Lynch Ryan's weblog about workers' compensation, risk management, business insurance, workplace health & safety, occupational medicine, injured workers, insurance webtools & technology and related topics

April 30, 2006

Beacon Mutual - Back to the Brink

Public sector institutions, created in response to crisis, often outlive their usefulness. A case in point seems to be Beacon Mutual Insurance Company of Rhode Island.

Most Insider readers are probably aware of the currently escalating catastrophe triggered by the audit report delivered April 14th by the committee headed by former Governor Lincoln Almond. Since I’ve observed the saga from the beginning and have intimate knowledge of the politics involved in how it came to be, I’d like to offer a personal perspective.

The saga begins in 1990.

Those who have been in the workers’ compensation arena since at least Ronald Reagan’s last term will recall the national crisis of the late 80s and early 90s. By way of example, in my home state of Massachusetts, 1992 total workers’ compensation insurance premiums were nearly $2 billion; now, premiums total around $800 million. Rates are where they were in 1981. Quite a turnaround.

Starting in the late 1980s, Lynch Ryan had done a lot of consulting business in our neighboring state, Rhode Island, because workers’ compensation problems were no different there. For a tiny state, costs were on a rocket ride to the moon. Of course, for insurers, as in most states, the problem manifested itself in the Residual Market, or assigned risk pool. Not enough premium going in, coupled with ever increasing losses, meant that the pools had insufficient money to pay the incurred value of claims, resulting in huge residual market deficit charges to insurers. Something had to give, and what gave is what usually gives in these situations. Insurers voted with their feet and stopped writing business in many industrial states, including Massachusetts, Rhode Island, Maine, Texas, California…the list is long. All of which caused the already flaming assigned risk pools to blaze even higher, like a bonfire with fresh gas.

Different states, different approaches to the problem
Different states reacted differently. In Massachusetts, a bi-partisan reform of the law, combined with the creation of the Qualified Loss Management Program, slowed, stopped and, by 1994, started to reverse the run-away train. Rhode Island, Maine, Texas and California approached the crisis from other angles.

For example, Texas decided to amend its law to allow employers to “opt out” of the workers’ compensation system altogether (I can remember flying to Texas to be interviewed for the McNeil Lehrer Hour on PBS and opining that “The Texas Legislature should be ashamed of itself.” National TV exposure can get one to spew hyperbole).

In addition to statute reforms, giant California, Down East Maine and little Rhode Island created state funds to take over their assigned risk pools.

California’s difficulties are long-standing and well-documented. Maine hired away from Travelers the exceptionally competent John Leonard. Regardless of whether one liked the idea of the creation of these state funds, which I didn’t, John made the thing work, and work well in Maine (Young and foolish, I can also remember saying in an interview that the states were “sweeping their problems under the carpet so posterity could trip over them.” Sorry, John, one lives and learns).

In any event, by the mid to late 90s, and putting aside some noteworthy state exceptions, the national crisis was becoming a national memory as costs dropped, insurers re-entered the marketplace and management, especially at NCCI, began to breath again. NCCI’s then president, Bill Hager, gave his famous “Back From The Brink” speech at the council’s 1995 annual meeting, during which the attendees heard Bill loudly proclaim, “We’re back from the brink!” 27 times.

I thought then, and still think now, that when the tide turned and costs fell, the great state of Rhode Island, taking a page from its native son, Major General Nathaniel Green, should have declared victory, folded its tents and, with trumpets blaring, left the field in triumph. But that did not happen.

Beacon Mutual, the company created with $5 million of state taxpayer money, the company that, to this day, has never paid taxes or contributed to the Guarantee Fund, got the Rhode Island legislature to approve its writing business in the voluntary market, eventually becoming Beacon Mutual, yet retaining its “special status” as a state fund. And, despite the good work done by many of its employees, Beacon Mutual, precariously straddling the razor-thin fence that sometimes separates the public from the private sector in Rhode Island, inevitably became a candidate for political and economic corruption. Beacon was allowed to set it own rates and could underbid any other insurer that had the temerity to want to write business in the state. It did “most favored nation deals” with certain agents and employers, some of whom, until last week, sat on its Board of Directors. Competition became non-existent. Although 60 carriers are licensed to write workers’ compensation in Rhode Island, Beacon Mutual insures 76% of the state’s premiums ($160 million) and 90% of its employers and wanted more by expanding to other states.

But along the way to becoming Goliath, Beacon Mutual picked a fight with someone armed with more than a sling shot, Governor Don Carcieri, who, given the Almond Report, seems committed to making the company bend to his will.

It will certainly be interesting to see how this whole thing plays out. Sort of like watching Rome burn. But for me, the bottom line is this: states should not set up insurance companies. And if they do, they should get out of the business as soon as is humanly possible.

Posted by Tom Lynch at 11:03 PM Link to, Comment (1), or E-mail this post
April 28, 2006

Worker Memorial Day: a day for mourning, recommitment

"We were worried and afraid, but we began to accept our fate. Junior Toler led us all in the Sinners Prayer. We prayed a little longer, then someone suggested that we each write letters to our loved ones. I wrote a letter to Anna and my children. When I finished writing, I put the letter in Jackie Weaver's lunch box, where I hoped it would be found.
As time went on, I became very dizzy and lightheaded. Some drifted off into what appeared to be a deep sleep, and one person sitting near me collapsed and fell off his bucket, not moving. It was clear that there was nothing I could do to help him. The last person I remember speaking to was Jackie Weaver, who reassured me that if it was our time to go, then God's will would be fulfilled. As my trapped co-workers lost consciousness one by one, the room grew still and I continued to sit and wait, unable to do much else."

I don't know that I can offer anything more compelling to commemorate Worker Memorial Day than these words from Sago Mine disaster survivor Randall McCloy Jr.'s grim first-hand account of deaths on the job. (Full text of letter, free registration required)

As of mid-April 24 coal miners have died at work. But that is only part of the story. Every day in the United States, an average of 16 workers die from occupational injuries.

Death on the job: the toll of neglect is the AFL-CIO's just-released 15th annual report on the state of safety and health protections for America’s workers. This extensive 158-page report includes both national and state-by-state profiles of safety, workplace fatalities, injuries, illnesses, the number and frequency of workplace inspections, penalties and public-employee coverage under the Occupational Safety and Health Act (OSH Act). It should be mandatory reading for all business managers and owners. Jordan Barab has taken the time to cull out and summarize some important portions of this report.

Also timely today, The Workplace Dirty Dozen - America's Dangerous Employers (PDF) - a report by The National Council for Occupational Safety and Health.

Additional resources
Worker Memorial Day - International Activities from Hazards Magazine
AFL-CIO Workers Memorial Day
Confined Space
rawblogXport

Posted by Julie Ferguson at 8:43 AM Link to, Comment (0), or E-mail this post
April 27, 2006

Protecting Homes, Humiliating Employees

Alarm One Inc. is in the home protection business. They install and monitor security alarm systems - serious business, or so you would think. A former employee, Janet Orlando, 53, is suing the company for $1.2 million in damages for the embarrassment of being spanked in front of coworkers. She quit her job in Fresno CA and sued, alleging discrimination, assault, battery and infliction of emotional distress. What's the matter, Janet, don't you like to have fun?

The facts of this bizarre case are not in dispute. Up until the practice was stopped in 2004, employees at Alarm One Inc., were routinely paddled, using the sign boards of their competitors, in a contest that pitted sales teams against each other. Winners threw pies at losers, fed them baby food, made them wear diapers and swatted them. Just your ordinary, All-American fun place to work.

Butch vs. Poncho
As "Butch" Wagner, Ms. Orlando's lawyer, puts it: "No reasonable middle-aged woman would want to be put up there before a group of young men, turned around to show her buttocks, get spanked and called abusive names, and told it was to increase sales and motivate employees."

Defending the company (no easy task!), attorney Poncho Baker said that the spankings were part of a "voluntary program to build employee camaraderie" and were not discriminatory because they were given to both male and female workers. In other words, Alarm One is an Equal Opportunity Harasser.

Of course, as part of its defense, the company attacked the credibility of the former employee, who is apparently a recovering prescription drug addict and has been arrested twice for shoplifting. (Therefore, of course, she has no business objecting to being humiliated!)

The ALARMing Vision
A visit to the company's website reveals some lofty goals:
Since 1996, ALARM ONE has made its mission to offer the finest security alarm systems and services available... Dedicated to providing its Customers with the highest quality of service, delivered with a sense of caring, individual pride, and Company Spirit, ALARM ONE continues to move forward in its mission to become the most trusted, largest, and most successful home security company in the world. [Care to elaborate on "company spirit"?]

Employees treat people how they like to be treated, regardless of the situation and irrespective of the potential or lack of potential for company gain. [If customers were aware of the company's "morale building" exercises, this statement might be cause for genuine alarm!]

ALARM ONE’S goal of protecting America's homes and families requires a greater level of sensitivity to customer needs than in virtually any other industry. As such, ALARM ONE will continue to provide families with the protection they need and the peace of mind they deserve. [Eventually, let's hope they get around to doing the same for their employees.]

It's interesting that Alarm One's unusual morale building exercises were dropped not because they were perceived to be immature, humiliating, and totally inappropriate, but out of fear that someone might get hurt. An employee filed a comp claim for injuries suffered during this, well, work-related team-building exercise. (We posted on the compensability of a spanking injury here.) In other words, the specter of increased workers comp costs brought the fun-filled staff meetings to an end. Sigh. It's nice they figured out that the activity had to stop. I'd feel better about it, however, if they stopped the nonsense for the right reasons.

Posted by Jon Coppelman at 1:50 PM Link to, Comment (1), or E-mail this post
April 26, 2006

The Perils of Management: When the Right Moves Go Wrong

You have a valued employee - a good producer - with a drinking problem. Ever since a traumatic divorce, his performance has suffered. He misses a meeting with a major client. You encourage him to seek help through the Employee Assistance Program. He voluntarily enters a detoxification program. He participates in Alcoholics Anonymous twice a week. He sees a counselor.

Yet his performance continues to erode. You suspect he may be drinking again. You call him into your office. He seems a bit spacy - might be taking a decongestant for a cold. You don't smell any alcohol, but you ask him if he had been drinking. He looks at you unflinchingly and says no. You give him yet another stern warning that unless his performance improves immediately, you will have to terminate him.

You're trying to be a good manager. You really want to help this guy, a valued employee. But how far do you go? When do you draw the line? You shake your head as he walks out of your office.

Judgment Call
The last thing on your mind at that particular moment is being sued for negligence. But for Ed Arlin, a manager at Unigraphic Solutions (UGS), that's exactly what happened after Thomas Wellinger left his office on May 3, 2005. Some three hours later, apparently on his way to an appointment with his psychiatrist, Wellinger drove his car at 70 mph into another vehicle, killing a mother and her two children. He was intoxicated to the point of no return, with a blood alcohol level at the literally staggering level of .40.

Where did Arlin go wrong? Did he wait too long to take action? In trying to help Wellinger, did he become an enabler?

Wellinger was just sentenced to a minimum of 19 years in prison. But the case does not end there. For Arlin and other managers at UGS, there is no end in sight. Gary Weinstein, whose family was wiped out on that fateful day last May, has filed a civil suit. So far, the police have been unable to trace Wellinger's movements on the day of the crash. So Weinstein cannot sue a bar for serving too much liquor. His only recourse at this moment is to sue the employer, who last saw the employee some hours prior to the accident. And based upon police reports, no one at the employer, Arlin included, had any awareness that Wellinger had been drinking on that day.

My guess is that there will be a settlement - a large one, at that. Even though UGS managers appeared to be on top of the situation; even though they made the accommodations that we hope considerate employers will make; even though they apparently had no direct knowledge of Wellinger's impairment on that particular day. Despite all of these factors, they are still likely to pay. Why? Because an innocent party has suffered tremendous harm and UGS, with its deep pockets (AKA liability insurance), is closest to the situation.

A Manager's Nightmare
Without question, Wellinger himself is responsible for what happened last May. He's on his way to jail. But in our system, every decision made by his employer will now be carefully scrutinized. If UGS could do it over again, they probably would have terminated Wellinger when his drinking resumed after detox; while recovering alcoholics are a protected class under the Americans with Disabilities Act, there are no such protections for active drinkers. UGS, in trying to do the right thing by Wellinger, ultimately made a wrong decision. It's a managers' nightmare. You make decisions every day, in the course and flow of the business. You have no way of knowing which decisions will come back to haunt you. As he wends through the civil trial with its endless depositions and testimony, Ed Arlin will have more than enough opportunity to second guess himself. It's not going to be easy for a manager who was simply trying to do the right thing.


NOTE: For additional background on this situation, check out our prior blogs here and here.

Posted by Jon Coppelman at 11:34 AM Link to, Comment (3), or E-mail this post
April 25, 2006

News roundup: hotel workers, certificates of insurance, productivity, and more

Hotel worker risks - Your comfort is a pain in the neck for many hotel workers - literally. Jordan Barab at Confined Space posts on how the increasingly plush bedding that hotels use to lure guests - duvets, double mattresses, down pillows - are adding to the injuries experienced by hotel workers.

"Still other research, by Orr Consulting, a firm dealing in ergonomics, found that the strain of making 12 or more king-size beds a day — many with 115-pound mattresses, 14-pound duvets and three sheets instead of two — exceeded federal occupational safety guidelines on lifting. And in a recent Unite Here survey of 622 housekeepers in Boston, Los Angeles and Toronto, 91 percent said they had work-related pain, 67 percent had gone to doctors because of that pain and 66 percent took medication for it.

More on popcorn lung - Artificial flavorings added to popcorn and other snack foods pose a serious threat to workers in the food industry and government watchdog agencies offer little in the way of protection, instead leaving the industry police itself. Francisco Herrera, a 32 year-old worker and father of two who suffers from disease that has destroyed 70 percent of his lungs wonders why, when everyone knew that the diacetyl was harmful. no one told the workers who handled it. In a must-read special report entitled Disease is swift, response is slow, The Baltimore Sun discusses this issue at length. Found via Jordan Barab at Confined Space, who has been blogging the popcorn lung issue thoroughly for several years now.

Kudos - to B. Jannell Grenier for the 3-year blogiversary of Benefitsblog, an excellent resource for tax, benefits, and ERISA law. Because the blog's topic matter is somewhat peripheral to workers comp, we don't pick up stories often, but it is a quality resource and a frequent read. Don't miss the wealth of carefully-chosen links at the end of the page!

Certificates of insurance - Specialty Insurance Blog highlights recent litigation that illustrates why the proper handling of certificates of insurance can be so important to agents and brokers.

More on WTC deaths - Federal authorities are taking note of the deaths of workers affiliated with the WTC cleanup, seeing an autopsy linking detective's death to ground zero's toxic dust a warning sign:

"The government’s point man on Sept. 11 health programs said he is worried that an autopsy linking a retired detective’s death to recovery work at ground zero may be a warning sign of other life-threatening cases.
Dr. John Howard also said it will take time to determine whether there is a scientific link between deaths and exposure to toxic dust. Some epidemiologists have said it will take 20 years or more to prove such a link."

Meeting productivity - Our fellow bloggers seem concerned about the productivity of meetings lately. Specialty Insurance Blog notes that insurance presentations aren't always scintillating, and to that, he serves up several excellent links on how improving presentations. And to ensure that your meetings attain their objectives, MSSPNexus offers tips for
making meetings valuable

Keep choice on the Internet - Beyond workers comp, we don't editorialize too often, but this is a topic near and dear to us, and if you are a blog reader, probably to you too. Is open access to the Internet important to you? Do you want the choice of independent sites or would you prefer to have your ISP slice, dice & package the Web much like cable TV? If you prefer choice and broad access, you may want to let your congressman know today. Pending legislation deals with abandoning "network neutrality" and there aren't too many lobbyists on the side of the individual web user. Here's a video clip that explains the issue, and here's an overview from Josh Marshall with some links for further action.

Short takes Judge: Worker can't be fired for web surfing
100 Years Later: State of the Art Business Response and Recovery Plans (PDF) (via Thoughts from a Management Lawyer
When a business travel bargain may not be a bargain.
How to put a band-aid on so it stays on all day Video clip via actuary.net

Posted by Julie Ferguson at 10:49 AM Link to, Comment (1), or E-mail this post
April 24, 2006

Immigration: The ICEmen Cometh

To hell with the truth! As the history of the world proves, the truth has no bearing on anything. It's irrelevant and immaterial, as the lawyers say. The lie of a pipe dream is what gives life to the whole misbegotten mad lot of us, drunk or sober. (The Iceman Cometh, Act I)


The recent surge of activity by agents of the U.S. Immigration and Customs Enforcement (ICE) brought to mind Eugene O'Neill's 1939 play, The Iceman Cometh. The ICE men and women recently raided IFCO, a manufacturer of pallets and pallet systems, arresting a number of managers and, most notably, somewhere around 1,100 illegal immigrants who were working for the company. (Read more at working immigrants here.) ICE has about 325 agents across the country. If this enforcement crew were to arrest 1,100 illegals a month (not likely, as it takes a long time to set up the bust), it would take them over 10,000 years to clean up the problem. That timeframe would probably satisfy the many people who fear the solutions more than the problem.

IFCO's press release following the arrests states that the allegations are "counter to everything we stand for." Well, we must assume, not quite everything. Ironically, they manufacture pallets for the harvesting industry, products used by thousands of undocumented migrant workers toiling in fields across America.

We all know what the problem is: we have about 12 million undocumented workers throughout the country. Most are working, providing a wealth of services in jobs that native born Americans seem reluctant to undertake. Because they are illegal, they function for the most part as second class workers, with limited benefits, lower wages and few protections. Their relatively inexpensive labor is a huge boon to our economy. So while some clamor to throw them out, others say let them stay and become citizens. Either solution would result in substantially higher costs for doing business.

Wink Wink
Given the downside of both proposed solutions, the Insider's guess is that we will muddle along with no significant changes. Congress will debate the issue endlessly, but will likely conclude, as they have done so far this year, that doing nothing is easier than doing something. Thousands of illegal immigrants will continue to slip through our porous borders every month. Millions of undocumented workers will continue to function with substandard wages and benefits, all the while fearing the day the ICEmen cometh. It's business as usual, wink wink, with no one quite willing to confront reality. We are living the lie that "gives life to the whole misbegotten mad lot of us." Perhaps the notion that we could actually fix this enormous problem is the biggest pipe dream of all. That's a sobering thought, indeed.

Posted by Jon Coppelman at 9:10 AM Link to, Comment (0), or E-mail this post
April 21, 2006

Readers reply: Premium comparison and safe patient handling

State Premium Ranking - Thanks to Mike Manley for pointing us to the 2004 Oregon Workers’ Compensation Premium Rate Ranking Summary, which offers a comparison of premium by state. Mike is the Research Coordinator at the Information Management Division of Oregon's Department of Consumer and Business Services. He also points us to some other workers comp studies that look very valuable - thanks, Mike.

Safe patient handling - Ann Hudson, RN, BSN commented on our recent post about Washington passes "Safe Patient Handling" legislation, noting that: "Substantial savings could be realized by insurance carriers and employers, and the nurse shortage could be eased, if workers' comp carriers assisted employers to retain back-injured nurses in other non-lifting nursing positions."

Her comment led us to the Working Injured Nurses Group or WING USA, a site that provides information, advice, and support to injured nurses. Anne is a founder of this group as well as co-author of Back Injury Among Healthcare Workers: Causes, Solutions, and Impacts. She has been active in championing the cause of back-injured nurses - both in terms of prevention and also in advocating for reemployment of injured nurses in positions that don't require lifting.

We appreciate informed comments from our readers. If you have resources, information, or just opinions, we encourage you to jump in!

Posted by Julie Ferguson at 6:48 AM Link to, Comment (0), or E-mail this post
April 20, 2006

Docs on Disability

The Insider has long puzzled over the decision-making process of doctors treating injured workers. Why do they rely so heavily on expensive pain killers when over-the-counter medicine might do the job just as well? Why do they choose one knee replacement part over another? Why are so many doctors quick to certify a disability, when the injured worker retains much of his or her ability to function? Why do so many doctors fail to see the relationship between being productive and being healthy?

As fellow-blogger Julie Ferguson pointed out yesterday, twenty one doctors with an interest in occupational medicine have published a fascinating report on the medical aspects of disability. Their white paper is entitled: Preventing Needless Work Disability by Helping People Stay Employed. It's a must read. From our perspective, the white paper is a 52 page symphony, closely aligning all the disparate players in the disability world. These doctors, affiliated with the American College of Occupational and Environmental Medicine (ACOEM), understand the problem and they propose realistic solutions.

Medically Unnecessary Disability
The white paper affirms what many of us in the field have long suspected: most time away from work due to a disability is medically unnecessary. You might want to read that line again: in most cases, it's not medical necessity that causes people to miss work. They are absent because of a host of issues involving insurance, work culture, medical practice and bureaucracies. At her own website, Webility MD, Dr. Jennifer Christian, one of the principle authors of the report, summarizes the difference between what is medically necessary and medically unnecessary as follows:

Medically-necessary disability is time away from work because:

  • work is medically contraindicated, or
  • therapy or recovery requires confinement to home or bed, or
  • there is no practical way to keep a vulnerable employee safe at work.

Medically-unnecessary disability is time away from work due to the interplay of the following non-medical features:

  • employers and physicians communicate poorly about injured and ill employees' ability to work
  • employers fail to address environmental and motivational problems, causing injured employees to stay out of work longer than medically necessary
  • physicians do not see disability as an outcome for which they are responsible.

The Paradigm for Occ Med
The white paper describes in compelling detail the many factors that prevent the medical delivery system from carrying out its fundamental role: "do no harm." If a doctor enables an injured worker to become a disabled person, he or she has indeed done much harm. The goal should always be to keep disabled people working: rather than fitting the injured worker to the benefit (workers comp, STD/LTD), keep the focus where it belongs: Staying at work. And for those who must lose some time, returning them to productive employment as quickly as possible.

This draft paper is worthy of widespread attention, not just among professionals who are directly involved in medical services, but among all of us who struggle with the issues of risk management, disability management and productivity in the workplace. The paper does not place the entire responsibility for fixing the current problems on the medical system. Insurers have a role, as do the employers whose workers are injured. Right now, it often seems that every special interest pulls in a separate direction. This white paper is a blueprint for bringing us back together, where we truly belong.

Posted by Jon Coppelman at 11:21 AM Link to, Comment (0), or E-mail this post

Health Wonk Review #5

Fard Johnmar of Envisioning 2.0 gets some help from an illustrious wonk in hosting the latest carnival of the creme de la creme of recent health policy-related blogging - Health Wonk Review #5. Plan to stay awhile - lots of good reading!

Posted by Julie Ferguson at 6:16 AM Link to, Comment (0), or E-mail this post
April 19, 2006

News roundup: RTW, Ambulatory Care, Rhode Island shake-up, and more

Today's must-read list: Give disabled workers every reason to remain part of your work force - an article discussing a report by the American College of Occupational and Environmental Medicine (ACOEM) on the Stay at Work/Return to Work process. The report discusses the psychological, emotional, and economic impact of disability on the individual. Read the full report: Preventing Needless Disability by Helping People to Stay Employed (PDF).

Peter Rousmaniere's column in Risk & Insurance this month - How to Avoid Getting Scalped - a look at Ambulatory Surgical Centers and their lack of transparency in billing practices. It's worth a read.

Rhode Island - Looks like Ohio may have some company in terms of workers comp scandals. Business Insurance reports that Governor Carcieri is calling for the termination of Beacon Mutual Insurance Company's CEO Joseph Solomon after a recent report detailed questionable practices and preferential pricing. Insurance Journal reports that Solomon and
the VP of underwriting have both been suspended
without pay, at least until a meeting scheduled for today. This is a big shakeup for an organization that writes about 90% of the state's workers comp policies. Beacon Mutual was created by the state in 1991 as a nonprofit independent corporation.

Scaffolding - In Boston, work has resumed at the site of the recent scaffolding collapse. The state is considering proposals that would assign scaffolding inspections to the Department of Public Safety, as is the case with cranes at construction sites. This political football will no doubt be tossed around for awhile. Meanwhile, a new scaffolding collapse in Milton Keynes , UK has dominated the headlines this week ... another worker killed. The BBC depicts the collapses in pictures. (via rawblogXport).

Employee Mutiny - You know things are bad when your work force quits en masse, leaving only a note on the door. Hospital Impact discusses this event, and raises other issues of employee morale and work force motivation in an interesting post that we found via Rita at MSSPNexus.

Posted by Julie Ferguson at 8:51 AM Link to, Comment (0), or E-mail this post
April 17, 2006

Hawaii Comp Needs Tweaking. We're Ready to Help!

The Insurance Journal has published a summary of benchmarking research on the state of Hawaii from the Workers Compensation Research Institute (WCRI). The Cambridge MA think tank found many things to like in the Hawaii system, and a few areas of concern. We'd like to link you to the full report, but WCRI reports are generally not available to the non-paying public. Too bad, because it's always interesting material.

A high proportion of claims in Hawaii involve lost time. Among the 19 states with a three-day waiting period, Hawaii had the highest proportion of incurred indemnity claims per 100,000 workers — 46 percent compared to the 19-state median of 29 percent (policy year 2000, the most recent data available). I wonder if this high rate is related to another finding of the study: The time to first payment in Hawaii was noticeably faster than 39 other jurisdictions. When you combine the "quick trigger" of a three day waiting period with rapid initial payment, you quickly cross into that murky zone where people are being paid not to work. It's the right thing to do, but it may also create "moral hazards" for people who really hate their jobs. And if you prefer fishing to work, what better state could you live in?

Safety Net
Most American workers must either prove that their conditions are work related or they will collect no benefits at all. Millions lack basic health insurance, and millions more lack disability insurance. It's workers comp or nothing. Hawaii has come up with its own state-mandated "twenty four hour coverage" program. This involves two related programs: non-occupational temporary disability insurance (TDI) and prepaid health care (PHC) insurance programs. While the compensability of a claim is being determined, a worker can file for non-occupational TDI and is entitled to 58 percent of her/his average weekly wage for up to 26 weeks. Under the PHC program, employers must provide health care benefits to eligible employees. In combination, these two programs help mitigate the impact on workers of delays in receiving workers' compensation benefits while compensability is in dispute. Hawaii is way ahead of most states in this area.

Hawaii has by no means perfected their workers comp program There are problems on both sides: Business representatives are critical of the high cost of premiums, fraud, mental stress claims and hearing delays. On the other hand, worker representatives expressed concern about rule changes promulgated by the Department of Labor and Industrial Relations to adopt evidence-based treatment guidelines. By focusing on work-related causation, some claims will be forced out of the system. (There may still be coverage, however, under the above mentioned TDI and PHC.)

Here are some of WCRI's other findings:

*Two features combine to produce a "user-friendly" hearing process in Hawaii. First, the process is issue specific and requires no special preparation other than the exchange of reports. Second, hearings are informal, held by hearing officers, who are usually not attorneys. In roughly one-half of the hearings, a claims adjuster represents the insurer or self-insurer; in roughly 45 percent of initial hearings, the worker chooses to be unrepresented or is assisted by a union representative. This results in less work for the attorneys, but less friction usually translates into lower costs. (Our attorney readers, naturally enough, will question whether the worker is adequately represented in this process.)

*The dispute resolution process is relatively fast. In 2004, the state-wide average interval from the request for a hearing to a hearing and decision was 162 days (5.3 months). This interval was shorter than in seven of nine other states WCRI has studied in the past ten years for which comparable data were available.

Paradise Found?
Hawaii used to be ranked among the lower cost states. But an alert reader (see Mike's comment below) points to more recent rankings, which show Hawaii moving up into the more expensive tier. The quick-trigger compensability and the generous benefits may be catching up with them. This evolving situation reminds us that comp is rarely static: what worked yesterday may not work tomorrow. Comp involves a delicate balancing act that requires constant fine tuning. If Hawaii is serious about bringing a "continuous improvement" discipline to their comp problem, if they want to turn the tide on rising costs, the Insider is willing to help. Our bags are packed and we're ready to leave on short notice. We have to admit that the prospect of consulting in Hawaii is just a bit more inviting than some of the more remote locations we've visited over the past 20 years. Comp issues may be universal, but some problem settings are more compelling than others...

Posted by Jon Coppelman at 12:04 PM Link to, Comment (1), or E-mail this post
April 13, 2006

"My Supervisor's Dead! Praise the Lord!"

Many employees wish that their bosses would drop dead, but when it actually happens, is it OK to celebrate in the workplace? If you ascribe the death to an act of God, is your speech protected under your freedom to practice religion?

We read in Suits in the Workplace about just such a case. When the supervisor of a Florida hospital worker suffered a stroke during a routine hernia operation and subsequently died, the employee began telling her coworkers that the stroke was a sign of God's "wrath" and an indication of Divine judgment. The employee told coworkers that God's vengeance was served and "victory is mine." These statements, needless to say, caused a major disruption. Some employees were so upset, they were unable to perform their jobs. The employee was subsequently fired for her conduct. So, naturally, she sued the hospital for religious discrimination under Title VII.

The (Less-Than-Divine) Judgment
The district court granted summary judgment for the employer, finding that there was no pretext in the employer's stated basis for termination, namely that the plaintiff was fired for openly celebrating the death of a coworker whom she despised. The fact that there was a religious element to the plaintiff's celebrations did not protect them or her. The court specifically noted it was not the religious component of plaintiff's comments that prompted the termination, but rather the inappropriate celebration of the supervisor's demise. The article did not indicate whether the plaintiff called down thunderbolts on the judge's head.

Accommodating Religious Belief
Setting aside the above employee's belief in a deity who functions like Marlon Brando in The Godfather, employers do have to make some accommodations for religious beliefs. Attorney Allan W. Brown from Eckert Seamans Cherin & Mellott provides the following summary:

: Meet (more than once) with the employee to seek a resolution (and take notes!)
: Accommodate the employee's observance of religious holidays, whenever possible
: Attempt to find a volunteer to swap shifts with an employee
: Attempt to transfer the employee to another job in the company, if necessary.

Spirituality and Work
Back in 1999, Business Week published an interesting article by Michelle Conlin on spiritual revivals based in the workplace. It's still a timely summary of the way spirituality in its many forms can impact the workplace. Conlin points out that people are working more and more hours, so the workplace becomes host to activities that used to take place somewhere else.

Most companies and executives are careful to stick to a cross-denominational, hybrid message that's often referred to as secular spirituality. It focuses on the pluralistic, moral messages common to all the great religions, such as plugging into something larger than yourself, respecting the interconnectedness of all actions and things, and practicing the Golden Rule. But it also puts a premium on free expression and eschews cramming beliefs down other people's throats.

Religious belief can be a tricky area for management. It's one thing to tolerate different beliefs. It's quite another when those beliefs infringe on other employees and disrupt the flow of work. Even if you believe your deity to be a vengeful personal protector, it's best to keep this comforting thought to yourself.

Posted by Jon Coppelman at 10:37 AM Link to, Comment (0), or E-mail this post
April 12, 2006

News Roundup: Immigration, illnesses, frequency, and more

Immigration - A column by Dana Parsons in the L.A. Times (free registration required) discusses illegal workers and the cost of doing business in California. He interviews a roofing contractor on reasons why he hires people off the books and - no surprise - the cost of workers comp is one of the primary reasons cited. Parsons follows up with:

"I ran the owner's comments past labor union executive Richard Slawson. In so many words, he says the laments are a crock.
Rather than being victimized by the system, Slawson says, the owner is a felon for violating workers' comp laws and represents one of the major contributors to the illegal immigration problem — namely, employers who depress wages by hiring illegal workers and not contributing fairly to the system.
The workers' comp complaints are nothing more than rationalizations for seeking unfair competitive advantages, says Slawson, executive secretary of the Los Angeles and Orange Counties Building and Construction Trades Council."

Immigration is, of course, a hot topic on many of the work-related blogs these days. Workplace Prof Blog discusses Immigration rallies and absenteeism and Jottings By an Employer's Lawyer has a post on A Summary of the Problem for Business. We recommend Peter Rousmaniere's blog Working Immigrants for facts, research, and news on the topic.

Disease Mongering - DB's Medical Rants points to an article that discusses disease mongering - whether the pharmaceutical companies are "inventing diseases" by exacerbating demand when there is none through direct to consumer advertising. I don't know about you, but I've felt a lot less healthy since all these ads have been on TV.

Flu and compensability - Joe Paduda poses the question as to whether the flu would be compensable if it were contracted at work - specifically during business travel. He's had a few replies, one from my colleague Jon Coppelman. Interesting discussion, weigh in with your thoughts.

Frequency underestimated by BLS? - Jordan Barab points us to a study led by Michigan State University, East Lansing Professor Kenneth D. Rosenman and team in an article in the April Journal of Occupational and Environmental Medicine finding that workplace injuries and illnesses may be significantly undercounted - by as much as two-thirds:

"Based on the results of our analysis we estimate that the number of work-related injuries and illnesses in Michigan is three times greater than the official estimate derived from the BLS annual survey," Dr. Rosenman and colleagues report. Whereas BLS statistics suggest that work-related injuries affect 1 in 15 Michigan workers per year, the new results suggest that the true rate is closer to 1 in 5."

24/7 Work Weeks - Michael Fitzgibbon at Thoughts from a Management Lawyer discusses the future of work and the idea that the 24/7 work week is becoming more commonplace, at least in certain types of jobs. That raises interesting questions in my mind about compensability issues and the course and scope of employment.

Worker Memorial Day - Just a reminder that this is coming up on April 28. RawblogXport offers some free posters for the occasion. The AFL-CIO site also has a page dedicated to resources.

Blogs - One of my new blog rediscoveries through Health Wonk Review is Over My Med Body!, a blog by Graham Walker, a Stanford medical student. It's not related to occupational medicine, but he does treat a variety of health policy and general health care issues. Plus, it's just an interesting read. Apparently U.S.News & World report thinks so too since his blog waas highlighted in a recent issue. Walker has also has developed a handy free service for consumers called Medslist. he suggests, "Sit down with your pill bottles for 5 minutes, enter in all your medications, and presto-change-o, you can download a PDF of it as well! (Small enough to cut out and carry in your wallet in case of emergencies or doctors' visits.)"

Posted by Julie Ferguson at 8:22 AM Link to, Comment (0), or E-mail this post
April 11, 2006

The long tail of WTC toxic exposures

Health experts predict that the health implications for the workers involved in the World Trade Center cleanup will take more than 20 years to be fully evident. A recent article in the PhillyBurbs discusses the frustrations that sick workers and health authorities alike are having in trying to come to grips with the health ramifications of post 9-11 cleanups. The World Trade Center Health Registry is faced with the daunting task of trying to track information on some 71,437 people who worked at ground zero, but even the matter of keeping a running tally of deaths is proving difficult. And although the health tracking is an important effort, many wish that there were less emphasis on the future and more on addressing the serious health issues that are emerging every day. In many cases, the workers have no financial or medical protection:

"Through its worker compensation program, the U.S. government has taken a dim view of any injury claim not directly from the day of the attacks.
Allen, 46, was one of the 485 federal employees to file for workers compensation claiming injuries from the aftermath at ground zero. Virtually all of those claims, some 478, were either rejected by the government or abandoned. Of the claims stemming from the day of the attacks, the government approved nearly all 987 of those.
New York state received 8,491 injury and exposure claims due to the events of Sept. 11 or the cleanup effort. About 680 - less than 10 percent - remain unresolved, but New York state insists it still has no idea how many of its resolved claims were granted or rejected."

Terrible stories are surfacing about WTC workers who are suffering severe and incapacitating disabilities - some are dying in poverty with inadequate medical care, and these stories will become more common as time goes on. At the time of the event, praise for the heroics of these workers was profuse - we need to find a way to care for these workers so those words don't ring hollow.

If the experience of the workers in the nation's nuclear defense industry are any measure, help may not be quick in coming. While it looks like these workers eventually found some relief, the next generation, toxic site cleanup workers, are exposed to serious health risks and the first workers comp claims are being filed.

Toxic exposure and toxic torts
Toxic exposures pose a unique challenge for the workers compensation system. Workers who contract occupational illnesses have a much harder time of making their case for compensation than a worker who suffers an occupational injury from a single event. It may be years before an illness surfaces, and even then, it is difficult to prove that the exposure was solely related to work and not to exposure that may have occurred in ordinary life. In some cases, such as radiation exposures or asbestosis, the dangers are so clearly linked to the exposure that the case is clear. But with the WTC, it's unclear if any accurate analyses of the toxic residues have been conducted. Certainly, the WTC environmental dangers were at best underestimated and at worst falsified by the EPA in the immediate wake of the events.

When workers compensation does not provide remedy, toxic torts often are the result, such as in the popcorn lung case. As the number of ill and dying WTC workers who have no workers comp coverage expands, we will have to see if the courts will be the place where workers turn for relief.

Posted by Julie Ferguson at 11:01 AM Link to, Comment (0), or E-mail this post
April 10, 2006

Boston scaffolding deaths: the blame game

Mourners gathered at funeral services on Saturday for the two Boston workers who were killed in last week's scaffolding collapse. Meanwhile, the blame game is in full swing. The city of Boston is reviewing an analysis of the accident submitted by Macomber Builders, the company with overall project responsibility. The union representing one of the workers who was killed is conducting a separate investigation, and the city has appointed top engineering firm Simpson Gumpertz & Heger of Waltham to determine what caused 10 tons of steel to fall on Boylston Street, killing three. The scaffold manufacturer has already weighed in noting that a crane should have been attached to the scaffold while it was being dismantled. The news media has also been digging into the safety records for both companies. As usual, Jordan Barab offers some perspective on the issue. In one post, he talks about how OSHA has responsibility for inspections but is woefully understaffed, and in a follow-on post, he notes that the state is on a voluntary inspection program.

On first blush, it would appear that workers compensation would come into play for any spouses and dependent children of the two deceased workers - the bar for piercing the exclusive remedy provision is very high, and would generally require willful intent to cause injury on the part of the employer. It's no surprise that the equipment maker was quick to offer an analysis - one of the first places that insurers would look is for any equipment failure so that insurance claims could be subrogated. The deceased passer-by is not beholden by workers comp laws so there would be no restriction on survivors filing suit. Confined Space has something to say about these economics, too.

While all the insurance and legal matters are being disputed, more workers are at risk. Last year, we wrote about the fact that, on average, three construction workers die on the job every day and, as this analysis of N.Y. construction accidents indicates, scaffolding and fall prevention are some of the most frequent sources of violations. Maybe it's about time we rethought the issue of inspections.

Posted by Julie Ferguson at 8:49 AM Link to, Comment (0), or E-mail this post
April 6, 2006

The day of the wonks

For those of you who have been waiting with bated breath to get your next heaping helping of health wonkishness, David Williams of Health Business Blog does a fine job of hosting the fourth and latest edition of Health Wonk Review. Some good reading!

Posted by Julie Ferguson at 9:40 AM Link to, Comment (0), or E-mail this post
April 5, 2006

Safety Disappears in a Hurry

Dressed in surgical scrubs, Dr. Michael Tsan Ty was driving through downtown Boston on his way to Brigham & Women's Hospital. He was in the midst of his usual 80-hour workweek as a neurology resident. Perhaps he was thinking about his post-doctoral work at MIT, where he studied the way brain cells recover after they are damaged by disease or injury. Or he might have been thinking about his small theatre group, which he somehow found time for during his hectic week. We will never know, because he happened to be in the wrong place at the wrong time: a scaffolding fell off of a building and crushed his Honda. In addition to killing Dr. Tsan, two construction workers died in the accident.

A series of articles in the Boston Globe describe how the scaffold came down during the dismantling process. It might have been human error. It might have been mechanical failure. Investigators are focusing on the apparent disconnection of a metal tie that had secured the 3-ton platform to the building. While there is much that is not known at this point, we do know this: Bostonian Masonry, a subcontractor to the general contractor Macomber Builders, was under tremendous time pressure to finish the job.

According to one employee of the masonry company, Workers had been laboring two shifts a day, seven days a week to try to get the building ready for the next school year. This push to complete the job has left many of the workers exhausted.

''The pressure is unbelievable," said the worker.

Robert Beane, 41, the supervisor killed in the accident, worked so hard at his construction job that ''it seemed like it beat the snot out of him," said Edward Page, who once was Beane's roommate. Beane had plenty of construction experience and had completed a number of OSHA training programs. His co-worker, Romildo Silva, a young Brazilian with a family, dreamed of opening a hair salon. He, too, died in the accident.

Time Pressures
Where did the pressure come from? We need look no further than the public statement of the customer, Emerson College. Officials said that from the outset, the project, renovating an office building into dormitories, had been scheduled to open this fall.

''It's going to open September 2006, and that was stated at the outset of construction," said Emerson spokesman David Rosen. ''We expect it to be finished on time if work resumes within a week." In other words, inspectors have a week to complete their work and draw their conclusions. A week to bury the dead and move on. Then it's back to business as usual.

We are in no position to judge the pace of the work or the working conditions. Both Macomber and Bostonian Masonry have been cited for OSHA violations in the past, but that does not necessarily mean there were problems at this particular jobsite. At this point I would guess that human error caused the accident. But how can you factor in the deeply-rooted fatigue that appears to permeate the Emerson jobsite?

Fingers pointing everywhere, but no one is to blame. Let's extract just one simple lesson from this incident: haste trumps safety, every time. No safety program can adequately adjust for an unreasonable pace of work. Whether you're driving a car or working on a scaffold, when you're in hurry, you and the lives around you are always at risk.

Posted by Jon Coppelman at 11:57 AM Link to, Comment (0), or E-mail this post
April 4, 2006

News roundup: kudos, unions, sheepherders, and more

Congratulations - to Jordan Barab of Confined Space. He recently celebrated his 3-year blogiversary, and now this week, his blog has been recognized with a Koufax Award for Best Single Issue Blog. Well deserved recognition it is - Jordan is a tireless voice for worker safety, shedding light on topics that would otherwise be relegated to coverage in obscure journals and the back pages of newspapers, if at all. He's knowledgeable, passionate, and indefatigable. We join the chorus in extending our appreciation for the work that he does. Kudos also to Tammy Miser who helps Jordan compile The Weekly Toll

Immigrant workers - Peter Rousmaniere at Working Immigrants reports on the AgJobs Bill that passed the Judiciary Committee March 27. Hopefully, it will have some protections for sheepherders. WorkplaceProf Blog points us to a story in the Washington Post about the bleak and terrible work of sheepherding, one of the many jobs that no U.S. citizen wants and immigrants perform. It's hard to believe that people in this country work under such conditions.

Dispute resolution - This is a nice story - three California construction-industry unions helped save employers $3 million on workers' compensation premiums in a new dispute resolution program for injured workers: "... none of the 380 employee claims reported since its inception 18 months ago has landed in court. The program encourages injured workers, their employers and health care providers to work together to avoid costly lawsuits.

Substance Abuse - The DOL is encouraging employers to recognize April as Alcohol Awareness Month. The state that "... Workplace alcohol use and impairment affect an estimated 15 percent of the U.S. workforce, or 19.2 million workers, according to the result of a recent study by the University at Buffalo’s Research Institute on Addictions."

Pharma news - Joe Paduda has posted a Workers comp pharmacy news roundup reporting on things he learned while attending the National Council for Prescription Drug Programs (NCPDP) meeting in Phoenix last week.

Worker Memorials - a collection of Worker memorials via rawblogXport. Remember, April 28 is International Worker Memorial day - what better tribute than to redouble your organization's commitmet to "zero injuries." If quality initiatives can produce zero defects for manufacturing, we should be able to do the same for workers, no?

Blogging - I guess this blogging business makes for some strange bedfellows. Nick at Blogboygmi announces the surprising news that Grand Rounds now has a corporate sponsor. Be sure to read the comments to learn what the other contributors and readers think of this idea.

Posted by Julie Ferguson at 8:30 AM Link to, Comment (0), or E-mail this post
April 3, 2006

Know Noe? No No!

Although the country is in the middle of an emotional and compelling debate on immigration, the Insider returns to the amazing and appalling case of Tom Noe, the ubiquitous Ohio coin dealer whose name has disappeared from the address books of powerful people near the Great Lakes and the Potomac River. Toledo Blade reporters James Drew and Steve Eder have been doing a great job keeping track of this ongoing saga, which now shifts to the nation's capital. We will return to the immigration issue soon. (If you can't wait, the latest developments, along with concise analysis, can be found at Peter Rousmaniere's working immigrant blog.)

Noe parlayed his formidable fund raising activities into the chairmanship of the Citizens Coinage Advisory Committee, where he helped guide the U. S. Mint toward issuing its first 24-karat, .9999 pure gold investment coin. There are those who believe that if the scandal had not erupted, he may have ended up directing the U. S. Mint. I wonder whose faces would have appeared on Noe-era coins...I'm sure that these "No-eez" would have made awesome collectibles!

In D.C., Noe set up the "Noe Supper Club," a group of high-ranking government officials who gathered for dinners at Morton's Steakhouse, where the tab was grabbed, needless to say, by Mr. Noe. (The Insider appreciates the name of the club, as it contains the kind of built in deniability that politicians relish: "There was no supper club, as far as I know.")

In cultivating his Washington contacts, Noe communicated through effusive emails, this one directed to Madelyn Simmons Marchessault, the U. S. Mint's director of legislative and intergovernmental affairs: "Wow, you are GOOD," he wrote in December of 2004. Listing his home phone numbers from Lake Erie to the Florida Keys, he added: "If you can't find me now...I don't exist!!!!"

Well, Tom, as a matter of fact, you don't exist!!! The passionate friendships, cultivated, we assume, with the millions pilfered from the Workers Comp fund in Ohio, have abruptly disappeared. Ohio's governor and three others have already pled guilty to accepting inappropriate gifts. We suspect that the federal inquiry might find some problems with Noe's largesse in the Nation's capital.

This dreary tale of corruption undoubtedly contains lessons for us all. Knowing what is known now, officials in Ohio and Washington would say "no way" to the Noe way. Alas, it's a bit too late for that.

Posted by Jon Coppelman at 1:26 PM Link to, Comment (0), or E-mail this post