Insights from an Innovative Self Insurer

At the 2015 WCIRB Annual Conference, Bill Zachry, Group Vice President of Risk Management from Safeway, Inc., presented a session highlighting their approach to self-insurance.

• Safeway’s program is costing about 40% of what their industry peers’ programs cost.
• They focus on providing quality care to injured workers who will deliver superior outcomes.
• Their managed care programs are the main factor in the savings and superior outcomes achieved.
• They feel it is important that medical professionals make medical decisions rather than claims adjusters. Their nurse case managers made all medical decisions on the claims.
• They have a custom-developed medical provider network that measures medical outcomes and grades the providers accordingly.
• Safeway pursues a compromise and release (C&R) on all claims so that all issues are closed and the files cannot be reopened years down the road. This has significantly reduced their open claims inventory.
• Only 5.1% of their medical costs are pharmacy, which is much lower than industry averages. They attribute this success to the Pharmacy Benefit Network that they created. This is something allowed in the law that very few employers have taken advantage of. While assembling this network was challenging, it has been very successful.
• They stress the importance of linking their utilization review and bill review systems. This ensures that only authorized treatment gets reimbursed. Before they made this change, they found that 25% of the bills paid was for treatment that they never authorized.
• They have a focus on getting claims reported, investigated, and a decision made on compensability as quickly as possible with the goal being under 14 days for all claims.
• They are the largest trucking firm west of the Mississippi, but they have not had a quad or para claim in 10 years. They have a significant focus on loss prevention and driver training.
• Significant effort is put into identifying injured workers who are at risk for delayed recovery due to poor coping skills or other psycho-social risk factors so that additional resources can be devoted to those claims. After a successful pilot program, they now conduct a screening questionnaire on all claims to identify the cases where intervention is needed. The intervention includes nurse case management, more-focused physical therapy, and cognitive therapy to assist in developing the necessary coping skills to achieve a superior outcome.