“Then we took that information
and inquiry from senior leadership and
leveraged it into an incentive-based
program to assist in our reduction of
expense and exposure.”
The incentive-based program holds
Albertsons’ business-unit managers
accountable for their areas’ workers’
Albertsons is self-insured with a risk
management department that operates
like an insurance company. It charges
decentralized business units premiums
for their risk exposures.
The incentive-based program for
reducing worker-injury losses has both
carrot and stick elements to encourage
safety education and training, Peters
explained. Putting that in place required
senior leadership’s commitment to fund
and back it as a company directive.
“If [the business units] contribute
and reduce their accidents, they are
rewarded through rebate of their
premiums.” Peters said.
“We used TCOR to engage and sell
that approach to and through senior
As a counter balance, increased
losses result in passing related costs
on to business units. Yet Albertsons’
risk management department
understands accidents still occur even
when managers pay serious attention
to safety. So, a unit experiencing an
accident can still avoid the penalties by,
say, prioritizing return-to-work efforts.
“Because we want you to engage
with employees, and we want you to
bring them back to work,” Peters said.
“We want you to accommodate
them as much as possible.”
Sandra Little, director enterprise
risk at Bar-S Foods Co. agrees that a
TCOR analysis helps improve claims
outcomes by serving as a persuasive
tool for convincing senior managers to
support risk management initiatives.
She joined Bar-S in December
2013, when the company lacked
a sophisticated risk management
program. Early efforts to change that
required providing education while
gathering information to help her
and senior leaders comprehend the
company’s total exposure.
A TCOR analysis helped her show
management the company’s risk profile,
which included an aging employee
population working in a manufacturing
environment and experiencing issues
such as repetitive motion injuries.
The TCOR analysis highlighted
those loss characteristics and helped
gain support for mitigation measures
such as focused safety training, nurse
case management and the assistance of
a return-to-work services provider.
In short, the TCOR analysis shared
with management helped make a
“It was an eye-opener for managers.
“It was something they hadn’t
experienced before,” Little said.
St. Joseph’s program for eliminating
physicians’ vague return-to-work
instructions required winning upper
management’s support for hiring a
licensed physical therapist trained in
job-function matching and for the
purchase of $1,500 worth of equipment.
“You have to finance the [program]
so how do you sell it to your C suite?”
“You look comprehensively at total
cost of risk.”
The physical therapist analyzes and
catalogues the physical demands of
typical jobs performed for St. Joseph.
An injured worker’s treating
physician can order a test that
the physical therapist conducts to
scientifically establish a worker’s
physical capabilities for when they are
potentially able to return to work.
The physical therapist supervises
the test in a clinical setting, carefully
meeting Americans with Disabilities Act
mandates, while simulating the essential
functions and physical demands of the
Sharing the results with injured
workers helps them gain confidence
that they are capable of performing
specific duties, Tsanopoulos said.
It helps doctors take the guess
work out of determining which tasks
a returning worker is capable of
performing. The doctor may learn, for
example, that the worker is capable of
performing seven of the 10 essential
functions of the job.
“That is a very tangible description
to return somebody back to work dropped to 2,600 days after a year, and
“It came out of frustration
with vague and ambiguous work
restrictions,” Tsanopoulos said.
“It was unrealistic to expect
the physicians to know what every
occupation is and what every physical
demand is.” &
ROBERTO CENICEROS is a senior editor
with Risk & Insurance and chair of the
National Workers’ Compensation and
Disability Conference & Expo. He can be
reached at email@example.com.
with,” Tsanopoulos said. “It’s not vague.
It’s not ambiguous. It’s specific.”
Supervisors also benefit by knowing
the precise work their returning
subordinates may perform.
The arrangement provides more
than a mere return-to-work program,
Tsanopoulos explained. It has an injury
prevention aspect as part of a post-offer
employment testing component.
St. Joseph first launched the program
in 2006 at a work site with 5,000
employees. Those workers previously
tabulated 3,600 lost days per year due
to industrial accidents. That number
DETERMINING TOTAL COST OF RISK:
THIRD IN OUR THREE-PART SERIES
“[The TCOR analysis] was really
an eye-opener for managers.
It was something they hadn’t
— Sandra Little, director enterprise risk,
Bar-S Foods Co.
Savvy risk managers know that analyzing total cost of risk (TCOR) for an
employer’s workers’ compensation program provides a clearer picture of
improvement opportunities and how TCOR analysis data can engage upper
management and secure needed investments. In this, part three of our
series, you’ll learn more about: potential data elements to include in a TCOR
analysis, expected challenges in information collection, and examples of
successful execution by risk managers. If you missed parts one and two,
visit riskandinsurance.com to access the complete series.
October 1, 2017
Part 1: The Value of TCOR: Measuring the total cost of risk, or TCOR, for an
employer’s workers’ compensation program is a fundamental practice for
gauging the program’s strengths and weaknesses. A TCOR analysis can
help employers uncover which services and program elements are working
and which ones are expending resources without impacting outcomes. But
the TCOR’s accuracy may be influenced by which expenses the employer
includes in the analysis.
October 15, 2017
Part 2: Capturing the Data: How risk management departments are
structured and how they arrange the claims services they contract for will
determine the degree of challenge encountered when amassing a range
of expense data necessary to conduct a workers’ compensation total cost
of risk analysis. Regardless of the degree of challenge, conducting a TCOR
analysis is a powerful tool for understanding a workers’ comp program’s
value and well worth the effort required to uncover.
November 1, 2017
Part 3: Applying the Results: Applying a TCOR analysis can help improve
safety, speed claims resolutions and reduce an employer’s overall spending
on workers’ comp. It can help risk managers and workers’ comp managers
win corporate leadership’s support for launching programs known to
reduce losses. Once upper management sees their company’s total cost of
risk, they’re likely to ask, “How do we improve that?” This question opens
the door for risk managers to obtain the resources they need.