Stop wasting money on pre-employment medicals

What if I told you your company may be shelling out millions for no real reason? Because I am about to tell you that your company may be shelling out millions for no real reason.

Pre-employment medical assessments are crucial to determine the safety of workers. They are also an indicator of potential costs that will be incurred if an employee gets injured based on a pre-existing condition.
Undetected, pre-existing injuries will cost a workers’ health and leave your business with the bill.

Preventing injuries will not only mean a happier and more productive workforce with higher retention rates, but is a sure way to save costs from workers’ compensation premiums, sick leave, and replacement labour.

Research shows pre-existing musculoskeletal injuries – damage to joints, bones and muscles, are vastly underdetected in pre-employment medicals.

According to Suremploy, the average rates for detecting pre-existing musculoskeletal injuries is between 0 per cent and 3 per cent in Australia.

Alarmingly, rates should be closer to 15 per cent, according to pre-medical expert Tom Aune, the chief executive of Suremploy.

“A lot of providers are literally detecting and declaring nobody as unfit,” he said. 

“The only way you can save money via pre employment screening is to detect pre-existing injury and stop those people walking into a job that’s going to injure them.”

Investing in a thorough pre-employment medical will reduce both short- and long-term costs, said Aune.

In the first 12- to 18-months, employers could save 50 per cent in Lost Time Injury Frequency Rate (LTIFR) –  the number of lost time injuries occurring in a workplace per 1 million man-hours worked.

A lost time injury means all on-the-job injuries that require a person to stay away from work more than 24 hours, or which result in death or permanent disability.

That figure was not too good to be true, said Aune.
“It sounds amazing and it is, but that’s typically what we have seen from a number of studies.”

As time went on, savings would come from reducing workers’ compensation premiums by up to 65 per cent.

This happens in the second and third years as a company’s LTIFR drops and insurance companies see less financial liability and adjust premiums accordingly, said Aune.

A constant saving comes from lowering a business’ replacement wages bill. When an employee is injured and takes time off work, their work still needs to be done so replacement labour has to be called in.

By reducing the risk of injury in the first place those costs can be shrunk indefinitely.

This can lead to even more savings in insurance premiums, depending on your jurisdiction, said Aune.

Some states include replacement wages in the workers’ compensation terms, some don’t.

“Within 12 months, the entire pre-employment medical cost is more than offset by the reduction in replacement labour for injured workers,” said Aune.

So how can you tell which company to go with, and which to avoid?

Red flags and price tags

You should change your pre-medical provider if:

  • Your LTIR and workers’ compensation premiums are not below industry standard
  • Your current pre-medicals are not finding at least 10 to 15 per cent of potential employees unsuitable due to pre-existing injury.
  • Detection rates for jobs involving manual handling – aged care, hospitals, manufacturing, transport, call centres – should be between 10 and 20 per cent.

When looking for a provider:

  • High testing costs ≠ better, but remember that savings don’t come from a cheaper test – they come from long-term injury reduction.
  • Ask to know their actual detection rates and independently commissioned cost benefit analyses. Don’t be fooled by just one good figure, ask to see a breakdown of stats for all measures
  • Seek out providers that use physiotherapists, they are specialised in musculoskeletal injuries
  • Look for testimonials from clients that are willing to put their names to their comments
  • Look for guarantees, Suremploy offers a free third year free if significant savings haven’t been made in the first two.

Share This Post