Ahold Tackles Rising Workers' Comp Medical Costs

For supermarkets trying to manage their workers' compensation costs, the good news is that nationally, workplace injuries and illnesses in the private sector continue to fall, and employers' costs are down. However, these gains are being offset by a significant rise in medical expenses, which is the primary driver of workers' comp costs today, noted Libby Christman, senior director of risk management

For supermarkets trying to manage their workers' compensation costs, the good news is that nationally, workplace injuries and illnesses in the private sector continue to fall, and employers' costs are down.

However, these gains are being offset by a significant rise in medical expenses, which is the primary driver of workers' comp costs today, noted Libby Christman, senior director of risk management for Ahold USA [4], Quincy, Mass.

Supermarket operators such as Ahold are taking proactive measures to help curtail medical payments, which jumped 8.8% to $29.1 billion in 2008, according to the latest statistics from the National Academy of Social Insurance, which tracks data on workers' comp cash and medical payments. This is the first time medical payments exceeded over half (50.4%) of the $57.6 billion in benefits paid to injured workers on the job in 2008.

Cash benefits ($28.6 billion) paid to workers in lost wages made up the difference with a slight 0.3% increase. All told, medical and cash benefits increased 4.4%, while employers' costs dropped 6.7% to $78.9 billion.

Nonfatal workplace injuries continue to fall on a national basis as well, from 3.7 million cases of nonfatal occupational injuries and illnesses reported in 2008 to 3.3 million cases in 2009, according to the U.S. Bureau of Labor Statistics. Nonfatal incident rates per 100 equivalent full-time workers dropped from 3.9 cases to 3.6 during same period.

Supermarkets appear to mimic national trends for nonfatal occupational injuries and illnesses with incidence rates falling nearly a point from 6.2 to 5.6 in 2009. There were 27,390 injury cases reported for supermarkets and other grocery, not including convenience stores, in 2009. Of those, sprains, strains and tears lead the number of injuries with 11,330 cases reported, followed by cuts, lacerations and punctures with 4,540 cases, and bruises and contusions, 2,950 cases.

Many of these cases may have resulted in a needless but costly trip to the emergency room, which can be four to five times higher than visits to a health clinic or physician's office. Such ER visits are said to contribute to escalating medical costs of workers' comp.


Christman, who was elevated to Ahold's top risk management position last year after serving as director of risk management for Giant Food Stores, Carlisle, Pa., told SN the retail chain is taking a holistic approach to workers' comp issues.

“We want to ensure that we are providing associates with the best medical care to treat their work-related injuries. In today's world, many people suffer from other chronic illnesses that impact the treatment or complicate the ability to recover and/or resume work. As an employer, we need to look at these issues holistically to better understand not only the financial impacts, but also how we can improve the process for employees that are injured on the job,” she wrote in a response to email questions on how Ahold was managing its workers' comp costs.

Christman said the goal of the company is to reduce the cost of workers' comp claims year over year or at the very least maintain a consistent loss rate even as Ahold opens more stores. “This is a particular challenge as we deal with medical inflation, which directly influences workmans' comp costs.”

The most frequently reported injuries at Ahold, which employs about 116,000 people at more than 700 stores among its four U.S. divisions — which include Stop & Shop New England, Stop & Shop New York Metro, Giant-Landover and Giant-Carlisle — mirror the rest of the supermarket industry. Frequent injuries are low back sprains/strains; shoulder strains from lifting, pushing or pulling; slips and falls resulting in contusions or back/knee pain; and cuts to fingers/hands, said Christman.

Christman plans to apply her 13 years of experience at Giant-Carlisle companywide. Giant-Carlisle focused a lot on training and reinforcement of training, and this continues, she said.

“Field safety specialists focus attention on safety audits, coaching and training managers and associates, enforcing personal protective equipment standards and strong management support have all been instrumental in our success.

“I have been privileged to work with senior management that believes that our associates are the most important asset of the company and they are willing to stand behind and support a variety of safety efforts.”

Among those initiatives was the implementation in 2007 of a slip-resistant shoe program and working with Medcor, McHenry, Ill., to cut ER and doctors' costs through a 24/7 telephone triage center manned by 60 registered nurses.

Giant Food piloted Medcor's triage in mid-2009 with about 12 stores and a distribution center. By the end of 2009, Giant rolled out the service to remaining stores. Ahold signed a contract with Medcor last year.

“We are currently piloting the program in other Ahold locations, with plans to roll out the service further in 2011,” Christman stated.

The triage is being utilized by Ahold employees, who report injuries, and by store management.

“Our associates have the opportunity to speak with a nurse on the phone immediately following a reported injury,” Christman explained. “These calls are made in private so the associate can speak about not only the injury, but also any other medical condition that may also be impacted by the work injury.”

It's important to note all Medcor triage calls are recorded for accurate injury reporting.

“Our store management relies on the nurse to make a decision about whether the associate needs immediate medical care and what type of medical provider will best serve the associate. Medcor eliminates the need for a manager to make a decision about medical care for their employee, which is a big relief to most of them,” Christman explained.

Leaving the medical decision making to a nonbiased third party helps prevent the practice of managers pressuring employees not to file workers' comp claims.

Raley's Supermarkets, West Sacramento, Calif., last year paid $550,000 in penalties and costs to settle charges, brought by six California district attorneys, that Raley's managers attempted to dissuade injured employees from filing workers' comp claims. As a result, Raley's contracted with a telephonic medical advice service as well as improved its record keeping and trained managers, according to reports.


Ahold, which declined to give specifics related to injury rates and workers' comp costs, said it has determined through the triage service that at least an additional 15% of reported medical incidents could be treated by “self care,” as suggested by the nurse, saving on expensive trips to the ER or doctor.

“Of course, if an associate wants to seek outside medical attention, we encourage them to go offsite. What we have found is that most of the minor complaints can be handled through first aid at our locations.”

Wal-Mart Stores is said to be piloting a Medcor triage program. Target Corp. has contracted with the service. Other supermarkets using the service are Safeway, Supervalu, Publix Super Markets, Kroger Co. and Roundy's Supermarkets, said Medcor executives.

What distinguishes Medcor's service from others is that it is independent from “claims-driven organizations” such as third-party administrators (TPAs) or network managers that have a revenue interest in driving claims and referrals to specified health clinics and doctors' offices, Medcor executives told SN. Some managed health care companies have set up similar pre-claim advisory services.

Medcor is currently providing triage to 80,000 worksites, including more than 10,000 grocery stores. The company launched the service over a decade ago and is now approaching its 1 millionth call.

Those using the service, which is on a contractual basis, can tap into Medcor's data warehouse to mine worker injury and illness statistics and individual store data to help prevent further incidents and make the workplace safer.

Medcor executives said the cost of the service is about $100 per call. That can potentially result in significant savings with the average cost of an ER visit at $1,200 or more, said Medcor executives. They said triage could cut workers' comp claims by half through “self care” treatment and get employees back to work quicker.