For ten years now, American Safety has provided loss control services to a group of 150 nursing homes in Missouri that self-insure for workers compensation. The group was facing a challenge because losses had recently increased to the point that they exceeded premium collected. The cost to run the self-insurance group, which functions much like a regular insurance company, is about 20% of premium. So, there remains only 80 cents of every premium dollar collected to pay claims. If claims are less than 80% of premium, the difference is eventually returned to the insured members in the form of dividends. If claims are more than 80%, the group has to dip into its reserves.
American Safety quickly put together a Total Safety Management loss control manual specifically for health care facilities and implemented our 15-point program through management consulting, group training sessions, site visits and on-call assistance.
The results have been impressive.
During the ten years the group operated prior to hiring American Safety, losses averaged 55% of premium collected. This resulted in an average 25% dividend payout to the members after deducting the 20% operating expenses.
In the last ten years, losses have gradually and consistently declined to 31% of premium, nearly doubling the funds available to be returned to the members in the form of dividends or premium reductions.