change the future?
    • DAS, Independent Actuaries and SAIF have reviewed statewide cost and claim data
    • DAS-Risk Safety Consultant has interviewed key agency Safety Advisors
    • Safety Operations Council convened to provide ongoing input and collaborate on activities and best practices
    • Executive Steering Committee led by DAS Director’s Office and including technical expert and stakeholder representatives is sponsoring and guiding
  • 27. 2006 Safety and Wellness Leadership Initiative - Focus Areas
    • Organizational Culture
      • Employee Feedback
    • Management Systems
      • Self-Assessment Tool
    • Data analysis
      • Target high risk / high opportunity
  • 28. Safety and Wellness Leadership Initiative - Key Strategies
    • Management leadership and accountability
    • Individual Involvement & Accountability
    • Safety and Wellness Programs
    • Learning Processes: Training & Communication
  • 29. Impact on the Employee Experience Individual Employee Experience ORGANIZATIONAL VALUES MANAGEMENT PROCESSES ORGANIZATIONAL CULTURE
  • 30. Future opportunities….
    • Questions?