Fred Miller MT Safety & Health Bureau March 12, 2013 MT SHB Safety & Health Bureau Profiting From Safety.
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Fred Miller MT Safety & Health BureauMarch 12, 2013
MT SHB Safety & Health Bureau
Profiting FromSafety
HOUSTON….WE HAVE A PROBLEM….
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MONTANA….WE HAVE A PROBLEM…
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PROBLEM:
Montana's workplace injury rates are among the nation’s highest
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Professional and technical services
Finance and insurance
Real Estate and rental and leasing
Information
Mining
Other services
Educational services
Administrative and waste services
Wholesale trade
Transportation and warehousing
Utilities
Accommodation and food services
Arts, entertainment, and recreation
Retail trade
Management of companies and enterprises
Health care and social assistance
Manufacturing
Agriculture, forestry, fishing and hunting
Construction
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
Montana United States Rate per 100 Full-time Employees
MT SHB Safety & Health Bureau
MT Injury & Illness Incident Rates
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FACT:
Montana's work comp ratesare among the nation’s highest2012 Oregon Workers’ Compensation Premium Rate Ranking Summary; Dept. of Consumer and Business Services
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MT = HIGH RATES2010
1)Montana
2) Alaska3) Illinois
49) Arkansas50) Indiana51) North Dakota
20121) Alaska2) Connecticut3) California
8) Montana
49) Arkansas50) Indiana51) North Dakota
SAFETY IS GOOD BUSINESS
If Montana’s workplace injury frequency rates are reduced to
national average(Source: NCCI White Paper to MT DLI, March
2008)
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$145 million
MORALLY…
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It’s the right thing to do.
SAFETY
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Quality
Safety
Productivity
Retention
Employees
OSHA
Lower health
Lower comp
SAFETY
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Safety
Bottom line
“There is a clear
connection
between safety
… and profitability.”
Edmund Kelly,
Former President & CEO(in Sept. 12, 2005 issue of Business Week)
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LARGE CORPORATIONS “GET IT”
LARGE CORPORATIONS “GET IT”
We want each employee and contractor working at an XTO site to return home as safe and sound as when he or she reported to work.”
Jack Williams, President, XTO Energy
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“Safety is the foundation of our business – nothing is more
important.
SOME MT COMPANIES “GET IT”
“Our premiums have gone down and that’s a fantastic story
financially.”
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Cheri Decker,HR Executive Simms Fishing Products
JEFFERSON CO. “GETS IT”
Over 3 years,
Jefferson County
saved more than
$85,000
in work comp
premiums with its
safety program.
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YELLOWSTONE CO. “GETS IT”
Yellowstone County
has saved over
$100,000
in the past three
years - and twice
won the Governor’s
Safety Award.
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MT STATE GOVERNMENT “GETS IT”
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2008 2009 2010 2011 2012
Incurred Loss 13719747.76 10912747.41 9436293.09 8094854.78 4792300.97
Premium 18293340 18792208 18041787 16660208 13298334
1000000
3000000
5000000
7000000
9000000
11000000
13000000
15000000
17000000
19000000
Montana State Government - Work Comp Claims & Premium
Since 2008, state work comp costs have decreased a total $6.4 million
SAFETY
IS THEMISSING LINK!
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Between now Lower work comp costs
MT SHB Safety & Health Bureau
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Root Causes
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Injuries are caused by a series of
underlying events that produce
an undesired result
MT SHB Safety & Health Bureau
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Discover the underlying cause - then
eliminate it, reduce it,
or control it.
MT SHB Safety & Health Bureau
#1: Montana workers are injured among the highest rates in the nation. (US BLS )
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Root causes of high rates
#2: Compared to the national average, it takes 23 dayslonger to get an injured worker back to work. (US BLS)
#1: Montana workers are injured among the highest rates in the nation.
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Root Cause Solutions
#1: Raise awareness #2: Free safety consultations#3: Free written safety plan#4: Free SafetyFestMT#5: Free monthly safety coalitions
#6: Free OSHA training 444-6401
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Risk Management solutions
#1 SOLUTION: utilize safety consultations
Call 444-6401
www.montanasafety.com
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OSHA standards
1910 General Industry
1926 Construction
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You choose
Education?
Enforcement?
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Root Cause Solutions
#2 Problem: It takes 23 days longer to get an injured worker back to work.#2 SOLUTION: RTW Education
Jason SwantDLI RTWjswant@mt.gov444-1748
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Root Causes
Risk Management solution
#2 SOLUTION: Education for returning an injured worker to job ASAP.
70 %
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SAFETY IS GOOD FOR BOTTOM LINE
Premium = Payroll (x) Rate 100
Each job has its own class code and
rate
Rates are determined by NCCI All types of work (in each state) is
compiled when determining the rate
SAFETY IS GOOD FOR BOTTOM LINE
Premium = payroll (x) Rate 100
(x) E-mod
Experience modification multiplies your premium based on 3-year history of your claims
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SAFETY IS GOOD FOR YOUR BOTTOM LINE
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E-MOD
Multiplies your premium up, or down.
A 1.00 e-mod = average; “C” grade;
neutral
A debit >1.00 (F)
A credit < 1.00 (A)
SAFETY IS GOOD FOR BOTTOM LINE
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Premium = payroll (x) Rate 100
(x) E-mod
Homework: Ask about your e-mod, what is it? Is it trending up or down?
SAFETY IS GOOD FOR BOTTOM LINE
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Premium = payroll (x) Rate 100
(x) E-mod
(x) Sch. Rating
Scheduled rating (Loss Control Credit) is an extra discount that you might receive.
SAFETY IS GOOD FOR BOTTOM LINE
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Scheduled Rating
DOCUMENT individual risk
characteristicsWritten safety plan
Safety Committee
Early-Return-to-Work
Tool box talks
DIFFERENCE SAFETY MAKES
Example: costs with POOR safety record
$100,000 payroll (x) 24.65 = $24,650100
E-mod (x) 1.25 = $30,813Sch. Rating (x) 1.10 =
$33,894
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$9,244 above average
DIFFERENCE SAFETY MAKES
Example: costs with GOOD safety record
$100,000 payroll (x) 24.65 = $24,650 100E-mod (x) 0.75 = $18,487Sch. Rating (x) 0.95 = $17,563
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$7,086 better than average
DIFFERENCE SAFETY MAKES
With POOR safety $33,894
With GOOD safety - $17,563
Difference =$16,330
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REAP A 400% HARVEST
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SOURCE: American Society of Safety Engineers (ASSE) 2002 White Paper.
SOW SAFETY
WORKPLACE SAFETY IS NOT JUST A GOOD IDEA –
Montana Safety Culture Act MCA 39-71-1501Employers:
1) Develop safety programs2) Implement safety programs
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it’s state law
1) DECIDE
2) DEVELOP
3) IMPLEMENT
4) MONITOR
5)
NEGOTIATE
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5 Steps
to Reduced Comp Costs
5 STEPS TO LOWER
COMP
“People pay attention to
what their boss pays attention to.”
– Shawn
Galloway 41
1) Decide “You get the level of safety you demonstrate you want.” – DuPont
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5 STEPS
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1) DECIDE
It all starts with a decision
either CEO, Board or Owners.
MT SHB Safety & Health Bureau
“The buck stops here.”
President Harry Truman1945–1953
5 STEPS
Call 444-6401For free Safety
help43
2) DEVELOP
Download a written
Safety Policy.
MT SHB Safety & Health Bureau
5 STEPS
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3) IMPLEMENT
Put your plan into practice –
make it part of your DNA.
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5 STEPS
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4) MONITOR your critical
numbers
MT SHB Safety & Health Bureau
Loss Ratio
E-mod
Scheduled rating
INSURANCE = RISK TRANSFER
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Transfers your risk to the insurance company in exchange for premium.
5) NEGOTIATE
MT SHB Safety & Health Bureau
5 Steps
5 STEPS
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If risk goes down, pricing should
follow.
MT SHB Safety & Health Bureau
Less risk = less cost
5 STEPS
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Join a Retrospective rated group plan
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Costs
Claims
Return
5 STEPS
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Join a Retrospective rated group plan
MT SHB Safety & Health Bureau
Montana State Fund Small Business Group
Liberty Northwest MT Chamber Choices
Liberty Northwest Contractors Group
SAFETY IS A CRITICAL COMPONENT
FOR A STRONG BOTTOM LINE.
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Safety is job # 1
Quality is job # 2
Production is job # 3
Allied Steel, Lewistown
Make Safety Job #1!
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1) Written safety plan?
MT SHB Safety & Health Bureau
Homework:
2) Scheduled rating?
3) E –mod
4) Retro group?
5) Who’s in charge?
DISCLAIMERS
1. This class discounts.
2. Retro groups have restrictions.
3. You may not join more than one group.
4. You might not have an e-mod.
5. After a safety consultation, you are expected to make improvements.
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HELP IS AVAILABLE! MT DLI Safety & Health Bureau 444-
6401
www.montanasafety.com
BILLINGS - Jennifer Rose, Joe Wolf
BUTTE - Vidya Bala, Chris Lockmer, Tiffany Ott,
Kristine Witt
HELENA - Edward Dawes, Judy Murphy,
Dave DeFer
GREAT FALLS – Fred Miller, Marissa Morgan
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HELP IS AVAILABLE! Your workers’ comp insurance
company Loss Control Department. Montana State Fund Liberty Northwest Hartford Travelers
Your local insurance agent Payne-West HUB
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Safety Management OSHA 30-hour OSHA 10-hour HAZWOPER 40-hour
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Coming soon….
MT SHB Safety & Health Bureau
SafetyFestMT.com
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Professional and technical services
Finance and insurance
Real Estate and rental and leasing
Information
Mining
Other services
Educational services
Administrative and waste services
Wholesale trade
Transportation and warehousing
Utilities
Accommodation and food services
Arts, entertainment, and recreation
Retail trade
Management of companies and enterprises
Health care and social assistance
Manufacturing
Agriculture, forestry, fishing and hunting
Construction
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
Montana United States Rate per 100 Full-time Employees
MT SHB Safety & Health Bureau
MT Injury & Illness Incident Rates
SAFETY IS GOOD BUSINESS
If Montana’s workplace injury frequency rates are reduced to
national average(Source: NCCI White Paper to MT DLI, March
2008)
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SUMMARY Safety: fulfills your moral responsibility.
Safety: protects most valuable resource.
Safety: helps employees be more engaged.
Safety: improves the bottom line.
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NEXT TO LAST WORD
“It’s the right thing to do.”
Cheri Decker, Simms Fishing60
MT SHB Safety & Health Bureau
PEOPLE COME FIRST
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“For a quarter of a century, Montana’s people…have come first with me.
That is as it always has been. That is the way it always will be.”
Sen. Mike Mansfield
Aug. 24, 1967
PEOPLE COME FIRST
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“For a quarter of a century, Montana’s people…have come first with me.
That is as it always has been. That is the way it always will be.”
Sen. Mike Mansfield
Aug. 24, 1967
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