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robintek

Dec 01
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REALIZE SUBSTANTIAL SAVINGS BY REVISING YOUR INSURANCE COVERAGE WHEN DOWNSIZING

By Business Protection Bulletin

In recessionary periods it is common practice for companies to downsize their operations. Downsizing would naturally include both your physical assets and personnel. Taking stock of your insurance requirements and re-evaluating your policy coverage should also be included in your downsizing strategy. And, even if you are not downsizing in the immediate future every business owner ought to take a close look and audit their insurance package anyway. If you are wondering why you should bother, the reason is simple: You could be missing out on some substantial savings!

Let’s elaborate further on the two main reasons you might want to audit your insurance coverage:

  • Paying for what you don’t need – If you are selling off assets then simply put, you don’t need to be paying for the insurance coverage. Similarly, if you’re reducing personnel then you don’t want to be paying for unnecessary Workers Compensation coverage, do you? If your policies are based on the value of your current assets then you will want to re-adjust your coverage and save on the premiums in the process. You might even use some of the premium savings to boost your EPLI coverage because laid off workers are not only disgruntled, but litigious minded when the pink slip lands on their desk.
  • There are bargains out there – Even insurance companies have to compete vigorously in a recessionary marketplace. Better deals can be obtained if you shop around. If you cannot find better competitive prices for your premium dollar, you will likely find alternative policies that offer better coverage for the same premium.

Start with an audit

Contact your insurance broker to help you perform a full insurance audit of your current situation. Think about your needs down the road by considering best and worst case scenarios. Don’t procrastinate and wait until the last minute when your policy is about to expire. An audit is best performed a few months prior to your policy expiration.

Ensure that your broker also comes back with other quotes from your insurance carrier’s competitors. This will at least prompt a very competitive bid from your current insurance carrier. They want to keep your business.

Remember to re-evaluate your insurance deductibles

When reviewing your policies don’t forget to review your current deductibles. If you are prepared to assume more risk then you can lower your premiums even further by increasing policy deductibles. Call us to arrange for a policy review with one of insurance professionals.

Dec 01
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LIMIT DURATION OF WORKERS COMP CLAIMS TO MINIMIZE COSTS

By Business Protection Bulletin

Workers Compensation claims are a major cost of doing business, and the length of time a claim remains open has a large effect. Claims that stay open for long periods of time are more likely to involve attorneys, high medical bills, and significant payments for lost wages. According to the Insurance Information Institute, between 2002 and 2007 the medical cost per lost-time claim (claims where the injured employee is unable to work) rose 50% faster than the annual rate of medical inflation for the economy as a whole. The institute estimates that attorney fees increase claim costs by 12% to 15% with no net gain in benefits to the worker. Most states index the maximum payment for lost wages to the state’s average weekly wage, a figure that generally rises each year.

Limiting the duration of Workers Compensation claims is an important strategy in the effort to hold down costs. To do this, employers have several options at their disposal:

  • Prompt notice of claims to the insurance company hastens the onset of medical treatment, speeds up the injured worker’s recovery and return to work, and reduces the likelihood that he will hire an attorney. Therefore, requiring workers to immediately report all injuries, however minor, and promptly reporting them to the insurance company can have a huge impact on the duration of a claim.
  • A prompt and thorough investigation of the incident is just as important. Interviews with the injured worker and witnesses, photographs, and other information gathered as soon as possible will help the insurance company to properly adjust the claim.
  • If the employee will be out of work for an extended length of time, the employer should keep in regular contact. An injured worker who gets the sense that his employer does not care will become a receptive audience for plaintiff attorneys. Employers might want to call the worker periodically to check on their condition, offer assistance with completing the paperwork, and generally to check on their emotional state.
  • The employer should have a good understanding of the state law pertaining to the waiting period for benefits covering lost wages. This is especially true if the employer operates in several states, as their laws might vary widely. Understanding how the law applies to the worker’s situation will help the employer set expectations properly. This reduces the chance of misunderstandings that can lead to problems down the road.
  • Building relationships with the physicians treating the employee will keep the employer better informed as to his condition, treatments, medications, and expected duration of disability. This should eliminate surprises and help the employer get the employee back to work sooner.
  • Return to work programs can shorten claim duration and reduce costs significantly. These programs permit an injured employee to return to work in some capacity before he has recovered to the point where he can resume his previous duties. They reduce payments for lost wages, meet the worker’s need to feel productive again, and remove incentives for the worker to hire an attorney.
  • Employers should review loss reports with their insurance agents and claim adjusters and ask questions about losses that do not appear to be progressing toward closure. They should also look for patterns in the loss reports to identify correctible factors that raise the cost of lost-time injuries.

Employers owe it to their workers to provide a safe workplace and benefits to help them should they get hurt. With some extra care and attention, employers can meet those obligations and keep costs in check. Contact our office today to see how we can help!

Dec 01
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IMPLEMENT A RETURN TO WORK PROGRAM TO GET INJURED WORKERS BACK ON THE JOB

By Business Protection Bulletin

Workers Compensation premiums represent a major personnel expense for most organizations. Injuries that cause employees to miss work are especially costly, in terms of both lost wage compensation and lost productivity. Also, the longer a worker is disabled and unable to work, the more his future earning power decreases and the more likely it becomes that he will hire an attorney. For these reasons, it is advantageous to both employer and employee to get the injured worker back on the job as soon as possible. As a result, many employers have implemented return to work programs.

Under a return to work program, the injured employee performs a different job while receiving their prior level of pay. The new job should be matched to their current physical capability, reflecting their state of recovery from the injury. To succeed, this requires a good working relationship between the employer and treating physician. The employer needs accurate information as to the tasks the worker can safely perform; otherwise, the result might be a second, more severe injury. If the worker’s physician will not cooperate or provide a realistic estimate, the employer or insurance company might have to require a physical examination by an independent physician.

A return to work program should be one piece of a comprehensive and coordinated loss management program. The elements of the program should include:

  • Immediate reporting and investigation of accidents
  • Arrangement of primary medical care
  • Return to work program
  • Regular communications with the injured worker

To assist in the arrangement of primary care, the employer should provide the treating physician with job descriptions that explain each job’s physical tasks in detail. Meetings with the physician to explain the nature of the employer’s operation will help match a job to the worker’s capabilities. Communications between the physician and the employer are vitally important. The employer might want to arrange for direct reports from the physician or regular reports delivered by the employee. The ideal situation is one where the employee can assume light duties without missing any time. Barring that, limiting lost time to a week or two will still keep the claim’s cost down, resulting in premium savings for the employer. The experience modification formula, which adjusts the premium based on loss history, gives the most weight to losses of $5,000 or less. Getting the injured worker back on the job quickly will help keep the loss well under that limit. Since losses remain in the calculation for three years, the effect of holding down claim costs is long lasting.

Of course, return to work programs have pros and cons. The pros include:

  • Limiting or eliminating lost work time
  • Keeping the worker involved in the work environment
  • Eliminating the need to locate, hire and train a replacement
  • Increasing the chances of success should the worker refuse the new duties and sue for lost wage benefits, since the employer can show that it made a reasonable job offer

Among the cons are:

  • The employer will pay the employee’s full wage for reduced productivity
  • An employee with a bad attitude about his alternative duties could lower morale among the other employees
  • If the alternative arrangement does not work out, returning the employee to lost wage benefits will wipe out any cost savings

Although individual cases might not produce the desired results, employers should realize long-term savings by implementing return to work programs. Beyond the verifiable dollar savings, return to work programs can give the employer a more stable, happier workforce and a good reputation with potential employees.

Dec 01
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EXERCISE CAUTION WHEN TERMINATING AN EMPLOYEE

By Construction Insurance Bulletin

There is never a good time to be laid off from a job. In addition to the loss of income, many people define themselves by what they do. To these employees, being laid off can be a blow both economically and emotionally.

That’s why it’s so important to relay this news to workers in a way that minimizes the possibility of a violent reaction. The best way to accomplish this is to remain respectful of the individual so that they can maintain their dignity. Here are some tips to help you terminate without destroying the employee’s ego:

  • Be explicit about the reason(s) for termination. If economic conditions have required you to let this employee go, you need to explain the justification for your actions. Don’t attempt to spare your employee’s feelings. If this person was chosen for termination instead of a colleague who has similar responsibilities, you must be explicit about what other issues, such as chronic lateness/absenteeism, poor performance, etc. influenced your decision. Be prepared to backup your statements with written documentation that verifies your decisions.
  • Choose an appropriate time. You should always terminate an employee early in the day and early in the week. Never terminate on a Friday or on the day before a holiday.
  • Have the termination paperwork ready. You should provide the employee with all information about pay, benefits, and unused vacation time during the termination interview. Be ready to answer all questions regarding what they are entitled to, especially if there is a severance package.
  • Ask for the assistance of your Human Resources professional. Having an HR person sit in on the termination interview can be helpful because they can answer questions about benefits in greater detail.
  • Conduct the interview in privacy. Hold the termination meeting in your office, and close the door so that other employees can’t overhear the proceedings. Assure the employee that no part of your conversation will be repeated to other employees. Also explain the wording that will be used to announce the employee’s departure to the rest of the staff.
  • Don’t overstate. Once you have explained the reasons for the termination and what benefits the employee is entitled to and given the employee time to ask questions, bring the meeting to a close. The longer you stay in the room, the more opportunity there is for the employee to try to negotiate to get the job back. This type of situation has the potential for violence.
  • Be mindful of your tone throughout the meeting. Be direct, but compassionate. Never try to commiserate with the employee.
  • Stay in charge of the meeting. The employee might attempt to deflect blame to save their job. Don’t allow this to continue. Politely interrupt the employee and explain that the decision has been made and is not reversible.
  • Offer some words of encouragement. End the meeting by thanking the employee for their service and wishing them well in their future career.
Dec 01
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AVOID FIRE ON THE CONSTRUCTION SITE BY TAKING PROPER PRECAUTIONS

By Construction Insurance Bulletin

With all the attention garnered in recent years by the California wildfires, it’s a vivid reminder of the constant threat that jobsite fires can pose on construction projects. Contractors need to continually reassess their risk management plans to adequately prepare for a potential fire. The International Marine Underwriters Association offers the following 10 tips for keeping construction sites free from fire:

  1. Maintain a written loss control plan that addresses risks of fire exposure comprehensively. Your plan should include general safety measures and specific objectives that are enforced actively by job site management, with a specific person in charge of on-site safety coordination.
  2. A no smoking policy should be enforced at all times during the project.
  3. Daily on-site inspections by project managers should investigate the work area, material and equipment storage, and any locations with hazards. A log should be maintained of all daily inspections for future reference.
  4. During “hot works” operations like cutting, welding or brazing, a designated person should look for sparks that could lead to fires by maintaining a line of sight to the working and adjacent areas. This person should watch actively for sparks, slag, and products of combustion, as well as inspecting the surrounding areas for at least 30 minutes after operations have ceased.
  5. All portable heating equipment should be placed on non-combustive flooring or platforms. Adequate clearance, maintenance and fueling should be in accordance with manufacturer’s specifications and/or recognized standards.
  6. Build temporary enclosures that contain designated travel paths for materials and emergency personnel. Ideally, these enclosures should be located away from overhead exposures and should be built with approved Underwriters Laboratory or Factory Mutual non-combustible construction materials.
  7. During roof construction, place at least one portable fire extinguisher on the roof level that has sufficient capacity for the task at hand.
  8. Properly clean roof vents to reduce possible ignition sources, such as lint, prior to roof surfacing operations.
  9. Review identification and labeling requirements on flammable liquid and gas containers prior to allowing them on the jobsite. Designate safe storage areas for flammable materials and clearly identify them with signs and stable barriers.
  10. Firefighting equipment should be readily available on the jobsite at all times. Project managers should ensure that such equipment is implemented properly, connected to a reliable water supply and easily adaptable to local fire department equipment.
Dec 01
Love0

REDUCE JOBSITE THEFT AND VANDALISM WITH THESE PRECAUTIONARY MEASURES

By Construction Insurance Bulletin

Jobsite theft continues to be a major challenge for all contractors with industry experts estimating annual losses at roughly $1 billion to $2 billion in the residential construction sector alone. Meanwhile, the National Equipment Register estimates annual thefts of heavy equipment, such as bulldozers and skid-steers, at $300 million to $1 billion – with only 10% of all stolen equipment ever being recovered. Contractors, equipment dealers, and insurers all suffer when jobsites are vandalized or equipment and materials are stolen. In what starts a vicious cycle, a stolen piece of equipment or material can shut the jobsite down temporarily adding to indirect costs for the contractor. Rental equipment companies may refuse to rent to contractors who don’t properly safeguard their assets. And finally, insurance premiums are bound to rise for all parties to mitigate losses associated with equipment theft.

The phenomenon of theft and vandalism of construction sites is not new and not limited to any one region. This is a national problem that will most likely only get worse over time. Whether we like it or not, jobsite theft is here to stay and the industry must focus on limiting the incidents as much as possible by making it difficult for the perpetrators to succeed.

Contractors can demonstrate commitment to stopping theft and vandalism on their sites by following these tips:

  • Inventory Assets and Property. All assets on a construction site should be identified, inventoried, and tracked as closely as practical.
  • Enlist Neighborhood Support. A company representative should contact neighbors around the jobsite to solicit their support in maintaining a safe and secure jobsite.
  • Control Keys. Keys should be issued to as few people as possible. A log of issued keys should be maintained which includes the type of key issued, to whom, on what date, and for what purpose.
  • Lock Gates after Hours. The number of gates on the jobsite should be kept to a minimum. If possible and practical to do so, uniformed guards should be utilized during working hours to check vehicles entering and leaving the jobsite. Gates should be closed and locked at night and on weekends.
  • Secure Tools and Equipment When Not in Use. Storage sheds or fenced areas should be provided on the jobsite for the secure storage of tools and equipment. When vehicular equipment is not in use, ignition keys should be removed and the cabs locked.
  • Engrave Construction Equipment in at least two obvious and one hidden location.
  • Install Motion Activated Lighting. Lighting can be an effective deterrent to theft and vandalism on the site. Lighting systems triggered by a motion detector are recommended as such lighting gives the impression an intrusion has been detected and might also warn neighbors of potential intruders.
  • Fence the Jobsite. Ideally, the entire jobsite should be enclosed in sturdy fencing topped with multiple strands of barbed wire. If it is not practical to enclose the entire site, at a minimum the area around trailers and material storage should be enclosed.
  • Hire a Security Company. It might be advisable to employ the services of a bonded and insured security company either to maintain guard staff on-site or to conduct periodic patrols of the construction jobsite.

Although this list might be lengthy, the time spent reading these tips and implementing them could save you a lot of time and money.

Dec 01
Love0

SLEEP DEFICIT CAN BE A RECIPE FOR DISASTER ON THE JOBSITE

By Workplace Safety

Too many employees work long hours for several days in a row without sufficient sleep — and that’s a recipe for disaster. When you haven’t had enough sleep, you’re more likely to feel tired, depressed, keyed up, or irritable. That’s why a jobsite staffed with fatigued workers creates a hazardous work environment.

The problem with sleep debt. Experts say that the average adult requires seven to eight hours of uninterrupted sleep every day. When you don’t catch enough ZZZs each night, you build up a dangerous sleep debt that adds up over time.

If you only sleep four hours one night, your work performance might not be affected right away. However, repeated nights of insufficient or disrupted sleep over a period of days or weeks will eventually wear you down. Over time, this growing sleep debt will not only make you feel tired and irritable, but it could ultimately lead to depression, loss of appetite and digestive problems. Insufficient sleep can also increase your risk of getting sick.

Fatigued Workers = Dangerous Jobsite. If you and/or your co-workers are sleep deprived on the worksite, you’re more likely to make mistakes or miss potentially dangerous situations. Sleepy workers often react more slowly than usual, show poor judgment, and are unable to stay focused on the job at hand. When you’re tired, you could also lose motivation, become forgetful, and take greater risks. This could lead to serious accidents and injuries on the jobsite. It all adds up to an unsafe work environment for yourself and your fellow workers.

This is why it’s so important to ensure that you get at least seven hours of sleep every night. If you are planning to work an extended shift, make sure that you make time for a good night’s sleep as soon as your shift is over. Although it might be tempting to run out after work and socialize with your friends, it’s more important to your safety and overall health to go home and get plenty of sleep.

Employers can help. Employers can pitch in and help make the workplace safer by ensuring their workers get plenty of sleep. Some employers require a certain number of mandatory off-duty hours. This increases the likelihood that workers will go home and get enough sleep before they return to the jobsite.

If workers are taking on extended shifts, employers can help by offering prepared meals and a quiet place where workers can rest during their breaks. Supervisors should also be aware of the dangers workers face when they are exposed to loud noise, chemicals, and extreme temperatures for extended periods of time.

If you are planning on asking employees to work lengthy hours, make sure that you consult with an occupational hygiene specialist first. This type of expert can evaluate the situation and determine whether or not it’s safe to increase a worker’s exposure to these potentially dangerous factors.

Dec 01
Love0

LEARN ABOUT BACK PAIN – AND THE BEST WAYS TO TREAT IT

By Workplace Safety

Whether you work a job that requires a lot of heavy lifting or sitting at a desk all day, you’ve probably heard plenty about back pain — and you might have experienced it first-hand. About 80% of all adults in the U.S. have experienced back pain at some point, according to the Consumer Reports Health Ratings Center.

In 2009, the Center surveyed more than 14,000 subscribers who experienced lower back pain in the past year but never had surgery. More than half said the pain limited their daily routine severely for a week or longer and 88% said the pain recurred throughout the year.

Unfortunately, misconceptions and myths about back pain abound. Read on to learn the truth about back pain and the best ways to treat it.

Surgery isn’t always the best solution. Many people falsely believe that surgery is the only solution for a slipped disk (also known as a herniated or ruptured disk). However, this is not necessarily the case. First of all, most back pain is not caused by a herniated disk. Oftentimes, it’s simply a pulled muscle or another problem that will heal on its own. Back pain is extremely complex, and each case is unique. As a matter of fact, doctors cannot make a specific diagnosis for more than 70% of patients with chronic back pain.

Therefore, you shouldn’t assume that you need surgery as soon as your back starts aching. Your doctor will have to put you through some extensive testing to determine if your pain is coming from a damaged disk. Even if the doctor does confirm that you have a slipped disk, you might be able to recover without surgery.

Some studies show that about 90% of patients with a herniated disk gradually improve within six weeks. If your pain persists longer, then you might be a good candidate for surgery. However, because back surgery can be extremely invasive and require lengthy amounts of recovery time, you should view it as a last resort.

You might not need to take it easy. Another common misconception is if your back hurts, you should take it easy and get plenty of rest until the pain subsides. However, many medical experts say exactly the opposite. If your back hurts, you should try to continue your every day activities. People who stay active tend to heal more quickly than those who banish themselves to bed rest.

Of course, if you are experiencing severe pain, you might need to take some time off from work, especially if you have a physically demanding job. However, you might consider coming to the jobsite for some light work until you recover fully. This will give you an opportunity to stretch your back and remain somewhat active while your back heals.

Not all back pain is caused by an accident or heavy lifting. Although you might be quick to assume that your back pain was caused by lifting something heavy, that might not be the case. Of course, people with physically demanding jobs that involve a lot of lifting and carrying of heavy materials are more likely to experience lower back pain. However, there are many other causes for back pain.

As a matter of fact, people who sit still at a desk all day long are actually at higher risk for a disk injury than those who do moderate amounts of physical work. That’s because these desk workers remain sedentary for much of the day, sitting in unnatural positions in front of a computer and placing constant pressure on their spine.

There are many other factors that contribute to back pain. For example, your age can play a role, as well as your gender. Men are more likely to injure their back when they’re around 40 years old, while women generally suffer from back pain between the ages of 50 and 60. Your lifestyle can also affect back pain. Smoking, obesity, and stress are often linked to lower back pain.

A back injury doesn’t mean the end of your career. In the past, many workers assumed that if they injured their back, they would never be the same again and would be unable to return to their job. However, most people who experience back pain eventually get better — with or without treatment.

Studies show that most people who take time off from work due to back pain return to the job within six weeks. Only a small percentage of people never return to work again after a back injury. Unfortunately, once you’ve suffered from back pain, you’re most likely going to experience it again at some point. Luckily, even these recurring incidences of back pain will generally go away on their own.

There are many treatment options. If you’re suffering from severe back pain, don’t feel like you’re alone. You can turn to many different types of experts to help you manage the pain and recover.

First and foremost, visit a trusted family physician. He or she can rule out a serious health problem and may be able to refer you to a specialist. Many back pain sufferers turn to chiropractors, physical therapists, pain management doctors, and other specialists. Although back pain usually resolves on its own with time, these experts can help you through the pain, give you valuable advice, and offer you some relief.

Dec 01
Love0

BE AWARE OF SIGNS THAT COULD INDICATE THREAT OF WORKPLACE VIOLENCE

By Workplace Safety

On average, 20 workers are killed each week on the job, making homicide the second leading cause of death at the workplace (after motor vehicle accidents). Additionally, an estimated million workers are non-fatally assaulted each year, according to data from the National Institute for Occupational Safety and Health, a division of the U.S. Centers for Disease Control and Prevention. Though the vast majority of workplace violence is related to robbery and perpetrated by individuals from outside a business, about 9% involves co-workers or former employees.

Workplace violence committed by current or former employees has a devastating impact on a business and its employees. Although the real and immediate injury to the victim(s) delivers the biggest blow, the business itself can suffer bad publicity and, likely, an expensive lawsuit. Regardless of whether or not workers who were not involved in the incident witnessed the event, many are likely to experience emotional after-effects.

What are the causes of workplace violence? According to a guide published by the Minnesota Department of Labor & Industry, workplace violence can occur at any business, because the business environment is not the only trigger of brutal incidents. Family stress, substance abuse issues, and an employee’s overall psychological status, can carry into the workplace and provoke an incident of violence. Other situations that can lead to tragedy include an employee developing an unrequited crush on a co-worker, being rejected for a promotion, or feeling they are treated unjustly by a supervisor. In some cases, an individual cannot handle the resulting feelings of rejection appropriately. The pressure to produce and/or fear of layoffs can also trigger violence in an unbalanced employee.

An analysis by USA Today of 224 incidents of workplace violence committed by employees concluded that, in 80% of cases, the employee had exhibited clear warning signs of possible violence, which were ignored or minimized by supervisors or co-workers. Although some red flags of violence are clear — such as wielding a weapon or making verbal threats — others are less obvious. Experts in the field urge caution when the following behaviors are present:

  • Continuous complaints of unjust treatment
  • Inability or unwillingness to be held accountable, as well as the need to place blame on others
  • Difficulty in accepting criticism
  • Deterioration of job performance
  • Mood swings or personality/behavioral changes
  • Emotional outbursts

Although workplace violence cannot be eliminated completely, businesses can take action to lessen the chances that an incident will take place. Supervisors, managers, and all other employees should be made aware of actions and attitudes that can indicate potential violence. Companies need to make it perfectly clear that non-physical precursors to violence — such as bullying, intimidation, aggression, and threats — will not be tolerated. Policies should also encourage employees to report such red flags, with reasonable assurance of their personal safety. Managers and supervisors require training in how to diffuse workplace tensions effectively and deal with confrontations before they turn violent. Employee Assistance Programs (EAPs) or other counseling services can be helpful in taking these steps.

Although people can and do change, many perpetrators of violence have a history of brutality, or of red flags for potential violence. For this reason, background checks, pre-employment screenings, thorough resume reviews, and pre-hire interviews can be beneficial tools in workplace violence prevention, according to information from the International Risk Management Institute. Other warning signs include frequent job changes that are not explained adequately; mysterious holes in an applicant’s work history; demeanor during a pre-hire interview that is unresponsive, uncooperative, or somehow unsettling; and, of course, any history of violent or threatening behavior.

With the right policies and preventive measures, a business can know that it has taken appropriate steps to deter workplace violence and protect their employees to the best of their ability.

Dec 01
Love0

ESPITE SUBSTANTIAL HEALTH CARE COST SAVINGS, GENERIC DRUGS REMAIN UNDER-UTILIZED

By Employment Resources

Despite their proven reliability in safely reducing health care costs, many consumers continue to have doubts about the use of generic drugs. Communications programs that increase employees’ knowledge about generics and their comfort level in speaking with prescribers about generic medications can help to overcome these doubts, increase use of generics in a health plan and, ultimately, result in substantial cost savings.

Data on consumers’ limited knowledge of generic drugs comes from a survey from Prescription Solutions, a UnitedHealth Group company. Among the surveyed adults, 31% did not know or did not believe that generics have the same active ingredients and same effectiveness as brand-name drugs. Furthermore, two-thirds did not understand the actual cost difference between generic drugs and brand-name drugs. On average, a brand-name drug costs 50%-70% more than its generic counterpart. A separate analysis from the Food and Drug Administration (FDA) indicates that drug costs per day can fall by 14% to 16% if an individual uses generics instead of brand-name drugs, depending on the individual’s medical needs. Individuals who can fully satisfy their medical needs with generic drugs can see as much as a 52% reduction in their daily medication costs, according to the FDA analysis.

Consumers’ reluctance to try generics is especially surprising, given that a majority of the Prescription Solutions survey respondents: 71%-remain concerned about prescription drug costs, and 27% have either delayed filling, not filled, or not taken a prescription as prescribed in an effort to save money.

The survey also found that doctors and pharmacists are the key influencers in encouraging the use of generics. Of those surveyed who take generic drugs on a weekly basis, 64% said their doctor recommended the generic and 43% said a pharmacist recommended the generic. Of those surveyed who do not take generic drugs on a weekly basis, 58% said they would if a pharmacist brought a generic to their attention as a less expensive yet identical substitute, and 52% said they would do this if their doctor made the recommendation.

As noted at the beginning of this article, communications programs that increase employees’ knowledge about generics and their comfort level in speaking with prescribers about generic medications can address misconceptions and concerns about generic drug use. A study published in the March 2009 issue of the journal Medical Care found that generic drug use was most closely associated with communications with providers about generics, and with an individuals’ comfort level with generic substitution, leading to the conclusion that educational campaigns that focus on these two areas might be most effective in influencing generic drug use.

To increase individuals’ comfort level with generic substitution, an educational campaign should stress the key facts about generics:

  • Although generics might differ in appearance from their brand-name counterparts, they have the same active ingredients and adhere to the same FDA standards.
  • Generic medications cost less, not because they are of a lesser quality, but because the manufacturer of the generic has no research and development costs to recover, and also spends no money on promoting the product to physicians and consumers.
  • Plan design, too, can encourage generic use. Plan designs that require a higher member copayment for a brand-name drug than for the generic substitute can lead to higher generic use, as can completely waiving the copayment for generics (or for certain classes of generics). Generic use also can be increased through mail-order programs.

Overcoming ignorance or unawareness of the true nature of generics can reap savings for an employer, making the money spent on communications and education a worthwhile investment.

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