April 2010 Archives

April 29, 2010


Get it while it's hot: Health Wonk Review: NBA Playoffs Edition - posted by Jason Shafrin at Healthcare Economist - a lean & clean compendium of what the health policy wonks are talking about.

Bloggers are taking over the world - We attended a few days of the Risk & Insurance Management Society (RIMS) annual meeting in Boston this year and were happy to have the opportunity to meet with four fellow bloggers: Joe Paduda of Managed Care Matters; Roberto Ceniceros, an editor at Business Insurance who blogs at Comp Time; Cara Barde, President and COO of Total Medical Solutions, which sponsors the Work Comp Complex Care Blog; and Peter Rousmaniere, workers' comp columnist at Risk & Insurance who has the Working Immigrants blog. We also chatted with Bob Wilson, founder of one of the online pioneering sites, workerscompensation.com - a valuable resource that gets better with time.

So many white crosses - "Look around your workplace tomorrow and imagine 29 people gone in one instant." Ken Ward posts a moving account of the final farewell to the deceased miners: Coal miners memorial: So many white crosses. Former Massey Mine worker to Congress: "People shouldn't have to work like that" And in today's news: two miners missing in Kentucky.

Jordan Barab video - Jon Gelman features a video clip of testimony that Jordan Barab, Deputy Assistant Secretary, OSHA, made before the U.S. House of Representatives Subcommitttee on Workforce Protections on Workers' Memorial Day: Facing unacceptable hazards in the workplace. Many of our readers will remember Jordan Barab as the passionate advocate for worker safety on his now-retired blog Confined Space.

BPEP oil rig explosion - At Today's Workplace, Lindsay Beyerstein has compiled a history of safety violations for BP Exploration and Production (BPEP), the company that held the contract for the oil rig that exploded off the Louisiana coast. Liz Borowski at The Pump Handle has more on the missing miners and the decision to call off the search. At III's Insurance Industry's Blog, Claire Wilkinson posts that the oil spill continues to worsen - and despite the event being a man-made catastrophe rather than a natural one, the scope of the disaster may prompt a federal disaster declaration.

Giving kids a chance - Over at LexisNexis, Robin Kobayashi posts about Kids' Chance, a nonprofit formed with the mission of providing scholarships to children of workers seriously injured or killed on the job. Founded in 1988 by Georgia attorney Robert Clyatt, today there are programs in more than 25 states. Check out Robin's post to learn more.

CT comp chimp case - The Connecticut Senate has approved a bill allowing police officers to seek workers' compensation for stress after using deadly force on mammals. The bill awaits House action before going into law. We've blogged about Officer Chiafari's ordeal previously, as well as that of the victim. Hopefully, this bill won't need to be called into use very often.

Case Law - Workplace Prof Blog posts about Bollinger Shipyards, Inc v. Director, Office of Worker's Compensation Programs, U.S. Dep't of Labor: Immigration Status Irrelevant under Longshore and Harbor Workers' Compensation Act

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April 28, 2010


Today is Workers' Memorial Day, both a global and a national day to remember those who lost their lives on the job. April 28 has been an annual day of remembrance since 1989. It is the anniversary of the Occupational Safety and Health Administration and the day of a similar remembrance in Canada. Trade unionists around the world now mark April 28 as an International Day of Mourning.

Here in the US, in addition to remembering the more than 5,000 workers who die on the job each year, we face the fresh and painful large-scale tragedies of the 29 workers who lost their lives in the West Virginia Massey mine disaster, 7 workers killed at the Tesoro refinery explosion in Washington, 6 workers killed at the Kleen Energy Plant in Connecticut, and 11 workers missing and presumed dead from Transocean's oil rig explosion off the coast of Louisiana.

These large-scale disasters were played out on a very public stage, with much media attention on the accidents, on the loss of life, and on the grief of the survivors. Less public but no less tragic and painful are the stories of the other 5,000+ deaths: 56-year old father of four James Wetzel, crushed to death in a collapsed trench that was not properly secured; a double fatality at the Kansas MagnaGro International Plant, in which 25-year old Iraq veteran Brandon Pierce and 51-year-old grandfather of four Roy Hillebert lost their lives in a vat of unspecified liquid or 32-year old mother Lori Keen who was killed after being struck by a pallet of bottled water in a Kroger store in Illinois. News reports often paint work-related deaths as freak accidents, but safety experts know that workplace freak accidents are a media myth - most entail preventable safety violations.

The AFL-CIO has amassed resources and information on Worker Memorial Day, including the release of its 19th annual report on the state of health and safety for U.S. workers: Death on the Job Report 2010: The Toll of Neglect. It's worth reading and passing along. The best way that we can honor fallen workers is to pledge that we can and we will do better.

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April 27, 2010


Salverio Todaro, a 68 year old entrepreneur, ran a safety inspection company called SAF Environmental Corporation. You may never have heard of Todaro, but if you live in the New York City area, Todaro may have succeeded in damaging your brain or shortening your life by a number of years. Certified to inspect buildings for lead and asbestos, Todaro rarely actually tested for the deadly substances. Beginning in 1989, he routinely filed bogus inspection reports, including phony lab results, on buildings scheduled for renovation or demolition across the five boroughs. (William Rashbaum of the New York Times provides the appalling details here.)

Think about the consequences of Todaro's failure to do his job. He gave the green light for projects that put construction workers on hundreds of jobs at immediate risk for exposure to lead and asbestos. These workers ripped apart buildings contaminated with asbestos, raising clouds of toxins for all to breath - construction workers, neighbors, passers by. It will take years for the toxins to do their work, but rest assured, that dreadful work will be done.
NOTE: I hardly need add that construction workers on the job sites certified as safe by Todaro are unlikely to qualify for workers comp benefits: thanks to Todaro, there are no records of hazardous substances on these sites.

In one documented case, Todaro was asked to examine an apartment where a young child had suffered from exposure to lead. Todaro gave the building a clean bill of health. As a result, the family had no reason to move, no reason to suspect that every breath their child took put him at risk for further brain damage.

A Punishment to Fit the Crime
In an earlier time, we might have pondered Todaro's fate after his death. In Dante's Inferno, the Ninth Circle of Hell is reserved for traitors, who find themselves eternally locked into awkward positions, encased in ice. Todaro betrayed his city and his fellow man, and made a few bucks in the process. But his actual fate is pretty mild by Dante's standards: he is facing four to six years in jail. After that, I imagine, he'll head south to a quiet retirement in Florida. No eternity encased in ice for this despicable betrayer of the public trust.

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April 26, 2010


We have been following the implosion of self insurance groups (SIGs) in New York. Back in June 2008, SIGs operated by Compensation Risk Management (CRM) collapsed. CRM had grown their business by offering comp coverage at very low rates. For a long time, they were able to maintain an illusion of profitability by under-reserving losses. Eventually, it all caught up with them.

When the CRM SIGs went belly up, the state worker's comp board looked around for some free cash to pay for the $450 million in unfunded liabilities incurred by CRM. They decided to penalize all the SIGs that had been operating in the black. In a move stunning for its arrogance (facilitated by legislation passed in 2008), they decided to raise assessments on these SIGs from the modest annual total of $104,000 to a whopping $11.1 million.

In other words, the insurance groups operating prudently - charging adequate premiums, controlling losses and turning a modest profit - were forced to make up the losses incurred by a company operating like a ponzi scheme. Well, as they like to say in New York: "You gotta problem with that?"

Acting state Supreme Court Justice Kimberly O'Connor had a problem with it. She ruled on April 14 that the 2008 laws that empowered the comp board to assess the SIGs were unconstitutional, as were the assessments issued by the board.

Justice Too Late
Unfortunately, judicial relief comes long after the once-profitable SIGs have folded their tents. First Cardinal once operated 13 SIGs in New York, with $166 million in premium. When hit with the exponential increase in assessments, First Cardinal decided to move its business out of the state (in itself a sure sign of management that was paying attention). They stopped writing in New York and laid off the 57 (innocent) workers who were doing a good job of managing the New York business.

You may recall the old saying: "The wheels of justice grind slow but they grind exceeding fine." In this case, justice - and fairness - were eventually served. But the pace of the process seems to have crushed the parties harmed by an unjust law.

Of course, the comp board believes that the assessments are legal and is planning to appeal. That should add a few more months to this ridiculous situation.

"You gotta problem with that?" Indeed, I do.

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April 22, 2010


Cavalcade of Risk #103 - Risk Management with the Stars Edition is posted at My Wealth Builder. Check it out - and don't miss Nancy Germond's post on the alarming increase in the U.S. disability rate.

Misclassification - Employers can expect a heightened focus on misclassification, with a push on both the federal & state levels. Risk & Insurance reports that the Obama administration recently earmarked an additional $25 million in the DOL's proposed FY 2011 budget for a misclassification initiative. The plan calls for hiring 100 additional enforcement personnel to address the problem and to provide grants to aid states in addressing the problem. Prior studies have indicated that more than 3 million employees may be misclassified. A 9-state study by the DOL found as many as 30% of audited employers misclassified at least some employees.

Fee schedules - Joe Paduda offers his thoughts on the role fee schedules play in workers comp: "...at best, a short term fix, and at worst, a blunt instrument that actually encourages over-treatment and extended disability." He also cites a column by Greg Krohm, Executive Director of IAIABC, who has a similar take.

New blog finds
First up - as we all watch developments in the new health care law playing out, you might add Covering Health to your reading list. It's a blog maintained by the Association of Health Care Journalists. While its mission it to keep health & healthcare journalists informed, it's a good read for anyone tracking the issues. The Association of Health Care Journalists is an independent, nonprofit organization with more than 1,100 members, and is dedicated to advancing public understanding of health care issues. In addition to the blog posts, the blogroll has a good list of health news blogs.

Reinsurance, you say? Try reinsurance girl's blog. She features a recent helpful post: Who to follow: insurance and reinsurance businesses in social media, which links to more reinsurance resources.

Death on the job - We haven't linked to the Weekly Toll in some time - it's a sobering look at recent on-the-job deaths. It puts a human face on statistics and exposes the geographic and industrial diversity of workplace fatalities. In a world that aspires to "zero defect" for product parts, can we aspire to any less when it comes to human injuries?

Hard market - Conning Research & Consulting forecasts that property and casualty insurance rates will begin to firm up in 2011 and that premium will grow modestly at about 2%. But the firm says to expect larger UW losses this year, and a deterioration in loss ratios. Meanwhile, the RIMS Benchmark Survey reports that the soft market still prevails, at least at present.

Virtual medicine - Jon Gelman has an interesting post about the trend to virtual doctors and online medical care, and speculates about whether such technological advances could benefit workers comp.

Massachusetts health care reform - "When Massachusetts's politicians designed their reform, they calculated that achieving near-universal coverage first would then give all participants in the health care system an incentive to help rein in costs. There are encouraging signs that that is starting to happen." This according to a New York Times editorial, Health Care Reform and Massachusetts. Thanks to Tinker Ready at Boston Health Blog for the pointer and for more links on Mass. reform.

Quick takes

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April 20, 2010


Because of their rarity, volcanic eruptions are a pretty interesting insurance topic, so on the "thigh bone's connected to the hip bone" principle, we thought we'd stray a bit afield today. Mother nature has reminded us who's boss in a truly spectacular display of muscle flexing that's brought travel and commerce to an unprecedented standstill for a huge part of the globe.

As an insurance event, it may not prove to be as costly as one might think, given the havoc that it is wreaking on business and travel - estimated at $2 billion and counting. Most airlines will be absorbing the cost of the delays since there is not actual physical damage to the fleet, and a volcano would be considered an 'act of God.' This prompts Vladimir Guevarra of the Wall St, Journal to ask if we might see volcano-related insurance as a new product for the airline industry.

European insurers don't expect a big hit, largely because business interruption claims are considered unlikely - claims would need to be triggered by actual physical damage. The property and casualty damage from volcanic ash is not expected to be extensive.

For at least one segment of the industry, this is being deemed a significant claims event: Insurance companies that provide trip coverage are being inundated with calls, and they expect to pay out millions in trip claims. For travelers who were insured before April 13, coverage is likely, depending on exclusions, but after April 13, travelers should not expect ash coverage.

Future scenarios
In the great scheme of things, as far as volcanic eruptions go, this is a modest affair. However, there are two scenarios that could raise the stakes. The first is what the effects would be if volcano disruption lasts weeks, months - many are speculating about how the European crisis could play out

The second rather troubling scenario would be if this is a dress rehearsal, which it could well be if history is any guide.

"Eyjafjallajokull has blown three times in the past thousand years," Dr McGarvie told The Times, "in 920AD, in 1612 and between 1821 and 1823. Each time it set off Katla." The likelihood of Katla blowing could become clear "in a few weeks or a few months", he said.

The 1783 eruption was devastating and had a global impact:

A quarter of the island's population died in the resulting famine and it transformed the world, creating Britain's notorious "sand summer", casting a toxic cloud over Prague, playing havoc with harvests in France -- sometimes seen as a contributory factor in the French Revolution -- and changing the climate so dramatically that New Jersey recorded its largest snowfall and Egypt one of its most enduring droughts.
Despite that sobering thought, Iceland's glaciers do not pose the most serious risk, according to the Willis Research Network. According to their research, an eruption of Mt. Vesuvias could be devastating, with 21,000 casualties and an economic toll of $24 billion. For some interesting risk-related reading, check out the Willis Research Network report on Insurance Risks from Volcanic Eruptions in Europe.

More volcano resources
Lists of the most deadly and the most costly eruptions
Volcano World
Aerial photo gallery of the Iceland volcano
Another gallery of stunning images
How to pronounce Eyjafjallajokull (video)

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April 19, 2010


We recently blogged California's open door policy on comp claims for professional athletes based in other states. Most of the claims involve orthopedic injuries. Today we examine a claim for coverage of brain injuries - specifically, dementia. This one might blow California's doors right off the hinges.

Ralph Wenzel toiled in the trenches for the Pittsburgh Steelers and the San Diego Chargers from 1966 to 1973. After retiring from the NFL, Wenzel coached for a number of years. In his mid-50s, he began suffering from dementia-like symptoms. Now, at age 67, he is institutionalized with full-blown dementia. He is no longer able to communicate.

Wenzel's wife, Dr. Eleanor Perfetto, has filed a claim under the California workers comp system, contending that the dementia was the result of Wenzel's football career. (At 6'2" and 250 pounds, he was somewhat undersized for a lineman.)

"Absolutely, this was work-related for Ralph," Dr. Perfetto said. Given that the NFL has toughened its stance on post-concussion activity for active players, the medical evidence is certainly leaning in what now appears to be a rather obvious direction: constantly banging your head in the course of work leads to mental impairment, up to and including dementia.

There is a lot of money at stake. California law requires that the employer or insurer pay not only all current and future medical costs associated with the injury, but also all the incurred costs. Wenzel's institutionalization, going back to 2006, runs about $100,000 a year. If deemed compensable as workers comp, his claim will run into the millions.

88 Hike?
Dr. Perfetto is not without resources in caring for her husband. He is eligible for beneifts under the NFL's 88 Plan, which reimburses up to $88,000 per year in medical costs for former players with dementia. [There does seem to be a presumption of work-relatedness for dementia in the very creation of such a fund.] The 88 Plan, plus Dr. Perfetto's health plan through her employer, pretty much cover the costs of Wenzel's care. Dr. Perfetto, however, wants to open doors for families who do not qualify for the 88 plan, which is limited to players with at least 4 years in the league.

[A question for no one in particular: If dementia is determined to be a work-related condition, could the health insurer invoke the "exclusive remedy" provisions of workers comp and refuse to pay for treatment?]

There are a number of parties very interested in the outcome of this case: not just the self-insured team owners and insurance companies, who are confronted with huge (and retroactive) liabilities, but the federal government itself, which would welcome an opportunity to shift the formidable costs of caring for patients with dementia out of the social security system and into the private sector.

If Dr. Perfetto succeeds, it will be interesting to see who becomes the first payer: 88 Plan or workers comp. As is usually the case, there will be winners and losers. For poor Ralph Wenzel, however, winning and losing - once the paramount goal of his existence - no longer matters at all. It's probably impossible to say what does matter to this once handsome warrior, who has paid a dreadful price for the all-too-brief glory of his seven years in professional football.

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April 15, 2010


New Health Wonk Review - David Harlow of Health Blawg has posted an entertaining and informative Tax Day edition: Health Wonk Review: Block That Metaphor. Grab your coffee and dig in.

Diabetes prevention - At GoozNews, Merrill Goozner writes about the cost-effectiveness of diabetes prevention programs. Employers take note. We've frequently talked about the effect of co-morbidities such as diabetes and obesity on comp claims. Any progress on the prevention front would be good news for employers - both for the workers comp costs, and also for overall employee health and productivity.

Handy new tool - CompPharmaPedia, a glossary of terms commonly used in the comp pharmacy business, published by CompPharma LLC, a consortium of workers comp PBMs. Not sure what a PBM is? Look it up!

Fleet safety - At the MEMIC Safety Blog, Randy Klatt posts about how GPS as a safety tool for fleet safety. "You can instantly see where all your trucks, vans, or cars are located and their current speeds... More efficient responses will also mean less temptation for drivers to exceed speed limits, especially since they know their movements can be seen. For those who have hours-of-service restrictions, GPS can be used to ensure accurate reporting and log keeping."

Trainer killed by elephant - It's been a tough time for animal trainers. A few weeks ago, a trainer was killed by a whale at a Florida"s SeaWorld, and last week, elephant handler Andrew Anderton was killed by Dumbo, the elephant that he trained and lived with for 15 years. The death is under investigation by OSHA, but was thought to be an accident after the elephant had a run in with sparks from an electrical wire. Animal-related occupational fatalities are more common than many might realize. Over a 6-year study period in the 1990s, the Department of Labor logged 350 animal-related fatalities.

Bullying - teen bullying has been much in the news of late, but unfortunately, this is not a phenomena that people outgrow. At Strategic HR Lawyer, Diane Pfadenhauer talks about workplace bullying.

Time lapse - At Comp Time, Roberto Ceniceros offers his nomination for strange claim of the month. OK, and while we're on the theme of "strange," we nominate the case of Copenhagen workers who went on strike in protest after an unusual work benefit was rescinded. You have to wonder what the safety record had been like.

10 ways to trigger a lawsuit - At HR Daily Advisor, Attorney Barbara Meister Cummins offers her picks for the 10 most lawsuit-attracting lines she hears from managers, part 1 and part 2. We'd add one that my colleague wrote about recently: "Don't report that, you'll screw up the safety bonus."

Scary medical story of the week - If you think getting a computer virus in email program is bad, just wait until the hackers turn their sights to implantable medial devices. According to the MassDevice blog, hackers have already hijacked a patient support website for epileptics, MRI machines and electronic medical records. The post talks about these incidents and discusses the need for heightened security for devices with life-sustaining functions.

Scam alert - The National Association of Insurance Commissioners (NAIC) to consumers: Beware of health insurance scams.

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April 14, 2010


Alan Schwarz of the New York Times has written a fascinating series on workers comp in California: specifically, a cottage industry that has sprung up securing comp benefits for retired National Football League (NFL) players. The interesting part is that the claims are not limited to players from teams based in California. In its effort to protect transient workers (e.g., truckers, flight attendants), California offers recourse to anyone who temporarily passes through the state. Thus, professional athletes on any teams that compete in California can file for benefits, even if years have past and even if it was just a single game. Needless to add, the carriers for these out-of-state teams are trying to get the California system ruled off-side.

There are currently about 700 former NFL players pursuing benefits. Most of the injuries are orthopedic - bad backs, shoulders, knees, ankles. (We will deal with a claim for dementia in a future blog.) Two points should be made about these orthopedic injuries: many are cumulative in nature, so there need not be an acute injury specific to the sporting event in California; and virtually anyone who played professional football is likely to have one or more injuries directly related to the game.

Attorneys Take the Field
Behind every loophole lurks an attorney. In this situation, two former NFL players, now attorneys, are leading the charge: Ron Mix, a lineman for the San Diego Chargers in the 1960s, and Mel Owens, a linebacker for the Los Angeles Rams in the 1980s. Mix and Owens help former players from teams across the country to file claims in California. There is some question, however, about the quality of help that they offer.

Once deemed eligible for benefits under California law, players could opt to receive lifetime medical benefits for any medical expenses related to their football years. Think about it. That might include shoulder and back surgeries, hip and knee replacements, not to mention treatment for dementia related to on-field concussions.

Would it surprise you to learn that over 90 percent of the players entering the California comp system decline the lifetime medical coverage and instead, settle for a lump sum payment? Most players have accepted an extra $60,000 to $100,000 to settle their claim for future medical coverage. That amount would pay for one, maybe two surgeries.

Why settle out the medicals? Settling avoids the necessity of a trial (in these instances, not by jury but by administrative law judge). It puts a significant amount of money in the players's pockets sooner rather than later. And, of course, it puts money in the pockets of the attorneys, which lifetime medical benefits do not.

Faulty Judgment?
Judge Norman Delaterre, who sits in Santa Ana, notes that judges must consider whether proposed settlements are fair. "These players are represented by experienced, competent attorneys - the players themselves, they're adults. Presumably they've discussed the ramifications of the various types of settlements with their attorneys and they've come to a decision to accept the lump sum. Even though the judge in the back of his mind is thinking, you know, if it were me, maybe I wouldn't do this."

Hey, it's all just a game, right? The players took their chances on the field. Now they roll the dice in the corridors of comp system. If they end up doing what's in the best interests of their attorneys, what harm is there in that? They get some cash, the attorney gets a nice fee, the insurer gets a settled claim with no future exposure. One door opens, another one closes. When and if the future medical issues arise or the dementia sets in, well, someone else will be on the hook for that.

There are a lot of people unhappy with California's wide open door, above all, team owners and insurance carriers outside of California. They are going to do their best to shut the Golden State's door - the only such door, we should add, that is available to the walking wounded veterans of the NFL wars. We will keep readers posted on any developments.

But enough with the old folks who can no longer play and whose names we barely remember. The NFL draft is just weeks away. Hope springs eternal for every team, even the Detroit Lions. I can't wait to see what happens.

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April 13, 2010


Just how much of a toll has the poor economy taken on the workers comp system? Robert Hartwig looks back and looks ahead in his article for this year's NCCI Issues Report, The Great Recession and Workers Compensation: Assessing the Damage and the Road to Recovery (PDF). He notes that while the property casualty industry fared better than many industries - not a single property casualty insurer folded due to the economy vs the 170 banks that did - the industry still took some serious body blows. And of the damage to the industry, the workers comp line was hardest hit. With 7.1 million job losses, declining payrolls, and a continuing soft market, net written premium fell by a whopping $8.5 billion in 2008, with another steep decline anticipate for 2009.

With such a grim backdrop, what's in the cards for recovery? Hartwig notes that recovery will be largely contingent on job and wage growth over the next several years, and on that front, he is not overly optimistic. If job growth proceeds at a pace consistent with that of the most recent expansion suggests a painfully long recovery period, job losses won't be recouped until late 2016. That doesn't leave insurers a lot of room to move:

With a limited ability to grow exposures and greatly diminished investment earnings across all lines of insurance, especially especially longer-tailed lines such as workers compensation, the focus -- at least for the first half of the 2010s -- must be on underwriting profitability. Generating consistent underwriting profits is the only way to earn risk-appropriate rates of return in the current slow growth, low investment yield environment.

What's in the card for employers? Look for the potential of price hardening and greater selectivity on the part of insurers. Tight underwriting means that options may be limited for employers with poor experience. While it's always important to control losses, this environment ups the ante. In particular, employers need to be taking steps to control losses as hiring ramps up: new and untrained workers experience more injuries than veteran employees. A recent article in Industry Week suggests that employers should make safety part of the hiring process: Hiring for Safety: Risk Takers Need Not Apply. In addition, employers should put a heavy emphasis on safety training for all new hires.

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April 12, 2010


In our first blog of the Upper Big Branch mine disaster that took 29 lives last week, we made no attempt to point fingers. It was a time for mourning, for acknowledging the sacrifices of the brave men whose jobs never see the light of day. Well, now that the final death toll has been rendered - there were no survivors - it's time for some accountability. Let's begin at the top.

The CEO for Massey Energy is Don Blankenship. He is a man of humble and hard-scrabble beginnings, raised by a single mother. He worked as a union miner (an irony that will soon become evident) and attended Marshall University, where he received a degree in accounting. He worked for Massey Energy in the accounting department. where his fiscal skills and his penchant for cost controls helped him rise in the ranks, culminating in his becoming CEO in 2000. He is a vehement foe of organized labor, along with government regulations and the "the hoax and ponzi scheme" of global warming. (His business is coal, so his disbelief in global warming runs as deep as his mines.) Blankenship constantly battles regulators over safety infractions, including adequate ventilation of the mines (which at this point appears to be a major factor in last week's exlosion).

While famous for his focus on production, Blankenship does give lip service to safety. In a July 2008 depostion defending Massey Energy's safety record, he appears to talk the talk:

"As an accountant, I know that safety is an important cost control. So even if I were so calloused, which I am not, as to believe that safety should be sacrificed for production, I would understand that it doesn't make any sense because the accidents and so forth cause you to have more costs."

But somehow, in the dust and drive of production goals and profits, safety falls by the wayside. Blankenship does not walk the walk - or, as we are talking mines, he does not crawl the crawl.

Management Styles
There are clues to his management style in his personal life (a rather critical summary of which appeared in Business Week). His maid quit, saying the working conditions were intolerable. Ever the bean counter, the politically connected Blankenship successfully fought her application for unemployment benefits. The case wended its way to the West Virginia Supreme Court, where the maid prevailed. Two of the court's justices said that "the unrefuted evidence" before the state unemployment agency showed that Blankenship "physically grabbed" the maid, threw food after she brought back the wrong fast-food order, and tore a tie rack and coat hanger out of a closet after she forgot to leave the hanger out for his coat.

"This shocking conduct" showed that she was, in effect, fired because she felt compelled to quit, the justices said. They said the conduct was "reminiscent of slavery and is an affront to common decency."

The same, alas, could be said of Blankenship's management of Massey Energy.

Humble No More
Don Blankenship earned about $11 million in 2008. Not bad for a man of humble beginnings. As for the survivors of the miners killed last week, they must turn to the West Virginia workers comp system, which will provide indemnity for widows and dependents. (It appears that Massey Energy is self insured for comp - a penny-pinching decision that is about to haunt Blankenship, big time.)

The company is also vulnerable under West Virginia law for civil suits: comp's "exclusive remedy" provision can be transcended if you can prove "deliberate intent." I would say that repeated stalling, appealing, stonewalling and dismissal of documented safety violations is likely to reach the "deliberate" standard.

You may remember the song "Sixteen Tons" - made famous by Tennesse Ernie Ford:

You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter, don't you call me, 'cause I can't go;
I owe my soul to the company store.

Surely the miners had souls to put in hock. That may be more than can be said for the man who currently runs the company store.

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April 8, 2010


We like to keep our eye on advances in rehabilitative and assistive tehnologies, so we were delighted to find one of our favorite inventors and entrepreneurs Dean Kamen showcasing another of his awe-inspiring inventions in a TED talk. Kamen is perhaps most known for the invention of the Segway. We were particularly smitten by his iBOT, a revolutionary stair-climbing wheelchair that allowed the user to raise up on two wheels to be eye level to a standing person. Unfortunately, these went off the market due to cost but you can see the iBOT in action here.

Kamen's recent invention is the DEKA Arm (or the "Luke Arm"), a highly advanced prosthetic arm which he created for veterans who lost limbs in the war. He tells the fascinating story of the development and shows some of the capabilities in the following TED video. Inspiring and exciting! (You can also view his recent appearance on the Colbert Report and you can read about it at Dean Kamen's "Luke Arm" Prosthesis Readies for Clinical Trials.)

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April 7, 2010


The 102nd edition of Cavalcade of Risk is posted at Political Calculations, where blogger Ironman offers a rating for each post based on topicality, information quality and readability. Check it out.

More on the West Virginia Mining tragedy - On Monday, we were thrilled to hear of the miracle of the surviving miners in China, only to learn of the terrible disaster for West Virgina's miners a few hours later. Question of the day: Four years after reforms, why another mine disaster? For ongoing news and developments on the West Virginia mining disaster, follow Charleston, WV reporter Ken Ward's blog Coal Tattoo and follow his Twitter feed http://twitter.com/Kenwardjr.

The Tesoro refinery explosion - Overall, it's been a tough week for catastrophic workplace accidents. On Friday, 5 workers were killed in a Washington refinery blast.The Chemical Safety Board wonders why deadly tragedies are still occurring with alarming frequency, despite lessons learned 5 years ago from the BP tragedy. ""We are concerned that we are seeing a repeat of issues that we thought had (already) received widespread communication and attention," said Don Holmstrom of the federal Chemical Safety Board, which investigates manufacturing accidents involving hazardous chemicals." Are some industries just inherently dangerous? "By comparison, not one of the nation's 103 nuclear-power plants has had a major accident in 30 years, said Bresland, of the Chemical Safety Board."

OSHA - In Risk and Insurance, Steve Tuckey writes about OSHA's deeper bite and what it will likely mean to employers. Among other points made in the article, Tuckey cites last year's GAO study of more than 1,000 occupational health practitioners, which found that: "More than two-thirds of the respondents observed worker fear for reporting an injury or illness, according to the survey. In addition, a third of the practitioners said they were pressured by employers to provide insufficient treatment to workers or to hide or downplay work-related injuries or illnesses. Moreover, half the respondents said they were pressured to downplay the injury so that it would not be reported to OSHA, the survey also found."

Medical marijuana & insurance - You know a business has arrived when it supports an industry trade journal: Marijuana Business Reporter focuses on the burgeoning, legitimate medical marijuana industry. It currently features an interesting insurance-related interview with Mike Aberle, the national director, medical marijuana specialty division for Statewide Insurance Services, a Sacramento, CA company that insures dispensaries and other services in the medical marijuana industry: Underwriting Medical Marijuana. (Thanks to Risk & Insurance for the tip.)

Are your internships legal? - Jared Wade of Risk Management Monitor talks about When Unpaid Internships Become Illegal. In this tough economy, there has been an upsurge in the number of organizations trying to expand the definition of "internship" to get free labor - often in direct violation of state or federal labor laws. Joel W. Rice of the law firm Fisher & Phillips offers guidance in regards to the Department of Labor's six criteria for gauging whether or not an unpaid internship is legal. For more on this topic, see Jeffrey Hirsch's post at Today's Workplace: Unpaid Internships.

Asbestos awareness - John Gelman tells us that it is National Asbestos Awareness Week and he follows up with some related posts on the topic: the first deals with the launch of Libby Care, an expansion of Center for Asbestos Related Disease (CARD). His second post is about a NJ Appellate Court ruling which Upholds $30.3 million mesothelioma verdict.

Same forum, different name - If you are on LinkedIn, the Work Comp Forum has had a name change to avoid confusion with other entities with a similar name. It's the same great group hosted by Mark Walls, but it now sports a different name: Work Comp Analysis Group

Sense of humor deficit syndrome (SOHDS) - Joe Paduda continued his tradition of featuring an April Fool's posting on his blog. Apparently, not everyone appreciates Joe's sense of humor.Our next question for Joe: when work-related, is SOHDS compensable?

Quick takes

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April 6, 2010


Whatever you may be doing as you read this, take a moment to focus on your breath - the simple act of breathing in fresh air and then exhaling. Then think for a moment of the all the people who work in conditions where clean air is nowhere to be found. Think especially of the miners working deep in the earth, extracting minerals which benefit us all.

I often wonder what compels people to choose work in such dire conditions. For many, it's the only work available. For others, it's just what they know. Here is a passage, quoted in a lovely essay by Colin Nicholson, from one of my very favorite writers, Alistair MacLeod of Cape Breton Island, Canada (whose books Island and No Great Mischief are simply wonderful). MacLeod's family emigrated from the Scottish highlands in the late 1700s and found work in the Canadian mines:

Once you start it takes a hold of you, once you drink underground water, you will always come back to drink some more. The water gets into your blood. It is in all of our blood. We have been working in the mines here since 1873.

Here he describes a young boy in his first working day underground:

And there was scarcely thirty-six inches of headroom where we sprawled, my father shovelling over his shoulder like the machine he had almost become while I tried to do what I was told and to be unafraid of the roof coming in or of the rats that brushed my face, or of the water that numbed my legs, my stomach, and my testicles or of the fact that at times I could not breathe because the powder-heavy air was so foul and had been breathed before.

I am haunted this morning by the thought of 25 miners in West Virginia, whose last breaths were taken 1000 feet below the earth's surface. For each, there was a first terrifying day in the mines, perhaps following their grandfathers, fathers or uncles into tunnels deep below the surface. Over time, the terror receded, followed by the grim routine of working in the dark and breathing powder-heavy air that had been breathed before.

In the coming weeks, there will be many questions about mine safety, company policies and procedures, and survival benefits for the families. But today, there is simply the hope that the bodies can be recovered and brought one last time to the earth's surface. In a concluding irony, the final resting place for these men will be far above the chambers where they worked and where they died.

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April 5, 2010


Dr. Diane Shafer practices medicine in the Tug Valley area of West Virginia. The Tug River runs along the Kentucky border. It's a hard-scrabble part of the state, famous mostly for the Matewan coal mine strike in the 1920s. (Mother Jones, featured recently in one of our blogs, led the miners in an unsuccessful attempt to establish a union.) With a declining population and a median household income of $27,000, the area is dirt poor.

Which brings us to Dr. Shafer, an orthopedic surgeon. She may practice in a desperately poor part of a relatively poor state, but she is doing pretty well for herself. We read in the Insurance Journal that prosecutors have been very busy tracking her activities. A January raid of her bank holdings yielded more than $500,000 in cash and valuables. About half that haul consisted of stacks of $100 bills found in one of her safety deposit boxes.

Where did the cash come from? Don't bother looking for surgical fees. Dr. Shafer sells drugs. A state-federal probe tracked hundreds of people who entered Shafer's storefront clinic daily, paid between $150 and $450 cash, and left with pain drug prescriptions. Evidence included photos showing a line of people waiting to see Shafer that reached the sidewalk and stretched down the street, with as many as 30 people waiting outside. Dr. Shafer was not just running the most popular ortho practice in Mingo County, population 26,000. It must have qualified as the most popular ortho practice in the world.

FBI Special Agent James Lafferty said in a sworn statement: "The condition of Dr. Shafer's office during the execution of the search warrant indicated that it would be physically impossible for her to utilize her examining tables. She indicated that she examined her patients 'at another location.''' In the back of her pick up truck, perhaps?

Dr. Shafer has parlayed her wealth into an interest in politics. She is running for the state senate with the slogan "You are Safer with Shafer." Well, you certainly feel less pain when she is doing her thing. On her platform, outlined in rather primitive form at her website, she proposes giving free prescriptions to senior citizens. She does not specify which drugs she has in mind, but we can probably guess.

This is not the good Doc's first encounter with law enforcement. Her license was suspended in the 1990s for bribery and falsification of evidence in a workers comp case. (Why am I not surprised?) Eventually, her license was reinstated. The latter court noted: "The evidence is undisputed that the appellee is a hardworking, valuable member of her medically under-served community, and her technical ability to practice medicine is unquestioned."

History Repeating Itself.
Mingo County may be poor, but it has a fascinating history, summarized here. The origin of the county is worthy of a Faulkner novel:

Mingo County is the youngest county in the state, formed by an act of the state legislature in 1895 from parts of Logan County. Its founding was related to a legal protest by a moonshiner who claimed that the Logan County Court that had found him guilty did not have jurisdiction over his case because his still was actually located in Lincoln County. A land survey was taken and discovered that the defendant was correct. The charges were then refilled in Lincoln County court. Although the moonshiner was ultimately found guilty of his crime, the state legislature was made aware of the situation and determined that Logan County was too large for the expeditious administration of justice and decided to create a new county, called Mingo. The county was named in honor of the Mingo Indian tribe that had been the earliest known settlers of the region.

Dr. Shafer appears to be carrying on in the tradition of Mingo's founding moonshiner. She is also likely to end up as he did, with a conviction. The shutting down of her wildly popular practice may well drive the good folks of Mingo back into the hills in pursuit of more traditional methods of mitigating pain: no prescription is required; the medication comes only in liquid form; and there are no warning labels, but the risks of consuming it are beyond calculation.

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April 2, 2010


We have blogged the sad tale of housekeepers at the Hyatt Regency Boston, who were fired and replaced by low wage workers hired by an outsourcing firm. The workers unknowingly trained their replacements in their final months on the job.

Katie Johnston Chace of the Boston Globe has done a follow up on the 98 laid off workers. It's a sad story of broken dreams and piling debts. Sixty of the workers have been unable to find work.

As Northeastern labor economist Andy Sum puts it: "At the low end of the ladder, it's not only that the unemployment rate is high, but that the number of applicants for every job is extraordinarily high."

At the time of the firings, there was a lot of bad publicity for Hyatt. The hotel workers union estimates a loss of $3.7 million in revenues. Fighting back, Hyatt says that the job restructuring was the result of "challenging economic conditions.'' As we pointed out in a previous blog, the hotel might have saved a lot of money simply by improving the safety and training of housekeepers; their injury rates - and associated costs - were double that of other major chains.

Business as Usual
Hyatt spokeswoman Amy Patti said it was interesting the union would "boast about actions they have taken to drive dollars away from Boston and put additional jobs at risk in this difficult economy.''

Well, Amy, sort of. The union wants people to keep on spending in Boston, just at other hotels. They might start with the Boston Park Plaza, which has hired four of the former Hyatt workers into housekeeping jobs with full wages and benefits. When introduced to the team, their new co-workers burst into applause.

That's a nice coda for 4 percent of the Hyatt workers. For the remainder, no applause and, for the moment, little hope. It's like the end of Tchaikovsky's Symphony Number 6 ("Pathetique"), which after much drama simply fades away into silence at the end. Hyatt knew they would take a hit at the time of the firings. They also knew that memory spans are short and that business would return to normal in a few months. Throw out a few bargain rates and customers will come surging back. It's the American way and it works like a charm.

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April 1, 2010


Rich Elmore has posted a most excellent Health Wonk Review: Special Edition on Health Care Reform, which might also be called the "when pigs fly" edition. It has a good roundup of the health policy blogosphere's reaction to the landmark legislation and a handy, must-see one page info-graphic of the time line.

Prevention in Health Reform - at the NIOSH Science Blog, John Howard, the Director of National Institute for Occupational Safety and Health, summarizes prevention provisions in the Patient Protection and Affordable Care Act and their implications for workplace safety and health.

Frequency - At Comp Time, Roberto Ceniceros looks at the way that health care reform might impact workers comp claim frequency. He explains that the data in this area is thin, but elicits some educated opinions on the topic.

More grim news from China - In addition to the increasingly desperate search for 153 miners which we discussed earlier this week, Ken Ward reports that in a different China mine, 12 miners have been killed and another 32 are missing.

Lifesaver - HR Daily Advisor tells us that survival rates for out-of-hospital cardiac arrest are only about 5% due to the length of time it takes to get treatment to the victim. The sooner defibrillation is started, the more likely the victim will survive. A recent series of posts discuss the benefits of adding an Automated External Defibrillator (AED) as part of a corporate wellness program. "OSHA says that immediate use of an AED can result in a 90 percent survival rate. With each minute of delay, however, nearly 10 percent fewer survive." A follow-up post discusses related legal and training issues

Food processing - At The Pump Handle, Carlos Rich makes the case for food processing companies to treat workers more like humans and less like machines. We agree. Meatpacking and poultry processing plants are some of the most notorious environments for safety today. Many also play fast and loose with employment laws.

New blog finds

  • Fair Warning - "...an online nonprofit publication that seeks to provide robust, public interest journalism on issues of health, safety and corporate conduct." The publication promises investigative journalism, legal and regulatory news, and reports from think tanks, academics, and advocacy groups.

  • Work Safety Blog from Blog4Safety - bills itself as "Your online resource for safety information, safety tips, and safety compliance." It's not a new blog, posts go back to 2008, but it is a new discovery for us. The blog is sponsored by The blog content has been provided by Texas America Safety Company (T.a.s.c.o.).

9/11 suit back to bargaining table - Southern District of New York Judge Alvin K. Hellerstein surprised a lot of people when he rejected the proposed $575+ million settlement for 9/11 first responders. His complaints? The settlement paid to victims was too little. Read more from law.com: 9/11 Lawyers Return to Bargaining Table to Refine Settlement.

Quick Takes

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