The Old College Try

Risk & Insurance, Nov, 1999 by Denise Myshko

This year's winner of the Best Workers' Comp program is Villanova University, which reduced paid claims by 84 percent over a five-year period. The secret? A team approach that included the broker and carrier--and reined in a severely undermanaged system.

What do you do with a workers' compensation system that is out of control? At Villanova University, the number of claims was spiraling, premiums were rising, and lost time was impacting the productivity of every aspect of the university, from maintenance to dining service to public safety.

If anything, the school's workers' comp system was virtually unmanaged. Villanova, a 10,000-student private university in Villanova, Pa., just outside Philadelphia, had no one responsible for workers' compensation claims, no universitywide program to ensure health and safety, and no formal programs for controlling losses.

"Compared with other educational institutions, we were just out of the ball park," says Charles Crawford, Villanova's pension plans administrator. Until October 1998, Crawford oversaw the university's workers' comp program. (Lisa Valosky, welfare plans administrator, now oversees workers' comp.) "Our loss ratio, the number of accidents, the severity, and the frequency were much higher than normal for an educational institution."

The university, which has about 2,000 employees, finally became serious about bringing its workers' compensation claims and costs under control. Villanova took proactive steps to rein in the number of injuries and claims, which were primarily back and shoulder injuries resulting from lifting, slipping, or falling.

The result: The number of claims has dropped 27 percent over a five-year period--and the total paid out in claims has dropped an impressive 84 percent. As a result, Risk & Insurance's annual look at excellence in workers' compensation programs recognizes Villanova University as the 1999 winner of our Best Workers' Compensation and Disability Management Program contest.

"Over the last five or six years, what really happened is that we professionalized the claims handling for workers' comp," says Gary Fenner, Villanova's VP for financial affairs.

Team Effort

A key factor to Villanova's success was its team approach with New York-based broker Marsh & McLennan and insurer The PMA Group in Blue Bell, Pa.

"Since we have no designated risk manager, we really count substantially on the support of Marsh," Fenner says. "They have become our partner in our entire risk management program in workers' compensation. We've worked very closely as a team and it has to be built upon trust, cooperation, responsiveness, willingness to share information, being open and candid about all situations. And it's worked very well. We've all worked toward the same goal of bringing down the loss experience of the university."

That team effort helped the university to reduce the number of claims from 162 in policy year Oct. 31, 1993/1994 to 119 in policy year Oct. 31, 1997/1998, a decrease of 27 percent. At the same time, total paid claims were reduced from $609,433 in the 1993/1994 policy year to $99,553 in policy year 1997/1998, a decrease of 84 percent. The number of claims so far in policy year 1998/1999 (as of May 31, 1999) is 30, with total paid claims of $20,983.

During this same time, Villanova's experience enabled it to switch from a deductible program to an aggressive retrospective insurance program. In fact, through 1997, the experience modification factor decreased 40 percent. Additionally, premiums have decreased 82 percent from 1993/1994 to the 1998/1999 policy year.

So what did Villanova do? One of the first things was to bring people on board dedicated to managing claims and implementing safety initiatives. "When I came on board in September 1993, the university was searching for some kind of workers' comp answer," Crawford says. "At the time, workers' comp was being handled by a person who was also doing medical bills and benefits work. She was thinly spread."

"It wasn't just one thing that changed," he says. "It wasn't like we implemented a formal return-to-work program and everything turned around. On the administrative side, I was dealing with employees, case managers, and claims professionals on the front lines, and Arnelia brought her experience in health and safety."

Arnelia is Arnelia Hollinger, Villanova's director of environmental health and safety, who was hired to communicate with workers about preventing accidents. Hollinger works with the university's safety committee, which reviews environmental health and safety issues, to identify areas within the university that need to be addressed. The committee troubleshoots problems and plans new initiatives, such as the establishment of an ad-hoc ergonomics committee, which is designed to prevent workers' comp claims through workplace ergonomic assessments.

In addition to Hollinger, members of the committee include the university's vice president for finance (Gary Fenner), the executive director for facilities management, the director of human resources (G. Thomas Bull), the director of dining services, the director of residence life, the director of public safety, and representatives from Marsh & McLennan, The PMA Group (the university's