April 2008 Archives

April 29, 2008


James Campbell taught art classes at Denny High School in Stirlingshire, Scotland. He filed a discrimination claim under the Disability Discrimination Act (DDA), the UK's equivalent of our ADA. His disability? Baldness. He claimed that he had suffered from harassment at the hands of pupils because of his lack of hair.

Judge Robert Gall (we will resist the temptation to play with his name) determined that baldness was not an impairment and thus was not covered by the DDA. "If baldness was to be regarded as an impairment then perhaps a physical feature such as a big nose, big ears or being smaller than average height might of themselves be regarded as an impairment..."

Policy makers in the UK are struggling with the same issues facing the courts in this country: when does an individual qualify as disabled? Where do you draw the line? (We recently blogged the US Congress's attempt to expand the ADA's definition of disability.)

The DDA, originally passed in 1995, has recently undergone a major revision. The revised law provides immediate protection to anyone diagnosed with multiple sclerosis, HIV and cancer. Where the ADA would cover these illnesses only if they limited "one or more major life activities," the DDA protection begins at the point of diagnosis. This is a very generous (and for employers, a potentially onerous) definition. The revised DDA also dropped a prior requirement that only mental illness which is "clinically well recognized" be covered. Thus employers confronting untreated stress or anxiety disorders may be subject to suits under the DDA. As difficult as it is to operate under the ADA, the DDA appears to offer even greater challenges.

The definition of "disability" is a moving target in all western countries. Employers who make facile assumptions about what may or may not be covered are vulnerable to prolonged litigation. For the moment, at least, there is a virtually universal assumption that baldness is not a disability. James Campbell was ruthlessly teased by his students. They may have aimed an occasional spitball at his shiny pate. Such actions definitely involved harassment. They should surely be universally condemned. But this harassment was not an act of discrimination. Campbell apparently was weak, but he was not disabled.

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April 28, 2008


Today is Workers Memorial Day, a day that is dedicated to recognizing workers who have been killed or injured on the job. It was started by the Canadian Union of Public Employees (CUPE) in 1984 and began here in the U.S. in 1989. Today, it is marked by workers across the globe. It occurs on April 28 in recognition of Canada's anniversary of the passage of a comprehensive Workers Compensation Act in 1914 and the U.S. anniversary of the effective date of the Occupational Safety and Health Administration Act of 1970.

Every year, as part of the commemoration, the AFL-CIO issues Death on the Job 2008, an annual report on the state of safety and health protections for America's workers, including state-by-state profiles.

Hazards offers a comprehensive Worker Memorial Day 2008 site with links to activities by country, a global image archive, and a news page.

Tami Miser offers The Weekly Toll, a partial listing of recent worker deaths. The litany of deaths includes incidents where workers were trapped or crushed in machinery, fell from heights, were electrocuted, were struck by objects, were involved in motor vehicle accidents or struck by vehicles, succumbed to mining accidents, or were victims of workplace violence.

The Pump Handle posts about the 30th anniversary of Willow Island Disaster where 51 construction workers plunged to their deaths. OSHA Underground notes that 30 years later, there are fewer OSHA inspectors.

Other news and events for the day can be found via Google news search for 'worker' and 'workers' Memorial Day.

Health and Safety Blogs
The Web can be a valuable tool for disseminating the message of the importance of strengthening workplace safety and providing educational information to regulators, employers, insurers, workers, and the general public. Jordan Barab of Confined Space was one of the blogging pioneers and pacesetters, beginning in 2003. In the same year our Canadian neighbor rawblogXport was also one of pioneers in occupational heath & safety blogs. We also launched our blog in 2003, and while our primary focus is on workers compensation, we try to devote a large percentage of our posts to furthering workplace safety and protecting workers' health and well-being - first, because keeping workers safe is simply the right thing to do, and secondly because prevention is the most effective workers compensation cost reduction strategy of all - the injuries that never occur don't cost money.

Since those early days, several others have joined the ranks of health and safety bloggers, and we hope to see more. Here are a few:
The Pump Handle - since November 2006
The Weekly Toll since January 2007
Hazards Recognized - since June 2007
Safety Daily Advisor - since November 2007
OSHA Underground - since December 2007
The Safety Blog -since December 2007
GotSafety Blog - since January 2008

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April 25, 2008


A labor group in our neighbor to the North, New Brunswick, Canada, is seeking an end to the three day waiting period for workers comp benefits. "We really believe it is unfair," said Michel Boudreau, president of the New Brunswick Federation of Labour.

The federation has pitched the idea of scrapping the three-day waiting period, during which employees receive no benefits, to the independent panel commissioned by the government to review the Workplace Health, Safety and Compensation Commission.

Boudreau said the waiting period, which was first introduced in 1993 to stem financial losses within the system, violates the principles upon which workers compensation in New Brunswick was founded.

Labour, he said, entered into the system with industry and government with the understanding that it would provide for them if they were injured. In exchange for that insurance, workers agreed not to sue employers when they are hurt on the job.

The waiting period is universal among the state workers comp systems, ranging anywhere from three to seven days. There is usually a retroactive period, after which coverage reverts back to day one. In Massachusetts, for example, there is a five day waiting period, retroactive to day one after three weeks.

Why Wait?
Does the waiting period serve any purpose? Or is it an undue hardship for injured workers?

While a case can be made that indemnity benefits should begin immediately after an injury, such a "quick trigger" would likely create more problems than it would solve. It is difficult enough to manage a three day waiting period (the shortest duration available among the states); it would create formidable logistical problems for insurers to begin indemnity immediately following lost time from an injury. It's worth pointing out that many employees can use accrued sick time to fill in the gap between the first day lost due to injury and the beginning of indemnity benefits. A case can be made that the anxiety of not being paid is a positive incentive for an injured worker to return to full or modified duty as quickly as possible. Immediate indemnity removes that sense of urgency.

The waiting period may also serve a psychological function. The transition from wage earning to receipt of indemnity involves a major shift: one moment you are an employee, a worker, and the next you are "disabled." For most people, this shift is inconsequential, but for some, it involves crossing a profound border from which there may be no return. The moment you become eligible for indemnity, you are being paid not to work. If you are ambivalent about your job, or if the future of the job is uncertain, the comfort of indemnity can be very powerful. Some injured workers convince themselves that the injury and the pain are worse than they really are, because there is a financial incentive to do so. This is rarely a conscious choice. Rather, it involves a "perverse incentive": it's financially advantageous not to get better, not to go back to my (unsatisfactory) job.

The Insider recommends that New Brunswick leave the waiting period right where it is, at three days (the generous end of the waiting period spectrum). The gap in payments is not great enough to cause tremendous harm; conversely, the potential hazard of instantaneous benefits would not just increase costs of the system, it could also harm otherwise motivated employees.

Comp is never the best of all possible worlds. It is tempting to tinker with every aspect and every benefit. While I understand where labour is coming from, in this situation the advice of my late mother-in-law might be best: just leave well enough alone.

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April 23, 2008


We're honored to be hosting this 50th edition of Cavalcade of Risk, a smörgåsbord of some of the best posts from blogs that focus on the realm of risk. We have a hefty helping of posts so we'll dispense with further formalities and just dig right in.

Health Care
Which countries have the best health care systems? That's a question Jason Shafrin of Healtcare Economist answers as he takes us on a whirlwind tour of health care systems around the world.

Are we looking after our student's health care? Bob Vineyard of Insure Blog tells us why student health insurance is a disgrace.

Richard Eskow of Sentinel Effects discusses why the words "universal coverage" ring hollow when it comes to the health care plans being promoted by the current roster of candidates.

Ouch. Louise of Colorado Health Insider relates a first-person account of the frustrations inherent in the health care system even for those who have insurance in her post about being caught by the out of network deductible.

David Williams of Health Business Blog discusses the risks and costs involved in pharmaceutical research and development and posts about a promising development for the pharmaceutical pipeline.

Money & Markets
Leon Gettler of Sox First considers the extent that the subprime meltdown might be the result of the mark to market accounting technique where assets are given a value that’s a fantasy.

What can we learn from a yo-yo? Dorian Wales of Personal Financier draws lessons from examining the wild swings of the Lehman Brothers’ recent stock price.

Jacob of Early Retirement Extreme reminds us that "being in it for the long term" does not make investing in stock risk free. He discusses the major risks of buy and hold index investing.

Business risk
In his post 30 Minutes, 30 Cents, 30 Billion, Charles H. Green of Trust Matters suggests that the business world of today is heavily driven by two trends: fragmentation of processes, and globalization of scale. But he suggests that the problem is that no one is looking at the overall picture.

Joe Paduda of Managed Care Matters notes that in the property & casualty insurance market, there is currently just too much capital chasing too few risks. He discusses the dynamics of the softening insurance market.

Specialty Insurance Blog posts about a recent court judgment that ups the liability risk for insurance agents and brokers if they fail to communicate effectively with their clients.

HR Web Cafe discusses spear phishing - an insidious type of email fraud that has been successful at penetrating corporations by impersonating communications from trusted insiders, such as members of the organization's IT or HR team.

Risk grab bag
After a visit to his doctor's office, Ernesto TIG of Insurance Yak fantasizes about about the iMed, potentially the greatest money savings device that has not yet been invented.

Nicholas White left his office to take a smoke break, and it lasted 41 hours. Here at Workers Comp Insider, we look at some of the scary risks you take when you get on an elevator.

At Get Rich Slowly, J.D. asks what you'd do if your cost for energy suddenly quintupled as it did for some of his Alaskan readers.

Consumer risk-reduction tips
In the light of many recent product recalls, Silicon Valley Blogger of The Digerati Life notes that we face some risks when we fork out money to buy goods and services. 10 tips for being a smart and safe consumer offers advice on how to avoid those risks make safe and wise purchase decisions.

Raymond at Money Blue Book suggests that fliers should always pay by credit card to protect against losses with airline bankruptcies, and discusses ways to get a refund when an airline or travel agency goes belly up.

As money gets tighter for many, Tisha Kulak of American Consumer News offers 10 warning signs of debt disaster and discusses what to do when you owe taxes but can't afford to pay.

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April 22, 2008


In conventional medicine, people are generally free to choose their care, up to the limits of their coverage. They can opt for certain procedures or decide to forego them. For the most part, adults are independent players in the medical system, acting in accord with their own wishes. In the final analysis, our health is an individual concern, factoring in, of course, the concerns of family members and "generally accepted" medical practices.

Workers comp is somewhat different. In addition to the preferences of the injured worker, his/her family and the treating physician, you have to take into account the interests of the employer, who is paying the bills (no co-pays or deductibles for the patient). Unhealthy behaviors or refusing treatment might be acceptable in conventional health care, but they raise compelling issues in workers comp. The case can and should be made that under comp, the injured worker has an obligation to get better.

Let's look at two cases: one involves an invasive diagnostic procedure, the other medically imprudent behavior.

Uncomfortable Diagnostics
Sewell Chan writes in the New York Times about Brian Persaud, a 33 year old construction worker. He was working at a Brooklyn construction project when he sustained a head injury. He was driven to New York Presbyterian hospital, where he received eight stitches for a head wound. As part of standard medical procedure, doctors wanted to perform a rectal exam, in order to rule out spinal injury. Persaud objected, a physical struggle ensued. While it's not clear whether the invasive procedure even took place, Persaud filed a civil suit, claiming that the exam comprised assault and battery at the hands of hospital workers.

Persaud’s lawyers turned to two experts, a neurologist-psychiatrist and a forensic psychologist, who testified that Persaud suffered from anxiety, depression and post-traumatic stress disorder as a result of the episode. The hospital put forward a doctor who testified that a rectal examination is an important part of advanced life support for trauma patients.

The case took eleven days to present, but the jury rejected Persaud's claim in less than an hour. In this case, the invasive procedure was deemed necessary to rule out more serious injuries. In general, patients may decline medical treatment if they are informed of the consequences of doing so and capable of making such a decision. But doctors have more leeway to perform a procedure if a patient has sustained a potentially life-threatening injury and if the doctor doubts the patient’s capacity to make informed decisions.

While the employer's interests were not directly represented in this confrontation, they were part of the mix: the employer would want to ensure that Persaud received a complete diagnostic work up, so that liability for this particular claim would be limited to the incident that occurred at work. Persaud's refusal of a necessary diagnostic test might lead directly to expensive medical complications.

Which leads us to our second example (from Lynch Ryan case files).

Incomplete Treatment
Maria M. worked as a maid for a home cleaning service. While approaching a job site, she slipped and fell on an icy sidewalk and broke her ankle. (It had recently snowed, so there was no negligence on the part of homeowner.) No question about compensability here. In order to repair the break, a temporary pin was inserted. Unfortunately, Maria was doctor-phobic. She refused to have the pin removed. As months went by, her condition worsened. She walked with a pronounced limp. The employer tried to accommodate her on light duty, but eventually they ran out of tasks. Maria was only getting worse. She was terminated due to her inability to perform the work.

The insurer was caught in the middle of a difficult situation. The injury was clearly compensable, but Maria's refusal to cooperate in her treatment involved "wilful intent" - a refusal to get better. The carrier had an opportunity to deny the claim within the six month "pay without prejudice" period, but they failed to do so. The claim dragged on. Even after an independent medical exam favorable to the employer, the carrier continued paying the claim. Eventually, the case settled for about $35,000, for the indemnity and loss of function exposures. Given the severity of Maria's condition, this is not a huge settlement. (The carrier feared an exposure of twice that amount.) However, the employer expressed frustration at the increase in his comp premiums. Maria's disability was the result of her own refusal to cooperate with recommended treatment, not the work-related incident itself.

Inconclusive Conclusions
All of which leads us to an inconclusive conclusion: do injured employees have an obligation to get better? Must they submit to medically necessary diagnostics? Are they required to do everything possible to return to productive employment? Is it necessary to take the employer's interests into account when determining diagnostic and treatment options? Well, maybe yes and maybe no. It all depends...

In the world of comp, the interests of employee, employer and medicine itself strive for an elusive balance. In the case by case, state by state approach, results vary dramatically. It's hard to find a consistent pattern. In the ideal world, injured workers do everything possible to get better and their employers do everything possible to facilitate a return to work. But in case you haven't noticed, we live in a world that falls way short of the ideal.

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April 21, 2008


A reader sent us a story from the Boston Globe that we previously missed about contractors who are suing KBR for toxic exposures to sodium dichromate in Iraq. Nine Americans are suing the erstwhile Halliburton subsidiary for " ...knowingly exposing them to the deadly substance and failing to provide them with the protective equipment needed to keep them safe."

Sodium dichromate is a very dangerous substance, yet the 100+ workers at the Qarmat Ali water injection plant worked in and around the substance without protection. Some workers were observed eating lunch on the floor next to chemical tanks and others exhibited nosebleeds, eye problems, shortness of breath, and ulcers on the skin.

Regular readers may recall that we've discussed Iraq-based contractors previously - all contractors - whether nationals or foreign - are covered by the Defense Base Act. Although this involves some creative insurance arrangements, the DBA essentially acts very similarly to workers comp.

As with workers comp, one of the cornerstones of the coverage is that the DBA is the employee's exclusive remedy. In other words, it is an employee's only legal redress in the event of injuries or illnesses. However, in workers comp, there are generally some exceptions, although the window for such exceptions is pretty narrow. Some states allow an employee to pierce the exclusive remedy shield if "willful intent" of injury can be proven or if there was substantial certainty that an injury would have been likely to occur. The burden of proof is on the employee, and courts usually require something more that goes beyond the realm of mere negligence - the employer's actions need to be quasi criminal.

KBR is relying on exclusive remedy for protection, but this troublesome matter may be a factor:

"But the company's own actions have undermined its case: To avoid payroll taxes for its American employees, KBR hired the workers through two subsidiaries registered in the Cayman Islands, part of a strategy that has allowed KBR to dodge hundreds of millions of dollars in Social Security and Medicare taxes.
That gives the workers' lawyer, Mike Doyle of Houston, a chance to argue to an arbitration board that KBR is not an employer protected by federal law, but a third-party that can be sued."
Interestingly, this "independent contractor" argument is the same one that Blackwater is using to justify why the company didn't pay $50 million in U.S. payroll taxes. So far, the IRS isn't buying that argument - they don't think that the Blackwater workers fit the definition of contractors. It seems that Blackwater might be trying to play both sides of the fence by not paying the taxes which would be an employer obligation but claiming the employer privilege of exclusive remedy afforded by the DBA when it comes to other matters.

My colleague has talked about the matter of independent contractors vs employees several times in the past - most notably in the case of the fascinating Fedex state-by-state saga 1, 2, 3, 4, 5, 6 and 7. It will be interesting to see how the matter of these giant federal contractors play out. Being a military contractor is apparently good work for the firms that can get it: lucrative no-bid contracts, U.S. taxpayers subsidizing the DBA coverage, and little in the way of pesky employee taxes, labor laws, or government oversight.

In looking into these issue, we stumbled on the Defense Base Act Blog (who knew there was such a critter?!) and blogger Aaron Walter makes some good points about being careful what you wish for - if KBR is not covered by DBA, then thousands of injured or deceased employees and their families would no longer receive income benefits or medical treatment. He also has good commentary on the Blackwater matter.

Stay tuned for more.

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April 18, 2008


While working late one Friday night to meet a publication deadline, Nicholas White decided to take a smoke break. It lasted 41 hours.

White worked on the 43rd floor of the McGraw Hill Building in downtown Manhattan. His descent in the elevator on his way to the smoke break was uneventful, but on the trip back up, the elevator got stuck around the 13th floor. Despite ringing alarms and the fact that his frantic attempts to extricate himself were visible on security cameras, nobody noticed until Sunday, when he was finally released. You can watch a consolidated time lapse film of his ordeal as captured by the building’s security cameras.

The New Yorker article goes into some detail about White's thoughts and actions during his entrapment, along with a great deal of detail on elevators - maybe more than you cared to know. The story of his confinement is pretty riveting, but the events after he was released are a story unto themselves. It's understandable that White was traumatized. (You can discuss to what degree, as did the folks on Metafilter where we found this story - unfiltered language alert if your organization is strict about that.) Suffice it to say, 41 hours of solitary confinement and sensory deprivation while contemplating your potential - and increasingly likely - demise is probably against the Geneva convention rules for torture. People can survive for three days without water, but after that, things get tricky. So White most definitely had a stressful ordeal. One could make a case for PTSD.

White never returned to his job and is now unemployed - you can read the full details why in the article, but the short version is that he was again entrapped, this time by anger and entitlement. In retrospect, he recognizes that it was not the event itself that changed him but his reactions to it. There's a lesson in his story that could probably be instructive to those who are helping people return to work after a physical injury. The psychological event of an injury can be as debilitating to recover from as the physical component. When trying to help people get well to and to resume their normal lives, the psychological trauma they have endured should not be overlooked.

Elevator tragedy: gruesome and horrifying death was not unique
In the same forum where we learned about White's ordeal, we found a disturbing elevator-related article with a much worse outcome. In 2003, Dr. Hitoshi Nikaidoh stepped into an elevator at St. Joseph Hospital in Houston and wound up losing his life. If you read the article in full, it may make a lasting change in your future elevator behavior. If you were previously inclined to insert a shoulder or a leg in the door to catch the elevator, it's likely you may think twice about that going forward.

Elevators are safe for most people most of the time, so we take them for granted. But when things go wrong, they can really go wrong. And they go wrong more frequently than you might think. According to Houston Press reporter Wendy Grossman, there were 256 elevator- and escalator-related accidents in Texas in the year before the article was written. Nationally, elevators and escalators kill about 30 people a year and seriously injure 17,100. Grossman notes, "There are no federal mandates on elevator safety. The U.S. government doesn't require elevators to be inspected, or that elevator inspectors know what they're doing. It's up to individual states."

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April 17, 2008


Maggie Mahar and Niko Karvounis have posted a fine new edition of Health Wonk Review at Health Beat. They've done superlative work in summarizing and commenting on each post, making it a very good read indeed.

While visiting Health Beat, be sure to check out some of Maggie's other posts - in the sidebar, there's a collection of links to some of the blog's most frequently read posts - a good starting point. Maggie is a health care author and journalist. Her series on The Politics of Health Care Reform (part 2) was recently featured on Talking Points Memo.

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April 16, 2008


Gina Kolata writes in the New York Times that health insurance companies are adopting a new pricing system for some of the most expensive drugs, pushing more of the cost onto consumers. It goes by the innocent sounding name of "Tier 4." It might as well be called "bankruptcy for the seriously ill."

All insurers require a co-pay on prescriptions, generally running from $10 to $35 dollars, with incentives for choosing generics over brand names. Despite the fact that some drugs cost hundreds, even thousands of dollars per month, the total exposure for the consumer has been the co-pay ceiling. Not any more. Under Tier 4, insurers are charging patients a percentage of the cost of certain high-priced drugs, anywhere from 20 to 33 percent. For the most part, Tier 4 covers exotic new medications for serious illnesses, medications where there are no cheaper alternatives. Patients are in a box - and if they cannot come up with hundreds or even thousands of dollars per month, they may literally end up in a box.

Tier 4 drugs include those for treating multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. Tier 4 targets "high cost drugs used to treat a relatively small number of people who suffer from complex conditions." Heck, if you don't have the common sense to avoid getting sick, we'll add to your misery by making you pay through the nose.

Take the case of Julie Bass, a 52 year old Florida resident suffering from metastatic breast cancer. She is disabled and covered by a Medicare HMO. Her doctor has prescribed Tykerb, which her insurer has designated as a Tier 4 drug. The monthly cost is $3,480 for 150 tablets - a 21 day supply. Given Bass's very limited financial resources, there is no way she can afford the co-pay. Tier 4 for her may be the equivalent of a death sentence.

As Dan Mendelson of Avalere Health notes, "This is an erosion of the traditional concept of insurance. Those beneficiaries who bear the burden of illness are also bearing the burden of cost."

Insurers are quick to point out that they are saving healthy people money: by pushing the cost of the drugs directly onto the patients, premiums for everyone else will remain (theoretically) lower. To which I say: no one is seeing lower premiums. At best, you have lowered the rate of the annual increase.

Rules of the Game
As Tom Lynch pointed out in the Insider's instructive five part series on health care in America, the administrative bureaucracy in American medicine runs over 30 percent of total costs (no other country exceeds 10 percent). Some portion of the boated admin is eaten up by the good folks who dream up things like Tier 4. This is clearly a situation where the affluent will be able to survive certain illnesses and the poor will not.

Call it what you will, Tier 4 is health care rationing and the American public is not going to embrace it. (It may even increase the momentum for a single payer system.) The talented bureaucrats who designed Tier 4 had best start working on a clever marketing scheme, to help the public swallow this bitter pill. For starters, they could bring back Smoky Robinson and the Miracles to sing "Tracks of my Tiers."

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April 14, 2008


Trouble brewing in Florida - Joe Paduda of Managed Care Matters is looking at a proposed regulation in Florida for hospital reimbursement and he is not liking what he sees. He says its a situation that is likely to "scare the pants off you."

Medical apartheid - Richard Eskow of Sentinel Effect posts about recent studies by the Robert Wood Johnson Foundation and the Harvard School of Public Health, which show extreme disparities in medical care for whites and black. Of the studies, the South Florida Times states: "... elderly black and Hispanic patients often received substandard care for common but serious conditions like heart attacks, congestive heart failure and pneumonia. Researchers say their data suggests that the nation's healthcare system is racially and ethnically segregated, not just for the elderly, but across the board."

Troubling questions about regulators and public health interests - are regulators who are charged with protecting the health and safety of American workers and the general public succumbing to political and corporate pressure? Liz Borkowski of The Pump Handle blogs about a CBS investigation into why why the Centers for Disease Control slashed its Beryllium Study. In raising the question of whether officials ceded to political and corporate pressure in downscaling a health study of residents living near Brush Wellman's largest beryllium-manufacturing plant, CBS questions whether the CDC "put politics before public health concerns."
Recent reporting in the Las Vegas Sun investigates OSHA's practice of reversing its findings and cutting fines for employers involved in construction fatalities. Reporters found nine instances where penalties for safety violations related to these fatalities had been scaled back after OSHA officials met privately with contractors. This reporting is the second part of a two-part series on construction deaths in Nevada. The first segment entitled Pace is the New Peril looks at a recent building boom that has claimed the lives of nine workers in sixteen months.

Exclusive remedy prevails in NJ - a suit for damages against a NJ employer was dismissed by the state's superior court in the case of a driver who was struck by a vehicle while unloading supplies from his truck. The employee had sued claiming gross negligence on the part of his employer as well as the company where the delivery occurred, stating that he had not been provided cones or flares and had alerted his employer about the safety problems that existed at this particular delivery spot. In so deciding, judges said there was not enough evidence in the case to show the companies "deliberately intended to harm (Dadura) or knew that the consequences of its inaction were substantially certain to result in harm." In most states, there is a very high bar for piercing exclusive remedy - employer negligence would have to reach a level of being intentional or certain.

Combustible Dust bill - Last week, a House Education and Labor Committee passed a bill that would require OSHA to issue an interim final standard regulating combustible industrial dust within 90 days and a finalized standard within 18 months. This progress represents only one hurdle however - the bill still must gain House and Senate approval in the face of significant opposition.

Soldiers suffering high rate of mental health problems - The New York Times reports that army leaders are concerned about the mental health of soldiers who face multiple deployments to Iraq. More than 197,000 have deployed more than once, and more than 53,000 have deployed three or more times. According to an Army survey of combat troops sent to Iraq for the third or fourth time, more than one in four show signs of anxiety, depression or acute stress. This means that American employers should expect a high rate of PTSD for citizen soldier veterans when they return to the workplace.

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April 11, 2008


The Arthur Avenue Bakery in the Bronx NY is famous for its cannoli and crusty bread. The bread is not the only crusty item at the bakery. We read in the NY Times that the 50 year old institution is suddenly famous for unfair labor practices: some employees worked 12 hour days for $50 a day - an hourly rate of $4.16, well below the state's minimum wage of $7.15. The bakery does not carry workers comp insurance. New employees often worked the first week without any pay. Some employees have not been paid for over a month. Occasionally, pay checks bounced. All in all, the bakery seems to be lacking in dough.

State officials deemed the conditions so unfair to employees, they shut the business down. The bakery can re-open only if they pay $140,000 in back wages and $37,500 in penalties for not carrying comp. That's a lot of cannolis!

Despite the stop-work order, it appears that the bakery may still be operating. Manager Walter Galiano says he is still doing business. (The state vows to look into this.) Arthur also questions the penalty and back wage calculations of the state labor investigators. "The high school they went to did their math differently from the way my high school did math."

It would be interesting to check out the problems in Walter's old math book:

Walter runs a bakery. If one of his employees works a 12 hour day and the minimum wage is $7.15, how much does Walter pay the employee?
Answer: Whatever he feels like.

You've heard of the new math. This is New York math. You gotta problem with that?

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April 9, 2008


If you have bloggers on the payroll, both you and they may be at risk for work injuries - or even death! At least that's the word according to a recent article by Matt Richtel in the New York Times, In Web World of 24/7 Stress, Writers Blog Till They Drop. Richtel describes a growing work force of sedentary workers who toil around the clock under great competitive stress to cover the latest news, "a digital-era sweatshop." While many bloggers are either non-paid or self employed, many are employees or contractors. Some work on a piece-work basis paid by the post and others depend on pay-per-click advertising.

The article cites the examples of two prominent bloggers who recently died of heart attacks, noting that while the deaths cannot be definitively linked to blogging, certain aspects of the blogger lifestyle can lead to weight gain, inactivity, poor nutrition, and sleep disorders. Plus, many suffer stress and blogger burnout.

Of course, the story has been buzzing through the blogosphere to mixed reactions. There is no shortage of bloggers having fun with the story (Five Brooklyn Bloggers Die Over the Weekend, Latest Victims of New, High-Tech Disease; The NYT Covers Blogging) - bloggers can be a very snarky and cynical group. But while many fault the story for being a bit on the dramatic side, it raises some good points that employers should consider: sedentary workers have unique health risks. Of course, this isn't limited to bloggers - it also includes IT workers, telemarketers, assemblers, managers, typists, receptionists, office workers - just to name but a few. Sedentary work environments can contribute to obesity, diabetes, circulatory problems, deep-vein thrombosis, musculoskeletal disorders, and other health problems.

While we haven't seen any workers comp claims for blogging yet, employers need to keep an eye out for sedentary workers, particularly any home-based teleworkers, to ensure that health risks are mitigated and that workers comply with health and safety standards. Set an expectation that work be punctuated with periodic breaks for activity or exercises and ensure that workstations have good ergonomic design. Blogger LifeDev shares some other pointers for keeping web workers healthy.

And as for us hard working bloggers at Workers Comp Insider, we offer assurances that we are not pulling all nighters to update the blog or struggling to feed our families on a click-by-click basis. But after this article, I am wondering if our readers' insatiable demand for the latest workers comp news might have something to do with my recent 10 pound weight gain.

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April 8, 2008


New Jersey is known for many things, including these odd tidbits: three consecutive governors broke their legs while in office (Whitman, McGreevey, Corzine); no self-serve gas; no state song; the lowest rate of depression in the US. And an idiosyncratic workers comp system that has not been changed significantly since the 1970s. We will pass on whether they need a state song (surely Springsteen could provide one), but the comp system needs some fixing.

Dunstan McNichol and John Martin, writing a multi-part series in the Star-Ledger, have done an admirable job exposing the considerable holes in the New Jersey comp system. With inordinate delays in the provision of benefits (it can take years), with no way to determine whether injured workers are receiving the benefits they need, with political patronage the order of the day in the appointment of judges, and with a bureaucratic structure that makes New York seem streamlined (yikes!), New Jersey is operating in the darkest of dark ages.

McNichol and Martin point to the plight of John DeJulio, a retired veteran working at Home Depot. He slipped on a puddle and broke his leg. It took more than three years to secure approval for knee surgery: over the course of two years he had to see five specialists and attend nine court hearings before the surgery was approved.

Claimant Joe DelDuca was involved in a work-related car crash. When a hearing on his claim was postponed for the 8th time in two years, he plowed his pick up truck through the glass entrance of a workers comp courthouse in Morris County. (No, any injuries resulting from this rash act would not be work related.) Ironically, his desparate ploy worked. One week later the judge order all parties back to court, weeks ahead of the scheduled hearing. They settled DelDuca's claim in a few hours. Unfortunately for the claimant, he was subsequently jailed for 6 months and died within two years of his claim's resolution.

New Jersey definitely goes its own way in comp. In terms of cost to employers, they are middle of the pack, ranked in the most recent Oregon study at 23rd overall. They run their own, unique experience rating system, independent of NCCI. Benefits can be generous, but they also can be extremely stingy: workers with minor injuries can receive permanent partial awards, even after returning to full duty; on the other hand, workers reaching maximum medical improvement (MMI) can lose all benefits, along with their jobs. McNichols and Martin describe the inordinate delays in accessing the second injury fund.

In most states, a workers comp advisory council oversees the performance of the system and makes recommendations for improvements. These councils, a blend of labor, management and administrators, can serve a vital function in fine-tuning benefits and in defining parameters for eligibility. New Jersey has a council, but the meetings are closed to the public and minutes are not recorded. Kind of a Star Chamber for comp, which, given the way things currently operate, is emblematic of a deeply flawed system.

Employers are generally content with the current state of affairs, because it is reasonably cost effective. The only real pain in New Jersey belongs to injured workers, who can encounter considerable difficulty in securing the benefits they need to stay afloat. I suspect that injured workers in the Garden state might have a few suggestions for a state song: the Stones's "I can't get no satisfaction," or maybe the Ray Charles classic, "Drown in My Own Tears."

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April 7, 2008


Nassau County in New York is currently paying about $10 million a year for the partial disability claims of former county employees. They would like to settle these claims, but as with most municipalities, their budget process offers no opportunity for fronting the costs of settlement. It's cheaper to keep paying the claims from year to year, pushing the problem onto future tax payers.

The county is now exploring the idea of borrowing $55 million to off-load about 1,000 claims to a private insurer. In return for the one large payment, the insurer would accept responsibility for all the claims. We think Nassau County is moving in the right direction, but there are some significant pitfalls. (Perhaps county officials should read our February blog on Connecticut, which encountered serious problems in attempting the same off-loading procedure back in 2001.)

A Well-Dressed Gorilla
Any municipality seeking to privatize the handling of workers comp claims has to deal with the 800 pound gorilla, in this case appropriately dressed in a three piece suit: what is the true value of the claims being privatized? No one really knows. Because municipalities operate on annual budgets, they pay claims from year to year, presumably until the recipient dies. While actuaries could project with reasonable certainty the ultimate cost of each claim, no such projections have been made. In Connecticut, the projections were performed by untrained college students. Their guesses wildly overstated the value of the claims, resulting in grossly overstated "paper savings." Instead of saving CT taxpayers money, privatization became a collosal rip off.

The fact that the county is spending about $10 million a year on these claims tells you very little, if anything, about the ultimate value. In fact, the only way to determine the real value is to secure a professional review of the claims, preferably before the county issues its RFP. That way tax payers will benefit from real savings and carriers will understand the actual risk of the undertaking.

Of course, the carriers are salivating at the $55 million upfront payout. They are probably so confident in their ability to make the cash grow, they could care less how accurately the county claims are reserved. Given today's market (subprime mortgages, anyone?) a little caution is certainly in order.

We've been down this road many times before: county officials dreaming of million dollar savings; private carriers dreaming of healthy profits. That's a lot of dreaming, which quickly turns into a nightmare if the process is not approached with an appropriate appreciation for the complexity of the task. A word to the wise is (presumably) sufficient.

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April 4, 2008


Back in November, just before Thanksgiving, we blogged the story of Deborah Shank, a 52 year old woman who stocked shelves in Wal-Mart's Cape Girardieu, Missouri store. Here's how we described the situation:

Seven years ago, [Deborah] was perusing yard sales with a friend when a tractor trailer plowed into her van. She was left with permanent brain damage. Walmart paid about $470,000 in medical expenses. The Shanks sued the trucking company and collected about $1 million, the limit of liability under the company's policy.

Jim Shank, Deborah's husband, used his portion of the settlement to buy an accessible home for his disabled wife. After paying legal fees, his wife was left with $417,000 to help supplement her care. End of sad story? Not quite.

When she signed onto the Walmart health plan, Deborah agreed that her employer would be first in line for payment out of any subrogation. [This type of language in employer health insurance policies is becoming increasingly popular.] Walmart sued Deborah for $470,000 plus legal expenses - in other words, they are suing for more than the balance of her settlement funds. They rejected the Shank's offer to settle for a portion of their costs. And of course, Walmart being Walmart, they have won the suit.

Despite the odds, at the time of the blog Jim Shank was pursuing an appeal to the Missouri Supreme Court. We predicted he would lose and he did. End of family, end of story?

Not Quite.

The Court of Public Opinion
In an extraordinary and totally uncharacteristic move, Wal-Mart has backed away from its claim on Deborah Shank's settlement. They won, but they have generously decided not to collect. Pat Curran, Wal-Mart's Executive VP for operations wrote to Jim Shank: "Occasionally, others help us step back and look at a situation in a different way. This is one of those times. We have all been moved by Ms Shank's extraordinary situation."

Curran said that Wal-Mart would drop its claim and would work with the family on Shank's continuing care, adding: "We are sorry for any additional stress this uncertainty has placed on you and your family."

When Jim shank received the letter at the beginning of April, he thought it was an April Fool's joke. It's no joke. Wal-Mart, invincible in the courts, has surrendered to the devastated and defenseless Shanks.

When the original story broke, we acknowledged that Wal-Mart was within its rights to seek reimbursement for expenditures under the employee health plan. Nonetheless, we awarded the retailing behemoth a turkey, for turning a tone-deaf ear on the pain and sorrow of the Shank family. (Their son, Jeremy, was killed in Iraq shortly after their case was dismissed at the appeals court level.) Wal-Mart has finally come to realize that there may actually be something more important than the bottom line. They have taken a huge PR hit for their relentless focus on cost-cutting perfection. Pursuing the Shank family may have been legally sound, but it was utterly lacking in compassion. Sure, America loves a bargain, but we believe in fairness, too.

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April 3, 2008


An excellent new edition of Health Wonk Review is awaiting your perusal at The Health Care Blog. The post is authored by Brian Klepper, a nationally recognized health care analyst and consultant and a roving blogger who regularly posts at Matthew Holt’s The Health Care Blog, Patricia Salber MD’s The Doctor Weighs In (where he is the sole non-physician contributor), and Robert Laszewski’s Health Care Policy and Marketplace Review. One of his recent posts, What Worksite and Retail Clinics Mean for the Primary Care Crisis is well worth a read for his discussion of this trend, and the exchange this has prompted between Brian and Maggie Mahar.

Wal-Mart relents - There's been an interesting development in a story discussed by my colleague Jon Coppelman last November. He awarded Wal-Mart a turkey in his post about subrogation and the case of Deborah Shank, a Wal-Mart employee who suffered permanent brain damage after her van was hit by a truck. Wal-Mart's health care plan paid her medical expenses, but when the Shanks sued and won damages against the trucking firm, Wal-Mart stepped in via subrogation rights to scoop up the settlement. Subrogation is not uncommon in the insurance world, but the harshness of this particular case (coupled with the fact that the Shank family also lost a son in Iraq around the same time) prompted a public outcry and national media attention. In an extraordinary response to this outpouring of condemnation, Wal-mart has backed off from its reimbursement claims, noting that in the future, company policies on subrogation will be reviewed on a case by case basis.

Good advice - Ten Insurance Tips For Corporate Counsel, Risk Managers And Executives - Mark Grabowski notes that, "Insurance policies often are acquired and then put in a drawer. But there are important steps that policyholders should take to help maximize the value of their insurance coverage."

High cost of alcohol problems - Researchers at The George Washington University Medical Center has recently issued a report on prevalence of alcohol problems by industry segment and what employers can do about it (PDF). While the national average for employees with alcohol-related problems is about 9 percent, the hospitality industry tops 17% and construction and mining is more than 15%. (See chart). The Report is issued by Ensuring Solutions, a part of the Medical Center which provides research-based information on effective alcohol treatment and the barriers many people face when they seek help for a drinking problem. The website is a handy link with much useful information, including an alcohol cost calculator that allows you to estimate the cost to your industry. Nationally, alcohol costs American employers an estimated $134 billion in productivity losses, mostly due to missed work.

OSHA and penalties for work fatalities - The Senate HELP Subcommittee on Employment and Workplace Safety recently held a hearing on serious OSHA violations, and as part of the hearing, OSHA's frequent practice of reducing penalties in workplace-related fatalities was discussed. Former OSHA Assistant Secretary Jerry Scannell, commenting on the pressure he felt to reduce monetary penalties, posed the question, "What are we, a discount house?" Read more at Celeste Monforton's post in The Pump Handle.

Advance notice - We'll be posting more about this in the future, but just an alert that April 28 is scheduled as Workers' Memorial Day, a day dedicated to those who died on the job and also to bring awareness to the need for worker safety.

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