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, 2009

Health Wonk Review and other news from the blogosphere

Health Wonk Review - Bob Laszewski hosts this weeks edition of the best healthcare posts on the Web! - check out this week's Health Wonk Review.

Pharma - Joe Paduda discusses a planned FDA ban on certain medications which is likely to take a high toll on workers' comp since they are "old stand-bys, drugs that have long been used to manage chronic and acute pain." Joe notes: "The loss of these drugs will certainly drive up costs, may lead to adverse events as patients try other medications to replace their now-banned drugs, and may make it harder for patients to get medications."

Ergonomics - A few ergonomics resources:
Call Center ergonomics: sit-to-stand work stations - if you have workers who spend the better part of their day on the phone or before a computer screen, sit-to-stand works stations might help to minimize repetitive stress injuries.

Exercises that protect against carpal tunnel syndrome - a four and a half minute video with tips from percussionist David Kuckhermann.

Thanks to Ergonmics in the News for the two links above - a great source for the latest news on the topic.

Work violence - HR Daily Advisor recently ran a pair of posts addressing workplace violence prevention. The posts are authored by Dennis A Davis, Ph.D., who notes that, "Because most people follow the rules, and because most violent people give ample signs before they act, employers can be successful at preventing workplace violence." He offers six key steps for prevention. The first post is Workplace Violence Is Not Beyond Your Control and the second is Are Your Greeters Ready to Deal With a Violent Visitor.

Illegal immigrants - Peter Rousmaniere summarizes and links to A Portrait of Unauthorized Immigrants in the United States, the latest Pew Hispanic Center report on illegal immigrants.

Posted by Julie Ferguson at 10:00 AM Link to, Comment (0), or E-mail this post
April 29, 2009

Swine Flu part 2 - links to helpful resources for employers

To follow up on my colleague Jon's Monday post on Swine Flu Meets Workers Comp, we've compiled a list of swine flu news and planning resources for employers.

How Employers Should Respond to the Swine Flu Outbreak - the Workplace Safety Compliance Practice Group of the employment law firm Jackson Lewis suggests 8 steps for employers to take in responding to employee concerns.

PandemicFlu.gov - Workplace Planning - HHS and the Centers for Disease Control and Prevention have developed guidelines, including checklists, to assist businesses, industries, and other employers in planning for a pandemic outbreak as well as for other comparable catastrophes.

Guidance on Preparing Workplaces for an Influenza Pandemic - a new guide for employers from OSHA

CDC Swine Influenza - news, updates, and resources from the Centers for Disease Control and Prevention

WHO Swine Influenza - global updates and news from the World Health Organization.

MedlinePlus: Swine Flu - excellent page with news, articles and links to a variety of resources.

Taking Care of Yourself: What to Do if You Get Sick with Flu - from the CDC
Taking Care of a Sick Person in Your Home - from the CDC

Maps
Global disease alert map from HealthMap
H1N1 Swine Flu

News feeds
CDC Emergency Twitter feed
What's new on the CDC Swine Flu page
CNN Health News
Y! Health Cold & Flu News

Posted by Julie Ferguson at 11:17 AM Link to, Comment (2), or E-mail this post
April 28, 2009

Indoor Football: Piling On the Sanctions

The Sioux Fall Storm are members of the Indoor Football league (not to be confused with the Arena Football League, although, truth be told, I am confused). They have won the league championship four years in a row (bet you did not know that) and were well on their way to a 5th title, having won their first six games in 2009. Then they made a big mistake. They neglected to purchase workers comp insurance for the team.

The league owners, all of whom have had hopes of a championship crushed by the relentless Storm, came up with a set of sanctions unique in the history of workers comp. The owners forced the Storm to forfeit the first six games of the season (6 and 0 instantly becomes 0 and 6). In addition, the Storm is only allowed to dress 20 players for future games (other teams can have 21). Finally, if the Storm should overcome the formidable obstacle of six losses and reach the playoffs, they are not allowed to host the initial playoff game. That sounds like roughing the franchise to me!

League owners have converted one team's failure to buy insurance into leverage to ensure that someone else - anyone else - wins the title this year. I have no idea which teams are any good, so I have handicapped my preferences based solely upon the intriguing names:
Billings Outlaws
Bloomington Extremes
Maryland Maniacs (I am not making this stuff up!)
Omaha Beef
RiverCity Rage
Everett (WA) Destroyers

And then there is the Kent*. No, not the Kent Asterisks. This is either an expansion team or inactive franchise, currently lacking a name. Given that they represent Seattle, I think something nerdy might be in order: The Kent Keyboards? Or given the need to project a violent image, how about the Kent (Hard Drive) Crashers?

Comp in Professional Sports
We have blogged the uneasy fit between workers comp and professional athletes. There really is no class that reflects the risks of being a football player. Given that the estimated premium for covering the Storm is about $200,000, it appears that insurance coverage per player runs in the range of $8,000 to $10,000.

Storm team President Colin Steen is not happy with the penalty:
“Clearly, these outrageously harsh punitive measures, imposed by a majority vote of IFL team owners, are intended to place the Sioux Falls Storm and its players at a competitive disadvantage against the other teams in the League for the remainder of the season and into the playoffs for a mistake that was totally unrelated to competition on the field.”

Steen is correct, but unfortunately his only recourse puts the issue right back into the hands of the same resentful owners who dreamed up the sanctions. In other words, it may be roughing the franchise, but the call stands.

This situation reeks of conflict of interest. It's admirable and necessary to enforce insurance requirements on all teams, but in this case, the penalty is totally out of alignment with the infraction. It's piling on - a fairness problem in most endeavors, but perhaps appropriate for indoor football.

Posted by Jon Coppelman at 2:30 PM Link to, Comment (2), or E-mail this post
April 27, 2009

Swine Flu Meets Workers Comp

It's only Monday morning and many of us are just refocusing after a weekend of gardening, football drafts, NBA playoffs, baseball (Ellsbury steals home!), so we are probably not quite ready to think about the unthinkable: a potential swine flu pandemic, originating in Mexico and already active in several major American cities.

Here is the official government announcement (which appears to circumvent potential panic by burying the bad news in gov-speak):

As a consequence of confirmed cases of Swine Influenza A (swH1N1) in California, Texas, Kansas, and New York, on this date and after consultation with public health officials as necessary, I, Charles E. Johnson, Acting Secretary of the U.S. Department of Health and Human Services, pursuant to the authority vested in me under section 319 of the Public Health Service Act, 42 U.S.C. § 247d, do hereby determine that a public health emergency exists nationwide involving Swine Influenza A that affects or has significant potential to affect national security.
[Where, oh where, do they learn to write like that?]

As is our custom, we focus on the implications for workers comp. Back in 2005 we blogged the ramifications of smallpox exposure from the comp perspective. The smallpox exposure - a result of the terrorism scare - proved to be a false alarm. The swine flu, unfortunately, appears to be all too real.

The Comp Dimension
It's not difficult to isolate the kinds of activities that might expose an individual to the Swine flu. Many of these exposures are prevalent in the world of work:
: travel
: frequenting congested areas (travel terminals, public transportation, classrooms, etc.)
: touching anything handled by strangers
: eating out
: meeting business colleagues from around the country and around the world

In order for the flu to be a compensable event under comp, certain requirements must be met:
: the individual must be "in the course and scope of employment" when exposed to the virus
: the exposure must arise out of work (as opposed to being a totally random event)
: work itself must put the individual in harm's way

An individual commuting to work via public transportation might have high risk exposure, but flu caught on a subway or bus would not normally be covered by comp. But if the exposure stems from company-provided transportation (for example, a van), the subsequent illness might well be compensable.

If one worker in a closed environment brings the flu to work, co-workers who succomb to the virus can make a good case that the illness is work related. The initiator, however, would not have a compensable claim, unless he/she could demonstrate a definitive work-related exposure.

Health workers are on the front lines of any pandemic. Even though it might be impossible to prove that they actually caught the virus at work, any and all cases of Swine Flu are likely be compensable.

If you fly on an airplane on company business and the person next to you is sneezing and coughing, your exposure is work-related and the subsequent illness is likely to be compensable. If you are flying to visit Aunt Martha, you are on your own.

The comp system is not well equipt to deal with illness. It's usually very difficult, if not impossible, to determine exactly when an individual actually caught the virus. With state laws varying in their assumptions of compensability, with a multitude of insurance carriers and third party administrators making compensability determinations, we will see a crazy quilt of decisions regarding the compensability of swine flu.

There is a lot of money at stake in these compensability decisions. For mild cases, the issue is moot. It's the more severe cases - prolonged illness and even death - that raise the greatest concerns. While thus far the fatalities have been limited to residents of Mexico, if the feared pandemic occurs, there will be prolonged illness and even fatalities in the states. Then the crucial decisions regarding compensability will directly impact the future cost of workers comp insurance.

What is to be Done?
So how should employers handle flu exposures? For a start, educate employees on prevention. The above government website has some helpful hints - and they are actually written in plain English; unfortunately, they are only written in English.

Any employee showing up at work with flu symptoms should be sent home immediately. And if any employee appears to come down with the flu while "in the course and scope" of employment, employers should report the illness to the insurer/TPA, so that a proper compensability determination can be made. As in all things comp, it is usually a mistake for the employer to make assumptions about compensability. When in doubt, report the illness and let the experts determine what to do.

As the world lurches from one crisis (economic) to another (pandemic), it is all too clear that we have fulfilled the Chinese (?) curse: "May you live in interesting times." We do, indeed.


Posted by Jon Coppelman at 11:00 AM Link to, Comment (2), or E-mail this post
April 22, 2009

Cavalcade of Risk #76

SuperSaver at My Wealth Builder hosts this week's edition of Cavalcade of Risk with an assortment of posts on five categories of risk: Insurance, Health, Business, Investment and Personal.

RIMS Update - Joe Paduda is blogging about RIMS - follow his comments for day 1 or day 2, or follow his Twitter feed.

Posted by Julie Ferguson at 9:50 AM Link to, Comment (0), or E-mail this post
April 21, 2009

AIG in Iraq: A Cruel Way to Make a Buck

AIG has been in the news mostly for its ingenious method of losing money: insuring the riskiest possible financial transactions and tanking after these risks go bad. But give the biggest insurance company in the world some credit. They still know how to make money the old fashioned way: collecting premiums and denying claims. To be sure, this strategy is not easy to do in the states, where public scrutiny is never more than a phone call away. But it works rather effectively in Iraq.

T. Christian Miller from Propublica and Doug Smith from the LA Times have described in great detail how AIG transformed Iraq into a business opportunity with an enormous upside. AIG is the predominant workers comp carrier in the war-torn country, insuring civilian workers. When these workers are injured - and the injuries can be devastating - AIG has routinely denied their claims for basic medical care, artificial limbs and desparately needed counseling for post-traumatic stress syndrome. More than 1,400 civilian workers have died and 31,000 have been wounded or injured in the two war zones.

Insurers have collected more than $1.5 billion in premiums paid by U.S. taxpayers and have earned nearly $600 million in profit, according to congressional investigators. That's nearly 40 percent profit after expenses - an unheard of loss ratio in the states.

Collect and Deny
The AIG strategy is deceptively simple: first, charge exorbitant fees for premiums, roughly 100 percent of a worker's pay. (Don't feel sorry for the companies paying these premiums; they are fully reimbursed by taxpayers.) Then, accept all the small claims and fight almost any claim involving lost time (more than four days of disability). Delay, delay, delay. Never make a payment until ordered to do so by a court.

The denial rate on serious claims is pretty astonishing: about 44 percent. How could you argue that any injury - let alone a serious one - is not work-related, as civilian employees are in Iraq for one purpose, supporting the war effort? In addition, fully half the claims for PTSD are denied. All this in the context of a war where catastrophic injuries are all too common and legitimate PTSD is as prevalent as cuts in a glass factory. How many state-side workers have watched co-workers blown to pieces by roadside bombs? Do you think that such incidents might qualify as PTSD?

AIG used the argument of extremely high-risk working conditions to boost the premiums. Then they turned around and used the strategy of denial to boost profits. Who says capitalism is dead?

I suppose you could argue that this reporting is just piling on poor AIG.The behemoth just cannot catch a PR break. Oh, well, dear reader, don't waste too much energy feeling sorry for AIG. After all, you are paying for AIG big time: in the bailout that exceeds $200 billion; in the war-based premiums that generate profits nearing 40 percent; and in all likelihood, in the social costs of caring for devastated civilian employees, who have so much difficulty accessing the comp benefits to which they are entitled.

AIG may not know diddly about the risk in risky financial vehicles, but they certainly know how to make money in conventional comp insurance. Of course, it helps that the injured workers are so invisible, like obscure figures in a desert sand storm, struggling blindly to find some kind of shelter in a harsh and unsympathetic world.


Posted by Jon Coppelman at 10:56 AM Link to, Comment (7), or E-mail this post
April 19, 2009

Great news for worker safety: Jordan Barab named to OSHA

In catching up on blog reading this weekend, we find we missed an important piece of good news last week: via Liz Borkowski at The Pump Handle, we learn that longtime safety advocate and erstwhile safety blogger Jordan Barab has been named Deputy Assistant Secretary for OSHA and Acting Assistant Secretary. We couldn't be more pleased and extend our heartfelt congratulations to Jordan on his appointment. Anyone familiar with his excellent work at Confined Space knows that Jordan has been a passionate and tireless advocate for worker safety. Thousands turned to his excellent blog for safety updates and education - we certainly were and still are among that number - if you haven't got his site bookmarked, run don't walk. Although he hasn't updated since being appointed an advisor to the House of Representatives a few years ago, it remains one of the web's most valuable safety resources. Unfortunately, so many of the serious and egregious safety issues that he blogged about are still open issues that need addressing, so he has his work cut out for him. .

Many of his blog readers may not be aware that worker safety has been a lifetime commitment for Jordan. To quote Borkowski:

"Of course, Jordan also lots of work experience not directly related to his blogging: He spent 16 years running AFSCME’s health and safety program; served as a Special Assistant to the Assistant Secretary for OSHA; was a recommendations specialist for the Chemical Safety Board; and then became a senior policy advisor to the House of Representatives’ Education and Labor Committee. (He mothballed Confined Space upon starting the Committee job.)"

We sincerely hope that "acting" will lead to a permanent appointment - we can't think of anyone more deserving of the post!

Here are what some other bloggers are saying about the news:
Effect measure
OSHA Healthcare Advisor
AFL-CIO Now Blog
OSHA Underground
OSHA Aboveground
SafetyXChange
Safety news Alert
John Gelman

Posted by Julie Ferguson at 9:16 AM Link to, Comment (0), or E-mail this post
April 16, 2009

Fresh Health Wonk Review; Safety resources

Glenn Laffel has a a new edition of Health Wonk Review posted over at Pizaazz - the "US Health Care Carousel of Progress" edition. Glenn is one of our newest contributors to HWR - check out his blog, too.

Coal Mining - Check out Coal Tattoo, a blog by Ken Ward Jr. award-winning reporter at The Charleston Gazette who has been covering the Appalachian coal industry for nearly 20 years. We've previously featured some of his reporting in our post The sad, quiet death of Bud Morris - father, husband, motorcycle afficianado. Unfortunately, he is reporting on sad, quiet deaths all too often. He talks about the interesting origen of his blog name on his bio page.

Good asbestos resource - The Mesothelioma Cancer Center is a valuable resource. The site has more than 3,000 pages of information on asbestos, mesothelioma, and other cancers that are caused by asbestos exposure (lung cancer, breast cancer, prostate cancer, etc.).

Substance abuse - OSHA reminds employers that April is Alcohol Awareness Month. Safety Advisor offers us a look at some sobering facts about alcohol and employee health. OSHA offers various tools addressing workplace substance abuse and Drug and Alcohol-Free Workplace Programs.

Lightning safety - With the good weather coming, Eric at The Safety Blog offers some good seasonal safety advice: Lightning Safety Guidelines.

Posted by Julie Ferguson at 9:26 AM Link to, Comment (0), or E-mail this post
April 15, 2009

Ask yourself: Do you feel lucky today?

Today, we thought we'd focus on risk in the larger sense rather than just in the workplace. This is prompted by our having chanced upon an interesting article by John Goekler, who poses the question, The Most Dangerous Person in the World? Not to offer a spoiler, but he answers this question at the outset of the article, and the answer isn't particularly surprising: "...unless you’re serving in a war zone, the most dangerous person you’re ever likely to encounter - by several orders of magnitude - is the one you see in the mirror every morning."

Goeckler lists various mortality statistics, offering some perspective on an individual's risk. The so-called "lifestyle diseases" top the list of killers, but there are other interesting and surprising factoids about microbial agents and toxic substances. Death by occupational trauma is in his top ten, just after mortality by overdosing on non-steroidal anti-inflammatories and slightly edging out death by foodborne agents. (See also: odds ratio versus relative risk)

His essay is an interesting read and his larger point worth noting: "The things we fear most may be least likely to occur, which means the time, trauma and treasure we invest in them is a complete waste." He offers this in the context of fear of terrorism, but it could be whatever bugaboo the mass media is hyping at the moment. One of our favorite annual scare stories is shark attacks - the Florida Museum of Natural History offers a helpful guide to The Relative Risk of Shark Attacks to Humans, as compared to other risks.

You're probably safe from a shark attack, but what about the likelihood of a cardiac event? Use the cardiac risk calculator to estimate your chance of having a cardiac event, dying from heart disease, and your overall chance of dying in the next decade. It's a handy little tool, and it might be worth sharing with your work force to get their attention on the so-called lifestyle issues that are taking such a toll on us all. Goekler's article is a good reminder that if you want to keep your workplace safe, focusing on employee wellness may be worth the investment and the effort. Just don't relax on other areas of safety - we'd like to see that occupational trauma statistic dropping further and further down the list.

Posted by Julie Ferguson at 10:55 AM Link to, Comment (0), or E-mail this post
April 14, 2009

Fancy Pants and Broken Lives

The Sunday Times had an article about tough times in Palm Beach, where the super-wealthy reside. They like to shop at Trillion, a store that kind of indicates, by the name, that if you have to ask how much something costs you don't belong in the store. The last time Bernie Madoff was in Trillion, he fell hard for a $2,000 pair of worsted spun cashmere pants, which Trillion didn’t have in his size. So Trillion ordered the pants from Italy. They arrived, alas, after Madoff had been busted. I don't think he'll be needing the pants where he currently resides. His new outfits - undoubtedly lacking that fine cashmere "hand" - are provided free of charge by the state of New York.

But this is not a posting about Bernie. The subject is one Victor Leon, a 26 year old illegal immigrant who fell off a roof three years ago. He was paralyzed and now lives in constant pain. He's run up about half a million in medical expenses at St. Mary's Medical Center, with the prospect of further surgery to come. You might expect that workers comp will reimburse St. Mary's, but that is unlikely to happen. The hospital, like Leon, is on its own.

What about Comp?
In most states, despite his illegal status, Leon would be covered by workers comp, up to but probably not including the voc rehab he clearly needs. Coverage is apparently not a given in the Sunshine state. A post-injury urinalysis run at the hospital found traces of cocaine and marijuana in Leon's blood. His employer, Altec, believes that the failed drug test, combined with Leon's undocumented status, are grounds for denying his claim. Leon's lawyer, supported by a toxicologist, asserts that the test does not prove that Leon was impaired at the time of the incident. Leon admits to taking "about four puffs" the night before, but he had a good night's sleep (alas, the last of his life) and was fully alert the next morning at work.

OK. If comp does not apply, Leon can sue his employer, right? Well he tried, but failed there, too. A civil court judge ruled that Altec owed Leon nothing, because they carried workers comp for their employees...Which takes up back to Leon's comp claim, which was, of course, denied. Leon is caught up in a rather ferocious version of Catch 22.

Leon's life is ruined, not because of greed or malice (sit still, Bernie!). He lied in order to get work. He performed his job to the best of his ability. He was seriously injured through an unfortunate miscommunication with a co-worker. While he has benefitted from good medical care, he is penniless and now homeless. He would return to Mexico, but if he does, all hope of winning his legal case would be lost.

So there you have it: A tale of two broken lives in America. One man dreams of the $2,000 pants he almost got to wear and the other dreams of being able to pull on a pair of cheap jeans. There are probably some compelling lessons to be drawn from these parallel stories. I'll leave it to our readers to figure out exactly what those lessons might be.

Posted by Jon Coppelman at 12:04 PM Link to, Comment (4), or E-mail this post
April 13, 2009

When the Bond is Broken: Workers Comp and Lay Offs

Last week Julie Ferguson blogged the interface between workers comp and recessions. For the most part, the news is good: during tough economic times, the frequency of injuries goes down, as workers hunker down and do their jobs as well and as safely as possible. But there is a big downside to downsizing: lay offs raise the specter of injuries - legitimate or otherwise - that are no longer under the employer's control.

The most effective tools for managing comp losses are in the hands of the employer: by responding to injured workers in a supportive manner, by securing the best available medical care and by speeding recovery through the prudent use of temporary modified duty, employers are able to keep employees positive and productive throughout the recovery process, all the while holding losses to a minimum.

But after lay offs, the employer tool box is virtually empty. There is no trust - most often, there is no relationship - between employer and former employee. The employer cannot manage the recovery process. The bond between employer and employee - whether it formerly was strong or weak - disappears altogether. Laid-off employees often feel anger toward their former employers and could care less about driving up the cost of insurance. In the context of considerable vulnerability and resentment, employees have to find their own path through the disability maze.

Who Manages, Who Cares?
After a lay off, injured employees are on their own. Where once there were (at least theoretically) two supporting pillars - the employer and the insurer - now there is only one. And where the insurer once relied upon the employer to maintain open lines of communication with the employee during recovery, the communication has been severed. The goal cannot be to return the employee to the prior job, as that job no longer exists. The modified goal is securing a release for full duty from the treating doctor, at which time benefits can be terminated.

After lay offs, employers have relatively little leverage in the recovery process. The burden falls almost exclusively on the (usually overworked) claims adjuster. And there is little incentive for the adjuster to aggressively manage the claims of laid off workers. These claims tend to fall through the cracks in the system, resulting in higher than necessary costs.

So here is a little advice to employers who find themselves laying off workers with (real or alleged) work-related injuries:
1. Aggressively manage any injuries reported at or near the time of lay offs. [For details, contact LynchRyan.]
2. Use the leverage of ongoing benefits to keep lines of communication with laid-off workers open.
3. Once laid off employees report injuries, keep in close contact with the claims adjuster. While you cannot offer return-to-work options, you can actively strategize open claims and ensure that the adjuster keeps these claims on the radar screen. This continued collaboration goes a long way toward reducing the ultimate cost of a claim.

Lay offs are traumatic for everyone, employers and employees alike. The bond of trust - such as it is - has been irretrievably broken. But even with the employer tool box stripped bare, there are still opportunities to keep losses at a reasonable level. The key is quite simple: even though workers are no longer employees, management must continue managing. That might sound like a "duh," but all too often in the world of business, out of sight means out of mind.

Posted by Jon Coppelman at 9:38 AM Link to, Comment (0), or E-mail this post
April 9, 2009

Rocky Mountain Two Step: Destabilize and Deprivitize?

Colorado, like most states, is facing a serious budget deficit. They are scrambling to balance the budget. So the legislature came up with the brilliant idea of tapping the reserves set aside by Pinnacol, the state's largest provider of workers comp coverage, with 70 percent of businesses in the fold. Pinnacol began as a state operation and was subsequently spun off. It now operates - very profitably - as a mutual insurance company.

The state, facing a budget deficit of $1.4 billion, has its eye on $500 million that Pinnacol has set aside to cover the future costs of current claims. They have proposed a Rocky Mountain two step: first, make Pinnacol a state agency, as it once was, thereby assuming control of the company's assets. Then, draw $500 million from the reserves and use them to cover a chunk of the current budget deficit.

As is so often the case, Pinnacol is being punished for being successful. Despite having reduced comp premiums by 42 percent over the past four years, and despite having set aside the funds needed to cover future obligations on current claims, Pinnacol is now the proverbial sitting duck. Blinded by cash in the coffers, legislators are poised to make two big mistakes: deprivatize a successful privatization and destabilize a financially stable operation. What are they smoking in the thin mountain air?

Mediocre Alternatives
A consortium of Colorado businesses has lined up against the ill-advised measure. As an alternative, they suggest three steps to close the budget gap:
: "tobacco securitization" - selling bonds against future tobacco settlements [after the economic debacle of the past 8 months, you might label this proposed process insecuritization.]
: sell state buildings [in a depressed market???]
: Reduce the pay of all state employees across the board [easy for the private sector folks to say]

At this point, I'm not convinced that either plan is worth pursuing. As a general rule, it is a bad idea to solve big,short-term problems by making bigger, long-term mistakes. Here's hoping that cooler heads in the clear, mountain air of Colorado kick back with a Coors and figure out a better path toward solvency .

Posted by Jon Coppelman at 3:26 PM Link to, Comment (3), or E-mail this post

Workers comp and safety in a recession

Recessions tend to place downward pressure on workers' compensation frequency, according to NCCI economists who made a recent presentation to the Casualty Actuarial Society. That makes sense. Reduced payrolls means fewer claims. Plus, with potential layoffs looming, some employees may be reluctant to report injuries - which might be part of the reason why there can be an uptick in claim reports after a layoff. The folks at NCCI note that economic expansions are times when frequency spikes - more injuries occur as payrolls climb and new, less experienced employees are added to the work force.

But despite a drop in frequency, safety experts would caution that an economic downturn requires greater vigilance, not less. In a white paper entitled Leading Safety in a Downturn, staff at BST point out that like many other operational areas, safety budgets are often cut and staff are forced to maintain the same standards with fewer resources at their disposal. They also suggest that in a downturn, there is a more complex cultural risk posed by changes in the business: "Even if it is not intended, an organization responding to economic conditions can experience a climate shift that puts a higher focus on production than safety. These shifts are "loud" to the employees who will take away from these experiences long-lasting memories of how they were treated and what they perceive the organization to truly value."

The authors suggest that a downturn can be a defining moment in a company's culture, and note that "how you do the hard stuff matters." They offer five critical actions that business leaders should take to be transformational leaders and to ensure continued safety excellence during a downturn.

More on recessions and workers comp
We've talked about workers' comp and recessions before, specifically, the impact on claims. We cull out this quote from a California study of prior recessions:

"In a six-state study, researchers noted that "...recessions increase back-end cost drivers (i.e., increase the cost per claim) to a greater extent than they increase front-end cost drivers (i.e., increase the number of claims). They state that recessions are 'characterized by increased use of the system, longer duration claims, and more frequent and larger lump-sum settlements.'"

In a prior post, Down the Rabbit Hole: The Economic Crisis and Workers Comp, my colleague Jon also talked about some other aspects of the current economic scenario that are playing out in workers' comp. These include the impact of the economy on the illegal immigrant work force, the fact that older workers may be forced to work longer since retirement funds have been destroyed, and the downward pressure that poor investment returns are putting on insurers.

Posted by Julie Ferguson at 8:39 AM Link to, Comment (0), or E-mail this post
April 8, 2009

A World of Risk

The latest edition of Cavalcade of Risk, hosted by Joseph Leppard, is available here. Oh my, there's risk aplenty: in health care, in life, in investing and in the economy. Perhaps it's time to create a Cavalcade of Safe Havens (assuming, of course, that such places still exist). In the meantime, if your looking for some compelling reading about risk, this should satisfy the need.

Posted by Jon Coppelman at 2:26 PM Link to, Comment (0), or E-mail this post
April 7, 2009

OSHA under fire from DOL Inspector General reports

OSHA has come under withering criticism in a report from the Department of Labor's inspector general for improperly enforcing safety and health laws against high risk employers with a history of safety violations and/or fatalities. In summarizing the report, Occupational Health & Safety notes: "The March 31 report says EEP [Enforced Enhancement Program] was mismanaged so badly that OSHA did not comply with EEP's requirements for 97 percent of sampled cases qualifying for it. No appropriate enforcement action was taken in 29 cases, the IG found -- and those employers subsequently experienced 20 fatalities, of which 14 deaths shared similar violations, the report states."

The report - Employers With Reported Fatalities Were Not Always Properly Identified and Inspected Under OSHA's Enhanced Enforcement Program (PDF) - summarizes the results of an audit of 325 work place inspections conducted under EEP from 2003 to 2008 in the Atlanta, Chicago, and Dallas regions.

The Pump Handle posts not just about this report, but also about a second report by the DOL Inspector General concerning the services provided by Randy Kimlin. Celeste Monforton discusses remuneration and oversight irregularities in regards to the consulting services of Kimlin, friend of OSHA chief Ed Foulke. According to investigative reporting by Washington Post reporter Jeff Smith, Kimlin's salary for his contract was "higher than that received by Vice President Cheney, any member of Congress and Foulke himself during that period." And the contract was awarded without competition: Procurement Violations and Irregularities Occurred in OSHA’s Oversight of a Blanket Purchase Agreement (PDF)

For more commentary and news on these reports:
Claims Journal: Labor Department Enforcement Lacking, Report Finds

OSHA Underground takes issue with the report on weak enforcement of fatalities: IG's Report Links Weak Enforcement To Job Fatalities and suggests that OSHA Should Request Repayment From Consultant

Washington Post: Initiative On Worker Safety Gets Poor Marks - IG's Report Links Weak Enforcement To Job Fatalities

AFL-CIO Now Blog: Sweeney: Bush OSHA Failure to Enforce Job Safety Law Cost Workers’ Lives

Associated Press: Labor Department enforcement lacking, probe finds

Posted by Julie Ferguson at 2:57 PM Link to, Comment (7), or E-mail this post
April 2, 2009

The Yogi Berra HWR, plus AIG, Florida lawyers, scaffolding & more news notes

Anthony Wright hosts Health Wonk Review at Health Access WeBlog this week, and he serves up some of the wit and wisdom of baseball great Yogi Berra with this week's best of the health care blogs. It's a perfect posting for our times when "the future ain't what it used to be."

Florida - a bill that would restore a cap on attorney fees passed its first hurdle this week when approved by the Florida House. It must also pass the Senate and be approved by Governor Crist. Attorney fees were considered one of the primary cost drivers in the Florida system and a cap on fees was one of the cornerstones of the 2003 reform, but was overturned in the Supreme Court Murray decision last November. See our prior posts on the topic: Attorney Fees in Florida: What is "Reasonable" and Florida Lawyers Win, Employers Lose.

AIG - In addition to all the other ongoing investigations, state insurance regulators are currently examining whether AIG violated rules governing workers’ compensation sales. "The probe is an offshoot of a 2005 lawsuit from then-New York Attorney General Eliot Spitzer, who said AIG shortchanged the premiums used in calculating its obligations to state pools. In most states, companies that sell workers’ compensation must fund pools that serve as insurers of last resort to cover injuries at employers that pose unattractive risks." The 50 state regulators expect to have their investigation completed by June.

Legal matters - In this month's Legal Clinic at Human Resource Executive, employment law attorney Keisha-Ann G. Gray tackles a few tricky legal questions: the length of time an employer must keep a job open for an employee who suffered a work-related injury, which touches on the anti-retaliation principles that apply across many states; also, a discussion about the relationship between the FMLA and workers' comp leave.

Scaffolding - Scaffolding (general requirements, construction 29 CFR 1926.451) was the most frequently cited standard in fiscal year 2008 by federal OSHA. It is also the standard for which OSHA proposed the second highest penalties. OSHA has resources to help employers and employees identify scaffolding hazards and solutions to those hazards at scaffolding and the OSHA publications page.

Workplace violence - HUB International Risk Consulting is offering a free Webinar on April 9: To learn more or register: Workplace Violence, What You Don’t Know Could Kill You

Posted by Julie Ferguson at 9:33 AM Link to, Comment (1), or E-mail this post
April 1, 2009

New York Workers Comp: Truth Stranger than Friction

The New York Times has a fascinating, two-part article about serious problems in New York's workers comp system (parts one and two). New York has long been famous for its bizarre system, which is among the most expensive in the nation, even though its benefits have been among the lowest. There's a lot of money moving around, but not much of it ends up benefitting injured workers.

New York's system is the most frictional in America: virtually every step of every claim is reviewed by a judge. The lawyers make their money simply by showing up at hearing after hearing.

This cumbersome system routinely results in inordinate delays for injured workers. In a review of 2007 claims, AIG found that even unchallenged cases plod on much longer than necessary. Lost time claims took on average 802 days to reach a final stage, 30 percent longer than in the rest of the country. In comp, time is money, but not necessarily money well spent.

The Times article zeroes in on an area where you do not expect to find friction: the independent medical exam (IME).

In most states, IMEs are commonly used to establish a (relatively) objective profile of an injury. Representing neither the injured worker nor the insurer, IMEs try to separate fact from fiction and provide a road map to future management of the claim. It is in the best interests of insurers, employers and injured workers to make the IME process as objective as possible.

In New York, the IME system is corrupt and chaotic. IMEs are routinely performed by retired doctors who have little or no interest in fair outcomes. It appears that many IME doctors slant their results toward the insurer, under the dubious notion that "he who pays gets his way."

The NY statute allows injured workers to videotape the IME exams: based upon the findings in these articles, this is a right that every injured worker should exercise routinely, even if it means using the taping capabilities of a cell phone.

Here's just one of a number of appalling examples of IME corruption in New York:

Dr. Hershel Samuels, 79, with a radiant smile and a burst of snowy hair, stopped doing surgery years ago. Until recently he commonly filled his days performing insurance exams on workers, sometimes as many as 50 in an afternoon, he said in his small office in Borough Park, Brooklyn. [Fifty exams in one day!]
“You obviously can’t spend a lot of time with that volume pushing up your back,” he said. “You have to assume there are going to be errors. Look, there are a lot of holes in this thing.”
At times, evidence shows, Dr. Samuels’s official reports were quite different from what he appeared to find during an exam.
Consider his 2007 examination of Johanne Aumoithe, a pastry chef who said she had hurt her arm and neck. On a videotape that Ms. Aumoithe recorded on her cellphone, Dr. Samuels comments that she had limited range of motion. His written report concluded the opposite.
Asked about the discrepancy in an interview, Dr. Samuels chuckled and said he could not even recall the people he saw yesterday. The way he worked, he said, was to submit a checklist to a Queens company called All Borough Medical, which transformed it into a narrative.
“I never write a sentence,” he said. “It’s really crazy, but that’s how it’s done.”
He often inserted numbers in the checklist — say, a measure of hand strength — after the person left, rather than as he performed the tests.
Was he sure they were correct? “I’m not sure of anything,” he said. “They’re just a guess in the first place.” [I wonder how occupational doctors feel about that.]
The law requires a doctor to attest to the accuracy of a finished report before signing it, but Dr. Samuels said he rarely read them. He doubted he had read the Aumoithe report. “I just sign them,” he said.
If he seldom read them, how did he know they were correct?
“I don’t,” he said. “That’s the problem. If I read them all, I’d have them coming out of my ears and I’d never have time to talk to my wife. [Kudos to Dr. Samuels for wanting to talk to his wife!] They want speed and volume. That’s the name of the game.”
Dr. Samuels said he generally received about $100 for one of these exams.[That's about $95 too much. And by the way, Dr. Samuels is no longer performing IMEs.]

Under the circumstances, IMEs should be dubbed "insurer medical exams" or perhaps just "Incoherent Mediocre Estimates." It is not surprising to find that many judges in the New York system ignore IME results and rule in favor of injured workers. But that begs the question: why does New York tolerate a system that routinely delivers unreliable information? Zach Weiss, the new chairman of the workers’ compensation board, said that he found the disparities in medical opinions shocking and that use of independent examiners was “off the charts.” But then again, there is a limit to how many problems he can tackle at one time.

The Burden of History
New York's comp system grew directly out of the adversarial relationship between labor and management that characterized the early years of the 20th century (and which still exists in many places today). The continuing, pervasive use of judicial review for routine claim transactions is an indication that distrust between workers and management is built into the system's archaic infrastructure. (As appalling as the pro-management corruption of the IME process is, I am sure that equally repellant stories about worker fraud can be uncovered in the Empire state.)

When Barack Obama was elected president of the United States, the satirical Onion News headlined, "Black man given worst job in America." With all the problems facing the New York Comp Board, Zach Weiss can make the case that his job is ridiculously difficult, too. And, alas, it comes with no where near the perks.

Posted by Jon Coppelman at 11:21 AM Link to, Comment (3), or E-mail this post