A Safe and Healthy Workforce and Risk Management
A year and a half ago the L.A. Coalition established a innovative partnership – the Operations Innovation Delivery Team (OIT) – with the L.A. Mayor’s Office, and the Mayor’s Fund for L.A., to bring together private and public sector skilled talent to reform three of the City’s outdated operational business systems that have a significant financial impact on the City’s budget.
One of the three goals we set out to address was the development of a a city-wide strategy to reduce the City’s rapidly increasing annual spend on safety and workers’ compensation liabilities. In the fall of 2016 the Workers’ Compensation Insurance Rating Bureau released a report titled: “The 2016 Study of Geographic Differences in California Workers’ Compensation Claim Costs”, which highlighted regional differences in California workers’ comp claim costs and frequency and L.A. was at the top of the list for costs.
In FY 2014-2015, L.A. City employees filed 7,106 workforce injury claims, costing the City more than $223 million in workers’ compensation expenditures. These direct costs of workforce injuries comprise roughly 70 percent of citywide liability claims and the workforce injury rate – 18 claims per 100 employees – far exceeds comparable local, state, and national benchmarks. These costs impose an unsustainable burden on the City’s budget, undermining the City’s ability to provide superior public service and to achieve fiscal and operational sustainability.
At the current rate of growth, workforce injuries are projected to cost the City more than $300 million annually by 2025. In addition to impacting the General Fund, the human capital costs are impeding the City’s ability to provide services at desired levels. Nowhere are these human capital costs more evident than at the LAPD. Police injuries prohibit approximately 1,860 officers each day from performing regular duties. This fact has been part of recent Public Safety Committee meetings as one of the reasons for rising crime in the City. Throughout the last three years, roughly 60 percent of the police force took leave for a workplace injury. Injury-related absences cause the LAPD to suffer from short-staffing and disruption across divisions, rising salary continuation costs, and an over-dependence on overtime.
To address these challenges the OIT established the following goal: The creation of a City-wide wellness and safety program that reduces costs and mitigates risk via infrastructure for ongoing accountability, tracking, and response to workforce injury and illness.
It is with great pride in the work of OIT, that I announce that L.A. Mayor Eric Garcetti has signed Executive Order No. 18 to put OIT’s recommendations into motion.
This would not have been possibly without the leadership of former OIT members Adam Bierman, who is now a deputy city attorney, and Mark Thomas, who is now the senior vice president for partnerships at the NYC Economic Development Corporation, and Renee Daigneault. In addition to the work of the Mayor’s Team – Rick Jacobs, Matt Szabo and Deidre Lind.
Key elements of the directive include the creation of a Chief Risk Management Officer in every department and office, the creation of a Mayor’s Risk Reduction Cabinet, that will include the City Attorney and President of the City Council (or their designee) and the creation of a Chief Safety and Wellness Officer for each department and office and the use of data and technology to create a monthly dashboard to track progress in the management of injuries.
The most critical aspect of this initiative now is its implementation, workforce compliance and leadership accountability. As the OIT’s two-year commitment heads into the final stretch, the OIT will disband in June 2017, I will continue to work with key leaders at City Hall to advance this Directive’s impact, which with the right leadership will produce the results we set out to achieve in a few years.