1. The Missing Link: ROI, TCOR & Injury
Reduction
Erike Young, MPPA, CSP, ARM Kim Weiss
University of California Remedy Interactive, Inc.
June 2011

2. Twinkies have a shelf
life of 100 years.
A nanosecond is one
billionth of a second
and is a common
measurement of read
or write access time
to random access
memory.
Ten cords of wood
stacked 4 feet wide by
4 feet high by 80 feet
long have the same
heating potential as
1,400 gallons of oil.
There are 293 ways to make change for a
dollar.
A "jiffy" is an actual
unit of time for
1/100th of a second.
315 entries in
Webster's 1996
Dictionary were
misspelled.
As of 2006, 200 million blogs were left without
updates.
If you add up the
numbers 1-100
consecutively the
total is 5050.
A quarter has 119 grooves on its
circumference. A dime has one less.
Data is only useful if it leads to results

3. Similarly, ROI from safety initiatives is
there, but you need to know where to
look and how to calculate it

4. Claims Analysis: Cost and Reduction
Top 5 Incident Types – Frequency
FY06
Incident Type Frequency % of TNRs
Work Duties
(Repetitive
Motion) 1,009 17%
Lifting 599 10%
Struck by Object 472 8%
Slip/Fall Same
Level 462 8%
Reaching/Over
Extension 349 6%
Total 2,891 49%
Top 5 Incident Types – Frequency
FY09
Incident Type Frequency % of TNRs
Work Duties
(Repetitive
Motion) 885 18%
Lifting 516 11%
Slip/Fall Same
Level 427 9%
Struck by Object 349 7%
Reaching/Over
Extension 260 5%
Total 2,437 50%

5. Claims Analysis: Cost and Reduction
Top 5 Incident Types - Severity
FY06
Incident Type Incurred % of Total
Work Duties
(Repetitive
Motion) $ 10,753,310 21.7%
Slip/Fall Same
Level $ 6,674,695 13.4%
Lifting $ 5,419,977 10.9%
Push/Pull $ 4,221,092 8.5%
Reaching/Over
Extension $ 2,581,698 5.2%
Total $ 29,650,772 59.7%
Top 5 Incident Types - Severity
FY09
Incident Type Incurred % of Total
Work Duties
(Repetitive
Motion) $ 4,111,323 18.8%
Slip/Fall Same
Level $ 2,435,909 11.1%
Lifting $ 2,100,072 9.6%
Struck by Object $ 1,430,132 6.5%
Push/Pull $ 1,235,899 5.6%
Total $ 11,313,335 51.7%

6. University of California Total Cost of Risk

7. Current Reality:
California Workers’ Compensation Rates
As of April 2011, the Workers Compensation
Rating and Inspection Bureau (WCRIB)
recommended a 39.9 percent increase in pure
premium rates.
The University of California reduced internal
rates by 1.9% for FY 2012

8. Terms to Know
• TCOR
• Loss Run
• IBNR and Loss Development
• Actuary and actuarial report
• P&L
• ROI
• Claims adjuster/TPA
• WCRIB

9. TCOR includes:
• Total cost of insurance (self-insured or otherwise)
• Workers’ Compensation
Experience modification factor
Number of claims, average cost per claim
Lost/restricted work days
• General Liability (including Auto, Employment and
Property), and Professional Liability programs
• Loss control program and safety program costs
• Claims administration
Total Cost of Risk (TCOR)

10. How Do You Measure Success?
• Reduction in total number of injuries
• Reduction in injury rate (per 100 FTE)
• Reduction in cost of claims (average or per 100 FTE)
• Reduction in insurance premium
• Reduction in experience modification factor
• Reduction in calculated rate for self-insured
• Reduction in Total Cost of Risk (TCOR)

11. Common Mistakes
• Using standard loss runs provided by TPA
• Knowing what claims to count
• Not using an exposure base for benchmarking
• Not accounting for legislative/regulatory reforms
• Not accounting for medical inflation
Not knowing how leadership is measuring your success

12. Typical Summary Loss Run
Fiscal
Year
# of Claims valued
6/30/09
Total
Incurred Valued
6/30/09
FY 06 5,898 $ 49,662,177
FY 07 5,705 $ 46,702,484
FY 08 5,663 $ 42,212,556
FY 09 4,826 $ 21,890,480

13. Loss Run Showing Development
Fiscal
Year
# of Claims
Valued at
end of each
year
# of
Claims
valued
6/30/09
Total
Incurred End
of each Year
Total
Incurred
Valued
6/30/09
Loss
Development
FY 06 5,490 5,898 $22,391,668 $ 49,662,177 48 months
FY 07 5,342 5,705 $23,186,292 $ 46,702,484 36 months
FY 08 5,272 5,663 $25,977,736 $ 42,212,556 24 months
FY 09 4,826 4,826 $21,890,480 $ 21,890,480 12 months

14. University of California: WC Claims

15. University of California: WC Claims

16. Analysis of Return on Investment
by
Be Smart
About Safety

17. Concept
• Developed as a funding mechanism to invest in new and
innovative loss prevention and loss control measures with
the goal of reducing the cost of risk as it relates to
employee safety
• Not intended to supplement program budgets
Funding
• Currently funded at 10% off each location’s workers’
compensation base accrual rate
BSAS Initial Concept & Goals

18. Rationale for Program
• Provides the locations with funding for loss prevention and loss
control programs that were not available prior to the inception
of BSA
• Has a direct impact on the locations’ WC accrual rate
– Investing in loss prevention and loss control will reduce the
locations’ core premiums, as the actuary provides a rate
discount to those locations participating in the BSAS program
• Investing in loss prevention will lead to a reduction in claim
frequency, which in turn will have a positive effect on a location’s
severity and overall claim exposure
• Investing in employee health & safety through loss prevention
and loss control is a sound business decision
BSAS Initial Concept & Goals (cont)

19. Ergonomics -
Programs/Staffing
27%
Ergonomics -
Equipment
7%
Ergonomics - Training
1%
Multiple Areas &
General Safety
Programs/Staffing
22%
Wellness
10%
Safety Training
5%
Safety Equipment
5%
Return-to-Work
4%
Investigation
3%
Outreach
2%
Lab Safety
2%
Stress/EAP
2%
Other
10%
Risk/Loss Profile Driven Strategy:
Proposals by Project Purpose 2005-2010

20. Funding Allocations:
Proposals by Project Purpose 2005-2010
Ergonomics - Programs/Staffing $18,898,407
Ergonomics – Equipment 5,207,470
Ergonomics – Training 478,297
Multiple areas/programs 14,966,834
Wellness 7,013,829
Safety Training 3,764,493
Safety Equipment 3,160,637
Post-Injury & Return-to-Work 2,966,562
Incident/Accident Investigation 2,046,003
Outreach & Marketing 1,594,119
Laboratory Safety 1,288,691
Stress & Employee Assistance 1,263,965
Other 7,030,067
Ergonomics - Programs/Staffing $18,898,407
Ergonomics – Equipment 5,207,470
Ergonomics – Training 478,297
Multiple areas/programs 14,966,834
Wellness 7,013,829
Safety Training 3,764,493
Safety Equipment 3,160,637
Post-Injury & Return-to-Work 2,966,562
Incident/Accident Investigation 2,046,003
Outreach & Marketing 1,594,119
Laboratory Safety 1,288,691
Stress & Employee Assistance 1,263,965
Other 7,030,067

21. University of California “Be Smart About
Safety” (BSAS): Analysis Methodology
FY 2005-2006 FY 2006-2007 FY 2007-2008
Control data
valued as of
6/30/06
Experimental data
valued as of
6/30/08
Evaluated BSAS projects
funded and implemented

22. Be Smart
About Safety
FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10
Losses $22,349,394 $22,887,092 $26,071,261 $22,373,304 $24,141,225
Claims 9,121 9,328 9,861 9,301 9,172
Frequency 1.18 1.14 1.11 0.97 0.94
Severity $2,450 $2,454 $2,644 $2,405 $2,632
Loss rate $0.29 $0.28 $0.29 $0.23 $0.25
Frequency – Number of claims per $1,000,000 payroll
Severity – Average cost per claim
Loss rate – Cost of claims per $100 payroll
Claim Profile Results
Workers’ Compensation Program Statistics

23. Be Smart
About Safety
Changes in Claims Count by Claim Type
FY 2005-2006 to FY 2009-2010
1,157 1,130 1,158 987 1,055
4,256 4,107 4,029
3,758 3,582
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Indemnity Medical First Aid
Participating Locations
Workers’ Compensation Program Statistics

24. Be Smart
About Safety
Changes in Frequency by Claim Type
FY 2005-2006 through FY 2009-2010
(claims per $1,000,000 payroll)
Participating Locations
Workers’ Compensation Program Statistics
0.15
0.14 0.13
0.10 0.11
0.56
0.50
0.45
0.39
0.37
0.48
0.50
0.53
0.48
0.46
0.00
0.10
0.20
0.30
0.40
0.50
0.60
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Indemnity Medical First Aid

25. Be Smart
About Safety
Changes in Incurred by Claim Type
FY 2005-2006 to FY 2009-2010
$15,380,107 $15,548,042
$17,584,192
$14,325,596
$15,982,971
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Indemnity Medical First Aid
Participating Locations
Workers’ Compensation Program Statistics

26. Be Smart
About Safety
Changes in Loss Rate by Claim Type
FY 2005-2006 to FY 2009-2010
(incurred per $100 payroll)
Participating Locations
Workers’ Compensation Program Statistics
0.20 0.19 0.20
0.15 0.16
0.08 0.08
0.09
0.07 0.07
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010
Indemnity Medical First Aid

27. Be Smart
About Safety
*Ultimate losses, UC losses limited to $100,000 per claim.
Participating Locations
Workers’ Compensation Program Statistics
Change in Frequency
(claims per $1,000,000 payroll)
-8.8%
-2.4%
-8.6%
-4.3% -4.1%
-5.2%
2006-2007 2007-2008 2008-2009
UC WCIRB

28. Be Smart
About Safety
*Ultimate losses, UC losses limited to $100,000 per claim.
Participating Locations
Workers’ Compensation Program Statistics
Change in Severity
(average cost per claim)
+11.5%
+12.4%
+6.3%
+15.3%
+14.3%
+8.6%
2006-2007 2007-2008 2008-2009
UC WCIRB

29. Be Smart
About Safety
*Ultimate losses, UC losses limited to $100,000 per claim.
Participating Locations
Workers’ Compensation Program Statistics
Change in Loss Rate
(cost of claims per $100 payroll)
+1.9%
+9.1%
-3.3%
+10.4%
+9.7%
+2.9%
UC WCIRB
2006-2007 2007-2008
2008-2009

30. Be Smart
About Safety
$5,960,414
$6,241,194
$3,661,206
$3,053,996
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
2006-2007 2007-2008 2008-2009 2009-2010
BSAS Ergonomics Spending Ergonomic Injuries Incurred @ FYE
Funding vs. Injury Metrics
Ergonomics
* Incurred as of fiscal year end.

31. Be Smart
About Safety
1,444 1,422
967
724
-
200
400
600
800
1,000
1,200
1,400
1,600
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
2006-2007 2007-2008 2008-2009 2009-2010
BSAS Ergonomics Spending Ergonomic Injuries Count @ FYE
Funding vs. Injury Metrics
Ergonomics

32. Analysis Conclusions
• Campuses investing in ergonomics-related
programs showed strongest improvement
• Increases in first aid claims indicate employees
are reporting problems and injuries earlier
• Marketing of safety and general awareness may
assist in improving safety culture

33. When You Manage Injury Costs, You
Haven’t Achieved Your Goals
The least expensive claim is the one that never happens
*Failure Point

34. Developing
Competent
people and
heroics
Repeatable
Basic project
management,
attempts at
defined
processes
Defined
Process
standardization
Managed
Quantitative
management
Maturing
Continuous
process
improvement
Organization Stages
PotentialforSoftwareROIYour Prevention Model:
Determines the Tools Needed for Success

35. Developing
Someone is in pain!
I’m on it! What the
@#$# did I do last
time this
happened?
Repeatable
Our injury
prevention program
is written down and
we’ve tried using it.
I wonder if the
person sitting next to
me knows what it is?
Defined
We have a standard
injury prevention
program and process
and we’ve trained our
staff and consultants
on how to execute it
and they seem to!
I wonder if it’ll work?
Managed
We have some
organizations that
aren’t executing all
that well, but on
average we achieve
75-80% of our
objectives of
employee education,
awareness and we’ve
seen a 25% reduction
in WC Costs.
Why aren’t we
getting 100% and
greater WC
reductions?
Maturing
We’ve reviewed the
data from the first 6
months of our
program and have
found that we’d have
a higher correlation
between program
involvement and WC
cost reductions if we
were to shift some of
our consulting dollars
toward better use of
an automated
process and give
deeper attention to
those who
demonstrate
discomfort for a long
period of time….
Organization Stages
PotentialforSoftwareROIYour Prevention Model:
Determines the Tools Needed for Success

36. Mitigate Risk
• In-person
communications
• Email communications
• On-line training
• Desktop-based
messaging
• Systems integration
• Process automation
Discover New Insights
• Measuring improvement over time
• Reporting and analytics for risk-based
response
• Benchmarking
• Recognition of structural norms and
accountability norms
Identify Workplace Risk
• Surveying and assessing
• Information processing
• Creating meaning with
data / risk algorithms
Our Approach to Health, Safety and
Productivity

37. Determine Whether You Need Software
Ask Yourself…
• Do you want to automate certain prevention processes, so you
can leverage human capital where optimal?
• Do you want to standardize how to assess your risks?
• Do you want to analyze which behaviors lead to higher risk of
injuries?
• Do you want to prioritize which employees need follow-up?
• Do you want to measure changes in risk assessments over time,
and understand which prevention processes are working?
• Do you want to scale?

38. Software and Process-Driven Injury
Prevention Solutions

39. Case Study: Agilent
• Situation: Needed a centralized approach to manage
EH&S and so that prevention resources could be
allocated efficiently (and ROI achieved) for 14,000+
employees
• Solution: Outsourced services, managed with a risk-
based software-driven approach
• Results:
• Reduced the number of high risk employees 82%
• Decreased # of RSI-related WC claims by 45%
• Reduced cost per WC claim by 50%
• Enabled the re-directed consultant resources

40. Case Study: Agilent
No Discomfort
Infrequent
Discomfort
Frequent
Discomfort
Constant
Discomfort
Low Risk N N Y Y
Moderate Risk Y  N Y  N Y Y
High Risk Y Y Y Y
Effect of
Recommendation
29% Decrease in Provisioned One-on-Ones
No Discomfort
Infrequent
Discomfort
Frequent
Discomfort
Constant
Discomfort
Low Risk NA NA 1:65
Moderate Risk NA 1:735 1:134
High Risk NA 1:630 1:149
Totals 1:1451 1:70
Chances of Injury
Recommendations for Change

41. Case Study: Large Public Recreational Resort
• Yesterday:
- Processed 14,000 doctor’s notes per year (50+ daily)
- RTW case manager works with employee’s manager to
determine if a restriction conflicts with a job demand
- System relies on the manager to know the physical
demands of a job including weights and measurements
- If employee can’t return to their job, RTW calls manager
of a designated transitional duty job to determine match
- Execution of this process can take between 30-60 min
and frequently spans multiple shifts and days
- In situations where a manager doesn’t have the required
knowledge, further delays occur

42. Case Study: Large Public Recreational Resort
• Today:
- Physical demands established for each job and accessible
to the RTW case manager
- RTW manager transfers doctor’s note into system and
gets answer to “can the employee perform their job?”
- In one click, RTW case manager can identify transitional
duty jobs or any job that can be performed
- Supports complicating factors like union membership and
department/division and location of work
• Results:
- Decreased lost work days (goal = >20% decrease) through
improved accuracy/speed and decreased re-injury
- 50% improvement in time required to perform a job match
when processing a restriction note

43. Case Study: Public Health Insurance Company
• Situation: Spent $5.2M per 1,000 employees on office
space in 2010
• Opportunity: Want to reduce carbon footprint and
costs by providing alternative workspace option for
employees; aiming for happier, more comfortable
employees and less risk
• Solution: Software and outsourced services
• Results To Date:
• Already saving $5.1M annually per 1,000 employees
• Can provide risk assessment for two workspaces

44. Case Study: UC Riverside
• Situation: Wanted employees to be compliant with
Coalition of University Employees (CUE); over 400
employees at high risk for injury in 2007
• Solutions: UC’s “SEAT” and other ergonomic program
resources including desktop ergonomics software
– Assessed risk, prioritized response & delivered targeted
prevention recommendations
– Yielded actionable data to enable triage of resources
– Measured risk reduction
– Provided reporting which better demonstrated how to
identify risk at the 400 foot level
– Increased comfort and productivity

45. Case Study: UC Riverside
• Results: Reduced high risk of injury by 85% - today, 65 employees
are high risk vs. 423

46. Practical, Economical Injury Prevention
Solutions

47. Be Smart
About Safety
• Situation: Custodians and groundskeepers
injured while emptying trash into dumpster
– Lifting, bending and reaching to put trash
into receptacles
– $117,110 cost over past 5 years
• Solution: Purchased 35 new containers
• “Foot Pedal” modifications will give users
– Mechanical advantage for easy opening
and access
– Ability to use two hands for dumping and
closing lids
• Total project cost $28,678
BEFORE:
Pitch-top
dumpsters
50”-56” high
AFTER: 39”
dumpsters
modified for
mechanical
advantage
Student Housing & Facilities
Management

48. Be Smart
About Safety
• Situation: Employees at several office work locations experiencing pain &
discomfort
• Solution: 144 ergonomic evaluations completed at individual employee
work station stations in 2007-2008
• Be Smart About Safety funded 50% (up to $500 per person) for injury
prevention for these 144 employees
• Cost avoidance example: $30-40K for just one carpal tunnel injury
• Total 2007-08 BSAS funds expended: $33,864
Work Station Ergonomics

49. Be Smart
About Safety
• Situation: Camera operators diagnosed with
neck and shoulder strains
– Tripods needed to be high to get ‘over’
the crowd
– Head was held in angled position
throughout 2 to 4 hour events
• Solution: Purchased new monitor and tripod
mounts
• Neck strain alleviated and surgery avoided
($30 – 40k)
• Equipment cost: $11,086
BEFORE: Neck Strain
AFTER:
Neutral head
position even with
elevated tripod.
Mediaworks

50. Be Smart
About Safety
• Situation: Past practice was for
three or four employees to
manually handle 1800 lb downed
cow to keep it on its feet
• Projected back surgery cost >$60k
for injured worker
• Solution: Purchase of pivot boom
• Pivot boom cost: $2,900
VMTH: Fork Lift Pivot Boom

51. Conclusions
• Investments should be driven by facts and
information
• … if they are, measurement of progress is possible
• Make sure you’re measuring outcomes that your
leadership cares about

53. Thank You
Erike Young, MPPA, CSP, ARM Kim Weiss
University of California Remedy Interactive, Inc.
Erike.Young@ucop.edu klopez@remedyinteractive.com