Recently in Best Practices Category

December 22, 2014


I am not a lawyer, thank you very much, but I am married to one. So, you may imagine that I am familiar with more than a few members of the breed. I've heard every lawyer joke there is (but if you want to send me a couple of your favorites, that would be OK).

In the mid-1980s, the early days of Lynch Ryan, I often heard my attorney friends saying they had to search "Lexis" for one thing or another. Since they were occasionally charging me for doing that, I wanted to know a bit about "that Lexis thing." Over lunch one day I was educated about this remarkable innovation for the legal community, an innovation that was actually saving me money.

The whole thing began as a searchable database experiment of the Ohio State Bar in 1967. In 1970, the Mead Corporation's Mead Data Central took it over and named it Lexis. In 1973, Mead made Lexis's full text search available for all cases in Ohio and New York. In 1980, after a 7-year key punch effort (you read that right), Lexis went nationwide for all federal and state cases. That same year, Mead launched the Lexis sister, Nexis, which allowed journalists to search news stories related to law.

In 1994, Mead sold LexisNexis to Reed Elsevier for $1.5 billion. Not a bad return on investment from those Ohio State Bar days.

Starting in 2000, LexisNexis began to get into the risk solution business, primarily by acquisition: Riskwise in 2000 and ChoicePoint, a data aggregator, in 2008. By the time of the ChoicePoint buy, LexisNexis had become profoundly involved in risk, especially workers compensation. It became a leading publisher of workers compensation material, including Larson's Workers Compensation Law.

The LexisNexis Senior Editor for all things workers compensation is Robin Kobayashi, a ridiculously smart and talented person (Phi Beta Kappa from UCLA -- by contrast, the closest I ever got to Phi Beta Kappa was admiring Gary Anderberg's pin).

Robin is the visionary who decided to recognize workers compensation bloggers, beginning in 2009. That year there was only one winner, and I'm proud to say we were it. However, beginning in 2010, Robin expanded the award to the top 25 blogs, realizing that there was a wealth of insightful Web commentary that cried out for recognition.

Recently, LexisNexis announced the top 25 workers compensation blogs for 2014, a most distinguished list, and we congratulate everyone on it. However, during this time of recognition, I thought it might be a good idea to shine the Workers Comp Insider arc light on the far-sighted professional who made this award possible, thus deepening and expanding the workers compensation community in a meaningful and long-lasting manner.

For her vision and dedication, we salute Robin Kobayashi.

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November 11, 2014


Veterans Employment Toolkit

" help employers, managers and supervisors, human resource professionals, and employee assistance program (EAP) providers relate to and support their employees who are Veterans and members of the Reserve and National Guard.

In this toolkit, you can learn about Veterans and the military, such as what Veterans bring to the workplace and what the military structure and culture is like. You can also learn how to support employees who are Veterans or members of the Reserve or National Guard in the workplace, through reading about common challenges and how to help, reviewing communication tips, reading a report about Veterans in the workplace, or by downloading handouts to use with EAP clients. Finally, Veterans and their family members can find employment resources for Veterans."

Veterans in the Workplace Project

Information for HR Practitioners - Statutes & Regulations

More employment resources for hiring vets

Veterans Crisis Line


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June 18, 2014


Pardon us while we self promote for a minute... but many thanks to Steve Schmutz at Claimwire for featuring Tom Lynch in his interview series. For those of you who don't know Tom and would like to learn a little more about him, you can read the interview here: Industry Spotlight: 20 Questions with Tom Lynch, CEO at Lynch, Ryan & Associates...and when you've read that, here is an archive of all Steve's prior interviews with insurance leaders. They are interesting reading because they dig below the professional surface with some questions designed to reveal what makes these well-known insurance professionals tick - who influenced them, what their career paths have been like, who they admire and other interesting questions that give insight. Thanks, Steve, for including Tom in your series.

Since this is blog post with Tom Lynch as a topic, it gives me a podium to add my personal perspective. As someone who has known and worked with and for Tom for more than 20 years, I would add that he is remarkable visionary and has been a key influencer in our industry -- as well as on the lives and careers of his many employees over the years.

Today. many of the day-to-day employer best practices in managing workers' comp claims that we take for granted were nurtured in the Lynch Ryan "labs" in the early days of the company. In those bad old days, Tom brought the true entrepreneurial spirit to addressing a broken system. "Changing the paradigm" is a shopworn cliche that rarely plays out beyond press releases, but Lynch Ryan truly shifted the approach by focusing on managing the human event rather than the financial transaction, a change in focus that enabled better and healthier outcomes for worker and employer alike. Tom & team identified many of the flaws and friction points in a malfunctioning system: a system in which most employers had better plans in place to address their copy machine breakdowns than they did for their injured workers; a system that was essentially geared to treating the "bad apple" on the bell curve, but not the preponderance of honest and legitimately injured workers; a system in which employers took a hands-off stance at point-of-injury, a critical management/human juncture; a system in which employers were paying large sums of money for a service it knew little to nothing about. Tom applied common sense management principles and a human-focused approach to fixing these problems saving employers a bundle in the process. Treating people well and fairly was actually more cost effective than treating people suspiciously and punitively -- who knew!

Tom hired a remarkable team in those early days (if I do say so myself, heh), inspired them with passion and gave them wide latitude to enact their ideas - effecting some out-sized industry-wide practices that continue to this day. I can say that it has been a true privilege to work with Tom.

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November 18, 2013


Review of work produced by Peter Rousmaniere, with support from Concentra and Broadspire.

Of the 15 occupations that are expected to see the largest numerical growth between now and 2020, foreign-born workers, immigrants, are currently over-represented in eight of them. And of those eight, six are classified as "low-skilled" for which a high school diploma is not required. The Bureau of Labor Statistics projects that these occupations will grow by 42% between 2010 and 2020. Odds are that they will continue to be over-represented by foreign-born workers.

Consider this:

  • Forty-nine percent of private household employees are immigrants;
    • Within the Construction industry, 65% of all "reinforcing iron and rebar" workers are immigrants, and they total 27% of all construction laborers;
  • Forty percent of maids and housekeepers in the Accommodation industry are immigrants; and,
  • While immigrants comprise 24% of all the workers in the Agricultural industry, they make up 61% of the field workers.

As of 2010, 29% of immigrants between the ages of 25 and 64 lacked a high school degree, as opposed to 7.4% of the U.S.-born population. And, although immigrants make up 15.8% of all U.S. workers (something a bit hard to believe when you consider their ridiculous over-representation in those fast growing industries), they account for 20% of all reported injuries.

These facts, alone, make Peter Rousmaniere's Work Safe: An Employer's Guide to Safety and Health in a Diversified Workforce (PDF), published with support from Concentra and Broadspire, a timely and compelling read. Moreover, it's free and is available as a pdf download at Broadspire.

Rousmaniere, publisher of the Working Immigrants blog since January 2006, and, until November 2013, a columnist for Risk and Insurance Magazine, has, until now, been a "voice crying in the wilderness." He's been banging the drum and sounding the alarm, saying that we, as a nation, and particularly as employers, are unprepared--indeed, are refusing to prepare--to deal with the needs and cultural differences presented by immigrant workers. A Harvard MBA, Rousmaniere believes that, although there is a moral imperative for doing so, making the effort to become sensitive to the language and cultural differences in our immigrant workforce just makes good business sense. And in this 57-page, 6x9 inch, handsomely produced Employer's Guide he skillfully makes the point.

Although immigrants are also over-represented in high-skilled jobs, this book is really aimed at the vast underbelly, immigrant workers who lack the education and skill set to navigate through the thorny thicket of work rules and health care issues, immigrants who may speak wonderful Spanish, or any number of other languages, but nary a word of English. The theme running through the entire book is one that urges us not to assume that English-challenged immigrant workers understand what we say, even when we say it in their language. Rousmaniere makes this point over and over again, so much so that I thought the book could have been somewhat shorter without losing a thing.

To me, this sentence is the big pitch:

"...moderately or low-skilled immigrants working in jobs of average or above-average injury risk are likely to face greater safety issues even if they work alongside U.S.-born workers."

The book has an excellent chapter on safety training in which Rousmaniere doesn't so much suggest what to say, but rather how to say it. He writes about teaching through stories, role-playing, body mapping and pictures. He's big on pictures, recommending that employers go so far as to hire cartoonists, because cartoonists have "a knack for telling a story in one or many panels." He even describes how cartoonists get paid and offers "Tips for working with artists."

In the Workers' Compensation chapter, Rousmaniere offers a novel idea -- the prepaid indemnity card. He points out that about a third of the people who earn less than $30,000 a year don't have bank accounts and, consequently pay hundreds of dollars a year in check cashing charges. To help them, he suggests that claims payers contract with debit card vendors to pay indemnity benefits directly to injured workers via the card, which the vendor would arrange to have honored at ATMs. Interestingly, this isn't a new concept. Rousmaniere says, "An increasing number of employees receive their wages via a payroll debit card." Left unsaid is what that "increasing number" actually is, but if you think about it, his idea might have more than a little merit because of the inexorable gravitational movement of technology.

The book has an extensive chapter on "Medical Care Across Cultures," and here Rousmaniere is writing about all medical care, not just work injury care. Again, it's all about translation and culture. He gives an illustration: "In some societies, it's believed that coughs are always fatal." I found myself wishing he'd enlighten us as to which ones.
He writes about "Job-Specific Challenges in Cross-Cultural Care" and says that "Medical Case Managers are likely to have to confront a patient's steep learning curve when it comes to understanding the American health care system." I found that one a bit rich, as in - does any patient understand the American health care system, if you can call it that.
In fact, I found that much of the chapter on health care really applied, not only to immigrants, but also to many native-born Americans who are unskilled at navigating the health care maze and have what Rousmaniere calls "low health literacy." For example, he offers a bullet list of "side effects" for this affliction: failure to seek preventive care, leading to more ER visits and hospital admissions; no written agenda for medical visits; missed appointments; lack of follow-through with imaging tests; misuse of medications; and so on.

Rousmaniere suggests an "Rx for Hospitals: Professional Interpreters." Moreover, he points out, "The Civil Rights Act obligates medical providers to arrange for patient communication in the most suitable language for the patient." I did not know that. He offers health care providers another bullet list of tips for overcoming language differences. In today's health care world the first tip, "Slow down. Plan double the normal time," might be hard to achieve. Trouble is, the tips all make good sense. They're thoughtfully done, and, were it not for our health care assembly line process, they'd be the norm. My bottom line takeaway to Rousmaniere's health care recommendations: they will take nearly dictatorial leadership to implement.

Then for good measure, in case we've missed the point, Rousmaniere throws in an entire chapter on translation and interpreting, entitled "Translate This!" But just when you know to the soles of your boots that this translation thing has gone way too far, he throws in this Case Study zinger that makes you think he might be right to concentrate so much on this:

"An English-speaking hospital staff once misinterpreted a patient's complaint of "intoxicado" as an admission of being intoxicated, not that the patient felt nauseous. The mistake resulted in permanent paralysis and a multi-million dollar financial settlement."

The translation and interpreting chapter lists a number of resources of which health care and insurance pros will likely be unaware. He compliments California for Senate Bill 853, which "requires that health insurance organizations provide free and timely translation and interpretation services for patients with limited English proficiency." And Rousmaniere's "10 Planning Steps for Translation and Interpreting" is spot on.

But for my money, the little jewel in this book is the last chapter - "Free Online Resources." I loved it. He has hunted down a wonderful library of resources that every professional in the field should have at his or her fingertips. They come as General Resources, such as a number of truly excellent offerings from the State Compensation Fund of California, Spanish to English and English to Spanish dictionaries published by OSHA, and resources aimed at a number of industries, the ones with all those low-skilled, fairly uneducated immigrants. Excellent, indeed!

All this may be a bit much for middle and small market employers, who may not think they have the resources or time to invest in this level of acculturation. I suspect that this book may not be a big seller for them. Health care professionals, on the other hand, would be well-advised to study it closely.

But, here's an idea: if insurance companies and insurance agencies were to distribute the book to their customers, that would go a long way toward educating employers and getting Peter Rousmaniere out of the "wilderness." For, in the immortal words of that great American philosopher and discount retailer, Sy Syms, "An educated consumer is our best customer."

The official launch of the Guide will take place at the National Workers' Compensation Conference in Las Vegas, NV, November 20-22.

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November 4, 2013


If you've been following the blog-o-sphere and the LinkedIn-o-sphere, you know that the space is crowded. Lots of workers comp practitioners have glommed on to the idea that the way to get ahead is to write and post frequently. Connect with more than 500 others in the profession. Write something, anything, put your name on it and throw it up against the wall to see if anything sticks. Kind of the way Garrison Keillor used to say he changed socks on a book tour.

Every once in a while, something helpful and interesting appears and gains a bit of temporary caché for itself and for its author. Mostly, the topics center on the persistent rise in medical costs and, even more often, on the insidious and, some would say, criminal use of opioids, which a regrettable number of alleged doctors, having checked their Hippocratic Oath at the door, are prescribing at a hell-bent-for-leather rate at a hell-bent-for-leather profit. The poor, unfortunate souls for whom these scripts are written are nothing more than high-cost collateral damage.

Consequently, efforts to control workers compensation costs are now almost entirely dedicated to reining in costs associated with medical care with a huge emphasis on prescription drugs.

My colleagues and I have always believed (and, I add, have time and again been proven right) that the workplace is the best place to control and manage work injuries and costs. That, in order to do that, employers need to be educated so that they understand that they, not the vendors to whom they outsource payment responsibilities, are the hub of the workers comp wheel. In the mid 1990s, at the height of the worst workers comp crisis ever to hit the market, this hypothesis became fact. Our clients, as well as the clients of a number of our competitors, overcame the workers comp troubles of the day because they learned that treating workers compensation in a Management 101 kind of way reduces costs to a minimum and goes a long way toward bolstering profits as well as employee morale and productivity. This meant training supervisors in the proper response to work injuries, keeping close communication with injured workers, creating good relationships with treating physicians, bringing injured workers back to work under medical supervision, seeing that injured workers received full pay while on modified duty, and measuring success every month just as they measured success in every other business enterprise. These, and other program components, gave these enlightened employers a distinctive competitive advantage, and the results spoke for themselves.

Something has happened between then and now. I think of it as the "workers compensation dark ages." There are still enlightened employers, but many have lost their way. We took a system that we had made relatively simple for employers to manage (and let's not forget that it is employers who ultimately pay the bills) and we made it progressively more complicated. We made medical care into a haunted house maze that only experts can navigate (hence, the rise of medical experts). Employers, suddenly realizing that they are now the south bound end of a north bound mule, have relinquished control to a myriad of vendors, the "experts." Not all employers, of course. Large, sophisticated organizations with well-oiled risk management departments, have not lost the focus, although they have to work harder to stay the course.
So, like Pogo, "We have met the enemy, and he is us."

The question is: What are we going to do about it? Could it be that the way forward is by way of the way back?

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May 7, 2013


In the Insider's decade of exploring workers comp, we have encountered many unusual instances of compensability, legitimate claim denials and outright fraud. But rarely have we found cases where a claims administrator, in this case, a TPA, simply refuses to pay for medically necessary treatment. The saga of the late Charles Romano reminds us that the great bargain of workers comp is not just between employers and their workers; it includes the good faith effort of claims adjusters to carry out the letter - and spirit - of the law.

Charles Romano worked as a stocker for Ralph's Grocery Company, a California-based operation that is part of the Kroger chain. It is worth noting from the outset that Kroger is self-insured for comp, with Sedgwick serving as the TPA. As a stocker, Romano presumably did a lot of lifting and reaching. He suffered a work related injury involving his shoulder and back in August of 2003.

A Solution Worse than the Problem
After conservative treatment failed to resolve the problem, he underwent surgery in December 2003. What had seemed like a relatively simple solution to a shoulder problem quickly descended into a grave, life-threatening situation: Romano contracted a MRSA infection following the surgery, which led directly to total paralysis. He suffered renal failure and several heart attacks, which were related to the MRSA infection. After enduring inadequate medical treatment directly related to the TPA's denial of treatment, Romano died in May 2008.

Nearly three years after the initial surgery, a workers comp administrative law judge (WCJ) ordered that the TPA pay for all the medical expenses related to the infection. Without consulting with medical professionals, the TPA unilaterally refused all payments - totalling, by this time, hundreds of thousands of dollars. The TPA appealed the adverse ruling.

In February 2012, a workers comp administrative law judge imposed penalties for delay of treatment in eleven specific instances, finding that the TPA "failed in its statutory duty to provide medical care, egregious behavior which increased the suffering of a horrifically ill individual." He imposed the maximum $10,000 fine for each denial of treatment.

Unappealing Appeal
The TPA appealed the penalties for delayed treatment. In what surely qualifies as a new definition of chutzpah, the TPA contended that penalties were not appropriate, among other reasons, because the claimant had died. Well, duh, the routine denial of treatment throughout the course of the illness was a significant factor in the death. Romano simply did not receive medically necessary treatments to address his formidable medical conditions.
NOTE: The penalties, even when maxed out at $10,000 per incident, is dwarfed by the suffering inflicted upon Romano.

The Workers Comp Appeals Board upheld the penalties [For a link to a PDF of the lengthy ruling, Google "Charles Romano Trust vs. Kroger Company]:

The WCJ's Report makes it clear that he imposed the harshest penalties possible under section 5814 because of defendant's extensive history of delay in the provision of medical treatment; the effects of those delays on a paralyzed, catastrophically ill employee; the lengths of the various delays; and defendant's repeated failure to act when the delays were brought to its attention.

Lest the ruling be considered in any respect ambiguous, the court went on to say: "We have rarely encountered a case in which a defendant has exhibited such blithe disregard for its legal and ethical obligation to provide medical care to a critically injured worker."

Risk Transfer, Risk Retention
It is tempting to conclude that the TPA's actions were related to their customer's risk assumption - otherwise known as self insurance. It is one thing to purchase insurance (risk transfer) and have the insurance company assume liability for a catastrophic loss. It is quite another for a self-insured company to absorb a loss of this magnitude on its own. (Presumably Kroger had some form of stop loss in place.) Despite the multiple findings of compensability, despite the judicial determination that the horrendous MRSA infection was indeed work related, the TPA persisted in denying treatments and rejecting payments, long after Romano's untimely death.

As Mark Twain famously noted, "denial is not just a river in Egypt." It's also a poor strategy for managing claims. In his last years, the unfortunate Charles Romano certainly had to confront health issues beyond anyone's worst nightmare; denial for him was not an option. For reasons that remain unclear, when it came to paying for Romano's extensive and expensive care, the TPA chose a path of full catastrophe denial .

In the findings of the court, this denial was in itself an unmitigated disaster for the acutely vulnerable Romano, accelerating his precipitous decline and death. In the interests of saving their client some serious bucks, the TPA dug in its heels and refused to accept the compensability of a claim that had been adjudicated as compensable. In doing so, they violated the spirit and letter of the workers comp contract and earned themselves, in this particular instance at least, a place on the Insider's Management Wall of Shame.

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March 4, 2013


After two stimulating days at the Workers Comp Research Institute conference, the Insider is ready to solve the opioid problem. To be sure, WCRI is a research-driven organization and makes no claims of solving problems; it simply reveals them through stark, powerful data. However, in a series of presentations ranging from improving the way doctors prescribe drugs through the mobilization of entire communities to tackle the problem, the conference has illuminated the path toward a favorable resolution of this increasingly dire problem.

Dr. Karin Mack of the Centers for Disease Control established the parameters of the problem: death from drug overdoses - mostly involving prescribed medications - now kills more people than traffic accidents. While heroin and cocaine account for about 4,000 deaths annually, opioids kill four times as many people - more than 16,000 in 2010. Most of the drug overdoses involved people of working age (between early 20s and 60). Dr. Mack identified the population most at risk:
- "Doctor shoppers"
- People receiving high daily doses of opioids and those using a variety of drugs
- Low income people and those living in rural areas
- Medicaid populations
- People with mental illness or a history of substance abuse

When the discussion shifted specifically to workers comp, the data becomes even more alarming. In some states, over 80% of injured workers receive opioids for pain relief - way too many! The prescribed doses are often much higher than is medically necessary. For many workers, the prescriptions extend for many weeks, even though pain usually subsides relatively quickly. And finally, very few doctors are monitoring patients who have been prescribed opioids.

Doctor Problems
Given that drug abuse has reached catastrophic proportions, and given that most of the problem involves prescribed - as opposed to illicit - medications, it is becoming increasingly clear that doctors are a big part of the drug problem. They are too quick to prescribe opioids; they prescribe them for too long; and they fail to monitor injured workers who are on these medications. The first red flag, in other words, is raised over the heads of our medical practitioners.

Dr. Dean Hashimoto outlined a Massachusetts initiative that significantly reduced doctor mistakes in prescribing opioids (a summary of the state's approach can be found here). The guidelines:
1. Distinguish between acute and chronic pain. For acute pain, doctors should explore ady and all alternatives before prescribing opioids and then carefully re-evaluate before extending the initial prescription.
2. For chronic pain [in itself a red flag], doctors should run urine screens to determine whether the prescribed drug is being used properly and whether other drugs have been taken; they should meet fact to face with patients as frequently as needed; and they should try to focus on function rather than pain.

Note that these are steps that doctors should, but all-too-often don't take. Combine that with the fact that a small number of doctors are generally responsible for a huge number of prescriptions: in California, 3% of doctors prescribe over 50% of the opioids. Once again, doctors are at the root of the drug problem.

In addition to improving best practices in the medical use of opioids, we need to know more about prescription practices. This involves the evolving tool of prescription drug monitoring programs (PDMPs), which track prescription practices of doctors across a given state. Because the programs are state based, they vary widely on how they work: what is tracked, how often data is submitted, how it is analyzed and what is done with it. Ideally, to be effective, the data should be collected on a real-time basis, but in practice, it's generally submitted weekly. Ideally, there should be standards across all state PDMPs: everyone collecting the same data, in the same form, generating information on prescription practices and "hot spots" with consistency.

Brandeis University's Center for Excellence identifies the best practices for PDMAs. But we live in an age where uniform standards are anathema. It's just not going to happen, so we'll have to live with the current chaos - which, however inadequate, is better than nothing.

Community Mobilization
While there is much that can and should be done at the doctor-patient level to fix the opioid problem, such efforts cannot solve the problem. We can actually map the crisis across the country and identify specific communities that have been devastated by drug abuse. The conference highlighted efforts in eastern Kentucky, where in some counties half the children are being raised with no parents in the home (the parents being dead from overdoses, incapacitated by addiction or in prison). Under Operation UNITE, the community has responded with a combination of drug enforcement, coordinated treatment, support for families and friends of abusers, education and mentoring for young adults. They teach kids archery and fishing, among other things, surely an example of putting the beautiful natural surroundings to good use.

It is hardly surprising that one focus of UNITE is the pill mills that are frequently found in poor, rural areas. One doctor prescribed over 100,000 pills a month (!) by issuing 40-50 scripts each day (!). Don't bother asking whether Dr. Hashimoto's standards of treatment were followed.

The Path to a Cure
The WCRI conference illuminates the path toward solving the opioid abuse catastrophe: teach doctors how and when to use these powerful drugs and how to find alternative treatment forms; carefully monitor injured workers on opioids to ensure proper use; severely limit the use of these drugs over the long term; monitor prescription practices to identify doctors who are not with the program; and provide support, mentoring and education to young people in high risk communities.

There are many obstacles to implementing a comprehensive and effective program, but in those areas where key elements have been established, the incidence of opioid abuse has been dramatically reduced. It is ironic, of course, that the stakeholders who must "do no harm" are in fact in the forefront of the problem. They can and must do better. Medicine got us into this mess and it is medicine, with its highly trained and presumably well-intentioned practitioners, that must lead the way out.

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February 19, 2013


Last week, published a blog post by John D'Alusio entitled, "The Responsibility of Policyholder Education." In it, Mr. D'Alusio talks about a friend's troubling, frustrating and painful experience after a work injury, a torn finger tendon. The friend works for a self-insured Florida city whose claims are managed by an unnamed TPA. According to Mr. D'Alusio's friend, the TPA, slow off the mark, delayed necessary treatment, dueling physicians traded opinions (slowly) and the employer, the city, was uninvolved, uneducated and unhelpful. In a word, clueless.

Mr. D'Alusio's overarching question in all of this is, "Who's responsible for educating the employer and employee about the workers comp system?" In other words, who is responsible for teaching workers comp best practices to employers who are all legally required to comply with workers comp statutes?

Here at Workers Comp Insider, we don't usually talk about ourselves, but Mr. D'Alusio's question prompts me to step outside that box for a moment, because his question is the same one I faced nearly 30 years ago.

I was an entrepreneur looking to start a business, and friends in the insurance industry suggested looking at workers comp, because costs around the country were raging like a California wildfire, and nobody seemed to have any answers that worked.

Knowing nothing about the subject, I at least had fresh eyes. And what I saw was that, even though workers comp insurers, agents, TPAs, et al, claimed to provide employer education, no one was actually doing it. The only thing employers knew about workers comp was that they had to buy it, and if employees were injured, the insurer was supposed to take care of it. Employers lived in a workers comp wasteland.

That insight was why we created Lynch Ryan with the mission to educate employers that the workplace is the best place to control and manage workers compensation. We were successful in that, and we grew into a substantial and influential management consulting company, and in 1991 Travelers Insurance made us an offer we couldn't refuse, because they needed help. Heady stuff.

Yet, today, while large, enterprise organizations (many of them our clients), have sophisticated systems in place, systems that start with an unrelenting focus on safety, that provide immediate and excellent care for injured workers when safety fails, that return them to meaningful transitional work along a programmed path back to full duty, and that, consequently, keep costs to an absolute minimum, the other 80% of American business does not have the resources or the training to do the same, as Mr. D'Alusio's Florida example illustrates. Why? Because traditional training is expensive, and a $7,000 premium (add a zero, if you'd like) doesn't justify it, so everything is always unplanned and reactive. Moreover, many insurers, TPAs and agents have neither the time nor the inclination to provide meaningful training for the folks who pay the bills.

So, I'm back to my 30-year old question. We have millions of employers in America, call them all students. Who teaches, and how do they do it?

The answer? Technology and eLearning. That's our new sandbox. What's yours?

If you'd like to see what we're doing, here's a 1-minute tease. Contact Lynch Ryan if you'd like to know more - email me directly or connect with me on LinkedIn.

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February 7, 2013


The Insider is very much looking forward to the Workers Compensation Research Institute (WCRI) annual conference, taking place on February 27-28 in the virtual epicenter of wonkiness, Cambridge MA. There is always much food for thought in these annual gatherings of insurance execs, state officials, policy makers, attorneys, medical specialists, employers and safety/loss control practitioners.

This year's agenda has zeroed in on the fundamental medicine-related conundrums facing workers comp systems across the country. All of us in workers comp long for insights into the following:
- Unnecessary medical care and its impact on treatment guidelines. (Back surgery, anyone?)
- Medical price regulation: what are the essential elements of an effective fee schedule? (Beware of the state where the doctors love comp...did someone mention "Connecticut"?)
- The Opioid epidemic: treatment protocols involving the generous and prolonged distribution of opioids are destroying lives across the country. Why are so many doctors so clueless about the proper use of pain killers? Whatever happened to "do no harm"?

WCRI's head honcho, Dr. Richard Victor, will host a discussion on health care policy involving (the presumably liberal) Howard Dean and (the assuredly conservative) Greg Judd. The dialogue might not equal the fireworks of July 4th on the Esplanade, but it might come close. The Insider will be listening closely for any indications of that rarest of phenomena: a common ground.

From Gorilla to ?
Last year, Dr. Victor concluded the conference with a discussion of the "gorilla in the room": the enormous and perhaps insoluble problem of structural unemployment among the 20 million people who lost jobs in the recent recession. For many of these people, especially those in their 50s and 60s, there is little prospect of returning to jobs with anywhere near the same rate of pay as before. Many will find themselves lost in the new economy, cobbling together part-time employment without benefits, while struggling to hold onto housing where mortgages exceed the value of the home. Tough times and, so far, not much in the way of effective solutions.

This year Dr. Victor will have to find some other animal analogy to glean lessons from history: Giraffe in the closet? Rhino in the den? He tells us that the lesson might have something to do with the first century Ephesians, toward whom St. Paul addressed some rather famous snail mail. While some might find such a teaser a bit obscure and full of religious overtones, the Insider looks forward to the story. Indeed, we look forward to this year's entire conference with great anticipation. There are few things better for policy wonks - our people! - than listening to the latest research from WCRI. Diligent note-taking will be in order.

If you count yourself among those with wonkish tendencies and you haven't signed up yet, you'd best jump on it immediately. If you have any questions about the conference, contact Andrew Kenneally at WCRI: 617-661-9274.

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November 20, 2012


When a laborer with limited English is disabled from physical work, is he obligated to increase his employability by learning English? This interesting question emerged in the case of Enrique Gutierrez, a 48 year old welder who worked at Merivic, a company specializing in grain-related processing. Gutierrez came to the United States at age 14, but in his 34 years in the country never learned to speak or write English. While at work, Gutierrez fell about 10 feet onto a steel table, injuring his shoulder and wrist. He underwent two surgeries, worked for a while as a one-armed welder, and then was let go. His post-injury functioning was significantly limited, including difficulty lifting and carrying, gripping and grasping, and reaching.

When the workers comp commission found him permanently and totally disabled, the employer appealed and the case reached the Iowa Court of Appeals, where the finding of compensability was upheld. Up until 2007, Iowa courts routinely lowered the indemnity paid to limited English speaking workers, on the theory that a language disability was something within the power of the worker to correct. A case entitled Lovic v. Construction put an end to that practice. The reasoning in this decision is worth quoting:

Unfortunately, this line of cases [involving reduced indemnity] overlooked the fact that the employers who hired these workers should have reasonably anticipated that an injury which limits an ability to return to manual labor work would have far more devastating consequences upon non-English speaking workers than English speaking workers. Oftentimes, this agency has penalized non-English speaking workers despite the knowledge that the employers actually recruited such workers because they were willing to work for less wages.

In other words, you get what you pay for: limited English speaking workers are willing to work for less, so the employer benefits from this potential "disability." The ruling goes on to attack the rationale for the reduced wages:

What has been troublesome to many, including myself, is that this agency has never similarly treated non-immigrant workers for failing to learn other skills. Defendants would certainly have trouble citing any agency or court precedent in the workers' compensation arena where an industrial award for an English speaking worker was lowered because the injured worker, before the injury, failed to anticipate he would suffer a devastating work injury and failed to obtain a type of education before the injury that would mitigate the effects of such an injury.

We simply cannot assume that claimant was capable of such training or that such classes are generally successful in leading to employment where fluent English is required . . . .

By reiterating the logic of the pre-Lovic court, Merivic was attacking settled - albeit recently settled - law. The Appeals Court rejected this "collateral attack" on Lovic and upheld the permanent total award, and in doing stumbled upon yet another conundrum: that of the older worker. The court found that once a laborer goes beyond age 47, his ability to perform physically demanding work comes into question. A vocational expert retained by Gutierrez described the 48 year old worker as "approaching advanced age." The Judge noted that "We have previously held the age of forty-seven is a factor that the commissioner may consider in finding industrial disability." The expert also noted that Gutierrez's entire career involved "limited education" and a work history limited to physically demanding jobs, which his permanent work restrictions now prevented him from performing.

The Very Big Picture
Our Colleague Peter Rousmaniere provides a valuable perspective on aging manual workers. In his Risk & Insurance article "The Age Trap" he points out that 55+ workers comprised 16.7 percent of the workforce in 2010, a number projected to increase to 22.7 percent by 2020. In contrast to Enrique Gutierrez, most aging workers are not injured and eligible for workers comp; to be sure, their bodies are wearing down and they are confronted with diminishing strength and balance, even as they desperately try to hold onto their places in the workforce. Rousmaniere suggests that employers develop a renewed focus on prevention, one that has been adapted to the realities of the aging worker. After all, these workers are valued for the skill and experience they bring to the work, even as their work capacities diminish.

The Big picture here - and it is a very big picture indeed - is the dilemma of aging workers who perform physically demanding jobs and who have little education and virtually no transferable skills. There are millions of such workers, some are immigrants, while many others are native born. Most have zero prospects for a secure retirement, even as Congress contemplates pushing social security retirement even further into the future.

Whether they like their jobs or not, aging workers see themselves working out of necessity well into the their 60s, 70s and even 80s. As their bodies inevitably wear out, as their injuries (cumulative and sudden) lead a number of them into workers comp courts across the country, judges will be confronted with the same dilemma that faced the appeals court in Iowa: for older workers with no transferable skills, workers comp becomes the retirement plan of choice for those with no retirement plans and no way to continue working.

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November 5, 2012


New York's workers' compensation system has taken a few high hard ones to the head lately. Premiums are now the 5th highest in the nation (according to the well-respected "2012 Oregon Workers' Compensation Premium Rate Ranking"); its surcharges are the highest in the nation; the Spitzer reforms, aimed at reducing costs to employers and improving care for injured workers, have done neither; attorney involvement is among, if not the, highest in the nation; the house-that-Jack-built bureaucracy is cumbersome and unwieldy; and all the parties in the system, every last one of them, bemoan what they perceive to be a train wreck of monumental proportions.

At the same time, New York's Workers' Compensation Board has come under wilting criticism from nearly all quarters. Mike Whitely, from Work Comp Central, has been doing an excellent job of reporting and documenting the whole thing. Last week, the New York Business Council weighed in with some heavy artillery of its own. In short, everyone's frustrated, and tempers are frayed.

I know the Board's senior management, and I am absolutely convinced that all of them, from Jeff Fenster on down, are highly dedicated. These are competent professionals doing the very best they can, but they are up against long odds. They are David with a broken slingshot, and Goliath is growing bigger every day. It does not appear that New York's loggerheaded vested interests - lawyers, doctors, insurers, unions, the Legislature, employers, and more still - will come to any grand bargain anytime soon.
So, is there anything the Board or anyone else can do to create some positive, forward momentum? I think there is, and it involves what is known as Code Rule 60, which is the New York Department of Labor's Workplace Safety and Loss Prevention Incentive Program. It's sometimes known by its really catchy and memorable acronym, WSLPIP. Code Rule 60, which came into being in September of 2009, is supposed to help employers establish DOL certified and approved safety, return to work, and drug and alcohol prevention programs. Participating employers receive premium credits: 4% for safety, 4% for return to work and 2% for drug and alcohol prevention. The credits run for 3 years (but the two 4% components drop to 2% in the second and third years) and are renewable. Only employers with experience modifiers of less than 1.3 are eligible (although why the state prohibits employers who would seem to need it the most from participating is a piece of logic beyond my comprehension).

The premise of Code Rule 60 is that employers who establish these programs will have safer workplaces and, eventually, lower costs. Not a bad idea. The problem is that the DOL has made the program so ridiculously bureaucratic that it would be easier for a New York employer to find his way through a dense maze of thorns, blindfolded, than to negotiate the journey to Code Rule 60 certification. Don't believe me? Here is the official Labor Law Regulation (PDF), in other words, the way through the thicket. It's 20 pages of dense bureaucratese. Busy employers find it nearly impossible to wade through the legal Pig Latin.

Code Rule 60 is totally process driven. There is no performance requirement. No performance measurement. Just build a certified program, and good things will happen. Maybe. The New York DOL doesn't seem to care if the program reduces loss costs. All the DOL wants to know is: Have employers built their programs the way we told them to build them?

With the preceding as background, you might be forgiven for asking how successful has the program been? Regardless of whether they've reduced loss costs, how many employers have succeeded in getting those precious premium credits? Even the New York Business Council couldn't find out, but, anecdotally, the number is fewer than five. Since September, 2009.

So, here's my proposal: First, scrap Rule 60. It's not working, and it never will in its present form. Second, Jeff Fenster should pick up the phone and call Paul Meagher, the highly respected President of the Massachusetts Workers' Compensation Rating and Inspection Bureau (WCRIB). Why? Because long ago at the height of the Massachusetts workers' compensation crisis, when 65% of the Commonwealth's employers were in the High Risk Pool, Mr. Meagher was instrumental in establishing the Massachusetts Qualified Loss Management Program. The QLMP (later replicated in Missouri, West Virginia and New Hampshire) is totally performance driven, and it played a big role in the Massachusetts workers' compensation turnaround, the continued success of which was documented last week by the Workers' Compensation Research Institute and last month in the Oregon study.

Here's how it works. Premium credits accrue to Loss Management Consulting Firms whose Massachusetts customers the WCRIB certifies have reduced their loss costs in the year following engaging a firm. The greater the loss cost reduction, the greater the credit, up to 15%, which is then passed on to the Loss Management Consulting Firm's customers in the succeeding year. Lower loss costs mean lower premiums for employers. The Loss Management Consulting Firms have to requalify every year. So, if a Firm's results slip, it will see its credit, and probably customer portfolio, reduced. In the QLMP, all of the incentives are lined up so that everyone is motivated towards reducing costs, while providing safe workplaces and high quality care for injured workers. (Full disclosure moment: The QLMP was an idea I gave to the WCRIB and the Massachusetts Division of Insurance).

Here are the rules for the Massachusetts QLMP (PDF), with a Q&A at the end. Four pages, written in simple English that any employer or agent can understand.

Senior management of the New York Workers' Compensation Board has told me on many occasions that their overarching goals are to reduce costs to employers and to see that high-quality care is provided to injured workers. It's obvious that Rule 60 is doing neither. A New York version of the Massachusetts QLMP would be a good first step in that direction.

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October 30, 2012


As we begin to survey the damage from Hurricane Sandy, a symptom of the global warming that has been religiously ignored in the course of the presidential debates, our thoughts turn toward the impact of trauma: Sandy's trauma involves man's influence on nature, but in war we have trauma that is purely the result of mankind's inability to live in peace.

About 2.4 million soldiers have cycled through the wars in Iraq and Afganistan. One third or more of those returning from battlefields suffer from post-traumatic stress disorders (PTSD) or depression. Suicide has overtaken combat as the leading cause of death in the Army. [That stark statement is worth a second read.] To date, treatment of PTSD has centered primarily on cognitive processing therapy (CPT), a labor-intensive approach that places veterans in a one-to-one relationship with a therapist. But only 40 percent who enroll actually benefit from the therapy, and even if it were more effective, the vast numbers of soldiers in need would require thousands of additional psychologists.

Tina Rosenberg writes in the New York Times of new approaches to treatment. Instead of using the one-to-one model, these new therapies work in groups. And instead of rehashing the images that gave rise to PTSD, these therapies focus on the present moment, long after the trauma has occurred. The Washington-based Center for Mind-Body Medicine has designed a course that involves conscious breathing, meditation, mindfulness, guided visual imagery and biofeedback. Other therapies include acupuncture and yoga. The Center has a proven track record, working with Kosovo high school students and Gaza residents. The techniques appear to work: following the ten-week program, participants in Kosovo had significantly lower symptoms of PTSD than non-participants.

In Gaza, center staff trained over 400 group leaders, who were able to provide therapeutic interventions with 50,000 people. Because of its group approach and relatively short training cycle, large numbers of people can be reached quickly and at very low cost. And retention levels within the training are much higher than those for individual counseling.

Life Skills
In comparison to CPT therapy, the group approach stresses practical coping skills. While there may still be some social stigma attached to participation in individual therapy, there is no such negativity associated with group work - aside, perhaps, from its New Age aura. Most important, the tools being taught are universal: we all experience stress and some degree of trauma and we all need practical techniques to help us adjust to the pace of modern life. Teaching life skills such as mindfulness and meditation does not isolate PTSD sufferers from everyone else; to the contrary, the fundamental lesson is that we all experience suffering and we are all in this together.

Surely these same group techniques would be helpful to devastated citizens recovering from this week's unprecedented natural disaster.

Teach Politicians to Breath?
I often wonder what would happen if our politicians were taught a few mindfulness exercises. Perhaps there would be more compassion in the world. Perhaps law and policy makers would pause a minute before they spoke, before they ridiculed their opponents or declared war on another country. Perhaps the elected officials who find life sacred at the moment of conception but insignificant once birth occurs would empathize with the plight of women compelled to carry a rapist's child.

These are agitating thoughts, indeed. Time to take a deep breath, sit still for a moment, and just say "om."

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October 3, 2012


When risk managers scan the virtually infinite horizon of risk, they often overlook the single greatest exposure in the working world: driving cars and trucks on the roads of America. Today we approach the issue through the back door, wherein an individual killed in an accident was deemed not be in the course and scope of employment. It might be the backdoor, but it still leads to the same conclusion.

Linda Gadbois was a cook for the California prison system. She suffered a work-related injury and was sent to a doctor. When this doctor proved unsatisfactory, she was allowed to choose another medical provider from a list. After completing her appointment in May of 2008, she headed back to work. She was involved in an accident: Gadbois was killed; the other driver, Kenneth Fields, was seriously injured. Under the theory that Gadbois was "in the course and scope" of employment, Fields sued Gadbois and the state of California, her employer. No need to ask why: the state's pockets were significantly deeper than those of the late Gadbois.

Going to Work
Field's case rested on the interpretation of the "coming and going" rule: was Gadbois, leaving a medical facility after work-related treatment, inside or outside of employment? The court noted that she had requested the second treatment on her own. Her employer did not require her to drive to the appointment, nor was she required to drive as part of her employment. As a prison cook, the essential job functions were limited to her cooking: how she got to work was not her employer's concern.

As a result, the fifth district appeals court concluded that the state was not liable for any injuries Gadbois caused while on her way to work. Field's suit against the state was dismissed; the status of his suit against Gadbois is not known, though presumably he collected up to the limits of her personal auto insurance policy.

It is worth noting that Gadbois's death was not compensable under workers comp. Gadbois was paid for the day of her death in accordance with a death benefit policy that covers all workers who die on a regular work day, whether at work, on the way to work, or on paid vacation or leave. Gadbois received her full salary for the day of the accident, but received nothing from workers' comp. Had she received death benefits under comp, Fields would have had a stronger case.

Drivers: Good, Bad and Indifferent
While the specific circumstances proved Gadbois to be the exception, many people do drive in the course and scope of employment: obvious examples would be tradesmen, salespeople on the road and people whose customers are visited in their homes. But the circle of drivers must be expanded to include any and all employees who run errands or perform any aspect of their jobs in company cars or in personal vehicles.

Some employees do this company-related driving on a regular basis; others only sporadically. But any employee driving "in the course and scope" of employment is a representative of the employer. Whether consciously or not, the employer has endorsed the driving skills of employees whose work involves driving. Even if the employee is in a personal vehicle, the employer has, in effect, entrusted them with the keys. This "entrustment" may well comprise the riskiest part of the working day.

Basic Management
How should employers manage this risk? It's really quite simple. Any and all employees who drive - or who might possibly drive - while working should be required to submit annual copies of their driving records. If there is a cost in obtaining the records, the employee should be reimbursed. The employer should review the records carefully and place restrictions on any employees with marginal or poor driving records. Indeed, the employer may well find that some employees who drive while working do not hold valid licenses. If these unlicensed drivers have accidents while working, the employer is on the hook for anything that happens.

In addition, employees should be required to report any moving violations, on or off the job. A speeding violation on the weekend might not preclude an employee from driving during work, but a formal warning would be appropriate.

Finally, prudent employers should have written policies on limiting the use of cell phones while driving and, needless to add, prohibiting texting. These policies should be enforced, with appropriate documentation and disciplinary action for any violations.

The risks of driving permeate our lives. When we drive in the course of work, the risks are shared by employee and employer alike, even if the latter is oblivious to the exposure. For the savvy manager, a well organized approach to the risks of driving goes a long way toward containing the ever-present perils of the open road.

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October 1, 2012


Over eight years ago, my colleague Julie Ferguson blogged on the issue of workplace heart attacks: compensable or not? (Workers Comp Insider just passed its ninth birthday, but we've been too busy to celebrate.) Heart attacks present a unique challenge to the courts overseeing workers comp. The general standard requires that something unusually stressful happened at work in the moments leading up to the incident; if people are doing their usual work in the usual manner, the heart attack does not arise "out of" employment. If, on the other hand, the demands of work are unusually stressful and beyond the ordinary, the incident might well be compensable.

Today's case raises the isse of whether anything that happens on Super Bowl Sunday can be ordinary. Colleen Robert's husband (no first name given in the court documents) normally worked as a receiver for Waldbaum's Supermarkets in New York. While the 2010 superbowl did not involve any New York teams - the contest featured the Indianapolis Colts versus the New Orleans Saints - Super Bowl Sundays are always busy for super markets. Roberts was asked to manage the store during the unusually busy day. At one point, he engaged in a verbal altercation with a customer (which in itself may not be unusual for those working in New York). Later that same day, while still at work, Roberts suffered a myocardial infarction and died.

The case was first deemed compensable, then denied by an administrative law judge, and then finally adjudicated by the Appelate Division of the New York Supreme Court. The judges noted that any death at work is presumed to be work related, but they also looked for a causal connection between the fatal attack and the work being performed. The autopsy revealed that Roberts suffered from extensive cardiovascular disease and thus was a good candidate for a myocardial infarction. In arguing against compensability, the defense pointed to the lapse of time between the verbal altercation with a customer and the attack itself. However, the judges noted that the entire day was full of stress and excitement for Roberts, who was not performing his usual job in the usual manner. They determined that the fatal heart attack was compensable.

Best Practices
In a similar case involving a supermarket in Massachusetts, a 70 year-old man with a pacemaker collapsed and died on his break. Because he had a known heart condition, and because of his age, the market assumed the fatality was not work related and failed to report it to their insurer. Months later, the widow filed for comp benefits. Due to the absence of timely interviews with co-workers and supervisors, and due to the "death at work" presumption, the case was deemed compensable.

The lesson for employers is both simple and straight-forward: report any and all incidents of heart problems immediately. Regardless of the state jurisdiction, the courts are likely to apply the same standards as in New York. And if a heart attack occurs on Super Bowl Sunday, defense may have a tough time proving it was just another working day.

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September 24, 2012


Cooper Road in Middletown, New Jersey, is rumored to be haunted by strange, ghostly creatures. They jump out from behind trees and startle the drivers of cars traveling down an unpaved portion of the road. There are no street lights and the road has sharp turns, so the appearance of these apparitions is both sudden and alarming. Based upon the numerous oddities in New Jersey's workers comp law, these ghostly beings might well be carrying sign boards that read "Ruined by balanced billing."

From the perspective of virtually any other state jurisdiction, New Jersey's approach to the reimbursement of medical providers in the workers comp system is demon-ridden and rather strange. To begin with, there is no fee schedule. Providers are entitled to their "usual and customary" fees. By leaving fees to the providers, the state creates an unusual level of tension between these providers and the insurance carriers and self-insured employers who pay the bills.

The tensions are not limited to the payers, however. When a payer refuses to cover all or part of the "usual and customary" bill, the provider has the option of billing the injured worker for the balance. The euphemism is "balanced billing" but in both concept and practice this is as unbalanced as a comp system can get.

The Broken Premise
The fundamental premise of workers comp is that the medical costs and lost wages of workers injured on the job will be covered by their employers. In return, workers have given up the right to sue their employers for work-related injuries and illnesses. In most states, the protective barrier between injured workers and the costs of treatment is absolute: there are no copays, no deductibles and no fees whatsoever for injured workers. Comp even covers the cost of travel to and from treatment. "Out of pocket" is a concept that simply has no place in workers comp.

Medical coverage under workers compensation is, in the words of my colleague Tom Lynch, "the best coverage plan in the world": it pays for everything and includes indemnity payments for lost wages, too. The only catch - and it's a big one - is that to qualify you must be injured "in the course and scope" of employment, with an injury "arising out of" employment.

Balanced billing is patently unfair to workers. Routine disputes between medical providers and payers spill over to injured workers. Unpaid portions of medical bills are sent to the workers, who are in no position to pay them. When workers routinely refuse to pay these bills, they may find themselves harassed by collection agencies. Not exactly what the doctor ordered when you are trying to recover from your injury and return to work.

Senate 2022 to the Rescue?
Senate Bill 2022 is wending its way through the New Jersey legislature. The bill recognizes the inherent unfairness of balanced billing and would put an end to the practice. Any disputes about payment would revert to the workers comp bureaucracy, but under no circumstances would the disputed portion of any medical bill become the responsibility of the injured worker.

It's interesting to note that the bill explicitly avoids the issue of a fee schedule. Medical providers will continue to bill for their "usual and customary" fees, which, in turn, will keep the cost of medical treatment relatively high. But at least the injured workers will be exempt from the dispute. That's the least the Garden State can do in its belated effort to restore fairness and equity to the comp system.

Here's hoping that S 2022, in one form or another, finds its way to the Governor's desk in time for Halloween. That would soothe the ghosts on Cooper Road and allow them to revise their signs to address some other glaring inequity in our imperfect world.

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September 18, 2012


Five years ago we blogged Missouri's tough-on-workers reforms that made it more difficult to collect benefits in the "show me" state. Among the provisions in the new law was a 20 to 50 percent reduction in indemnity for workers who are injured while wilfully ignoring the employer's safety program.

Which brings us to Dennis Carver, a roofer who worked for Delta Innovative Services in Kansas City. Carver was carrying a 100-pound roll of composite weather barrier up a ladder - no easy task! - when he injured his back, resulting in a permanent total disability. The problem was that Delta had a safety policy that required three point contact with a ladder at all times: it would be physically impossible to carry a 100 pound roll and maintain three point contact. Because he violated the policy, Carver's indemnity was cut in half, from $743 per week to $371.

Carver admitted that he went to work with the intent of violating the policy. He knew that instead of having the usual crew of 11 men on the job, the crew that day would total two people: himself as foreman and one other crew member working in a separate area. He knew full well that he was on his own. He also knew that company policy required that he use a hand pulley or power equipment - or request the assistance of a coworker - to lift materials to the top of a ladder.

Delta argued that Carver caused his own injury by failing to follow its "three-point" safety rule. Slam dunk for the employer? Here is the statute:

[w]here the injury is caused by the failure of the employee to use safety devices where provided by the employer, or from the employee's failure to obey any reasonable rule adopted by the employer for the safety of employees, the compensation and death benefit provided for herein shall be reduced at least twenty-five but not more than fifty percent; provided, that it is shown that the employee had actual knowledge of the rule so adopted by the employer; and provided, further, that the employer had, prior to the injury, made a reasonable effort to cause his or her employees to use the safety device or devices and to obey or follow the rule so adopted for the safety of the employees.§ 287.120.5

"The burden of establishing any affirmative defense is on the employer․ In asserting any claim or defense based on a factual proposition, the party asserting such claim or defense must establish that such proposition is more likely to be true than not true." § 287.808.

The Checklist
Thus the statute presents a checklist for reducing indemnity payments:

1. that the employer adopted a reasonable rule for the safety of employees; CHECK

2. that the injury was caused by the failure of the employee to obey the safety rule; CHECK

3. that the employee had actual knowledge of the rule; CHECK and

4. that prior to the injury the employer had made a reasonable effort to cause his or her employees to obey the safety rule. NOT SO FAST!

Theory and Practice
While Delta's owner, Danny Boyle, testified that "[n]ormally our guys are trained ․ [that] the only thing that should be carried on a ladder is the person himself," he then testified that employees routinely violated that rule:

Q. Does that mean nobody ever carries anything?

A. Not at all. Guys tend to do things wrong all the time.[emphasis added]

Q. And that's what--

A. I'm just being truthful.

Q. Sure. It happens. It's faster to carry it up sometimes?

A. Yes.

Q. Because you're trying to finish a job and get something done, you may carry something up a ladder as opposed to using the beam?

A. Yes.

Q. Or the pulley?

A. Yes.

Even though Boyle was aware of multiple instances in which employees had failed to follow the three-point rule, he was unable to provide any testimony concerning discipline imposed on noncompliant employees. In other words, the policy was not enforced. And because it was not enforced, Delta must own the consequences of employees failing to follow it.

The Court of Appeals remanded this case back the workers comp commission, for a closer examination of whether there were grounds for reducing the indemnity payments. In all likelihood, Carver will collect the full indemnity.

Roofers at Risk
Boyle's testimony that "guys tend to do things wrong all the time" reminds me of a telling moment in a training session some years ago. I was explaining the implications of implementing a drug testing program and the owner of a small roofing company responded: "I could never do that. Half my guys would fail." [Need I add that, following the seminar, I alerted the underwriter to flag that account for non-renewal?]

Would it surprise you to learn that roofing is one of the most expensive job classes in workers comp? The rates can run as high as $50.00 per $100 of payroll and even higher. It is difficult, demanding work. In some respects, there is no such thing as a good day for a roofer: it's either too hot, too cold, or too windy. The exposures are relentless and the work itself, especially on the commercial side with hot tar involved, can be noxious.

Owners of roofing companies like Danny Boyle are faced with a daily conundrum: do I enforce the rules and slow down the work? Do I discipline employees for violations or let the work flow, hazards be damned? In the course of normal employment, it's tempting to ignore the finer points of safety. But that puts workers at risk for serious injuries - and owners at risk for footing substantial bills.

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September 10, 2012


We have been tracking the compelling issue of compensability in drug overdoses within the workers comp system. We have blogged drug-induced fatalities that are compensable (Tennessee) and non-compensable (Ohio and Connecticut). Given the prevalence - make that rampant over-use - of opioids in the workers comp system, prescription drug abuse is an issue with profound implications for injured workers, their employers and the insurers writing workers comp policies across the country.

Which brings us to the saga of Bruce Ferguson-Stewart. He was injured on May 25, 2004 while working for AltairStrickland, an industrial contracting firm in Texas. A bolt weighing several pounds fell from above, striking Ferguson-Stewart and injuring his shoulder and neck. The MRI showed "minor disc bulges" at three levels on his cervical vertebrae. His treating physician diagnosed him with a left shoulder contusion and prescribed hydrocodone as part of the treatment plan. The doctor also recommended surgery to repair the shoulder.

Denial and its Consequences
For reasons that are not clear from the trial documents, the claim was denied by Commerce & Industry Insurance, the employer's carrier. The carrier lost the initial appeal and then lost again. The insurer then sought judicial review of the Division-level finding of compensability.

Meanwhile, with his shoulder untreated and in extreme pain, Stewart continued to take his prescribed Hydrocodone, known locally as an "East Texas cocktail." At every level of appeal, the compensability of the claim was upheld, but the surgery was delayed - with apparently disastrous results. (The delaying tactics may have been related to Stewart's alleged history of abusing prescription drugs.)

On October 3, 2004, while his worker's compensation claim was still being contested, Ferguson-Stewart died from an overdose of hydrocodone. His blood contained a hydrocodone level of 0.38 mg/L, which is consistent with acute severe toxicity. The blood also contained carisoprodol, a prescription muscle relaxant, and marihuana.

Trial by Jury
Ferguson-Stewart's widow filed for death benefits under workers comp, but the case was denied. The widow appealed.

At trial, Ferguson-Stewart presented two theories as to how and why Stewart might have unintentionally or unknowingly ingested a lethal dose of hydrocodone. First, in what CIIC describes as the "accidental overdose" theory, Ferguson-Stewart alleged that the overdose must have been accidental because her husband did not intentionally or knowingly commit suicide.

Tommy J. Brown, a forensic pathologist who performed an autopsy on Stewart, concluded that the cause of death was hydrocodone toxicity and that the manner of death was "accidental." Brown's testimony is right out of central casting:

Well, I--I see it a lot. I do autopsies on people with chronic pain a lot and this--like before I see them, start out with their drugs and then they increase the drugs, and then to try the [sic] alleviate the pain more, and pretty soon they're taking more than prescribed, and pretty soon they will overdose theirselves [sic] or they will overdose theirselves [sic], some people do. And then they die and it's usually in a low lethal range [like that observed in Stewart]. So I consider that an accidental death because they were overdosing due to the chronic pain.

With its pathos and illuminating detail, the widow's testimony reads like a monologue from a Faulkner novel:

The day before or the day of--that he died. They say he actually died
early in the morning; so, I guess the day before. He was really disoriented. He was not acting normal or the way he had been acting since he was hurt. He wasn't acting normal at all. His speech was slurred. He was stumbling and falling all over things. I remember--I think I remember one time he actually falling [sic] out of a chair and--in the yard
because he was trying to get up and he tripped over a root and he fell on
the shoulder he had injured. And that made it even that much more
painful for him. He was--he was very--he was crying about it. He really
had hurt himself.
. . . .
He was--in the last couple of days before he died, he was getting really
bad about forgetting that he had already taken his medicine and taking it
again; and you know, sometimes I would have to tell him, "Hey, you
already took it. You can't take it again." And usually he would agree with me; but there were times when he would say, "No. No. No. I didn't take it. I'm sure I didn't take it. I'm still hurting too bad, and I don't remember taking it." So, he'd take it again.
But especially the day of [his death], he was entirely too confused. He
wasn't--like I said, he wasn't himself at all.

The jury charge instructed that "[a] claimant's death does not
result from medical treatment instituted to relieve the effects of his compensable injury if the death results solely from a claimant intentionally or knowingly failing to comply with his doctor's instructions[emphasis added]." The jury concluded that Ferguson-Stewart's death was unintentional, resulting from the treatment for his compensable injury. The widow was granted death benefits.

Intention, Confusion and Compensability
Under Texas law, compensability hinges on Ferguson-Stewart's intent: was the death an intentional suicide or was it an accident? He had no intention of killing himself, so the death was compensable. In a somewhat similar Connecticut case (see above), the overdose was the result of the deliberate (and illegal) act of using a needle to ingest drugs. That case was denied.

Behind every death due to prescription drugs lies a story worth telling. Powerful and effective pain killers are transformed into instruments of death. When it comes to the compensability of these cases, disorientation and confusion are not limited to injured workers experiencing pain. The medical and workers comp systems struggle with the ambiguous legacy of medications: while opioids offer immediate, short-term relief from pain, the relief is followed all-too-often by a downward spiral of addiction and dependency.

I truly wish the testimony of Ferguson-Stewart's widow could be played in the examination room of any doctor about to write a script for an "East Texas cocktail." The doctor just might consider a more benign and less toxic alternative.

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August 27, 2012


Last month, Tom Lynch posted a concise and rather devastating macro view of workers comp costs in New York. Today we revisit an issue that illustrates the difficulty of lowering costs in the Empire State: the use of stenographers in each of the several hundred thousand hearings that take place every year in New York. With some reluctance, we will set aside the question as to whether the 300,000 hearings and the 30 million scanned documents are actually necessary in overseeing comp in New York. (They are not, but that is fodder for another day.)

As we read in Work Comp Central (subscription required), New York employs over 100 stenographers, along with their supervisors, to generate an "accurate record" of comp hearings. The staunch defenders of these stenographers - they are legion in the legislature - believe that the only way to secure an acceptably accurate account of a comp hearing is the use of a live stenographer. Electronic devices will miss the nuances, will mess up the occasional non-English word, will make unintentional errors, and will be flummoxed by occasions where more than one person is talking at the same time. In other words, without stenographic documentation, courtroom justice as we have come to know it in the Western world will cease to exist.

Best Practices
When the New York Workers Comp Board proposed a program to test digital recording of hearings, 67 comments were generated. Would it surprise you to learn that 66 of the comments objected to making any changes in the way hearings were documented?

As is often the case, the only reasonable context for examining the Byzantine construction that is New York comp is a comparison to other states. Do other states conduct hearings for any proposed change in each and every claim? Do other states scan every document moving through the comp system? Do other states require stenographic documentation of every comp hearing? Do other states prohibit the use of digital recording in the courtroom? Clearly, New York is out of step with the nation in these areas. Thus it should come as no surprise that the only aspect of comp where New York is a pace-setter is in the spiralling cost of comp to its employers.

One Small Step for Man...
In response to the NYWCB's plan to introduce digital recording into some of its hearings, the legislature passed Assembly 7508, which made explicit and absolute the requirement to use live stenographers. The Insider is pleased to report that Governor Cuomo vetoed the bill. This green - or should we say yellow? - light to proceed with a testing of digital recording will begin to align New York with other states in its approach to courtroom transcripts.

It's Not About the Jobs
In the context of a faltering economy, it is important to note that court stenographers are unlikely to face any layoffs. They are union employees, covered by a five year contract negotiated last year. The pilot use of digital recording is not aimed directly at them. So how does the new program, made possible by the Governor's veto, save money? By gradually shifting away from live stenographers to the use of cheaper - and comparably accurate - technology. As the current incumbent stenographers retire - or move on to new careers - the vacancies will not be filled. In all likelihood, these $60K per year jobs will eventually disappear.

With all the humongous cost-drivers in New York workers comp, the stenographers are a very small part of the problem. Nonetheless, there is significant symbolic value in taking on this miniscule stake holder. The long-standing problems in New York stem from a system that has made very little movement away from the bitter labor environment of the early 20th century. A profound lack of trust permeates the system.

The Governor, the legislature and the comp board need to evaluate each and every proposed comp initiative from a simple and fundamental test, based upon the essence of comp: does the proposed action improve benefits and conditions for injured workers? And does it lower costs for employers? Other considerations - politics-as-usual, stake holder leveraging and sheer bureaucratic inertia - should no longer be part of the discussion.

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July 31, 2012


"An educated consumer is our best customer." - Sy Simms (a really smart retailer)

In the mid-1980s and early 1990s, our nation was in the midst of an awful workers' compensation crisis. In my home state of Massachusetts, the cost of workers' comp was approaching $2 billion dollars annually. Employers were looking for straws to grasp. Associated Industries of Massachusetts, the leading employer organization in the state, held quarterly seminars in large hotel ballrooms and filled them every time with CEOs, CFOs and HR VPs, all wanting to know what they could do to stem the tide.

Often, I was a keynote speaker. Why? Because my company, Lynch Ryan, had figured out that even though, as Peter Rousmaniere, my CFO at the time, put it, the crisis was "a horrendoma of the first order," employers who were committed and driven to reduce their costs could do so if they instituted real, systemic programs with roles, responsibilities and accountability throughout the organization. These employers learned that time was their enemy and that when safety failed and injury resulted, they needed an urgent sense of immediacy to take hold of the injured person and keep him or her as close as possible to the bosom of the workplace. They didn't just report the injury to their carriers and return to business as usual.

Relative to their peers -- their competition -- these employers shone like bright stars in the clear night sky.

In 1992, Massachusetts enacted far-reaching legislation to significantly improve what had become a woebegotten state system. This reform legislation produced results that still echo today as Massachusetts continues to have among the very lowest costs in the nation, but among the highest benefits. The big national bugaboo, medical costs, are about 40% of the total spend, as opposed to around 60% nationally. The $2 billion has shrunk to around $600 million.

Yet, even now, employers who treat workers compensation as they would treat any other important business function (time to repeat - with written documentation, roles, responsibilities and accountability established throughout) still outperform their competitors. I've worked with many of them who managed workers' comp well and were proud of the results they'd achieved.

And that, to me, remains the secret sauce.

Yes, the Great Recession has caused terrible damage to the nation and, by extension, to the workers compensation system. Yes, the combined ratio is unsustainable (and may be understated). Yes, we're in the middle of an epidemic of opioid abuse, enabled, for the most part, by doctors who long ago forgot their Hippocratic Oath and who now bow to Gordon Gecko. And, yes, workers' comp, especially with respect to medical claims management, has gotten much more complicated over the years (and the Medicare Secondary Payer Statute hasn't helped). But in the midst of all this, you will still find employers who are so serious about safety and injury management, that their workers' compensation costs, relative to their peers, give them a significant competitive advantage. All things being equal, their boats are in a safe harbor, waiting to sail when the storm lifts.

In many cases, these employers who "got religion" long ago are large organizations, at least upper middle market. They have the resources to institute systemic programs. But what about the other 80% of American businesses? These companies need help. How do we bring them the education they sorely need to weather the market vagaries?

I think that's the bull's eye challenge.

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May 15, 2012


For those who seek risk conundrums, workers comp is fertile ground. From a micro perspective, the unfortunate Ronald Westerman, a paramedic for a California ambulance company, embodies many of the elements that result in sleepless nights for claims adjusters and actuaries: Westerman had an inordinately long commute (2.5 hours each way!), a sitting job with periodic lifting (inert patients and medical equipment), along with the comorbidities of hypertension, obesity and diabetes. In two years of ambulance work, Westerman gained 70 pounds, thereby compounding the co-morbidity issues.

In March 2009 Westerman returned home from a 36 hour shift and suffered a stroke. His doctor determined that the stroke was work related and that Westerman was permanently and totally disabled. He was 50 years old. While there was some dispute over the cause of the stroke, an independent medical evaluator surmised that it was caused by a blood clot moving through a hole in Westerman's heart to his brain, otherwise known as in-situ thrombosis in his lower extremities - a direct result of too much sitting. (We blogged a compensable fatality from too much sitting here.)

At the appeals level, compensability centered on the performance of a shunt study - an invasive test - that would have determined whether the blood clot caused the stroke. Westerman was willing to undergo the test, but his wife refused to authorize it, due to his fragile health. If there was no hole near the heart, the entire theory of compensability would be disproven; the stroke would not have been work related.

Had the defense attempted to force the test issue, it would have given rise to yet another conundrum: was refusing an invasive test the equivalent of "unreasonable refusal to submit to medical treatment"? Indeed, does a diagnostic test, by itself, meet the definition of "treatment"? Fortunately for Westerman, the defense requested - but did not attempt to require - the shunt test.

Managing Comorbidities
Our esteemed colleague Joe Paduda, who blogs over at Managed Care Matters, provides the macro perspective, one which is unlikely to aid in the sleep patterns for actuaries. He reports on the impact of comorbidities on cost from the recent NCCI conference:

The work done by NCCI was enlightening. 4% of all claims (MO and LT) between 2000 - 09 had treatments, paid for by workers comp, for comorbidities, with hypertension the most common. These claims cost twice as much as those without comorbidities [emphasis added].

It is beyond doubt that comorbidities make work-related injuries more expensive. But what, if anything, can claims managers do about this? In the Westerman case, there is not much to be done, as the stroke resulted in a permanent total disability. But in other cases where there is a path to recovery and even return to work, adjusters should flag these claims for early, intensive intervention, including psychological counseling and support for weight loss and other life style adjustments. To be sure, this would increase the upfront costs, but these steps just might go a long way toward mitigating the ultimate cost of the claims.

As is so often the case in workers comp, it's "pay me now" and "pay me later." To which I can only say to my claims adjuster and actuary friends, "sweet dreams!"

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May 9, 2012


These are the calm days before the coming storm. For most employers, workers comp falls under the "business as usual" category. If a worker is injured, the standard protocols are followed: secure medical treatment; report the claim; if it's convenient and not too difficult, bring the worker back on temporary modified duty. Sure, you will eventually pay for the losses in the form of higher premiums. But rates have been low for a long time. As for the experience mod, how high could it possibly go?

Pretty high! NCCI's new rating plan will roll across the country throughout 2013, beginning in January in a handful of states and finishing up in Utah at the year's end. Employers who pay attention to these things know that primary losses - the most expensive dollars in every claim - are doubling from the current cap of $5,000 to $10,000 in 2013, and eventually going up to $15,000 by 2015. It sounds a bit ominous, but it's still way off in the future, right?

The future is now. Most employers are currently operating in policy year (PY) 2012, which began sometime between January 1 and today. The losses under this policy will not be included in the experience mod until PY 2014 and they will remain in the calculations through PY 2016. In other words, the increased primary losses in these calculations have already been incurred - not only for PY 12, but going back as far as PY 09. The future rating plan, in other words, is not only with us, it's behind us!

What Should Be Done?
Employers who want to stay on top of their insurance costs need to ratchet up their loss control programs. The best injury is the one that never occurs. And for those moments when a safety program fails, employers need to enhance their post-injury management programs, which should include:
- Employee awareness on hazards and safety
- Supervisor training in immediate post-injury response
- A relationship with a quality occupational medical provider
- Prompt reporting of all injuries to the insurer
- An effective and aggressive temporary modified duty program
- Accident analysis to prevent recurrence

To be sure, these key elements are no different from what was needed under the current rating system. But the situation is about to change dramatically. With primary losses doubling and eventually tripling, the need to manage claims from day one has become much more important. Under the current system, the "heavy losses" end at $5,000. Going forward, the heavy losses push much deeper into each claim and will come back to haunt employers in future experience mods.

Waiting Periods: No Time for Waiting!
For employers in states managed directly by NCCI, there is an opportunity to reduce primary losses substantially. If injured employees can be brought back to work - in regular or modified jobs - before the end of the waiting period, the medical-only costs associated with the claim will be discounted by 70%. Waiting periods vary from state to state, with the shortest running for three days and the longest for seven. Once the waiting period is over, out-of-work employees are eligible for indemnity (lost wage) payments and the discount disappears.

So here is some free - and, if I must say so, extremely valuable - advice: do everything humanly possible to bring injured workers back to work before the end of the waiting period. Even if medical bills run to thousands of dollars, the total amount of these primary losses will be reduced by 70% - if, and only if, return to work occurs before indemnity kicks in.

This may not seem important today, but once the experience rating sheets for PY 2014 and beyond start to hit the your desk, you will see the wisdom of this preventive action. The experience rating changes may still be months away, but you are already operating under the new rules. For those who remain oblivious to what is already happening, the future may be dark and ominous indeed.

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April 23, 2012


When looking for cutting edge activities in workers comp abuse, it's a good idea to start in California, where key stakeholders occasionally function like pirates in the Gulf of Aden. We have frequently focused on the burgeoning costs of opioids in the workers comp system. As we learned at the Workers Comp Research Institute conference last November, too many doctors who prescribe opioids have no idea what they are doing, no idea how to manage opioid-based treatment and no clue about the potential for harm.

In the entrepreneurial free-for-all that is California, we see the latest trend in opioid abuse: turning the "best practice" of drug testing into an opportunity to milk the system. (The details are available in Greg Jones's article at WorkComp Central - subscription required.)

Here's how it works: doctors who tend to over-prescribe opioids are jumping on the drug testing bandwagon: either through their own testing, or through contracted services, they are able to parlay a simple $200 drug test into a bill for $1,700 or even $3,000. The labs are playing with billing codes, performing the less expensive qualitative tests but charging for the more expensive quantitative tests. It's a clever scam: first over-prescribe, then drug test and over-bill.

The WorkCompCentral article quotes Howard Appel, president of Millennium Laboratories of San Diego: "I'm offended when workers' comp is paying $3,000 for a drug test that cost $200." Appel's company operates under a "responsibility pledge" where explicit ethical standards are used for drug testing and billing.

Genuine Best Practices
We remind Insider readers of the best practices that should accompany virtually any prescription for opioids:

1. Above all, use opioids sparingly; most prescriptions for opioids in the comp system are unnecessary, ill-advised and poorly managed.
2. Virtually all injured workers prescribed opioids should be evaluated for dependency issues prior to beginning an opioid regimen, drug tested prior to receiving opioids and throughout the course of treatment. Without these pre-conditions, opioid use is full of uncertainty and fraught with danger.
3. Ideally, opioids should come with a written contract and a User's Manual. Workers should be tested on their knowledge of the benefits and the risks.

Note that drug testing is a necessary component of the treatment protocol. The problem in California - and probably elsewhere - is that drug testing is of little value where opioids have been mis-prescribed in the first place. Under best practices, opioids are a last resort, rarely used and carefully managed. Under California scheming, they are over-prescribed, over-monitored and over-billed. All of which goes to show that you don't need a fishing boat and a few automatic rifles to become a pirate. A nice white coat and a plastic cup can work just as well.

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February 27, 2012


Earlier this month, Julie Ferguson blogged the hazards of unsafe trenches. Today we examine the consequences of unsafe trenching for Oscar Avalos, a laborer for a Texas-based company involved in the installation of sewer pipes. The good news for Oscar is that a jury awarded him $4.5 million for the general contractor's negligence in supervising his jobsite; a court of appeals has upheld the award. The bad news, of course, is that Avalos will never work again.

Nowak Construction, a Kansas-based company, was hired by the city of El Paso, Texas, to install new sewer lines. James Heiman, Nowak's onsite superintendent, was neither an engineer nor safety expert. In their plans submitted to the city, Nowak proposed using trench boxes for safety, a proven means of preventing trench collapse. Unfortunately, when they hired Rocking Q as a subcontractor, they did not require that Rocking Q adhere to the trench box procedure. Instead, they deferred to Rocking Q's decision to use "sheet piling" - a form of bracing in which steel plates are driven into the ground with a backhoe and then secured with chains. This alternative plan was never submitted to the city for approval.

Thus we have a jobsite where digging and maintaining trenches are a constant activity, where the original safety plan has been scrapped, and where an alternative plan is in effect. Rocking Q did not use any cross-bracing to support the street plates. Rocking Q's owner testified that no one from Nowak told him that this was unsafe or asked him to use cross-bracing. Further, an engineer representing the City visited the work site daily and never criticized the trench safety system (in itself fodder for another blog posting).

Water-soaked Trenches
On the evening of September 13, 2006, 1.15 inches of rain fell within a two-hour period. At about 7:30 the next morning, site super Heiman went to the area where the Rocking Q crew was working. He then went to work about 150-feet away, within sight of the Rocking Q crew.

Here comes the astonishing part: Heiman testified that he returned to the area at around 12:30 or 1 p.m. and saw that the street plates were not anchored in any way - they had neither chains nor cross-bracing. Heiman did not mention to anyone that he thought the site was unsafe. Just two hours later, the dirt behind a street plate collapsed, causing the plate to fall on Avalos while he was working in a trench. The unanchored plates, intended as safety barriers, were transformed by unstable earth into moving objects with catastrophic impact. Avalos was totally disabled in the accident.

Initially, Avalos's injuries were covered by workers comp. But he also sued the GC Nowak for negligence. In the course of the testimony, Novak's lack of safety oversight was exposed:

Heiman testified that the street plates were tied back with a chain. Heiman had never before worked on a job in which street plates were used for trench safety. He had some initial concerns about [the subcontractor's] system because no structural supports were used for the street plates. According to Heiman, [the sub] told him "that's the way they do it in Texas." Heiman called Mr. Nowak to report his concerns, but he also told Mr. Nowak that [the sub]'s system seemed to be working. Mr. Nowak spoke with [the sub], who assured him that the plates were being hammered into the ground properly and that a chain was being used to anchor the plates. Mr. Nowak then approved the use of street plates for trench safety.

By giving a verbal OK to the revised trench safety plan, and by not seeking El Paso's approval for the change, Nowak assumed liability for the consequences. When the trench failed, Nowak became the responsible third party for Avalos to sue.

The Eyes of a Stranger
One of the intriguing aspects of this case is the way everyone overlooked an obvious hazard, including the city's own site inspector. Trenches were routinely secured by plates driven into the ground. There were no cross braces - indeed, no requisite trench boxes - in view. Based upon the testimony, it appears that chains to secure the plates were not used consistently.

Because we are consultants, LynchRyan always has the benefit of seeing job sites for the first time. We view the work being performed with the eyes of a stranger, because we are, literally, strangers. As part of our approach to safety, we encourage companies to look at the work being done as if they had never seen it before. Routine fosters indifference. I once toured a large warehouse with the company safety director. We came across an employee awkwardly pulling a bulky box from a shelf above his head; a rolling ladder stood a few feet away. What I saw was a very unsafe practice which could easily have been mitigated by using the ladder; what the safety director saw was his buddy, Ralph. He waved to Ralph and we moved on.

Everyone knows that trenches are dangerous. As OSHA frequently notes, "an unprotected trench is an open grave." Yet even in companies whose only work involves trenches, the hazards persist. Despite OSHA's videos, PowerPoints, brochures, and posters highlighting trench hazards - along with well-publicized fines for failure to comply - bad safety practices in trenching persist. In losing this liability case, Nowak has probably learned a painful lesson. But I shudder to think that big time lawsuits are the only effective way to motivate management to take trench risks seriously.

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February 24, 2012


You have to feel sorry for Erik Martin. He went to work for Quick Chek Corp in 1999 as an assistant store manager. He was promoted to store manager in the summer of 2000. He was diagnosed with Parkinson's disease that same year. After informing his supervisor of his diagnosis, she advised him to keep his illness "hush, hush." Martin complied, and never mentioned his illness to the company's HR director. Martin missed work in 2004 and 2006 due to two mini-strokes and took a two-week leave of absence in 2007 because of depression. Despite his formidable physical difficulties - unrelated to work - he returned to work as soon as he was able.

In March 2008, Martin requested and received a demotion because his medical condition, combined with the lack of an assistant manager, precluded him from satisfying his work obligations. Later that same month, Martin injured his back at work. He contacted his doctor, who instructed him to take a darvocet that was previously prescribed to Martin's mother-in-law. Martin visited the doctor the following day, at which time he was prescribed percocet to manage his pain.

Drug Policy
In keeping with company policy, Martin was drug tested two days after the injury. A few days later, he was contacted by the testing facility. They asked him to disclose the medications he was taking. He told them about his prescriptions, including the percocet, and also informed them about the darvocet he took on the day of the injury. Because he tested positive for darvocet without a prescription, the testing company reported a failed drug test and Quick Chek terminated Martin.

A reasonable person might think that Martin was in compliance with the company policy. He took a pill at the verbal direction of his doctor. Was this a "prescribed" medication? Well, that's where a problem arises.

The word "prescription" comes from the Latin "praescriptus" compounded from "prae", before + scribere, to write = to write before. Historically, a prescription was written before the drug was prepared and administered.

It appears that a "verbal prescription" is an oxymoron: if it isn't in writing, it isn't a prescription. [NOTE: the court ruling did not even address this issue.]

The HR director testified that his decision to terminate Martin was based on the failed drug test. He further testified that in his thirteen years managing human resources for Quick Chek, he never made an exception to the company's zero-tolerance drug abuse policy. The director also stated that he was not aware of Martin's Parkinson's disease until this litigation commenced.Thus Martin's termination was consistent with company policy. And in the view of the court, the termination was perfectly legal.

The court wrote:

Unquestionably, the company's drug policy was enforced in a harsh fashion against Martin. The company relied completely on the assessment of the testing company that Martin "failed" the drug test. Quick Chek operates in such a way as to delegate total discretion to interpret the drug test results to the testing company. Once deemed to have failed the drug test, an employee is terminated without exception with no apparent right of appeal. In Vargo v. National Exchange Carriers Assn., Inc., 376 N.J.Super. 364, 383 (App. Div. 2005), we held that a company need not investigate possible legal reasons for a positive drug test before taking action with regard to a prospective employee; nor should such a duty exist with respect to existing employees. NJLAD is not offended by a private company's lack of compassion in these circumstances.

Note how the court starts with a precedent involving a job applicant and then applies it to a loyal employee of long standing: "nor should such a duty exist with respect to existing employees." The court may not see any difference between an applicant and a loyal employee, but I do.

No Room for Compassion
The court "is not offended by a private company's lack of compassion." Well, I am. Zero tolerance policies back companies into a corner; their rigidity may eliminate the need for discretion, but in doing so, these policies also eliminate many good employees. A little discretion in the hands of good managers is a powerful tool toward building a positive work culture. By contrast, zero tolerance policies may provide an illusion of control over matters that are difficult to control, but they are not an effective way to run a company (or a school, for that matter). Indeed, the policy makes it difficult for the company to fulfill its promise as a great place to work:

Quick Chek is proud to be one of NJ's Best Places to Work! With 2,600 team members in over 120 stores, we strive to create a positive experience and fun environment where core values are nurtured, hard work is rewarded and leadership is cultivated.

I wonder what Erik Martin thinks of the company's "core values." When his illness prevented him from doing his job, he requested and was granted a demotion. When his illness prevented him from working, he took (unpaid) time off and focused on recovery. When he was injured at work, he followed his doctor's orders and his company's procedures. Martin's loyalty and perseverance are admirable qualities, but they did not buy him much in the corporate offices of Quick Chek or the courtrooms of New Jersey.

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December 5, 2011


Florida is famous for at least three things: citrus fruit, sunshine and pain pills. The citrus and sunshine are pretty much permanent, but it appears that the easy dispensing of opioids may be coming to an end. HB 7095, the state's new law regulating opioid distribution, bans doctor dispensing of drugs and subjects pharmacies to inspection of prescription records. The state is determined to put an end to its reputation as the pill mall of America.

Now CVS, the giant pharmacy concern with over 700 stores in Florida, has stepped into the breach. They have notified a small number of doctors that they will no longer honor their prescriptions for opioids. CVS has analyzed prescription data and determined that these doctors are over-prescribing. As with so many issues involving insurance coverage, the data goes into a black box and a determination comes out the far end. What happens in the box remains a mystery. Our esteemed colleague, Joe Paduda, has strongly endorsed the CVS effort at his Managed Care Matters blog.

Feeling the Pain
It should come as no surprise that a key stakeholder in the use of opioids, the Florida Academy of Pain Medicine, is crying foul. The academy points out that the criteria for blackballing doctors is unknown and that doctors - and only doctors - should be allowed to determine who needs pain killers and for how long. As Jeffrey Zipper, chair of the Academy's Medical Affairs committee puts it, "I don't want to be subject to the scrutiny of CVS."

Given the immense dimensions of the prescription drug problem in Florida, it's clear that some doctors have long been abusing their power to prescribe medications. They need scrutiny and they need to be sanctioned. While CVS and other pharmacies are a key part of the distribution network, their leverage in this area is somewhat limited. To begin with, other pharmacies may choose to pick up the rejected business: we're talking big bucks. In addition, CVS at some point will have to disclose the criteria used for rejecting the prescriptions written by certain doctors. Once this happens, doctors may attempt to manipulate their prescription practices to avoid detection and sanction.

In attempting to get its arms around this formidable problem, the State of Florida has reframed the question about who controls controlled substances. While it's apparent that doctors no longer have sole discretion in the area, it remains to be seen how effective and how equitable the control exerted by pharmacies can be. The Insider will monitor with great interest this important experiment in substance abuse control.

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October 11, 2011


For 36 years Rodolfo Meza worked for Aerol Corporation in Rancho Diminguez CA as a metal worker making cast iron and aluminum molds. He was about 48 when he began working; he was about 84 when he was terminated while on medical leave for a knee operation. Rodolfo sued, claiming age discrimination, raising the question: how old is too old to work?

In the course of his trial and subsequent appeal, Rodolfo noted that his immediate supervisor commented frequently about his being "too old to work." Despite operations for a hernia and a knee replacement (the court rulings do not indicate whether these were covered by workers comp), Rodolfo had every intention of continuing to work. When his normal job became a bit difficult for him to perform, he requested a transfer to the engineering department, where he often had performed work. His supervisor responded "no, Rudy I can't [transfer you]. You are too old to move to engineering."

When he was terminated in 2009, his 24 year old son (conceived when Rodolfo was 60!) noted that he became sad and depressed.

Age Has Its Benefits
A jury awarded Rodolfo $100,000 for future economic loss: based upon his annual earnings, that's a little over three additional years of employment, bringing Rodolfo to age 87. In addition, they awarded $300,000 for past non-economic damages (presumably, the ongoing agist comments of his supervisor). That's a lot of money for an individual nearly 20 years past the conventional retirement age.

Aerol appealed and lost. The CA Court of Appeals found a pattern of discrimination, along with a legal technicality that prevented Aerol from contesting the award for the future earnings: Aerol failed to raise the issue in a timely manner during the initial the trial.

Expensive Lessons in Human Resource Management
Is the court saying that employers must continue to employ workers into their 80s, with no recourse available to force retirement? Can workers work as long as they like?

Not really.

Aerol - through the actions of Rodolfo's supervisor - made a number of critical mistakes in managing this situation. The supervisor made repeated comments about Rodolfo's age; the supervisor should have been warned to cease this behavior and disciplined if he continued. Rodolfo had an exemplary record of employment; there was no (written) indication that his performance had deteriorated. When Rodolfo felt less capable of doing his regular job and requested a transfer, he was denied the opportunity based solely upon his age. When he requested time off for the knee surgery, it was granted; there was no indication that his job would be eliminated during his absence, but that's exactly how Aerol proceeded.

A Word to the Wise on Aging
Savvy employers would do well to learn from Aerol's mistakes:
- Never assume that based solely upon age a worker is "too old"
- Focus on the essential job requirements: employees must be able to safely perform jobs as specified (some accommodation based upon age should be considered)
- Document any problems in performance
- Train supervisors in managing older workers (along with women, minorities, disabled workers and any other protected classes)
- Above all, keep lines of communication open.

Rodolfo gave 36 years to Aerol. He deserved consideration as he grew older, but he was not guaranteed a job. If and when any issues of his job performance arose, his supervisor should have sat down with him to discuss them openly. Ironically, there are no real winners in this situation: Aerol (or its insurer) took a big hit economically. They also lost a loyal employee who was still capable of making a positive contribution to the company. Rodolfo lost the job he loved and lived for. To be sure, he now has a nice nest egg for retirement, but that is not what he wanted most. He was one older worker who just wanted to keep on working.

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October 4, 2011


Predictive modeling has long been used in personal lines, especially auto insurance. It's only in the last 8 or 9 years that we've seen it squeezing through the workers' compensation front door in the areas of underwriting and claims administration. In this period, the major risk management consultants, TPAs and insurers have been developing sophisticated models to, in consultant-speak, "use advanced statistical techniques (e.g., multivariate analyses, generalized linear models) to simultaneously evaluate numerous potential explanatory risk factors for maximum amounts of knowledge from available data sources" (from a TowersPerrin 2006 paper) (PDF).

To translate, in the claims process, the purpose of predictive modeling is to identify injured workers who are most at-risk of delayed recovery or malingering. The best time to do this, of course, is at the time of the injury. As my friend and colleague Mike Shor, of Best Doctors, puts it, "Think of it as being no different from the triage process that occurs in combat medicine or an emergency room.... the military talks about the golden's what happens in that first 60 minutes that drive outcome. In WC we believe there is a golden 24-48 hours where the claim decisions that get made determine the ultimate outcome. It is here where claims that have the potential to run off the rails actually do."

To a certain degree, predictive modeling systems can suggest which injured workers are most at risk for staying out of work longer than is medically necessary. Predictive models use advanced statistical techniques to perform multivariate analyses that suggest the degree of risk associated with any one underwriting risk or any one injured worker claim. Some predictive models use hundreds, even thousands, of univariates, but, in the claims arena, as you can probably imagine, there are a limited number, perhaps 10 to 15, that are of most value, and many of these are of the common sense variety. For example, co-morbidities such as obesity, diabetes and diseases that affect oxygen intake, all of which hinder healing. Others are demographic, such as age, education, marital status and distance from the worksite. For example, if you have a 55-year old divorced Type-2 diabetic male who lives alone more than 20 miles from the worksite and who suffers a crushing injury to the foot you more than likely have an employee at high risk for extended absence. Of course, any claims adjuster worth his or her salt intuitively knows this, but a predictive modeling system can examine all of the appropriate variables and spit out a ranking with recommendations in a nanosecond or two. Predictive modeling doesn't come cheap, and it doesn't replace the experience and judgment of a seasoned claims specialist, but, if used wisely, it offers a significantly sharp, relatively new arrow in the claims quiver.

"Used wisely" is the key phrase, because if that happens the claims adjuster can quickly link the at-risk injured worker with a clinician skilled in dealing with the bio-psychosocial risk factors associated with delayed recovery. In other words, the full-court claims press can be applied very early in the claims cycle.

Add to this mix an educated employer injury coordinator who projects a caring and compassionate approach to injured workers and who offers a well-thought-out modified duty program, and the likelihood of successful return to work is increased substantially. The goal is to remove excuses for staying out of work longer than is medically necessary. This type of approach assures that injured workers, the vast majority of whom are motivated to return to productive lives as fast as possible, do so on the fast track. Even more important, those who are not so motivated, those with other agendas, are identified almost immediately.

We recommend that you ask your insurer or TPA claims executives to explain their firm's approach to and usage of predictive modeling. Employers should know to what degree and in what way their claims adjusters are using this tool.

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September 26, 2011


It's been over 20 years since NCCI changed the rules relating to the calculation of the experience modification factor. Given that experience modification determines the cost of insurance for all but self-insured employers, these changes require careful scrutiny. While some of the details have not yet been announced, one thing is clear: employers with higher-than-expected losses are likely to pay more for insurance. [NOTE: the Insider apologizes in advance for what is inevitably a rather technical discussion. For readers who would like additional background, check out our 2004 primer here.]

Under the current system, claim dollars - what's been paid and what's been set aside for future payment on each claim - fall into one of three categories:
- Primary losses: the first $5,000 of each claim. These losses carry the most weight and drive up the experience mod much quicker than the losses above $5,000.
- Excess losses: the losses above $5,000 within each claim. These are discounted in the calculation, with as little as 10 percent of the total included in the calculation (depending upon the size of the premium)
- State Rating Point: the cap on individual claim dollars beyond which the losses are excluded from the calculation; this varies from state to state, generally falling between $125,000 and $200,000.

NCCI is expanding primary losses from the current level of $5,000 up to 15,000. This change will take place over a three year period, with the ceiling rising to $10,000 in the first year, $13,500 in the second year and $15,000 in the third year.

Why does this matter? Primary losses are the major cost driver in experience rating. Primary losses are not discounted: they go into the formula dollar for dollar. As a result, employers with moderately large claims (between $5,000 and $25,000) are likely to see an increase in their experience mod.

Expected Losses
Employers who have analyzed their premiums carefully understand that experience rating is essentially a comparison: the individual employer's losses are compared to the losses for other employers performing similar work. The actual comparison is contained in the rates paid for insurance.

For example, in your state the rate for carpenters might be $10.00 per $100.00 of payroll. The total expected losses within this rate might be $5.00 per $100 of payroll. The expected primary losses (called the D Ratio) might be 20 percent of total losses: in this case, $1.00 per $100 of payroll.

As NCCI increases the ceiling for primary losses from $5,000 to $15,000, they must also increase expected primary losses. Unfortunately, they have thus far provided no information on how much expected primary losses (the D ratio) will increase. This number will determine just how much more employers with higher-than-expected losses will pay for insurance. Conversely, the revised D ratio will also determine how much of a discount will be given to employers with lower-than-expected losses. As with our changing climate, the fluctuations under the new system will be greater than in the past.

Given the trend toward very large (catastrophic) claims, it would not be surprising to see the state rating points also increase: for example, instead of capping individual claims at $200,000, the limit might be closer to $300,000. (To date, NCCI has been silent on this matter.)

Winners and Losers
NCCI actuaries are working under the requirement that total premiums within a state remain the same under the new system. In other words, when they apply the new rules, experience mods will go up or down for individual employers, but the total premium in the state will stay the same.

On an individual insured level, there will be winners and losers. Here is our advice to any employers with debit mods (above 1.0) in states managed by NCCI: follow these new NCCI developments carefully. [The easiest way to do this, of course, is to keep reading the Insider.] Primary losses remain the biggest cost driver in the workers comp system and primary losses within individual claims are about to double and soon triple. The strategies for experience mod management that were effective with the primary loss ceiling at $5,000 may no longer apply. As the rules of the game change, savvy managers will change with them.

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June 20, 2011


In the world of workers comp, chronic pain is a major cost driver. When pain persists beyond expected healing times, the prognosis is grim: injured workers suffering from prolonged pain often drift into anxiety and depression and may even become addicted to powerful pain medications. In the downward spiral of relentless pain, it becomes increasingly difficult to separate physical and psychological issues. The prospect of return to work disappears, the injured worker's life disintegrates and the cost of the claim goes through the roof.

The claims adjusters who are responsible for managing chronic pain injuries usually resist any recommendations for psychological counseling; they avoid such interventions because treatment - whether individual or group therapy - cannot and should not be limited to what is "work related." Pain subsumes the worker's entire life. Yet counseling is often an essential part of what is needed: injured workers talking through their many difficulties and sharing their experience with others.

So is it possible to develop a chronic pain program that limits financial exposures, narrows the treatment options and sets reasonable time frames for completing the treatment cycle? And can pain management encompass at least some focused counseling?

A Guide for the Perplexed?
Massachusetts has taken a shot. The state's Department of Industrial Accidents(DIA) Health Care Services Board has issued draft guidelines (PDF) for managing chronic pain. Under the leadership of Dean Hashimoto, who holds both medical and legal degrees, the draft protocol tiptoes through a minefield populated with poppy plants, doctors with prescription pads and long needles, chiropractors, acupuncturists, counselors and biofeed back practitioners - not to mention the ever-present drug salespeople. The draft guidelines could well serve as a Guide for the Perplexed.

Beginning with the caveat that 10 percent of all chronic pain cases will fall outside of the protocol, Hashimoto's task force tries to set parameters for all types of treatment: the number and type of diagnostic and therapeutic injections permissible; the goal-oriented use of mental health counseling, with specified durations (6 to 12 months); "very limited" use of opioid analgesics, with referral to pain specialists, if needed, and including a detailed list of specific actions designed to avoid addiction.

A Work in Progress
The DIA is soliciting comments on these guidelines. Alas, they are unlikely to hear from the relatively small portion of stakeholders who are profiting from the current chaos: the pill-happy doctors, the attorneys who discourage injured workers from returning to work, the physical therapists and chiropractors who believe that treatment, once begun, should go on forever, and the pharma sales folk who encourage use of the most powerful opiates for what is usually short-term pain.

The draft guidelines are comprehensive and reasonable. As the final guidelines will not and cannot have the force of law, they will not eliminate the abuse that currently exists. But if they help motivated treatment practitioners to offer more effective services, and if they open the door to at least some counseling for injured workers, the guidelines will surely save both lives and careers. That in itself will validate the admirable and essential work of Hashimoto's board.

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June 13, 2011


DeWayne Sutton worked for Tomco Machining in Dayton, Ohio. When he hurt his back while dismantling some equipment, he followed "best practices" and reported the injury immediately to company owner Jim Tomasiak. The boss pulled a "Trump" - deviating 180 degrees from "best practices" by firing Sutton immediately. No reason was given for the termination. As you would expect, Sutton was able to collect comp benefits (termination is no bar to eligibility), but could he also sue for wrongful termination? In other words, was the termination retaliation for reporting the claim?

Under the Ohio statute, employers are prohibited from firing, demoting or taking punitive action against an employee who files a workers comp claim. The question at issue is one of timing: the claim had been reported to the employer, but not yet filed with the insurer. So did Tomasiak violate the law by firing Sutton in the interval between the injury and the report to the insurer?

Begging to Differ
In a sharply divided opinion (4-3), the Supreme Court of Ohio found in Sutton's favor, sending the case back to the lower court for reconsideration. Chief Justice Maureen O'Connor, writing for the majority, notes:

We find that the General Assembly did not intend to leave a gap in protection during which time employers are permitted to retaliate against employees who might pursue workers' compensation benefits.

The alternative interpretation - that the legislature intentionally left the gap - is at odds with the basic purpose of the anti-retaliation provision, which is "to enable employees to freely exercise their rights without fear of retribution from their employers."

The court minority noted that Sutton was able to collect comp benefits - kind of "no harm, no foul." Then, as Justice Terrence O'Donnell notes:

The majority has today expanded the public policy behind the provisions of (state law) to apply to those persons discharged before filing, instituting or pursuing a workers' compensation claim. This allowance is a legislative prerogative, and in my view, we should follow the law as written and defer to the General Assembly, instead of stretching the extent of protection to fit situations not addressed by the statute.

This is familiar territory in the world of law: liberal interpretation (the majority) versus strict construction (the minority). One vote determined the outcome.

The Biggest Loser
Business owner Tomasiak comes away with a double whammy: he is liable for the comp claim through the experience rating process; having fired Sutton, he is unable to lower the cost of the claim by bringing Sutton back to work on modified duty. Then he faces a wrongful termination lawsuit, which he is probably going to lose. The timing of his action, along with the absence of any stated rationale, reak of retaliation.

Tomasiak's impulsive response to Sutton's injury violated Rule Number One for employers: if employees are not working out, fire them before they get hurt. Once they are injured, comp laws pretty much assume that any firing would be retaliation. For Tomasiak, just trying to run his machine shop in Dayton, Ohio, this is a tough - and expensive - lesson in best practices.

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June 8, 2011


As we noted in a blog earlier this year, the number of fatalities in grain bins reached record levels in 2010. There were 51 grain bin accidents last year, up from 38 in 2009 and the most since tracking began in 1978. Twenty-five people died, and five of them were children under age 16. The previous record for grain bin accidents was 42 in 1993. In response, OSHA has developed an explicit program to improve safety in grain bins. In doing so, they have increased the pressure on bin operators to operate safely. The stakes have been raised beyond even the robust fines that OSHA routinely hands out for violations.

As an example of the new program in action, OSHA has cited Lakeland Feed and Supply in Hamilton, Montana, for exposing workers to grain bin machine guarding and fall hazards, along with other safety and health hazards. At this point the fines total $122,500, but this might change after corrective actions and negotiations.

In detailing the serious violations, OSHA paints the picture of a hazard-filled environment that may well reflect the day-to-day operations of many grain bins across the country:

...Platforms missing guarding; no landing platform on a ladder; unguarded shafts, pulleys, chains and sprockets; the lack of an emergency evacuation plan and no fire alarm system; employees walking on grain in the bins; high levels of potentially explosive dust; the lack of a housekeeping program; not locking out augers when employees enter the bins; exposed live electrical lines; improper electrical wiring for high dust areas; and employees not trained on the hazards and chemicals associated with their work.

Not Exactly Junk Mail
As part of the grain bin initiative, OSHA has written to operators across the country, detailing specific steps to be taken to prevent accidents when workers enter storage bins. These steps include:

Turn off and lock out all powered equipment associated with the bin, including augers used to help move the grain, so that the grain is not being emptied or moving out or into the bin. Standing on moving grain is deadly; the grain can act like 'quicksand' and bury a worker in seconds. Moving grain out of a bin while a worker is in the bin creates a suction that can pull the workers into the grain in seconds.
Prohibit walking down grain and similar practices where an employee walks on grain to make it flow.
Provide all employees a body harness with a lifeline, or a boatswains chair, and ensure that it is secured prior to the employee entering the bin.

Provide an observer stationed outside the bin or silo being entered by an employee. Ensure the observer is equipped to provide assistance and that their only task is to continuously track the employee in the bin. Prohibit workers from entry into bins or silos underneath a bridging condition, or where a build-up of grain products on the sides could fall and bury them.

Test the air within a bin or silo prior to entry for the presence of combustible and toxic gases, and to determine if there is sufficient oxygen.

Ensure a permit is issued for each instance a worker enters a bin or silo, certifying that the precautions listed above have been implemented.

On Notice
Bin operators are on notice that the above safety procedures must be in place. By providing this unambiguous and highly detailed list, OSHA is saying, in effect, "these are the standards. Nothing less is acceptable."

Why does this matter? Attorneys for workers injured in storage bins will review the details of any and all accidents. Where the above standards have not been met - and they are not easy to meet! - these attorneys may aggressively pursue increased sanctions against employers. In many states, injuries due to the "wilful intent" of the employer result in higher indemnity payments. In the event of serious injuries or fatalities, attorneys may attempt to pierce the "exclusive remedy" shield of workers comp and secure substantially higher benefits due to employer "negligence".

In other words, OSHA may have raised the stakes for grain bin operators above the traditional "no fault" level. While there is nothing radically new in the required safety procedures, the fact that OSHA has presented a definitive list means that employers are accountable for each and every one of these procedures. As is customary, violations will result in heavy fines. But in addition to the fines, bin operators may be at risk for exposures well beyond the "usual and customary" comp benefits.

The working conditions in grain bins are extremely challenging. There are critical time pressures, complex mechanical issues, weather concerns and at times, a shortage of trained labor. Teenagers -all too frequently the victims in bin accidents - may or may not take safety precautions seriously. If life on the farm is difficult, life in the bins may be even harder. When it comes to safety and the protection of the people doing the work, OSHA's sympathies are with the workers. In this environment, when serious accidents occur, employers will be judged by a single criteria: did they follow the OSHA book on grain bin safety? If not, bin operators are likely to pay, pay and pay again.

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June 6, 2011


Darrell Miller worked for the Illinois Department of Transportation (IDOT) as part of a crew that maintained bridges. He worked without any problems for five years, but then encountered some difficulty with the job related to a fear of heights. In the most dramatic event, he and another crew member had to "go over the edge" of a bridge over the Mississippi River to change the navigation light bulbs directly above the river. The court describes the incident:

Miller had to climb down a ladder on the side of the bridge to reach the station that held the light fixtures. Some of the stations would have required him to stand on a bridge beam while wearing a lifeline. When Miller attempted to change a bulb that would have required him to stand on a bridge beam, he was unable to complete the task. He suffered a panic attack and was taken by ambulance to a hospital. That was the first, last, and only time Miller was unable to complete an assigned task because of his fear of heights.

Subsequent to treatment for this panic attack, Miller was diagnosed with acrophobia, a fear of heights. Following a series of incidents where his requests for accommodation were rejected, he was fired.

Given the bare outline of what took place, it would appear that the employer was within its rights to terminate Miller. He could not perform some "essential" job functions. In fact, a lower court dismissed Miller's claim of discrimination, granting summary judgment for the IDOT. However, the 7th Federal District Court took the time to examine not just Darrell Miller, but the crew of which he was part. Their thoughtful and detailed ruling, from which we quote at some length, leads to an interesting and perhaps counter-intuitive conclusion.

The Devil in the Details
The Court noted that not all of the tasks associated with the job involved heights:

As a highway maintainer assigned to a bridge crew, Miller was responsible for a variety of tasks, many of which could be performed from the ground. Those tasks included operating and repairing maintenance vehicles and equipment, including trucks, pavement marking equipment, tractors, mowers, snow plows, and jack hammers; maintaining large culverts, abutments, guardrails, and drainage installations; spreading salt, sand, gravel, and asphalt; directing traffic during maintenance operations; cutting grass, weeds, and brush; repairing signs and digging post holes; cleaning and maintaining the crew's headquarters; disposing of trash and highway debris; and record-keeping.

In addition, Miller was able to perform most, if not all, of the job:

From the outset of his employment, Miller had occasional difficulty working from heights, particularly when he worked in an unsecured environment. When he began work he had not been formally diagnosed with acrophobia, but Miller informed IDOT and the lead worker of his bridge team, Steve Maurizio, that he had a fear of some heights and that there were a few tasks that he would not be able to do. Specifically, he informed Maurizio that he would not be able to "walk a bridge beam." In spite of his fear, Miller was able to perform work in an elevated, hydraulically lifted "snooper bucket" at heights of up to 80 feet, and he was able to crawl on the arch of a bridge on a catwalk. He estimated that his fear would be triggered and he would have problems with less than three percent of his job description, but even then he was able to complete his assigned tasks on all but one occasion.

Finally, the court observed that there were a variety of "reasonable accommodations" afforded different members of the crew:

Until early 2006, IDOT informally accommodated Miller by allowing other members of his team to handle those tasks for him, just as other team members' conditions or limitations were accommodated. For example, Maurizio was unable to weld. Another co-worker refused to ride in the snooper bucket, was not required to climb the arches of an interstate bridge linking Illinois to Kentucky, was unable to spray bridges because of his allergies, was not required to mow the yard, and was not required to rake patching debris. Other crew members would swap assignments as needed to enable the crew to complete those tasks. In short, the evidence would allow a jury to find that the team worked effectively as a team, taking advantage of each member's abilities and accommodating each member's limitations.

Essential Functions, Reasonable Accommodations
Then the court examined the crux of the case: was Miller able to perform the essential functions of the job, with or without accommodation:

We are confident that some high work in exposed or extreme positions is an essential function of the bridge crew as a whole. IDOT would have us take that point a step further to find that any individual assigned to the bridge crew had to be able to perform each and every task of the entire bridge crew. That would require finding that every task required of the bridge crew as a whole was an essential task of each bridge crew member. On this record, we cannot make that finding as a matter of law. Plaintiff has come forward with substantial evidence showing that his bridge crew did not actually work that way. The bridge crew worked as a team. No one person was assigned permanently to any one task. Although individual members of the team did various tasks as needed, there was no requirement that the bridge crew members rotate from task to task in an organized, routine fashion, such that it was necessary for any one member of the bridge crew to be able to do every task of the bridge crew as a whole.

In a footnote, the court tackles the unlikely possibility that an entire crew might suffer from acrophobia:

We recognize that if most or all members of a bridge crew had acrophobia like Miller's, the crew could not perform all of its essential duties. If and when such an extreme case might arise, we are confident that the law would accommodate an employer's need to get its work done. In this case, however, the evidence showing that plaintiff had actually been accommodated as he requested shows that the employer is not entitled to summary judgment on this theory.

The 7th District Court's reasoning is at once both compelling and intriguing. Miller, as a member of the crew, was able to do enough of the job to allow the team to proceed unhindered and unimpeded. They accommodated Miller - and his co-workers - routinely in the course of determining which crew members were assigned to specific tasks. Reasonable accommodation for everyone was an ongoing part of the job. Thus, when confronted with a diagnosis that appears to preclude bridge work, the court concluded that accommodating Miller was not only reasonable, but that IDOT had been doing it all along.

The purpose of the ADA is to welcome and sustain people with disabilities in the workplace. Conventional thinking all too often concludes that people who appear to be disabled, or who actually are disabled, cannot do the job. Can a person with a fear of heights work on bridges? In these specific circumstances, yes, he can.

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June 2, 2011


Governor Rick Scott has issued Executive Order Number 11-58 compelling all state agencies under his control to implement a comprehensive drug testing program: all job applicants must undergo pre-employment testing. All current employees - regardless of what they do - must be randomly tested every quarter. Because drugs stay in the body for hours and even days after they are used, the governor is attempting to control every waking minute of the state workforce. Not even commercial drivers are subject to such stringent monitoring.

There is no question that drug testing can play an important role in a comprehensive safety program. For workers whose jobs put themselves or others at risk, random testing can be smart policy. For employers struggling with a rampant drug culture, drug testing often makes sense. [I remember discussing this issue at a workers comp seminar some years ago. The owner of a roofing company said, "I could never implement drug testing. Half my guys would fail!" (I made an immediate note to alert the underwriting team.)]

Even as we acknowledge that drug testing is appropriate under certain circumstances, we must recognize its limitations. Testing science itself, while significantly more effective than it was a decade ago, is not 100 percent reliable. The producing and subsequent custody of urine samples is at best embarrassing and at worst an invasion of privacy. Drug testing does send a message, but there are times and circumstances - such as now in Florida state government - when this message is demoralizing and counter-productive.

Within weeks of the issuance of the executive order, the ACLU sued to put a stop to the program.

Ideology and Policy
The testing of all employees, without even considering job function or safety exposure, crosses the line between best practice and rigid ideology. This policy does not stem from "business necessity" nor does it take into account individual freedom and the right to privacy. Using the governor's logic, you could argue that everyone in America should, for one reason or another, be tested for illegal drugs. This is bad policy and, to put it bluntly, unAmerican. Here's hoping the courts toss out this executive order and restore some light to the Sunshine state.

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May 31, 2011


The brinksmanship continues in Illinois. A moderately effective reform bill passed the senate but has been defeated in the house by Republicans, who seek stronger ways to limit compensability. As a result, the Dems are moving forward with the Doomsday option: a bill to abolish workers comp and send each and every claim into the court system. Wow, that's one way to make everyone miserable, above all, injured workers looking for a reliable safety net.

Among other things, the defeated reform bill would have reduced the medical fee schedule by 30 percent, thereby saving (theoretically) $500m to $700m per year. The reduction sounds harsh, but in practice, fee schedules are fluid. For top specialists, the fees are almost always negotiated upward; for run-of-the-mill practitioners - or the Dr. Feelgoods with their pockets full of pills - they can take it or leave it. Lowered fee schedules provide payers with leverage to find the best available doctors - not necessarily a bad thing.

Who Blinks?
At the moment, legislators are playing a classic game of chicken: if we can't reach agreement on reforms, we'll blow the whole thing up. Given that Democrats are behind the Doomsday option, I doubt they will allow things to reach that point, as it would be a disaster for workers. But they are running out of time.

The potential good news for Illinois employers (and there isn't much when it comes to comp) is that even the modest changes in the reform bill will begin to reduce the cost of workers comp, currently the third highest in the nation. The bad news is that further reforms will be needed, most of all, perhaps, involving the de-politicizing of comp in a hyper-political state. My advice to the legislators is simple: take it incrementally. Pass the reform bill pretty much as is and revisit the issue in the next session. In this precarious situation, half a loaf is better than none.

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May 25, 2011


Henry C. Becker Custom Building Limited was doing some construction work in Newburyport MA. They hired the Great Green Barrier Company to do some waterproofing. They apparently did not ask for a certificate of insurance; Great Green Barrier did not carry workers comp for their employees. There was an explosion on the jobsite. Timothy Wentworth, an employee of Great Green Barrier, was killed; his son, Ezekiel, was severely injured. As the employees of an uninsured subcontractor, the Wentworths collected workers comp through Becker's insurance company, which paid out substantial lump sum settlements to each.

Then the Wentworths sued Becker as a third party. Becker objected: comp, after all, is an exclusive remedy. Once the Wentworths collected comp benefits, they should be precluded from any other remedies. Becker sought and won a summary judgment dismissing the lawsuit.

The case wended its way to the MA Supreme Judicial Court, where the justices determined that the summary judgment was improper: the exclusive remedy provision of the comp statute applies only to employees. The Wentworths were not employees of Becker, but of Great Green Barrier. Becker, in other words, was a third party and thus, despite the payment of comp benefits, was not immune from lawsuit.

Compounded Liabilties
Becker is going to pay and pay again: first, under their workers comp policy, the payroll for Great Green Barrier employees will have been added to the Becker payroll in the premium audit; that's the chump change. Then, the substantial losses for the Wentworths - each likely exceeding the state rating point limit of $175,000 - will be added to the experience modification calculation for Becker over a three year period. That's serious bucks (but nowhere near the financial hit taken by Becker's comp carrier).

Then, given this ruling, the Becker company is vulnerable to a lawsuit, which is likely to result in additional payments to the Wentworth family. The MA Supreme Court has made it crystal clear: general contractors are liable for the comp costs of uninsured subs, but the acceptance of comp benefits does not preclude a third party lawsuit.

The lesson for GCs should be clear: proper risk transfer must be a fundamental part of the operation. Make sure subcontractors carry workers comp: require that any and all subs produce a certificate of insurance, with the GC named as an additional insured. Track the expiration dates on the certificates and do not allow subs on the job site unless they have shown that comp (and liability) policies are in place.

Henry C. Becker Custom Building has learned about risk transfer the hard way, an expensive lesson indeed. May a word to the wise be sufficient.

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May 17, 2011


Illinois is struggling mightily with its bloated workers comp system. Currently ranked 3rd highest for overall cost in the Oregon study, the governor and legislature are under intense pressure from the business community to lower the cost of comp insurance. Aiming its powerful bulldozers at the state capital, the Caterpiller Company has threatened to move their business somewhere else if reforms are not implemented immediately. In exploring all options, the legislature has gone so far as to think the unthinkable: abolishing workers comp.

In looking for ways to save money, Illinois does what all states do: first, identify the cost drivers and then try to change the statute to bring down costs. Among the hot issues on the table are the medical fee schedule (too generous), employee choice of doctor (too flexible), duration of benefits (too long), causation (too vague). Ah, behind every cost driver is a vested interest (perhaps literally vested, with many of the lobbyists wearing three piece suits). The common denominator among all states struggling with high comp costs is the omni-present stakeholder, who is deeply committed to the status quo.

Governor Quinn would like to see a number of reforms, including the capping of carpal tunnel benefits, denying claims where employee intoxication is a significant factor, attacking fraud (see our blog on Illinois's dubious arbitration services), capping wage differential benefits at age 67 or five years after an injury, and implementing utilization review for physical therapy, chiropractic and occupational therapy services.

Going Nuclear
The Illinois legislature is so frustrated with the slow progress and with stakeholder resistance to change, they are now threatening to blow up the entire system. Interesting to note, this pressure is coming from the Democrats. John Bradley (D-Marion) has filed House 1032, a bill to repeal the workers comp act and send all workplace-injury issues into the court system. Should this happen, Illinois will find itself in the world prior to 1912, when injured workers had to sue their employers and could collect benefits only if their injuries were caused by someone other than themselves. They would collect no benefits while awaiting adjudication of their claims. They would be out of work and out of luck.

In all likelihood, repeal of workers comp is not a serious option in Illinois; it's a political strategy for getting the attention of inertia-bound legislators. But the prospect of abolition does raise an interesting issue. Workers comp came to America 100 years ago. By the end of the World War II, every state had implemented the program.

What if there were no workers comp programs today? What if each state were starting from the beginning and tackling the issue of protection for injured workers? I find it hard to imagine that state legislatures would be willing to implement a program, totally funded by employers, that provides indemnity for lost wages and 100 percent medical benefits for injured workers. Why so generous? Why so inclusive? It's too expensive. It will create disincentives for working. The cost will drive employers out of business or out of state.

With today's acrimonious, ideology-driven debates, workers comp would be a hard sell. That's too bad, for despite its problems and inequities, despite the wide variations in benefits and costs from state to state, comp is a compelling example of effective social engineering. In Illinois, cooler heads will likely avoid the meltdown option. To be sure, Illinois comp is a mess, but the alternative - a workplace without workers comp - would be far worse.

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May 12, 2011


A couple of days ago my colleague Julie Ferguson blogged OSHA's new focus on farm safety. We all share the concern for the safety of farm workers. But OSHA is upping the ante in a way that requires the immediate attention of both insurance companies and their clients. As part of their investigation into the deaths of two teenage workers in a silo operated by Haasbach LLC, OSHA issued subpoenas for documents from Haasbach's insurer, Grinnell Mutual Reinsurance Co. OSHA wanted to review safety inspection reports and any follow up documentation from Haasbach. The insurer refused, arguing that the subpoena would discourage businesses from allowing insurers to conduct safety inspections if the material contained in the inspection reports can be used against a business during later litigation or OSHA enforcement proceedings.

The U.S. district court has ordered that the records be given to OSHA.OSHA Assistant Secretary Dr. David Michaels praised the decision. "The court affirmed OSHA's authority to obtain relevant information from an employer's workers' compensation insurance company. This is not surprising legally, but it does illustrate that workers' compensation and OSHA are not separate worlds divorced from each other," he said. "Workers' compensation loss control activities overlap with OSHA's efforts to bring about safe and healthful workplaces, and in order to achieve a safe and healthful working environment for all Americans, all efforts of business, insurance, labor and government must move forward together."

The court ruled that OSHA has jurisdiction to investigate the workplace fatalities, and further has the authority to require the production of relevant evidence and the ability to issue a subpoena to obtain that evidence. The requested documents, which included copies of site safety inspections, applications for insurance coverage for the site, and correspondence between Grinnell and Haasbach concerning the site, were found to "reasonably relate to the investigation of the incident and the question of OSHA jurisdiction," according to the decision.

A Tighter Safety Net
The court's ruling has important implications for both insurers and their clients.

Insurers are required to provide safety services, including site inspections with the findings documented in written reports. Usually, the safety inspector asks for a written response within a set time period. With OSHA potentially accessing these reports, there is liability for insurers: did they identify safety problems? Did they follow up to ensure that the problems were fixed within a reasonable period of time? It's another version of the great liability question: what did you know and when did you know it?

Similarly, the documents put insureds at risk. Safety issues have been identified. How did the business respond? Did they fix the problem? Did they perform the necessary training? Did they document their activities to show good faith in correcting identified concerns?

In all of this activity, candor is essential. The last thing anyone wants - and that anyone certainly includes OSHA - is for this court's ruling to have a chilling effect on the routine inspections performed by insurance companies. The concern is that inspectors, sensing OSHA reading over their shoulders, might hedge the findings just a bit - enough, perhaps, to create an ambiguity in the finding that results in an ineffective and unfocused response by the insured, which, in turn, perpetuates the hazard and leads, perhaps, to a serious injury or even death. That would be an unintended consequence of tragic dimension.

Focus on Safety
As always when OSHA becomes involved, there is a lot of money on the table. Following the fatalities, Haasbach was issued 25 citations with a penalty of $555,000. This was in response to the situation where three (untrained) workers became entrapped in corn more than 30 feet deep. At the time of the incident, the workers were "walking down the corn" to make it flow while machinery used for evacuating the grain was running: all in a day's work on the farm, and extremely hazardous.

It is certainly not in the best interests of insurance companies and their clients to build defenses against potential OSHA involvement. If we all share a commitment to safety - and we must - then an open and candid dialogue is essential. To be sure, both insurers and their clients are "on the hook" once problems have been identified. But surely it is in their combined interests to fix those problems as quickly as possible. Insurers and their clients must keep the focus where it belongs: not on OSHA, but on the moment-to-moment, day-to-day safety of workers on farms, in factories and in every American workplace.

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May 4, 2011


Last month we blogged the suicide of Dave Duerson, a former NFL star who killed himself at the age of 50. In order to preserve his brain for study, he took the unusual step of shooting himself in the chest. He suspected - and the subsequent autopsy confirmed - that he suffered from chronic traumatic encephalopathy, a degenerative and incurable disease that is linked to memory loss, depression and dementia. A definitive diagnosis is available only through an autopsy.

Among the many ironies surrounding this sad tale is the fact that Duerson sat on the six person NFL committee that reviewed claims for medical benefits submitted by retired players. Duerson was known for his harsh line on these claims, apparently voting to deny benefits in many cases (the votes of individual committee members were not recorded). He even testified before a Senate subcommittee in 2007, supporting the NFL's position that there was no definitive relationship between repeated concussions and subsequent dementia.

The days of denial appear to be over. Dr. Ira Casson, who represented the "prove it" mentality of the NFL, is no longer actively involved. The medical evidence is accumulating; while some refuse to connect the dots, it's increasingly clear that repeated brain trauma (concussion) is often directly related to a precipitous decline in brain function in the post-gridiron years.

Old Game, New Order
The NFL is trying to improve the safety of its players. The new rules limiting return to the playing field after a concussion are taking root. Helmet to helmet hits are being penalized with increasing financial severity. But even as the league tries to limit future exposures, the fate of retired players looms large. There will be increasing numbers of claims for disability, including workers comp where applicable, by players who face a substantially diminished burden of proof to connect dementia to playing field ("workplace") exposures.

It is painful to contemplate the agony of Dave Duerson's final days. Confronted with the incontrovertible evidence of his own demise, he must have realized how wrong he had been in taking the company line on dementia. He knew what his own autopsy would reveal: a brain damaged by chronic traumatic encephalopathy, caused by repeated trauma. His choosing to shoot himself in the chest was a farewell gesture, not only to his own life, but to the beliefs that had led him to take a hard line with his former colleagues. A loyal member of the "old guard," he ended his life with the unmistakable and moving embrace of the new order.

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April 27, 2011


Edwin Graning drove a van for the Capital Area Transportation System (CARTS), which serves the public in the communities surrounding Austin, Texas. He is also an ordained minister. He was sent to pick up two women and deliver them to the Planned Parenthood office in Austin. He was "concerned" that the customers were going to Planned Parenthood for an abortion, so he called his supervisor and told her that in good conscience, he could not carry out the job. He was instructed to return to the garage, where he was promptly terminated for this refusal to follow orders.

Graning, supported by lawyers from the American Center for Law and Justice, alleged a violation of the Civil Rights Act of 1964. (Goodness, quite a bit of irony in that!) He sued his employer for discrimination based upon religious beliefs. In the lawsuit, he sought reinstatement with backpay, payment for his pain, suffering and emotional distress.

Surely, there is no basis in the law for this claim. Surely, Graning is the one who should be sued. Then again, this is the Lone Star state that some would transform into a sovereign nation.

Unsettling Settlement
Lawyers for CART advised them to settle. Blanco County Commissioner Paul Granberg said that the attorneys "advised the board that it would cost a lot more in attorney fees than it would cost to settle." So they wrote a check to Graning for $21,000. Is there any such thing as principle in law these days? Did CART's attorneys even consider doing what is right and just?

CART, which did nothing wrong, has changed its hiring procedures, to prevent a recurrence of this ludicrous situation. David Marsh, CART general manager, said officials have begun making it clear when drivers are hired "that we have a job to do and we don't decide what destinations are." Boy, that must be a revelation (no pun intended) to people applying for jobs as drivers.

Graning has been amply rewarded for his discriminatory and prejudice-laden act. He had no way of knowing why the customers were going to Planned Parenthood, which offers a wide range of health services, by no means limited to abortion. He was represented in this crackpot lawsuit by attorney Thomas Brandon, Junior, of counsel to Whitaker, Chalk, Swindle & Sawyer. Chalk it up as a Swindle, indeed.

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April 11, 2011


We have long puzzled over a peculiar and cruel stipulation in Virginia's workers comp statute that denies coverage to workers with brain injuries, where the injury had no witnesses and the injured could not testify on their own behalf. We first encountered the issue with a trucker named Arthur Pierce, who was found unconscious beside his truck with multiple skull fractures, a sinus facture and head trauma. Had Pierce been found dead at the scene, the injury would have been compensable. But because survived the accident only to die later at a hospital, the system invoked the rule that the claimant must provide direct testimony.

In their denial of benefits, the workers comp commission wrote:

The circumstances surrounding the claimant's injury and death are tragic, and we are certainly sympathetic to the loss his family members have experienced. We are also mindful of the difficulties in obtaining and introducing sufficient evidence to support those claims...It would be purely speculative to infer that the only rationale (for the accident) was a workplace risk.

Purely speculative?. Sure, he might have been knocked off the truck by space aliens (which, to my mind, would still be compensable as he clearly was in the course and scope of employment).

Ever-So-Gradual Justice
We are pleased to report that the Virginia legislature - through a unanimous vote in both house and senate - has corrected the statute, which Governor Bob McDonnell has signed into law. Title 65 of the Code of Virginia now reads:

In any claim for compensation where the employee is physically or mentally unable to testify as confirmed by competent medical evidence and where there is unrebutted prima facie evidence that indicates the injury was work-related, it should be presumed in the absence of a preponderance of evidence to the contrary that the injury was work related.

It's too late for Claire Pierce, Arthur's widow, to benefit from a law that she diligently lobbied for. And while the Virginia legislature would never thumb its nose at the comp board, it would have been nice to call Title 65 the "Arthur Pierce Provision." This grotesque loophole has finally been closed. Unwitnessed brain injuries may now be compensable. It appears to be a no-brainer, but it took the brains of Virginia a rather long time to reach this just conclusion.

Thanks to Workcompcentral(subscription required) for the heads up on this item.

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February 14, 2011


If Missouri is the "Show me" state, Pennsylvania is in the running for the "show me the documents" state. They have a way of over-engineering solutions to what may or may not be problems. (See our prior post ["Blood on the Forms"] on requiring injured workers to sign 2 forms at the time of injury.) Now the Keystone state weighs in on the independent contractor conundrum through the recently implemented Construction Workplace Misclassification Act, also known as Act 72.

In tackling the problem of misclassification, Pennsylvania has done something smart: they have limited the scope of the law to the construction industry, where the worst abuses abide. (Massachusetts kicked a hornets nest with an expansive definition of independent contractor that extends well beyond construction.) The statute contains the usual and customary language requiring independent contractors to control the work, work for others and provide their own tools. But in its relentless need for documentation, Pennsylvania requires general contractors and subs to get out the pens and archive some paper. Independent contractors must:
- Have a written contract for every job
- Carry at least $50,000 in general liability coverage for the duration of the job (this requires a certificate of insurance from the agent)
- Document a proprietary interest in their business (how would a sole proprietor do this - tax forms?)
- Realize a profit or suffer a loss for the project (an interesting and potentially problemmatic issue for craftsmen whose spouses are not accountants)

Act 72 prohibits general contractors from forcing subs to sign any contract that results in misclassification. It also forbids retaliation against any person who files a complaint under the law.

The Amish Exception
As we pointed out in a previous blog, Pennsylvania's Amish population (roughly 51,000 total) is generally exempt from insurance requirements. Amish employers are not required to provide social security or workers compensation coverage, and it appears likely that the Amish will be exempt from the new health insurance standards. When a need arises, they pass the (rather old fashioned) hat throughout their community.

So what happens when an Amish (or non-Amish) general contractor hires an Amish sub? Which of Act 72's requirements apply to the Amish? Certainly not the general liability insurance. Perhaps not the "profit and loss" and "proprietary interest" documentation. While we are not suggesting that employers seek out Amish subs to avoid Act 72, it might simplify matters. For everyone else in PA, it's time to focus on the paperwork.

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January 6, 2011


As long as we're on the topic of healthcare today, it seems to be an opportune time to share a moving video clip that we bookmarked over the holidays. Marty Ratermann, a Missouri a craftsman and furniture maker, relates his story as a cancer patient at the 2010 Health Literacy Missouri Summit. He was diagnosed with Stage 4 rectal cancer in 2008. After a grueling recovery process, he has been in remission for more than a year. He details how his situation could have been prevented with better communication between him and his doctors.

His story illustrates the difficult path that a person faces navigating the complex healthcare system and making critical choices at a point when he or she is particularly vulnerable. His prescription at the end of the clip is a simple one: take the time and make it a priority to communicate.

I couldn't help but think of the parallels in the healing process for workers who have experienced a serious injury. Many a claim has spiraled out of control for want of good, clear communication and a simple human-to-human moment of concern. So often, we see workplace injuries that are treated as financial transactions when, in reality, they are fundamentally human events: someone is injured, often through no fault of their own. The complexity of the system a worker may find themselves suddenly thrust into, the unfamiliar insurance jargon, the impersonality - all occurring at a point where the worker may be feeling fear and anxiety about their future physical and financial well being. Our prescription: Less thinking about the injured worker as a claimant and more thinking about them as a person. In our experience, that's what leads to the best financial outcomes in the long run.

A Patient's Story from Health Literacy Missouri on Vimeo.

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December 22, 2010


This is a very busy time for delivery companies.Whether it's the post office, UPS or FedEx, there are more packages moving around than people to handle them. The UPS solution is the hiring of 37,500 (!) temporary workers. These folks have been working for a few weeks and will continue working right up until Christmas Eve, when they will all be laid off. Due to the struggling economy, UPS had no trouble filling temporary jobs. This year, many laid off white-collar workers donned the drab brown uniforms and hopped on board delivery trucks, occupying the "jumper" seat next to the regular driver.

The Wall Street Journal has a nice article about this war-scaled ramp up (subscription required). As you can imagine, there is not a whole lot of time for training the new employees: a few tips on lifting "in the power zone," a caution about getting into the truck ("three point contact") and then off you go. The job is a frenzy of lifting, bending, carrying and climbing. These are physically demanding jobs, with relentless exertion required.

Risk Management Nightmare
Which leads to a loaded question for the risk managers at UPS: what percentage of this temporary workforce will be injured on the job? Even if it's only one half of one percent, that would be nearly 200 people. In all likelihood, they will have been laid off before the claim has been filed. And once laid off, these temps will have no loyalty and no commitment to UPS. They will have already handed in their brown uniforms.

More troubling from a risk perspective, the types of injuries may be the most open-ended and expensive claims in the comp system: back, shoulder and knee injuries, slips and falls on ice (for most of the country it is, after all, a rather tough winter). Statistically, you can expect an occasional robbery or animal bite.

All business entails some risk. Hiring strangers is always risky, no matter how thorough the vetting process - and in this case, that process is foreshortened, to say the least. Placing thousands of temporary employees into physically demanding jobs increases risk exponentially.

So when you go home tonight and look for the packages you are expecting, think for a moment on the harried temporary employees who brought them to your door. And say a little prayer, that the New Year brings these former white-collar workers health, happiness...and a job once again suited to their hard-earned skills.

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December 14, 2010


Up until recently, Peter Orszag was the director of the White House Office of Management and Budget. As he leaves this job for a presumably more lucrative position with Citibank (no comment), he offers a final op ed piece in the New York Times on the subject of disability: specifically, the sharp rise in applications for SSDI benefits that has accompanied the collapse of the economy. Discouraged job seekers, many with obsolete or atrophied skills, try to qualify for a program that will take them out of the job market forever.

Currently, about 750,000 people apply for disability benefits every quarter, a rate 50 percent higher than that of four years ago. Orszag fears the consequences of burgeoning disability rolls: it's not only expensive, it's counter-productive. Once on disability, people rarely return to the workforce, even when jobs become plentiful. They "qualify" for benefits by proving themselves incapable of productive employment.

The fundamental question for SSDI is similar to the one faced by workers comp practitioners: once an individual qualifies for permanent benefits - usually a long, drawn out process - is there any way to encourage a return to work? Or is eligibility for disability, by definition, a self-fulfilling acknowledgement that employment is no longer a possibility?

The Digital Divide
Orszag speculates that the problem may lie in the rigid determination of disability: once disabled, always disabled. There is no middle ground where an individual's limitations might be re-assessed periodically, where incentives for taking a job might encourage less dependence upon disability payments.

Orszag believes that we need some kind of interim program, less absolute in its determination of disability and less of a drag on public resources. He recommends privately funded, interim disability protection for non-work related disabilty (which would run parallel to the benefits already available through workers comp). The new program would last up to two years, during which both the employer and the worker would have strong incentives to return the disabled worker to productive employment. For workers who remain disabled at the end of the two years, application for SSDI would probably be in order. Under this model, the digital switch is made analog, with options and incentives all along the way. The cost? He estimates a relatively modest $250 per worker per year, assuming, of course, that all workers are included in the program.

Disability is indeed a conundrum: it requires people to prove that they are incapable of productive employment. The stage for this determination is strewn with detritus: the perverse incentive to prove one's lack of ability; the ever-changing economy, which casually discards workers with obsolete skills without a hint of compassion; the notion that disability is a permanent state, which, once entered, precludes the possibility of growth and change.

All too often, disability intersects with the law of unintended consequences. By seeking to protect those who cannot protect themselves, we place people in the awkward position of proving their inability to function in the working world. There is very little incentive to do otherwise. We set disability up as a locked room, with no exit. We need to think of disabiility as a bridge, arcing out of the darkness toward new possibilities. While most who are disabled may never be able to cross this bridge, those who can must be given every opportunity to make the journey.

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October 5, 2010


In yesterday's blog on this topic, we told the story of a pizza delivery driver whose undisclosed seizure problem put others (and herself) at risk. Today we examine the inordinate and ultimately terrifying risks that routinely confront the people who deliver pizzas to homes.

The risks of delivery jobs are embodied in one sad tale. Richel Nova, 58, was a hard working immigrant who worked two jobs, one being delivering pizzas for Domino's in Boston. He responded to a call from the Hyde Park neighborhood. The address was a vacant home. He was lured into the house, robbed, stabbed multiple times and left for dead. The three thieves took his money ($100) along with the pizza and drove off in his 1995 Subaru. (The age of the car tells us a lot about Mr. Nova.) The abandoned car was found a bit later, along with the blood-stained pizza box. All but three pieces had been eaten.

Nova's life revolved around his family: twin 20-year-old daughters and an older son. The twins are both juniors in college. All that stood between Nova and a seat at his daughters's graduation next year were a hundred bucks and a pizza to go.

Robberies of delivery people in the Boston area have been a long-standing problem - 52 were reported through mid-September.

Common Ground Among Competitors
The three main pizza chains - Domino's, Pizza Hut and Little Caesar's - have collaborated on developing safety programs for drivers. Among them, they have nearly 90,000 drivers on the road. (Here is the Domino's description of the job.) Statistically, it's not difficult to identify the riskiest neighborhoods for delivery, but the chains face pressure from neighborhood groups and the federal government to provide delivery services without discriminating against the poor.

Back in 2000, Domino's reached an agreement with the Justice Department to formalize a delivery policy for all its restaurants. Reflecting what Domino's said were well-established standard practices, the new guidelines require managers to evaluate crime statistics with local law enforcement agencies and community groups before limiting delivery. As part of that policy, drivers must report any incidences of violence, and delivery limits must be drawn narrowly. (Easier said than done.)

(Sort of) Managing Risk
There are a number of ideas floating around on how drivers should handle what appear to be risky delivery scenarios:
- Require the customer to come to the car to pay for the delivery and pick up the pizza. (This may not be feasible in all circumstances - for example, disabled customers may not be able to come to the street.)
- Require customers to have exact change for their purchase (and hope against hope that they have a bit extra for the tip!)
- Advise drivers not to enter darkened dwellings
- Limit deliveries after certain hours (in the Boston data mentioned above, many of the robberies took place after 9:00 pm.)
- When in doubt, when confronted with what appears to be immediate risk of harm, the driver is instructed to return to the store (and risk the wrath of legitimate, irate customers awaiting their dinners)

For those of us who have never had a gun or knife thrust into our faces, the dangers confronting delivery workers every day are both frightening and unimaginable. For Richal Nova's children, any mention of pizza will haunt their thoughts for the rest of their lives - reminding them of their father's lonely and senseless demise at the hands of cruel thugs with a half-baked plan for a free meal.

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September 24, 2010


The folks at American College of Occupational and Environmental Medicine (ACOEM) know something about doctors. They also know quite a bit about workplace injuries in that most of the members are physicians actively practicing in the field, in one capacity or another. That's why we sat up and took notice when we saw their recent publication, A Guide to High-Value Physician Services in Workers' Compensation - How to find the best available care for your injured workers. ACOEM joined forces with the International Association of Industrial Accident Boards and Commissions (IAIABC) to produce the 11-page "best practice" summary, which includes the best thinking and contributions from a diverse group of workers' compensation system stakeholders in a meeting convened by ACOEM and the IAIABC last April. You can see the list of participants on page 11 - a group of heavy hitters that includes a geographical and industrial sampling. It's great to see a think tank of employers and insurers sitting down at table with policymakers and physicians to come to some agreement about best practices. The only thing we might suggest for improvement would be to add a representative from labor at any future convocations.

The stated purpose of the document is to provide specific guidance and resources to all stakeholders in the workers comp system - from injured workers and employers to insurers and TPAs - to help identify the best physicians for care of both everyday, uncomplicated injuries, as well as for specialized medical services addressing catastrophic injury or administrative tasks required by the workers' compensation process.

It identifies ways to find physicians who:

  • Are willing to accept patients covered by workers' compensation insurance
  • Employ best practices in providing high quality and compassionate medical care
  • Respect and fulfill the extra responsibilities that the workers compensation system creates
  • Produce better overall outcomes at comparatively better total cost over the course of an injury or illness. (High-quality care produces better outcomes for workers and better value for payers.)

The Guide offers both a "High value" checklist and a step-by-step process for identifying physicians, verifying credentials, working with, and measuring performance. We put this one on our "required reading" list. And for adjunct reading, we also recommend ACOEM's Preventing Needless Work Disability by Helping People Stay Employed.

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August 31, 2010


Today we examine an interesting case where the ADA runs up against OSHA's general duty clause, where the individual's right to "reasonable accommodation" collides with the need to ensure the safety of the general public.

In 1999 Oscar Brownfield became a policemen in Yakima, Washington. By all accounts, he was a good cop. In 2000 he suffered a head injury in a non-work-related car accident. He returned to work about 6 months later. In 2005 the troubles began: he (wrongfully) accused a co-worker of malfeasance. He was short-tempered, storming out of a disciplinary hearing with a superior. He described moments of intense anxiety when he was not sure he could control himself. And he made alarming comments about how meaningless life had become.

Fearful of Brownfield's mental state, his employer sent him for a Fitness for Duty Exam (FFDE). He was diagnosed with a mood disorder and disabled from work due to his "emotional volatility, poor judgment and irritibility." The disability was considered permanent.

Then Brownfield had another auto accident. His treating physician, Dr. Gondo, released him for work: that is, he wrote that Brownfield could carry out the "physical requirements" of the job. When pressed on the issue of Brownfield's mental state, Dr. Gondo did not back down, but he did not respond either. He simply remained silent. As a result, the Yakima police department sent Brownfield for a second FFDE, with the same result as the first. Brownfield was terminated from his job.

Claiming an ADA disability (he does appear eligible), Brownfield sued for a violation of the ADA, violation of his first amendment rights of free speech (his apparently groundless accusations against a fellow cop) and violation of the FMLA (which limits the ability of employers to require multiple FFDEs). Brownfield's case was dismissed on summary judgment by the district court, a decision subsequently upheld by the 9th circuit court of appeals.

A Tool in the Toolbox
Employers often balk at requiring Fitness for Duty exams. They fear a violation of the employee's rights. This case clearly indicates that those rights can and should be tempered by a clear-headed vision of business necessity. If the employee's mental or physical condition undermines his ability to perform essential job functions safely, a fitness for duty exam is not only allowable, it is necessary. To be sure, the exam comes with a high standard: the need must be work related and it must derive from business necessity. But where these standards are met, employers must act. If the employer takes the path of least resistance and does nothing, they could easily be charged with negligent retention when and if something bad happens.

Management continuously walks a fine line between employee rights and the obligation to operate a safe workplace. Yakima took a chance in terminating Brownfield's employment, but it appears that they did what had to be done and they did it legally. Brownfield was unable to perform his job safely. His mental state comprised a risk to himself and to the public he was oath-bound to protect. It is never easy confronting an unruly, agitated and volatile employee, but it must be done - and done in a timely manner.

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August 2, 2010


Erie County (NY) executive Chris Collins was frustrated by an annual outlay of about $11 million for workers comp. So the county implemented a policy requiring workers collecting indemnity (about 300 in all) to pick up the checks in person from the supervisor. Collins hoped that this face to face contact might lead to quicker return to work for employees capable of performing light duty.

Not surprisingly, the state comp board had serious concerns with the new "return to work" program.

"It places an additional burden upon an injured worker at a time when the claimant is not medically able to return to the workplace." Oh, by the way, it's also illegal.

The Collins administration fired back, saying that the board lacks the authority to halt Erie County's new policy and that it will continue, at least for workers with temporary injuries.

Erie spokesman Grant Loomis blasted the comp board: "We were not surprised that a board full of Albany bureaucrats would raise objections to getting municipal workers back to work as soon as possible." (With his demonstrated talent for distortion, Loomis may have a future in politics.)

Loomis said Collins wants to revise the program to call in only the recently injured who might have substantially recovered and can perform light tasks, currently about two dozen people. Collins wants workers to receive their checks directly from their supervisors, who then would ask whether they could return to work in some capacity.

Compounded Errors
The Erie folks are making a couple of basic mistakes: first, they issue a blanket policy covering 300 people, even though they only want to target about two dozen. Then they ask supervisors to do things they are not qualified to do: determine whether injured workers can perform light duty tasks and, while they are at it, distribute checks. All in all, not a very good idea.

The missing piece is obvious: no one is talking to the treating physicians. Only doctors can determine the medically necessary restrictions - what the injured worker can and cannot do - and whether temporary light duty would be appropriate.

Now before Erie County implements a policy requiring doctors to show up in person for their checks, here is an alternative: establish lines of communication with the treating doctors. Track medical visits and ask doctors to update restrictions each time the employee sees the doctor. Supervisors should be kept in the loop, especially in regard to available light duty tasks, many of which are seasonal, but they should not be asked to manage the entire process. That is a job for county administrators. Heck, even Grant Loomis could help out, provided, of course, he takes a class in diplomacy. Angry rhetoric might work for politicians stirring up the masses, but it is usually counterproductive in the challenging world of workers comp.

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March 29, 2010


Performance incentive programs are a good idea - except when they aren't. The Insider has always viewed such programs with ambivalence: yes, it's a good idea to reward employees for safe performance over a given time period. The problem is that these programs can discourage employees from reporting legitimate injuries. And the employee who does report an injury - the guy or gal who breaks the string of injury-free days - may incur the resentment of fellow workers. "You blew the pizza and the draw for a TV because you cut your hand!" It can be yet another form of the great American tradition, blaming the victim.

Then there are the rogue performance incentive programs, where non-reporting of injuries is embedded in the work culture. Which brings us to California. (Is it my imagination, or does every conceivable scam bring us to California?)

At the Smurfit-Stone Container Corporation, the performance incentive program rewarded managers for not reporting workers comp claims. The company's motto is "solving it from all sides" - and it appears that one of the sides is, well, illegal.

David Polk, 53, and Douglas Tateoka, 61, pleaded no contest Wednesday to charges of concealing events related to on-the-job injuries and conspiring to deny injured workers their benefits. The two are scheduled for sentencing May 20 in Monterey County Superior Court.

Employees were discouraged from reporting workers comp claims. When injured, they were treated outside of the comp system: the employer took care of the medical bills. It's not clear whether any attempt was made to pay indemnity for lost time. I doubt it.

As is usual and customary in California, doctors figured out a way to make a few bucks in the scam: in this case, Steven Davis of Davis Chiropractic, who once worked for Surfit-Stone as a human relations manager, and Eugene Guzman, a physician's assistant at Pinnacle Urgent Care. Both are facing charges in the fraud.

Whose Incentive?
Any performance incentive program that focuses exclusively on managers is immediately suspect: a legitimate program rewards workers first, then managers, for good safety performance.

Performance incentive programs have a positive role in many workplaces, but it's crucial to align the incentives with the realities of the workplace. These programs should celebrate safe performance without penalizing or ostracizing employees who suffer injuries on the job. Beyond that, performance incentives must never trump employee rights under workers comp laws. It's one thing to reward safe performance; it's quite another to stifle claims reporting and the awarding of statutory benefits.

Managers at box manufacturer Smurfit-Stone tried thinking out of the box to lower their comp costs. Now they are on their way to a concrete box with bars on the windows. They are about to participate in a very effective performance disincentive program, one that most of us try diligently to avoid.

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March 26, 2010


Bryan Griffin was a pilot for Australia's Qantas Air from 1966 to 1982. In 1979 he began to have "uncontrollable urges" to switch off the engines in mid-flight in order to bring down the airplane. He would leave the flight deck and smoke a few cigarettes until he calmed down. He made no attempt to hide his problem - he talked to his colleagues about it. Qantas had him examined and treated by several doctors, but the problems continued, including the urge to "scream and cry." He routinely ignored instructions and repeatedly missed radio and altitude calls. On a flight from Singapore to Sydney, he felt his hand "being abused by the uncontrollable pull of the start levers" - which, if pulled, would kill the engines.

OK. Not exactly "pilot of the month" stuff. There are a couple of intriguing aspects to this tale.

First, Qantas made the management decision to keep Griffin on the job. While the Insider normally recommends following a "return to work/stay at work" protocol, in this case, "staying at work" for three years with severe mental illness clearly put far too many people at risk. Griffin was incapable of performing his job safely; he should have been put on indefinite leave until his mental state stabilized beyond any reasonable doubt.

Griffin continued to fly until he retired in 1982 with a diagnosis of anxiety, depression and obsessive compulsive disorder.

Indemnity for Working?
Here is the second unusual aspect to this case: Nearly 30 years after his retirement, Griffin has been awarded $208,000 by an industrial compensation commission, which ruled that his mental problems were exacerbated by his continuing to work. The Workers Compensation Commission found that the pilot's condition had been worsened by continuing to fly for Qantas until his 1982 retirement. The financial award covers "loss of earnings, medical expenses and legal costs."

While I am no expert in the intricacies of comp as it operates down under, I am confused by this award. How can you suffer a "loss of earnings" when you continue to work? How does workers comp indemnity come to play in a situation where there was no lost time? Perhaps the commission assumes that if Griffin had been grounded during his prolonged period of mental disability, he eventually would have been cured and then would have been to continue his career with Qantas beyond 1982. In other words, Griffin's premature retirement was caused by making him work while he was suicidal. If that is the reasoning, it's a bit of a stretch.

I have one additional question for the commission: why did it take nearly 30 years to reach this conclusion?

Qantas is considering an appeal on this ruling. I think they should shut up and cut the check. Any additional proceedings might further expose their amazingly reckless decision to keep Griffin in the cockpit. That is negligent entrustment at its very worst. Ironically, had Griffin succumbed to his demons and crashed the plane, we might never have known the real cause of the accident. As it is, Qantas is lucky that both Griffin and his hundreds of passengers survived. Air travel is stressful enough without having to worry about a pilot with a barely controllable urge to crash the plane.

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February 19, 2010


Robert Friedman went to his local Starbucks in Boca Raton and ordered a coffee. He sat at a table and began swearing loudly while punching the wall with his fist. Alarmed by this behavior, the baristas called the cops and had Friedman removed. They asked that he not return to the store or he would be arrested for trespassing. End of story?

Not quite. Friedman suffers from Tourette's Syndrome, which leads to uncontrollable actions in his body and, on rare occasions, a stream of obscenities. Friedman, in other words, suffers from a recognized disability.

In its initial review of the case, the Florida Commission on Discrimination ruled in Starbuck's favor, determining that the baristas had no way of knowing that Friedman was disabled. The commission's own lawyer, however, over-ruled the investigators and found that Friedman had been a regular customer and was thus known to the baristas as a disabled person. As his behavior did not constitute an immediate threat to Starbucks staff or customers, the store had an obligation to accommodate him.

Ah, there's the rub. How exactly do you accommodate an individual who is swearing loudly and smashing walls with his fist? The commission wanted Starbucks to at least ask Friedman to stop behaving in an unruly manner before calling the cops. The commission noted that Friedman did offer an apology at the time of incident, before the police removed him from the premises.

Starbucks disagrees with the commission's findings and believes that its personnel took appropriate action to remove a disruptive customer from the store.

Outside the Comfort Zone
It is easy, perhaps too easy, to side with Starbucks in this situation. It's difficult enough to run a coffee house without worrying about accommodating unruly customers. But before you allow your distaste for bad behavior to slam the door in Friedman's tormented face, take a moment to view this video of children who suffer from Tourette's. They are victims of a cruel and random process that robs them of their dignity and compromises their ability to function in a challenging world. They deserve our sympathy.

As for Friedman, it is admittedly difficult to empathize with an adult who appears simply to behave badly. If we met him as a stranger, we would distance ourselves immediately. But once we know the source of his disruptive actions, he deserves at least a chance to re-establish his tenuous equilibrium. Tourette's puts us all outside our comfort zones - not necessarily a bad place to be. Friedman has to live with this problem every waking moment of his life; he has few, if any, comfort zones. We can accommodate Friedman for a few random moments, while enloying our lattes or going about the many tasks that comprise our hectic days. If nothing else, Friedman's situation reminds us that it is a great gift to be masters of our movements and of our words.

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January 19, 2010


NCCI has issued its latest report (PDF) on the status of older workers in the comp system, with a particular focus on workers 65 and up. If nothing else, the study reinforces the notion that older workers are safety conscious and a relative bargain. For employers worried about workers comp costs, older workers are not a significant problem.

In 1988 eleven percent of workers 65+ participated in the workforce; now 17 percent of these older workers are still working. That percentage will likely increase as the long-term effects of the financial collapse continue to resonate through the damaged economy. Some people continue working because they want to; many more continue because they have no choice.

Injury Prone?
The frequency rate for older workers varies by occupation: in construction, older workers appear to be safer than younger workers - they are injured at a 4 percent rate, compared to 12 percent for their younger colleagues. The results are flipped in retail/sales: older workers are injured at a 23 percent rate, compared to 15 percent for all others.

As you might expect, the leading cause of injuries for 65+ workers are slips, falls and trips - 47 percent of all injuries for this cohort. (Younger workers suffer these injuries at a 24 percent rate). For strains and sprains - the overall leading cost-driver for workers comp - the results are reversed: the frequency for older workers is 23 percent, compared to a whopping 38 percent for all others.

It does take longer for older workers to recover from injuries: they have a median days-away-from-work rate of 16, compared to 12 days for workers in the 55 to 64 group and 10 days for workers 45-54. Despite this higher rate, overall indemnity costs are lower. Why? Because older workers make substantially less on average than younger ones. Wages peak in the mid-50s and then fall off dramatically after age 65, down to the same level as the entry level 20 to 24 group. So much for the notion of paying for experience!

The only red flags in the study involve the retail trade and service/hospitality industries, where older workers are showing higher-than-average costs for comp. These jobs probably offer ample opportunity for slips, trips and falls, the number one cause of injuries for these workers, .

It will be fascinating to watch NCCI's study evolve over the next decade. The percentage of workforce participation for the 65+ group is going to increase steadily. With this growth, the risks will be enhanced. There is likely to be an upward trend in both frequency and severity, but perhaps not as much as feared. Certainly, the NCCI study reinforces the argument that older workers are safe, reliable and motivated. There is no reason to discriminate against them. If anything, you could make a good case for preferring an older worker to a younger one. Fodder for further thought, indeed.

NOTE: Special thanks to reader Soon Yong Choi for spotting an error in an earlier version of this post (see comments). Given my checkered track record with numbers, I can only hope that Choi and similarly adept readers continue to cast a critical eye on any of my postings where statistics are involved.

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December 21, 2009


It's hard to think of anyone bullying Bath Iron Works, the General Dynamics subsidiary that builds destroyers for the U.S. Navy. But they are being kicked around like the proverbial 90 pound weakling by the workers comp system in Maine. Two years ago we blogged the inability of Mainers to come up with a viable fee schedule for workers comp medical costs. The legislation authorizing the fee schedule became law in 1992. Now we approach 2010 - nearly 20 years! - and there's still no fee schedule.

Workers comp insurers are free to negotiate rates for medical services. In effect, they develop their own de facto fee schedules. Bath Iron Works (BIW) is self-insured for comp. They do not have the leverage to negotiate fees. So when a local hospital sent a bill for $107,000 for treatment of two injured workers, BIW filed a lawsuit. They lost: they had to pay the hospital's "usual and customary" fees - an ironic appelation if there ever was one. The only suckers stuck with paying the full boat (so to speak) are self-insureds and uninsureds.

So how is the fee schedule coming along? And why the inordinate delays?

The rule-making group charged with developing the fee schedule is trying to come up with something acceptable to the medical providers. That's like asking an employee how much of a pay reduction they would like. How about nothing? In the current draft, total billings of $80 million would fall by about $1 million. In other words, a drop of less than 1 percent. That's a fee schedule only a medical provider could love!

The Massachusetts Model
Maine officials are worried that low fees would drive doctors away. Paul Dionne, executive director of the Maine Workers' Compensation Board, says he heard from a group of orthopedic doctors who said if the board made the new base fee too low, "they weren't going to treat injured workers. They're private, they can do that."

That's not what happens in Massachusetts, which has the lowest fee schedule in the nation. Everyone recognizes that the fee is too low. So insurance carriers and TPAs routinely negotiate a reasonable fee with doctors on an individual basis. For example, the scheduled fee for hand surgery is only $725. The "usual and customary" fee of a skilled surgeon might be $5,000. The insurer and doctor would settle somewhere in the middle, perhaps $3,000 for the service. It sounds frictional and inefficient and to some degree it is, but overall, medical costs remain unusually low in Massachusetts, doctors continue to provide services and injured employees are satisfied with the results. The system is working despite what appear to be severely deflated medical rates.

One unusual and perhaps unintended benefit of the low fee schedule is the leverage it provides against medical providers who refuse to treat with a return-to-work focus. If "Dr. Feelgood" insists on keeping a marginally injured employee out of work, the adjuster can dig in and offer to pay only the deflated fee schedule rates. That will get the doctor's attention immediately.

Maine used to be part of Massachusetts. If they want to solve this particular problem, they might consider re-joining the Commonwealth, or at least copying Massachusett's highly successful comp model. Step one involves some tough negotiations - with or without the doctors in the room. Thus far, by trying to please everyone, Maine is punishing some of their most valued employers. Nearly twenty years into a failed process, it's time to face reality: a fee schedule is a cut in pay. If the doctors are happy, it's not an effective fee schedule.

Meanwhile, it looks like a bleak Christmas for the mighty folks at Bath Iron Works. There are undoubtedly a lot of nice goodies under their tree, but a fee schedule is not among them.

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November 30, 2009


Lately, there has been discussion in the blogoshere about workers' compensation metrics, what do you measure, how often, do you focus on accidents or injuries, lost time or lost dollars, how deep do you drill down in management reporting, and the list goes on and on.

Because performance measurement is such a serious issue, I'd like to offer a perspective gleaned from working with national account and middle market employers, as well as insurers, for more than 25 years.

Performance measurement should have four characteristics: It should be simple, it should be meaningful, it should be consistent and it should be continuous.

By simple, I mean easily and quickly understood by senior management. Meaningful means that it should sit in senior management's sweet spot; it should be something that is anticipated and valued by leaders. It should be consistent, because those leaders, once trained to view performance in one way, do not appreciate abrupt course changes. And to be effective over the long term, it has to be a continuous and routine process. The mantra should be: What is consistently well-measured is highly valued.

With this framework in mind, I usually recommend that monthly reports to senior management measure two things religiously: Incurred losses per full time equivalent employee (and this should be done by department, division and company) and incurred losses per every hundred dollars of payroll (again, split out by department, division and company). Before any measurement occurs, however, management should settle on targets, which should be a bit of a stretch, but attainable. And target selections should be set against actual performance in the prior three or four years. For instance, if costs per FTE have been in the $200 to $300 range in the last few years, a good target would be a reduction of 30% to 40% in the current year.

Senior managers have finite attention spans. Therefore, workers' compensation performance measurement should fit on one page, a Scorecard that senior management can assimilate in no more than a few minutes. If the information is pithy enough, that's as long as it should take, but it should also lead to fruitful discussion about management actions to enhance performance, discussion that comes out of knowledge.

There are many other solid and valuable workers' compensation metrics, but, in Lynch Ryan's experience, these two are the ones that senior managers appreciate the most.

All of this assumes, of course, that a serious and ongoing safety, workers' compensation and injury management program is humming along, and that all parts of the organization have been trained in how to keep it that way. To quote the Bard, "Ay, there's the rub."

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November 10, 2009


We turn yet again to the ever-troubling issue of independent contractors. In today's case we examine a situation where two individuals, beginning as legitimate independent contractors, morph over time into employees. It's a cautionary tale that demonstrates what is true today may no longer be true tomorrow.

Fred Cromwell and Jeff Bankston became involved in the restoration of damaged telecommunication lines along the Mississippi Gulf Coast in the wake of Hurricane Katrina. They were hired as independent contractors by Driftwood Electrical, a subcontractor of BellSouth. Cromwell and Bankston provided their own trucks, testing equipment, connection equipment, insulation equipment and hand tools - a total personal investment of $66,000. BellSouth supplied materials, including cables.

Each day Cromwell and Bankston reported to BellSouth's location to receive their assignments. They worked 12 hours a day for thirteen days and then had one day off. (Tough working conditions, indeed.) They were paid a fixed hourly wage for their work and labored under these exhausting conditions for about 11 months.

At issue is the rate of pay: Driftwood paid them a set hourly rate. (They also, we note with interest, provided workers comp coverage.) Cromwell and Bankston sued for overtime pay under the Fair Labor Standards Act (FLSA). A district court granted summary judgment against Cromwell and Bankston on the grounds that they were independent contractors, not employees, and thus exempt from the overtime provisions of the FLSA. The U. S. Fifth Circuit Court took up the appeal.

The court found that Cromwell and Bankston were to a significant degree independent contractors:
- They controlled the work, with no direct supervision from Driftwood
- They provided their own tools
- They could theoretically work for others (although they did not)

The court also found, however, that in comparing this case to others, there were significant differences:

The plaintiffs in this case worked full-time exclusively for the defendants for approximately eleven months...The plaintifs did not have [a] temporary, project-by-project, on-again-off-again relationship with their purported employers.

While the court found "facts pointing in both directions" regarding the issue of employment status, they determined that on balance, and as a matter of economic reality, Cromwell and Bankston were economically dependent upon Driftwood and were not in business for themselves. "The permanency and extent of the relationship [with Driftwood], coupled with Driftwood's...complete control over...schedule and pay, had the effect of severely limiting any opportunity for profit or loss by Cromwell and Bankston."

Thus, even though Cromwell and Bankston controlled the details of the work, were not closely supervised, invested in equipment and tools and used a high level of skill in performing the work, they were not "in business for themselves" during the eleven stressful months of Katrina clean up. The judgment of the district court was vacated and the case was remanded back to that court for reconsideration.

The Lessons of Time
The lessons here are clear: even when virtually all the criteria for independence are met, independent contractors may still be considered employees, especially where they work for a substantial block of time for only one employer. The case serves as a warning to contractors going forward: if your "independent contractors" only work for you over a substantial period of time, they are likely to morph into employees, with all the rights and considerations attached to that fundamental and eternally-perplexing relationship.

NOTE: A special thanks to Michael Maslanka, a Texas attorney blogging at WorkMatters, for highlighting this case. His blog, just celebrating its one year anniversary, is an excellent resource.

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November 2, 2009


It's safe to say that no state has really solved the independent contractor/sole proprietor conundrum. Rather than require comp coverage for all workers, most states either exempt sole proprietors from coverage or make it optional. As a result, many small construction sites are full of "sole proprietors." No one works for anyone. Thoeretically at least, no one is in charge. Nonetheless, the building goes up on schedule. And the final cost of construction is far less than similar job sites where all workers are protected by comp. If one of these sole proprietors is severely injured, the state will try to pin the cost on a general contractor, if they can find one. Otherwise, the state fund usually pays for the benefits.

Solving this problem creates new problems. In Massachusetts, the attorney general issued an advisory with a catch-all definition of "independent contractors" that is so broad, it includes virtually everyone. As a result, when general contractors cannot produce certificates of insurance for subcontractors, the cost of these subs is added to the payroll for calculating comp premiums. The cost of doing business goes up substantially.

In Delaware, they passed a law a few years ago requiring coverage for everyone, including sole proprietors. That is the cleanest and most comprehensive way to solve the problem. Alas, it's also fraught with political risk. The subsequent uproar led legislators to back track and repeal the law.

Now, Tennessee is moving ahead with a new law that mirrors the one repealed in Delaware: limited to construction workers, the law requires coverage for everyone, including sole proporietors. Cost estimates for individual policies range from a few hundred to as much as $6,000. The latter figure is pretty daunting to a part-time, semi-retired craftsman who earns less than $25,000 a year.

The Tennessee legislature is considering some modifications to the law, which is scheduled to go into effect on December 31, 2009. They may allow for cheaper-than-usual policies that include high deductibles. Or they might let sole proporietors off the hook, if they can show that their own health insurance will cover workplace accidents. (Now there's a cost-shifting measure that will create some interesting dialogue on the health care side!) The legislature has the right idea: find a way to make comp affordable to people who cannot afford much in the way of premiums.

With the legislature not scheduled to meet again until mid January, the law will go into effect as written on the last day of the year. Solve one problem, create another. Welcome, once again, to the ever-complicated world of workers comp.

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October 19, 2009


Kris Indergard used to work on the railroad. Then she hurt her knee (partly work related), had surgery and was out of work for over a year. Her doctor established "permanent" restrictions. Indergard wanted to return to work, so Georgia Pacific sent her for a physical capacity exam (PCE). The PCE provider observed Kris's actual job, which the employer stated required lifting up to 60 pounds. Sixty pounds exceeded the restrictions established by the treating doctor, so the employer refused to take her back.

Half a year later, Kris's doctor lifted the "permanent" restrictions. ("Miracle recoveries" - a subject in themselves - are beyond the scope of today's blog.) So Kris had another PCE, this time including a complete medical workup. Her lifting ability was tested, along with job simulations. Not surprisingly, Kris was out of shape - she had been out of work nearly two years - so her aerobic capacity was limited. She could not complete a 60 pound lift. As a result, Georgia Pacific terminated her.

Indergard sued, claiming that the employer misrepresented the essential functions of the job: she believed that the lifting requirement was exaggerated; hence, the PCE was improper and discriminatory.

Her case boiled down to a technicality: was the PCE a medical exam? If yes, the exam "must be job related and consistent with business necessity." If not, the PCE was exempt from this requirement.

The prior court determined that the PCE was not a medical exam and issued a summary judgment for the employer.

Big Picture, Little Picture, No Picture
Indergard appealed, noting that the PCE included a check of her blood pressure, her aerobic capacity and a detailed medical history. In other words, it was not simply a test of her physical capacities. The U.S. Court of Appeals, 9th Circuit in Oregon, determined that the PCE was indeed a medical exam. They over-ruled the summary judgment and remanded the case back to district court.

What is fascinating in all the legal arguments is what is missing: the issue of "reasonable accommodation." Indergard challenges her employer's contention that the job requires lifting of 60 pounds. How often is this lifting required? Are there any available lifting aids? Are other people available to help? Is lifting 60 pounds truly an "essential" job function?

Indergard's victory isbased upon a technicality: the PCE was in fact a medical exam, because medical issues were included. (It's difficult to imagine any test for physical capacities that would not include at least some medical issues.) We can only hope that the lower court focuses on the big picture: Indegard's ability to perform the essential job functions, with or without accommodation. It's hard to believe that this case has dragged on for six years. It began with a rush to judgment and ends with an agonizingly slow parsing of technicalities. Indergard wants her job back. Sounds simple enough, but with the wheels of justice churning along, it is doubtful that such an outcome will ever take place.

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October 14, 2009


You might not think that the H1N1 virus, commonly know as swine flu, has anything to do with the ADA. Well, you clearly have not been reading Nation's Restaurant News. Lisa Jennings writes a complex and cautionary tale for restaurant managers, warning them to back off from asking obviously sick employees whether they have the swine flu. Somehow, this advice does not sit well with me - or with anyone else who might sit down for a meal in a restaurant.

Attorneys with nothing else to do have raised the issue that swine flu may be a disability under the ADA. After all, we have all been warned of a potential pandemic and there have been a relatively small number of fatalities associated with the virus. But does that mean that every case of swine flu is a disability? Is the ADA's recent recognition of shorter term disabilities meant to include a week of sore throats, coughing and fever?

Jennings quotes Virginia attorney Jonathan Mook, who notes that the ADA sets limits for when and how employers may inquire about medical conditions. He concedes that swine flu may not technically be a disability, but "it could be perceived as disabling because of the myths about it. If an employer asks specifically about swine flu, for example, and later is perceived as not wanting to work near the employee, even after the worker is no longer contagious, there may be grounds for a discrimination complaint."

Are employers really supposed to worry about that?

Fortunately, the article recommends that employers focus on symptoms:

In communities where an outbreak occurs, it is a good idea to include in every preshift meeting questions about specific symptoms related to the flu. It's also OK for employers to ask whether employees have fevers, sore throats, coughs or intestinal ills, so long as they don't ask for a diagnosis [emphasis added].

In addition, attorneys say, employers are permitted to send employees home if they're showing symptoms of the flu and are allowed to ask them to stay home for three to seven days, as recommended by the CDC in Atlanta--or as long as necessary to complete treatment, such as antiviral medication.

So the attorneys say that it's ok to send people home for flu-like symptoms, as long as you don't suggest that you are doing so because you think they have swine flu.

A Note from the Doctor and FMLA
To complicate matters even further, a specific diagnosis of swine flu is unlikely, as most people with flu-like symptoms are instructed to stay home and employ the usual remedies. We are not to go to hospitals and clinics unless symptoms are unusually severe. The CDC does not want to overwhelm emergency rooms and local clinics with needless requests for documentation.

On the other hand, if there is a formal diagnosis of swine flu, the employee may be eligible for FMLA leave, as this particular flu would be considered a "serious medical condition" - as opposed to regular flu, which might also kill you but is not viewed as a part of a world-wide pandemic. Go figure.

I hope that a fear of (preposterous) litigation does not result in employers keeping sick people at work. No one with flu-like symptoms belongs in the workplace. I have never sued anyone, but if my scrambled eggs are delivered by a waitperson with a runny nose, flushed skin, an expectorant cough and a raspy voice, I won't eat a thing. And if there happens to be a lawyer in the next booth, I surely would be tempted to strike up a conversation.

Postscript: A note of thanks to my esteemed colleague Jennifer Christian, CEO of Webility, who somehow finds the time to read National Restaurant News.

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September 14, 2009


The Insider just returned from a speaking engagement in Stillwater, Oklahoma. The occasion was the annual workers comp conference sponsored by the judiciary that manages comp in the state. I was invited by fellow blogger Judge Tom Leonard, whose blog provides valuable information to comp practitioners in the state.

As a relatively high-cost state, Oklahoma is experiencing rumblings in the state legislature to switch to an administrative - as opposed to judicial - system. In theory, this makes sense, as a formal judiciary with its due process rules can slow down the resolution of claims. But this is no simple problem, with no simple solutions. The first event at the conference featured a panel of legislators who were involved in crafting the systemic fix: in general, republicans were pushing for change, while democrats cautioned that the interests of injured workers may be compromised.

While the Insider does not take a formal position on the controversy, we did caution all parties to "beware the law of unintended consequences." Every "fix" contains the seeds of both success and failure. The prudent legislator would do well to examine the problem from all sides and fashion a dispassionate solution - much as the talented and compassionate judges currently operating the Oklahoma system approach every claim.

Six Humongous Problems
The insider was invited to provide a national perspective on workers comp to the conference's 400 participants. We focused on six looming crises facing comp across America. Here is a brief summary of our concerns:

1. The Original workers comp model is obsolete: Comp is nearing its 100th anniversary (New York 1911). The workplace at the beginning of the 20th century was very different from what confronts us today. Legislatures struggle to modify the initial legislation to keep pace with change.

2. The economic collapse is a game changer: The comfortable assumptions of financial planners (stocks rise inexorably over time) have disintegrated in the world-wide collapse that began just over a year ago. This collapse has implications for workers comp, with employment shakier than ever and the retirement plans of millions in tatters. Which leads to:

3. The Aging American workforce is going to get older: With baby boomers approaching retirement age, the workforce is already at its oldest. As retirement accounts sink with the economy, more and more workers are finding themselves in a bind. They do not have enough money to retire. These older workers bring skill and experience to the workplace, but their aging bodies are breaking down. The comp system is not built to handle workers in their late 60s and 70s who plan to keep on working. Will comp become the retirement plan of choice for workers with no other choices?

4. Undocumented workers are half in and half out: most states cover the medical costs and indemnity for injured, undocumented workers, but draw the line at vocational rehabilitation. By definition, these folks are not "available for work." Will Congress create some form of amnesty, thereby opening the door to complete workers comp coverage for foreign workers?

5. Insurers are in big trouble: There may be low hanging fruit in the insurance world, but not in workers comp. There is a nation-wide suppression of rates, which is compounded, of course, by the idiocy of carriers who drop steep discounts on top of inadequate rates. Carriers may dream of a hardening market, but it never seems to arrive. Meanwhile, the bottom line continues to erode.

6. The federal government might mess everything up: The Medicare Secondary Payer program has invaded the settlement process for comp claims, creating chaos and uncertainty and increasing the costs. [Check out Judge Leonard's blog for some excellent materials on the Secondary Payer program.] Now we have national health insurance on the immediate horizon. No, it's not "death panels" or alleged coverage for undocumented workers that concern us. It's the more basic issue of who will choose doctors, under what circumstances, and what impact this might have on workers comp.

We have covered all of these crises in the Insider and will continue to do so in the coming months. I'm not sure that the good folks in Oklahoma found much solace in the fact that their own little comp crisis is dwarfed by issues that transcend state lines. Meanwhile, I did learn a thing or two about Oklahoma. It all comes down to this: Sooners versus Cowboys. No, I'm not going to explain. You have to be there to really understand.

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August 24, 2009


Wyoming might be a good place to work, but it's also a good place to die at work. The mortality rate for occupational injuries is three times the national average, with 15.6 fatalities per 100,000 workers. Many of these fatalities occur in the oil fields, where "roughnecks" make pretty good wages in exchange for working in relatively dangerous conditions. As DeeDee Correll writes in the Los Angeles Times, everyone shares the goal of improving safety on the far-flung job sites, but there is a continental divide in how to achieve that goal.

Most oil workers are employed by independent contractors, who provide the bodies for the intense work in the fields. The fields are owned by big corporations. On one side of the fence you find workers and their advocates, who want to be able to hold the big corporations liable for what happens on the job. They want to be able to sue the big corporations when they suffer catastrophic injuries or deaths on the job.

The counter argument says that workers comp - carried by the employers of these field workers - should be the exclusive remedy for work-related injuries.

At issue here is the question of accountability and control: under current Wyoming case law, injured workers have to prove that the operator maintained "pervasive" control over the site. This is a very high standard, because the daily operations at these sites are primarily under the control of the independent contractors. By lowering the standard of control, worker advocates would make it easier for workers to sue the oil companies for damages.

Denim Versus Suits
The battleground for this dispute is the Wyoming legislature. As is so often the case, there is considerable theatricality on display. Many of the roughnecks lobbying for a change in the law show the scars of their chosen occupation. They are dressed in denim and baseball caps. Their opposition, lawyers for the oil companies, wear the indispensable dark suits.

The "suits" counter the compelling visual evidence of the roughnecks with some dubious arguments, maintaining, for example, that any change in the law would expose home owners to liability for injuries to contractors working on their houses. That's a red herring, as homeowners rarely exercise significant control over the work environment of their contractors.

There should be enough middle ground in this dispute to fashion a meaningful compromise. Wide-open litigation is rarely the best way to go. The legislature should set specific standards for safe operating procedures in the oil fields. Oil companies should be held accountable for meeting these standards. Only if they are demonstrably negligent in maintaining and documenting these standards should the door be opened to law suits. At the same time, the state should bolster the benefits available to workers who are killed or severely injured on the job.

The "exclusive remedy" provision of workers comp is a standard well worth preserving. It's tempting to carve out exceptions, but each exception becomes a fault line in the fundamental compromise that is workers comp. We are nearing the 100th anniversary of comp in America (New York 1911). For the most part, it is a remarkably successful experiment in public policy. The law makers of Wyoming would do well to keep this success in mind: by all means tinker with the statute to make it more responsive to 21st century working conditions, but don't mess with the premise. This is not the time to find fault with "no fault."

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August 20, 2009


Earlier this week, my colleague Julie Ferguson blogged an intriguing case in Indiana, where Adam Childers, an obese pizza baker, suffered a back injury when he was hit by a swinging freezer door. He was unable to get better due to his obesity. As a result, the Indiana court ordered the employer to pay for weight reduction surgery, to be followed by back surgery, all the while providing temporary total disability benefits to Childers. A relatively large claim becomes a very large claim due to the prospect of sequential surgeries. This case raises some fascinating issues concerning the cost of getting better. Boy, does it ever!

There is no need to repeat the succinct summary of the case provided in Julie's blog. For those interested in the details, here is the actual opinion of the court.

This case raises two compelling issues: First, the degree to which employers become responsible for non-work related factors in recovery; and second, the looming specter of widespread discrimination against people whose pre-existing conditions make virtually any injury substantially more difficult to manage.

Taking People as They Are
Employers cannot set a high bar for "health and wellness" and then exclude everyone who falls below it. Any health standards must be grounded in business necessity. As we have seen in recent blogs, employers might be in a position to reject applicants who smoke (depending upon the state), but they generally cannot arbitrarily turn away people with co-morbidities that may impact recovery times: diabetes, heart conditions, asthma, etc.

In the Indiana case, at the time of the injury Childers weighed 340 pounds and smoked 30 cigarettes a day. In its opinion, the court did not consider him "disabled" as defined in the ADA: his weight did not "substantially impact" one or more major life activities. Thus, despite his weight, he did not fall into a protected class.

Once injured, however, Childers's weight became a major obstacle to his recovery. Indeed, any obese person suffering from back, hip, knee, leg or ankle injuries would find recovery extremely difficult, as their spine and limbs are routinely stressed by the sheer weight of the body. Under Indiana law, the pre-existing condition of obesity combines with the work-related injury to produce a single injury. With the pre-existing condition absorbed into the workers comp claim, the employer is responsible for any and all treatments required to bring the worker to maximum medical improvement.

There is a definite logic to the Indiana court's position. The problem is not in its protection of Childers, but in the implications for all Indiana employers as they are confronted with hiring decisions.

When in Doubt, Leave Them Out?
With the Childers's decision, employers in Indiana have been put on notice that at least one conspicuous part of the labor pool - obese people - bring the risk of substantially higher costs following injuries in the workplace. As employers make day to day hiring decisions, they may well have the image of higher costs of injuries associated with obesity in the back of their minds. Given two applicants, one obese, one within normal weight ranges, employers may be tempted to ignore other important hiring factors such as motivation and experience and reject the obese applicant.

Thus the unfortunate consequence of providing extensive benefits to Childers is that it may have the proverbial "chilling effect" on the job prospects for others with similar weight problems. The obese already suffer from the daily judgment of a thousand eyes: their weight problems are impossible to hide. Now they may have to overcome the additional burden of fearful Indiana employers, who exclude them from employment in the vague hope of keeping the costs of comp under control.

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August 17, 2009


Back in December of 2006 we blogged the story of Scott Rodrigues, a new hire of the Scotts lawn care company, who was fired after failing a drug test. No news here, perhaps, except that the drug in his system, nicotine is perfectly legal. Scott's is self-insured for health benefits, so they have a vested interest in making sure that employees follow basic wellness practices.

On his way to a pre-placement drug test, Mr. Rodrigues chewed on Nicorette gum. He was trying to kick the habit. Ironically, the Nicorette may have triggered the positive finding for nicotine. Rodrigues was hired provisionally and then abruptly terminated once the test results were released.

Rodrigues brought suit in federal court for violation of privacy and civil rights. Judge George O'Toole has ruled in favor of the company. The judge found no violation of privacy laws, as Rodrigues smoked while walking down the street and in a restaurant parking lot. His supervisor spotted a pack of cigarettes on the dashboard of his truck. Would the judge have ruled for Rodrigues if the employer had peeked through a window to see him smoking at home?

O'Toole also rejected the notion that the firing violated a 1974 federal law that protects employee rights to benefits. O'Toole ruled that Rodrigues was not yet a bona fide employee and was working on the condition that he pass the urinalysis.

Jim King, a spokesman for Scotts, said the smoking ban has never been used to fire an "existing" employee. It is used solely to screen out applicants. Since the ban went into effect in 2005, the percentage of smokers among the company's 7,000 employees has fallen to 7 percent from 28 percent.

[The Insider notes in passing that even as a "provisional" employee, Rodrigues was covered by workers comp from the moment he began working - indeed, while he was on his way to the drug testing lab.]

Whether employees can smoke or not depends upon the state they work in. A few states (e.g., Kentucky, Louisiana) explicitly protect smoker rights. Other states do not. It's interesting that Rodrigues pursued his case in federal court, probably because Massachusetts laws offered no protection to smokers.

Is Obesity Next?
We all know that smoking increases the risk of illness and the cost of medical coverage. The same goes for obesity. So the next front in the battle to control the business side of medical costs may well be the bathroom scale. The New York Times magazine profiles the Cleveland Clinic, which has been upheld as a model for medical cost control. Two years ago, they stopped hiring smokers. Delos M. Cosgrove, the heart surgeon who is the clinic's chief executive, would like to expand the hiring ban to include applicants who are obese.

"Why is it unfair? Has anyone ever shown the law of conservation of matter doesn't apply?" Cosgrove states that people's weight is a reflection of how much they eat and how active they are. The country has grown fat because it's consuming more calories and burning fewer. Our national weight problem brings huge costs, both medical and economic. Yet our anti-obesity efforts have none of the urgency of our antismoking efforts. "We should declare obesity a disease and say we're going to help you get over it."

Should the Cleveland Clinic - or any other employer- decline to hire obese people, it will be interesting to track the results. Where obesity can be traced back to genetic or chemical issues - where it qualifies as a disability under the Americans with Disabilities Act- employers would be guilty of discrimination. If no such causes can be specified, employers may be on solid ground. (The unaddressed issue in these hiring practices, of course, is the loss of a vast pool of talented and often essential workers.)

A recent article in Health Affairs estimated the annual cost of obesity to be $147 billion and growing. That translates into $1,250 per household, mostly in taxes and insurance premiums.

The Fat Tax
Cosgrove is interested in an idea that some economists favor: charging higher health-insurance premiums to anyone with a certain body-mass index. Call it the Fat Tax. Another alternative might be taxing the calorie-rich foods that lead to obesity: just imagine paying a little surcharge for your large order of fries, your jumbo soda and your two-for-one pizza. That would be interesting, indeed! Just as smokers pay a tax-driven premium for their cigarettes, eaters would be taxed for their food addictions.

This is simply not going to happen. To be sure, fundamental wellness is the cornerstone of any plan to contain health care costs. But when the public good collides with the rights of freedom and privacy, individual rights will win out. Policy wonks may not like it, but citizens can eat whatever they damn well please. Lighting up after that supersized meal? Well, that's one area where the public good pretty much trumps the private right.

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August 10, 2009


We live, alas, in interesting times. As the health care debate spirals downward, the fault lines in our culture become more and more evident. On one side, anti-reformers stack town meetings to prevent any meaningful dialogue from taking place. These folks are even trying to intimidate unions. What am I missing here? Who is supposed to intimidate whom? On both sides of this momentous debate, pockets are being stuffed with special interest money. This makes the ultimate outcome - whether status quo or some degree of reform - highly suspect. The notion of genuine debate and civil discourse have disappeared altogether.

Which leads us back for a moment to the lingering conflict between UPS and FedEx. Back in December, we blogged FedEx's unusual charter:

FedEx began 35 years ago as an airline. As such, it fell under the Railway Labor Act of 1926, which made unionization of public and commercial transport companies extremely difficult. By contrast, UPS began as a trucking company and was subject to the National Labor Relations Act from day one. UPS is unionized: they pay workers more than FedEx, they provide better benefits.

It would be to UPS's advantage to remove their fierce competitor from the Railway Labor Act and force them to operate under the NLRA. That requires an act of congress, so it's no surprise that UPS has been aggressively lobbying congress for this change. They say they want to level the playing field.

Level playing fields are fine. The devil is in the details: how do you accomplish your goal? Apparently, by playing unfairly. UPS has been accused of forcing union members to write to their congressmen, urging passage of legislation to eliminate the FedEx exemption. The letters bombarding congress appear to express the views of individual UPS drivers. In fact, many are based upon prescribed forms. We read in the Washington Post:

Officials with UPS and the International Brotherhood of Teamsters, which represents 240,000 UPS drivers, acknowledge that the company has paid for workers' time to pen many of the letters and has supplied the envelopes, paper and stamps needed to mail thousands of them to Congress. UPS spokesman Malcolm Berkley said the effort was "totally voluntary, and any allegations to the contrary are ridiculous."
But Internet sites dedicated to UPS-related discussions feature dozens of accounts from anonymous employees who in recent weeks have said they were forced to write the letters or felt they would be punished for not doing so. Such tactics could run afoul of both labor laws and lobbying disclosure requirements, according to legal experts.

So it appears that UPS may be violating labor laws in order to force FedEx to operate under labor laws. Were you expecting anything different?

In one of Norman Rockwell's many iconic images, a humbly dressed man stands up in a town meeting to express his opinion. The painting is entitled "Freedom of Speech." We could certainly argue the degree to which such freedoms ever existed. But it's all too clear that Rockwell's image bears no relation to what is occurring today. If he were to depict our present situation, we would see an enraged citizen shouting down his local congressman. This individual would waive an inflammatory poster complete with Nazi symbols. In his pocket, we might glimpse the bus ticket that brought him into town. In the corner we might see an innocent mother, huddling to protect her child from the pending violence.

We are currently facing many complex issues, ranging from FedEx's status as an employer to the health care options for every American. There are pros and cons to every path. No one really knows how to get from point A to point B. Indeed, we may not even agree on what point B is. But when civil discourse deteriorates into the ravings of the mob, we all lose. If winning is defined by who shouts the loudest, who cheats the most effectively, who succeeds in intimidating the oppostion, there will be no victory for anyone.

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August 4, 2009


The other Nicholas Sparks is in a bit of trouble: not the well-known writer, but an obscure 25 year old tow truck driver from upstate New York. The lesser known Sparks has earned himself a place in the Business Hall of Shame when he raised multi-tasking to new heights (or better, depths). He was talking on one cell phone, texting on another(!), when, surprise of surprises, he lost control of his vehicle, smashed into another car, careened across a front lawn and plunged his flatbed tow truck into a swimming pool. The 68 year-old woman driving the other car suffered head injuries but is in good condition; her 8 year old niece suffered minor injuries.

Sparks has been charged with reckless driving, talking on a cell phone and following too closely. He was driving a truck for Adams Towing Company. While I was unable to find an area company listed under this name, I do hope they carry robust liability coverage. The company is clearly guilty of negligence and will pay dearly for their multi-multi-tasking employee.

Driven to Distraction
The New York Times has singled out the use of cell phones while driving as a major danger. They have a begun a series focusing on this new road hazard entitled "Driving to Distraction." In their most recent article, they describe the ubiquitous talking on cells performed by taxi drivers. (My family caught a cab during a downpour in Brooklyn last week; I sat in the front seat and listened to one side of a conversation in an Arabic tongue that was underway when we entered the cab and continued after we had paid and exited.)

While New York City has one of the most stringent laws in the country prohibiting taxi drivers from using cell phones while driving, it is rarely enforced. Fewer than 800 summonses were issued to cab drivers in 2007. If the law were enforced, the annual summonses would run in the hundreds of thousands.

It all comes down to this: anyone who drives can no longer plead ignorance to the dangers of talking/texting and driving. A new and potentially huge liability has emerged for the employers of people who drive in the course of employment. The employers are going to be held accountable for the mistakes of their employees. Property will be damaged and people will be hurt, even killed. In order to avoid liability, management will have to demonstrate that effective cell phone policies have been both promulgated and enforced.

Which leads to one final question: with liability ultimately falling to the insurance companies, what steps have they taken to ensure that policy holders have mitigated this ever-increasing risk? How will their underwriters identify the companies most likely to produce the next Nicholas Sparks - the driver, that is, not the writer.

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June 8, 2009


Alan Rosenbaum is a revered professor of art at Virginia Commonwealth University (VCU). He shows students how to work with clay - at least, he used to, until he was disabled by silicosis. Rosenbaum was exposed to silica dust in the clay mixing room and ceramic studios of the university. The state Workers Compensation Commission last year found that the professor's silicosis was caused by his exposure to hazardous dust and awarded him permanent disability benefits totaling $211,800.

Silica is a common mineral found in clay, sand and rock. The dust in the VCU's Fine Arts Building came from the powder that students and staff mixed with water to make clay, as well as from scraping kilns clean of bits of clay and glaze after firing. There are intake vents directly above the five mixing machines, designed to take in dusty air and run it through a filter before releasing it outside the building. However,the vents failed to function properly, because for five years university staff members taped plastic bags over them, apparently to keep the dust from spreading elsewhere in the building. (There were complaints from woodworking and other shops that the dust migrated from the intake vents into work areas.) By blocking the vents, all the dust was contained in the ceramics area.

In addition to the vents being blocked, janitors swept the floors daily, causing the dust to fill the air for thirty minutes or more.

The Hazards of Sand
Ironically, VCU art classes included instruction on the hazards of silica in clay. (Here is a fascinating, if somwhat bizarre MSDS sheet on sand. It might make you think twice about heading for the beach...) It is hardly surprising to learn that students and teachers ignored the warnings.

Air-quality tests conducted by VCU staff after Rosenbaum's diagnosis found dust levels were 98 percent below hazardous levels -- but VCU did the testing after removing plastic bags that blocked the ventilation vents. In addition to activating the vents, janitorial staff began using sweeping compound to capture fine particles before they were released in the air. In other words, mitigation of the risk was readily available, but such measures were not implemented until Professor Rosenbaum became ill.

As in Julie Ferguson's post last week on laboratory hazards, this situation in the art studio of a major university reminds us that education is not without risk. A little learning can quickly become dangerous. The budding artist working with clay and the mason cutting a cinderblock face essentially the same hazard. Dust is dust. If we are not careful, dust can speed our return to the dust from which we all come. That's one lesson that Professor Rosenbaum is unlikely to forget.

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June 2, 2009


Here's a question that comes up frequently in our employer seminars: can you terminate an employee who is on workers comp? In general, it's not a good idea. In many states there is a presumption that the termination is in retaliation for filing the comp claim. Nonetheless, the complete answer to the question is yes, you can, but you must do it very carefully.

The invaluable Risk and Insurance Magazine describes a case in Texas that illustrates this point nicely (Williams v AT & T, U.S.District Court, Southern Texas). Williams, a telecommunications tech, alleged that he sprained his leg stepping down from a ladder. He was a bit confused about the exact date, offering more than one in his descriptions of the incident. His claim was denied. One month later, he violated an important company policy and was suspended and then terminated. Even though his comp claim was denied, he alleged that he was terminated in retaliation for filing the claim. He sued AT & T for violating the Texas comp act.

Keep in mind, the employer must be able to demonstrate that the termination had nothing to do with the (denied) claim. In this situation, the burden of proof is definitely on the employer. AT & T presented evidence that Williams had a history of poor performance and excessive disciplinary actions for more than a year prior to the alleged injury. In other words, two key criteria of proof were met: the disciplinary problems preceeded the workers comp incident and they were thoroughly documented.

The court granted summary judgment to the employer. While falling under the protected class of employees who have filed comp claims, Williams could not establish that his termination was related to the comp claim. There were plenty of other reasons for the employer's actions.

I often hear employers complain that they had been planning to terminate a marginal employee, but then the employee got hurt. In most cases, there is inadequate documentation of poor performance prior to the injury. These employers are stuck: any attempt to document performance issues after the injury will be viewed sceptically by the court. The termination will trigger retaliation claims.

Here is a quick tip to avoid this situation: fire marginal employees before they get hurt. Once employees are injured on the job, an employer's options narrow significantly. Given that marginal employees are more likely to be injured - that's part of what makes them marginal - prompt action to end their employment is an essential "best practice."

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June 1, 2009


We've been following the tentative steps taken by management to confront a relatively new and ubiquitous risk: the use of cell phones while driving. Most people seem to realize that cell phone use is a dangerous distraction, whether involving talking or, lord help us, texting. While surveys indicate that nearly every driver (98 percent) considers him or herself a safe driver (NOT!), fully 20 percent of drivers between 16 and 61 admitting to texting while driving and 80 percent admit to talking on their cells. What we have is a serious disconnect between risk and action. We are all just driving obliviously up DeNile.

We have focused our attention on the potential risks to corporations, who are liable for the actions of their employees "in the course and scope of employment." Back in 2001, Dyke Industries settled a case for $16 million, involving one of their salespeople taking out an elderly pedestrian while chatting on a phone.

Maggie Jackson in the Boston Globe writes that some corporations have taken aggressive action to mitigate the risk. Back in 2005, the engineering firm AMEC prohibited employees from any and all cell phone use while operating a vehicle. DuPont, a legendary leader in safety, first required employees to use headsets and then, on second thought, forbid all cell phone use while driving. AstraZeneca has similar policies in place.

Risky Business
What about everyone else? When, if ever, will managers of major and minor corporations bring the hammer down on blatantly risky behaviors behind the wheel?

We have two thoughts on the matter. First, it will take a few more tragedies to get the attention of corporate America on this risk. We all seem to labor under the delusion that multi-tasking is necessary and harmless. It is neither. Secondly, insurance companies are bound to wake up and smell this distinctly acrid brew: underwriters for general liability and fleet auto policies will begin to ask whether potential insureds have policies in place prohibiting the use of cell phones while driving. Those failing to implement such policies may find themselves scrambling for coverage. Perhaps a few innovative carriers will begin to offer discounts to employers with credible policies in place.

Employees subject to cell phone restrictions are beginning to develop new means of coping. Heck, there are support groups for everything, why not for cell phone withdrawal? Here are some of the tips that have emerged:

Plan Ahead. Call and send messages before leaving your desk.

Play relaxing music in traffic jams to reduce the frustration of "not doing anything."

Turn off wireless devices. Still tempted? Lock them in a bag. Place the bag in the trunk.

Put a message on your voicemail saying, "I'm in a meeting or driving."

Take a cab instead of driving, especially on out-of-town trips.

Warn people who regularly call - i.e. spouses - that you aren't available in transit.

The Insider would add one more tip: when driving, just drive, with one relentless point of attention and with one goal in mind: arriving safely at your destination. For most of us, driving is the riskiest part of the work day, yet we treat driving as a relatively mindless means to an end. Alas, if we are not careful, driving may be the last thing we ever do.

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May 26, 2009


Our blog last week linking skin cancer to workers comp has already generated a few comments. "Workers comp attorney" raises some interesting questions:

(1) How much weight do you give to the person's leisure activities and/or length of employment? It seems these would certainly be factors in assessing whether the employment is the predominate cause.
When assessing the work-relatedness of skin cancer, claims adjusters will look carefully at non work exposures: hobbies such as hiking, fishing, boating, outdoor sports, surfing, swimming or simply tanning. Balanced against these exposures will be the work setting: outdoors all the time (eg, roofing, migrant farm work, paving) or just incidentally (framing carpentry).

While the case law is still rather limited, there are examples of compensable skin cancers involving a limousine chauffeur (!) in New York and an architect in Texas. [NOTE: a sun screen manufacturer, unsurprisingly, is keeping close track of case law developments!] It is safe to assume that the burden of proof remains on the employee to show that the cancer is work related, but this burden is now supported by substantial medical evidence. Indeed, the existence of government funded education on the risk - here is a CDC link - would tend to support claims of compensability.

As far as length of employment goes, it usually does not matter. As in the case of repetitive motion injuries, the most recent employer is usually on the hook for coverage, even if the employee has only been working for a few weeks.

(2) What steps could employers take to prevent work-related skin cancer other than the mentioned provision of sun screen and policies to enforce dress code?
Employers should just stick with the basics: provide - and enforce the use of - sun screens; require head gear. In the vast majority of exposed workers, this is not happening. There is research showing an increase in skin cancers among Latinos. I wonder if this is related to the negative cultural images associated with protective gear. [NOTE: my teenage daughters hate my wide-brimmed sun hat. It's just not cool!] [I wear it anyway.]

(3) What about research indicating that some, if not all, sunscreen products are carcinogenic?
While there is some evidence that tanning booths may be associated with cancer, I am not aware of any medical evidence to support a connection between sunscreens and cancer. In any event, the risk of not using a sunscreen far exceeds the risk of using one.

4) What balance should be sought between skin cancer and heat-related illnesses (if any "balance") as far as prevention is concerned?

Skin and heat protection are not mutually exclusive. People have been covering up in desert cultures for centuries by wearing light colored, loose clothing and head gear. (I hardly need add that American workers would vehemently reject any protective measures that made them resemble middle-eastern sheiks!)

Proactive, Reactive, Inactive?
Another reader wonders how many companies have actually implemented the recommended preventive measures. That's a great question. Judging by limited observation of workers in the sun, smaller employers have done little if anything to prevent risk. Any time I see a worker in the hot sun, shirtless and hatless, I assume that the cancer issue is simply being ignored.

What, if anything, will mobilize employers to take action to limit sun exposures? It usually comes down to money. Employers who operate in states that view skin cancer as potentially work related will eventually find it cheaper to provide (inexpensive) sunscreens and hats to their workers in the great outdoors. If state courts reject these claims, the workers will bear the burden.

Let's hope that employers take action before the courts force the issue. We have a known risk and we have proven remedies. Reason says that employers, at a minimum, will immediately share this information with exposed workers. But then again, how often is the voice of reason heard in the American workplace?

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April 13, 2009


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.

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April 9, 2009


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.

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April 8, 2009


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.

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February 17, 2009


Dr. Scott Haig, an orthopedic surgeon, has a thought-provoking article in Time Magazine on returning to work after surgery. As those of us involved in workers comp know all too well, returning to productive employment is not simply a matter of healing. Motivation is obviously a huge factor, as is the lurking sense of entitlement that may accompany a work-related injury.

Haig cites a study conducted back in 1995, involving 103 patients who underwent rotator cuff surgery. The study focused on the type of insurance coverage. Where the injuries were work related and covered by workers comp, only 42% of the patients felt better and returned to work in the medically necessary time frame; by contrast, fully 94% of those covered by conventional insurance felt better and returned to work in a timely manner.

These differing results have little, if anything, to do with the quality of the surgery. It's a matter of motivation: people covered by conventional insurance are not making money during recovery; they need to get back to work to pay their bills, or back to whatever life requires them to do. By contrast, people on comp are being paid not to work. They may prefer life on comp to the working grind. They may not approach the return-to-work process with the same sense of urgency that others usually feel.

Chester's Pain
Haig goes on to tell the story of a cop named Chester. Haig performed rotator cuff surgery on Chester, who healed well and seemed ready for a return to light duty, which was readily available. Haig was scrupulous in cultivating a good relationship with Chester; he was confident of optimum results. But well into the recover process, Chester, accompanied by his aggressive mom, complained that light duty wasn't fair. "My sergeant had the same operation and he got six months off...[and by the way],I'm in constant pain."

Alas, despite the availability of appropriate light duty (answering phones), Haig realized that his return-to-work plan was doomed. "I knew the mess I was in. You can't argue with the complaint of pain. I could imagine the grimaces I would see when I examined his shoulder..."

Ultimately, Chester went back to work in four months and stayed on light duty for two more months. In other words, he got his six months, just like his sergeant.

As Haig concludes, the type of insurance coverage goes a long way to determine how much pain you feel. For those who qualify for comp with work-related injuries and illnesses, the pain just might reach the level where work of any kind is simply not not an option. At that point the pain is shared by the employer, who loses a productive employee for a longer period than is medically necessary, and faces increased cost of insurance through the experience rating process. When it comes to comp, there is plenty of pain all around, for sure.

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February 12, 2009


The National Safety Council, surely a credible safety organization, has come out for a total ban on cell phone use while driving. The council points to increasing evidence that the distraction of cell phone use - with or without headphones - is a major cause of accidents. The council has written to the governors of all 50 states, recommending legislation to outlaw cell phones for individuals operating vehicles.

This is from their press release: “Studies show that driving while talking on a cell phone is extremely dangerous and puts drivers at a four times greater risk of a crash,” said Janet Froetscher, president and CEO of the NSC. “Driving drunk is also dangerous and against the law. When our friends have been drinking, we take the car keys away. It’s time to take the cell phone away.”

Of course, this is not about to happen. A few states have limited cell phone use - some require headsets and others prohibit teen drivers from using the ubiquitous devices. (The NSC website has maps showing which states have implemented bans.) Charleton Heston famously noted that he would never give up his right to bear arms - you would have to pry his guns from his "cold, dead hands." American consumers have a similar attachment to their cell phones. Unfortunately, if the NSC numbers are correct, thousands of drivers will end up in accidents, cell phones in their cold hands - or perhaps headsets on their (cold) ears.

Looming Liabilities
The Insider has no position on cell phone use while driving. We recognize that it's a dangerous distraction, but one that has become an essential component of American life. Do it if you must, but do it carefully.

The emerging issue is one of liability. Many of us make work-related calls while driving in our vehicles. If we were distracted during such a call (post-accident, it is pretty easy to determine to whom we were talking at the exact moment of impact), our employers are vulnerable to lawsuits for negligence.

In response to what is now a widely acknowledged risk, some employers have issued policies banning cell phone use while driving on company business. Are they serious about this, or are they just "covering their butts?" It's one thing to have a policy, but if employers really intend to use the policy as a defense, they would have to prove that the cell phone ban is enforced. Theoretically, they would have to correlate cell phone records with known "time on the road" and take disciplinary action on employees who violate the policy. (Sounds like a lot of work for not much return, let alone a way of seriously compromising productivity.)

Perhaps the parties with the most at stake are the insurance carriers - the folks who write general liability and fleet auto policies for American companies, large and small. They are ultimately holding the bag for losses due to "negligent" driving. I wonder if these insurers will begin to require that their insureds issue and enforce "no cell phone" policies for drivers, in a manner similar to their requirements for safety committees and return-to-work programs for workers comp policy holders.

It will be interesting to track the development of this new and potentially expensive liability. In the meantime, the NCS has raised the bar significantly for all of us who drive and talk, and dare I add, drive and text. The sages of India recommend "one point of attention" at all times: when driving, just drive. Alas, this is hardly a viable option for a nation of time-harassed multi-taskers.

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January 29, 2009


Clyde Stroman, 53, of Elmira, NY, worked as a youth aide at the MacCormick Secure Center in Brooktondale, NY. He worked with some pretty tough kids. While restraining a "client" back in August 2008, Stroman injured his right eye. If you were his supervisor, filling out the incident report, you should write: "Injury to right eye." Sounds obvious, of course. If you were in a hurry, as I suspect his supervisor might have been, you might just write: "Injury to eye."

The actual injury was minor. Stroman did not miss any time from work.

Sometime after the incident, Stroman had a complete eye exam. The ophthamologist found an old injury in his left eye. Stroman apparently decided to work the system: according to investigators, he attempted to convince the New York State Insurance Fund and his employer that the initial treating doctor’s reports identified the wrong eye as being injured. He gave a detailed, sworn written statement to that effect. (I'm guessing that the accident investigation form - if any - did not specify which eye was injured.)

As a result of this eye "switcheroo," Stroman received $2,860 in workers comp benefits. Investigators estimated the potential future value of his claim to be more than $118,000. (The injury to the left eye must have been fairly severe, with some permanent loss of vision.) Unfortunately for Stroman, his ruse did not work. Investigators determined that the original injury to his right eye was minor, while the serious injury to his left eye was not work related. Stroman was arrested on January 8 and charged with falsifying business records and violating the Workers’ Compensation Law.

A Lesson in Documentation
Only time - and a trial - will determine whether Stroman is guilty. The important lesson here lies in the area of post-injury management, in those critical moments immediately following an injury. When supervisors fill out their first reports, they should carefully note not just the body part involved, but which body part. For injuries involving fingers or toes, for example, supervisors should specify which digits are involved. In this particular case, noting that the incident involved Stroman's right eye might have saved everyone a lot of trouble (including, perhaps, Stroman himself). These details might seem trivial at the time, especially in the context of rushing someone off to treatment. Nonetheless, a few moments of careful documentation often prove critical in the weeks and months following an accident, long after the initial (and often traumatic) details have been forgotten.

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January 20, 2009


When a flock of geese flew into two engines of US Airways Flight 1549 last Friday, pilot Chesley Sullenberger was confronted with a set of circumstances he had never seen before. Sure, the flight simulators may have thrown a similar scenario at him, but this was real: he had a plane loaded with 155 passengers and a crew of six. The engines had just failed. He was piloting the plane in one of the most densely populated places on earth. He had to figure out where and how to put the plane down and he had just a few moments to make a decision. That's pressure in real time.

They're calling Sullenberger's actions the "Miracle off 47th Street." He somehow managed to land the plane in the chilly but not quite frozen Hudson River. The passengers donned their personal flotation devices (which I always thought so ridiculous when demonstrated by the flight attendants before take off) and safely exited the plane. Many huddled on the wings of the floating aircraft (the fuel is lighter than water, thereby helping the plane to float). Nearby boats plucked the passengers off, one at a time. There were minor injuries, but no fatalities. Sullenberger made one last tour of the aircraft, to make sure everyone had gotten off safely, before leaving the plane himself.

We all marvel at the calm skill shown by Sullenberger. One moment he was a pilot among thousands of pilots who do their jobs anonymously every day. The next he is a hero. To this point, Sullenberger had not agreed to perform any interviews. He canceled a scheduled appearance on the Today show. Good for him. This should not be about the public's relentless appetite for the story behind the story. Ultimately, it is about someone who simply did his job under very trying circumstances. He may not have "expected the unexpected," but he surely was able to handle it.

Hemingway wrote that "courage is grace under pressure." Sullenberger has become an instant icon for such courage and grace. I suspect that the passengers on Flight 1549 will say quiet prayer each morning for the rest of their lives, thanking their lucky stars for having Chesley Sullenberger in the cockpit on that fateful day.

Footnote: Perhaps the title of this entry led readers to believe that the Insider was about to pontificate on our about-to-be inaugurated president, Barack Obama, who in his own way has demonstrated, at least on the campaign trail, considerable grace under pressure. We strive for non-partisanship, of course, but in this case we do hope that America's new leader will perform his onerous duties with Sullenbergeresque efficiency.

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January 15, 2009


Now that Robert Aurbach's compelling discussion of bankruptcy has concluded, we thought readers might enjoy a quick look at an issue that none of us can do anything about: drunken workers in Peru.

Peru's top court has ruled that workers cannot be fired simply for being drunk on the job. The case was brought by Pablo Cayo, a janitor for the city of Chorrillos, who was fired for being intoxicated at work.

The court determined that the firing was excessive: yes, Cayo was drunk, but as Justice Fernando Calle put it, "he did not offend or hurt anybody." In other words, he was a pleasant drunk.

Calle went on to say that the court would not revise its decision, despite complaints from the government.

What is most surprising about this decision is the implications for safety: not just Cayo's, but other employees and members of the public who might come into contact with the intoxicated worker. Cayo might not be much of a risk while pushing a broom, but surely his ability to perform the full range of his job duties safely is severely compromised by his intoxication.

Here in the States, active drug/alcohol use is not protected. Under OSHA's General Duty clause, employers are expected to take immediate action when a worker is intoxicated: they are required to eliminate the risk of harm to the employee and to others. (See a related Insider story here.) In most cases, this means sending the employee home - providing transportation if needed. (You do not - repeat, do not - allow an intoxicated employee to drive him or herself home!)

While recovering alcoholics/addicts are protected by the Americans with Disabilities Act, active drug/alcohol use is not considered a disability. Most employers would be within their rights to terminate any employee who is found to be intoxicated while at work. Under some circumstances, employers might be expected to guide the employee toward a treatment program, but in general we have zero tolerance for being drunk at work.

The high court in Peru appears to be breathing that thin Peruvian air. This is the kind of decision that drives managers crazy. As Celso Becerra, chief administrator for Chorrillos, put it: "We've fired four workers for showing up drunk, and two of them were drivers. How can we allow a drunk to work who might run somebody over?" Normally, I might say "Tell it to the judge." But in this case, they have to take their complaints somewhere else.

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December 22, 2008


When we think of safety on the construction site, it's usually in the context of new and renovated buildings. But deconstruction is fraught with hazards, too. Just as the timing and sequence of events in building must be constantly reviewed from a safety perspective, deconstruction requires a similar review. You could say that failure to anticipate safety concerns, whether you are building or unbuilding, is criminal. That's just what the grand jury decided in New York City.

The Deutsche Bank building in lower Manhattan was a victim of the 9/11 attacks. The building withstood the initial blasts, but the structural damage was too severe for repair. The building had to come down. In the process of this deconstruction, a fire broke out in August 2007. Firefighters do not distinguish between buildings going up or coming down: they rushed in to put out the blaze. Firefighters Robert Beddia and Joseph Graffagnino died in the blaze.

In the anguish that always follows this type of fatality, fingers have pointed in many directions and then settled on two individuals: Mitchell Alvo, an executive of subcontractor John Galt Corporation, and Jeffrey Melofchik, a site safety supervisor for Bovis Lend Lease, the construction management company. (You can read the New York Times article by William Rashbaum and Charles Bagli here.)

What went wrong? Where did deconstruction decisions cross the line into criminal behavior?

Timing and Sequence
In deconstruction, it's not just what you do, but when you do it. At the time the fire broke out, the building's sprinkler system had been dismantled. The fire exits had been sealed off (to facilitate asbestos abatement). A standpipe designed to carry water to the upper floors had also been dismantled. Finally, cheap, non-fire-retardant plywood had been used in deconstruction. None of these actions in themselves are criminal acts, but because they combined to create extraordinary hazards in the event of a fire, they resulted in grand jury indictments.

You may wonder what role New York City played in the hazardous conditions. Plenty, but the city dodged indictment due to the formidable legal obstacles in establishing liability for a public entity. Nonetheless, the city has agreed to acknowledge its failures and establish a new division in the Fire Department, to be staffed with 25 civilians. Its mission will be to inspect high-rise buildings under construction or demolition. Let's hope they do a better job than the city's crane inspectors...

My thoughts wander to Jeffrey Melofchik, the site safety supervisor. In retrospect, he must be going over and over the sequence of events that lead to the deaths of the two firefighters. Beddia and Graffagnino haunt his dreams. Now his guilt and self-reflection become a very public process as he faces a daunting accountability for his actions. My guess is that there is plenty of blame to go around, but in this sad tale, two men are apparently in position to take the fall.

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December 9, 2008


On December 1 we blogged the story of Taneka Talley, an employee of the Dollar Tree stores who was stabbed to death at work by a deranged racist. We believed that Talley's death was compensable under workers comp, as she died at work, performing her job (she was stocking shelves at the time of the assault). Dollar Tree's TPA denied the claim under the theory that the death was not work related because the killer was motivated solely by Talley's race (she was African American). A few of our readers agreed with the denial.

This was no personal dispute. Talley and her assailant had no prior relationship. She died because she was in the wrong place at the wrong time. If she had been stabbed on the street, there would be no workers comp claim. But she died while working, so in our view her orphaned son is entitled to benefits.

Dollar Tree's mission statement refers specifically to the importance of good judgment: "Do the right thing for the right reasons." Well, Dollar Tree has now agreed to pay the full amount allowed by California workers comp for death benefits. The company's statement asserts that it was acting voluntarily because "we feel this is the right thing to do." Mission accomplished!

In this emotion-laden situation, a literal and nit-picking interpretation of the law is simply not in the company's best interests. To be sure, a case for denial can be made. They might even prevail in workers comp court (we doubt it), but Dollar Tree had much to lose in the court of public opinion. Some customers had called for a nationwide boycott and protesters picketed the Fairfield store where Talley died. With this agreement to pay the claim in full, Dollar Tree ends a public relations nightmare and preserves its standing in the community. Dimes to dollars, that's money well spent.

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December 1, 2008


Dollar Tree is a national company with stores in all 48 states. Everything they offer costs a buck. (They are doing very nicely in this recession.) Here's how they describe themselves:

Walk into one of our stores and it hits you immediately: this is a place where shopping is fun. We call it "Thrill of the Hunt". We have worked hard to create an environment where our customers can discover new treasures every week. Where entire families can enjoy looking for that special something.

As you will soon see, the "thrill of the hunt" has become a very unfortunate metaphor for the Dollar Tree experience, at least for one hapless employee.

Taneka Talley worked at a Dollar Tree store in Fairfield, California. On March 29, 2006, Tommy Joe Thompson walked into the store not looking for a bargain, but for someone black. Identifying Talley as a person of color, he stabbed her to death. Talley left a son, Larry, who was 8 years old at the time of the murder.

It seems pretty obvious that Talley was in "the course and scope" of employment at the time of her murder. She had no prior relationship with Thompson. Her death, therefore, is a compensable event under workers compensation. Thompson's racist motives have no bearing on that compensability.

Well, it appears that it's not just the merchandise at Dollar Tree that's worth a buck. Their legal advice is equally on the cheap. Dollar Tree's TPA, Specialty Risk Services, has denied the Talley family claim for survivor benefits. Their reasoning? Thompson's sole motivation for attacking Talley was her race. The death had nothing to do with her being a Dollar Tree employee. She just happened to be at work when Thompson walked into the store on his demonic errand.

The insurer's denial is based upon testimony during Mr. Thompson's mental competency hearing. District Attorney Dane Neilson asked psychiatrist Herb McGrew, "You know that he (Thompson) got up that morning and he said, 'I'm going to kill a black person.' She was unfortunately, the first person he saw, correct?"

"Correct," McGrew said.

It took the jury less than half an hour to determine that Thompson could understand the proceedings against him and was competent to stand trial. At some point, if this case reaches a judicial proceeding, Specialty Risk's denial of the claim will be brushed aside with equal fervor. Dollar Tree would do well to work out a (generous) settlement prior to any such hearing.

If Dollar Tree needs additional motivation to reach a settlement, perhaps they should begin by reading their own "mission and values" statement:

Attitude: Responsibility, Integrity, Courtesy
Judgment: Do the Right Thing For The Right Reasons.
Commitment: Honor and Respect for Self and Company

Do the Right Thing for the Right Reasons, indeed.

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October 1, 2008


This is part 3 in a 3-part series. Click here for part 1 and part 2.

Step 6 – Establish a partnership with your claim service provider
The role of the insurer or third party administrator (TPA) is not to solve your workers’ compensation problem. That is something you do together. The insurer or TPA administers and manages your company’s claims according to relevant law and brings a diverse array of claims-related services to the table, including utilization reviews, intensive case management for catastrophic injuries and investigation of dubious claims. Your goal should be to develop a close working partnership. On your side, you need to report claims immediately and establish good documentation to serve as the basis for the insurer’s work.

Together, you and your insurer or TPA should maintain a steady and consistent focus on every open claim. Use all the tools and resources available to return your injured workers to the job; where this is not possible, work diligently to reach agreement on the appropriate way to reach closure on the case.

Step 7 – Measure and track results
You know the drill – what you measure becomes important.

Be sure to establish clear objectives for what you want to accomplish and communicate them in concrete terms.

Here are three simple, but effective, ways to measure performance. These are measurements that senior management can readily understand and track on a monthly basis.

First, measure the total costs of losses per full-time-equivalent (FTE) employee. Doing so factors out both overtime and part time employment.

Second, measure the cost of losses per hundred dollars of payroll.

Third, measure days lost due to injury per every 200,000 hours worked (equivalent to one hundred employees working 2,000 hours per year). This is the OSHA Severity Rate and is an excellent way to measure lost time.

With this data in hand, ask your insurance broker or carrier what the averages are for these metrics in your industry. They should be able to tell you. Then, benchmark yourself against your industry and yourself.

Track results and report them just as you would track and report production or quality objectives. Moreover, discuss the results with employees. If senior management pays consistent attention to the organization’s loss reduction performance, everyone else will, too.

Another measurement factor focuses on accountability: make support of your injury management system an ongoing part of performance reviews for management and supervisory staff. Not doing this sends a subtle message – safety and injury management are really not that important at your company.

Step 8 – Define and communicate responsibilities
In a well-coordinated injury management system, everyone knows his or her proper role and responsibilities. Each person must understand how to respond. Injured workers must notify supervisors immediately of any injury. Supervisors must respond in a caring manner and make sure that workers who sustain injuries are escorted quickly from the work site to the right medical provider. Supervisors also are charged with analyzing accidents and taking steps to ensure they don’t happen again. Supervisors should thoroughly document accidents and injuries with the assistance of injured workers. And senior management should follow through by making sure that corrective action identified actually does occur.

It is a truism of business that well-defined responsibilities go a long way toward assuring that objectives are met or exceeded. Workers’ compensation cost control is no different.

Workers’ compensation is not an insurance problem. It is a management problem. Employers committed to taking control can reduce costs significantly. At the same time, their companies will benefit from improved morale and productivity. Like so many of life’s thorny issues, workers’ compensation can be managed if you only have the will to do it.

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September 30, 2008


This is part 2 in a 3-part series. For part 1, click here.

Step 3 – Develop an injury action plan
Many employers think that when an injury occurs responsibility for getting the injured worker back to work shifts to the claim adjuster. Nothing could be further from the truth, and it is this basic misunderstanding that causes many claims to deteriorate with oftentimes tragic consequences for both worker and employer.

The claims adjuster’s job is to determine compensability, coordinate benefits, follow the law and work within it and the workers’ compensation insurance contract to resolve the claim satisfactorily. And while adjusters play a vital role in the process, they can never be your human resource director.

Misunderstanding the role of the adjuster creates an atmosphere in which injured employees are left to drift, groping their way through a quagmire of medical services, uncertain benefits and a cloudy future. In fact, a truism in workers’ compensation is, “When a claim goes south, costs go north.” As the employer, you need to structure a clearly defined path from the moment of injury through early return to work back to full employment. What you do or don’t do in the first few hours after an injury has a significant impact on your ultimate costs.

Employers need to create a turnkey action plan – a clear set of policies, procedures and expectations with supporting tools and documentation. The plan must include a way to stay in continuous contact with injured workers throughout the recovery process, keeping employees connected to your organization and motivated to return to work.

Step 4 – Establish a relationship with a high-quality medical provider
A close relationship with medical providers of exceptional quality who understand work-related injuries is essential to managing costs. The pivotal emphasis should be on quality, not price. This sounds paradoxical in these times of higher and higher medical costs, where medical treatment now accounts for nearly 60% of workers’ compensation loss costs. However, ample research shows that doctors who specialize in occupational medicine with a sports medicine approach and who follow ACOEM (American College of Occupational and Environmental Medicine) guidelines, consistently provide injured workers with high-quality treatment while shepherding them back to the workplace in a compassionate and caring manner. Board-certified occupational medicine physicians know that a worker should remain out of work no longer than is medically necessary. This leads to an active recovery and lower costs.

Take the time to shop for a provider who offers the highest-quality care with an active sports medicine philosophy. Look for physicians who will take the time to understand your needs, perhaps through actual work site visits. Once you have identified a potential provider, develop a written agreement that sets explicit procedures for handling workplace injuries. Be sure that the provider is willing to identify specific restrictions resulting from injuries and work with you to accommodate appropriate modified duty placements.

Now, admittedly, this approach can be difficult in the 21st century workers’ compensation medical environment. Large medical management companies have enrolled more physicians than there are entries in the New York City telephone directory and have wrung out of each a discounted rate for service. This arrangement might be good for the medical management companies, but not necessarily for you. In workers’ compensation, like in most everything else, you get what you pay for. So, our suggestion is that you should be prepared to negotiate higher payment for the good service you expect. It is well worth it in the long run.

As with any valued vendor, you should provide positive feedback to physicians who take the time to care well for your injured workers. However, while everyone appreciates praise for a job well done, you should always remember that a physician’s first responsibility is to the patient. The more that the physician understands that you have the same outlook, the more the physician will trust you and work with you to accommodate the injured workers needs appropriately.

Step 5 - Stress early return to work
Time away from work can be frightening and debilitating for injured workers. Their physical, emotional, and financial well-being are often in turmoil. They are worried about their job and how they will pay their bills, particularly so in today's economic climate. They often begin to think of themselves as “disabled.” The longer they are out of work, the harder it becomes to get them back into the work routine. Consequently, it is crucial to speed recovery through the use of modified duty, one of the most important tools an employer has to reduce loss time and costs.

Modified duty is a bridge back to full duty, keeping workers active and part of the team. Instruct your medical provider to focus on what the employee cannot do while injured, clearly delineating work restrictions.

For a moment, put yourself in the skin of the injured worker and imagine you are talking with your doctor about your injury. Would you want the doctor to list for you the potentially countless physical tasks you could actually still do while injured? Or, would you want the doctor to tell you the realistically few things you should not do? The latter approach is the one doctors prefer, too.

Once you have the medical restrictions, work with your supervisors to develop progressive, short-term transitional jobs and tasks. Most important, make sure that employees and supervisors carefully follow the physician’s restrictions: The goal is to speed recovery, not aggravate the condition and make things worse. As medical treatment continues and your medical provider gradually lifts restrictions, increase job demands to ease the employee back to his or her original job.

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September 29, 2008


Many companies have recognized a basic truth about workers' compensation: that the worksite is the best place to control losses, and that they, as employers, have the maximum leverage to lower losses. These employers no longer try to hand the problem off to their legislators, their insurers or their attorneys; instead, they manage workers' compensation as a controllable expense. This fundamental shift in attitude empowers employers to take charge of workers’ compensation.

How have they done this? What are the key steps foresighted employers take? Over the last 25 years, our company, Lynch Ryan, has been privileged to assist many of America's leading corporations as they struggled with this issue. I've now concluded that there are eight essential strategies that help savvy employers turn workers' compensation liabilities into assets. The principles are simple, founded on basic human values. They involve a concrete action plan and sound management. More important, they work.

Today, we'll focus on the first three steps, and over the course of this week, we'll post the other five.

Step 1 – Make a commitment
As with any major corporate endeavor, commitment starts at the top. Make sure that workers' compensation is afforded priority status throughout the organization. Set realistic and attainable goals, and communicate them to the organization from the top down.

If you approach injury management simply as the "idea of the month," you will certainly fail. Commitment involves building safety and injury management into the very fabric of your organization. You should never lose sight of your goals. And you should never compromise your commitment to safety by drifting toward expedient, short-term objectives that place production quotas above the safety of your people.

Step 2 – Focus on reducing lost time
Chances are, your company has been working to create a safe working environment. That’s good. Safety is essential in controlling workers' compensation, but it's only half the equation. Good safety programs have a positive effect on the frequency of injuries, but the best safety program in the world will not eliminate all accidents. People being human, injuries will happen. Try as we all do, work conditions change and we make mistakes. To really attack workers' compensation costs, you need to focus on reducing severity: the length of time injured employees stay out of work. Severity is the real cost driver in workers' compensation. Every day that an employee is off the job costs you money.

When your machines break, you fix them immediately. Think of something as simple and common as a department's copier. When you purchased or leased that machine, you insisted that prompt maintenance or even replacement was part of the deal. An out-of-order copier slows production. You need to do the same for your most important resource, your employees. So your goal must be to keep days away from work to an absolute minimum. You need to focus, laser-like, on the goal of returning every injured employee to work, through modified or transitional duty if needed, and to the original job as quickly as possible. That's good for you and it's also good for the employee.

Steps 3 through 8 will be posted over the course of the week.

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September 23, 2008


Milliman, Inc has just released a study that shows that Paradigm Management Services has remarkable rates of return to work for catastrophic and complex claims when compared to a benchmark database of 60,000 similar claims. Paradigm was five times more successful in getting patients released to return to work, 5 time better in getting patients returned to work, and 13 times better in getting employees returned to work in full-duty. The study notes that 20% of the Paradigm cases returned to work in full duty capacity compared to 1.5% of the benchmark claims.

Those are some pretty impressive numbers because just one catastrophic claim can have a serious impact on an organization's bottom line. But the costs go well beyond the financial - the harsh reality of a debilitating, life changing injury can have a profound effect on the worker who suffered the injury and on the injured worker's family and work colleagues. One problem that plagues workers comp all too often is that people tend to view it as a financial transaction when at its very heart, it is a human event. We've found that if you take care of the human event, the dollars and cents generally follow.

Most work injuries are relatively minor - soft tissue injuries such as sprains and strains, abrasions, cuts, burns. Most workers can be restored to good health and resume normal life and work activities within a few days. About one in every 4 or 5 injuries requires some degree of lost time, but even the bulk of those generally only require a matter of days or weeks. According to Paradigm, catastrophic injuries are 1/10 of 1% of all workers compensation claims, but can account for 30% of total medical dollars paid.

For this small percentage of injuries, the injured employee won't be able to resume "normal" life activities, at least in the sense of pre-injury levels. These types of injuries include spinal cord injuries, brain injuries, severe burns, amputation, and multiple trauma. Think the workplace equivalent of war injuries. These injuries are complex and costly, requiring sophisticated medical care and rehabilitative services.

Paradigm offers some good advice on managing catastrophic claims - see Managing Catastrophic Injuries, a handout by Jo Carter, RN, BSN, CCM from a recent presentation. It outlines some of the issues and best practices, and gives a window into why and how Paradigm is achieving impressive outcomes.

For more on the importance of return to work, we highly recommend the ACOEM Guideline Preventing Needless Work Disability by Helping People Stay Employed (PDF). This is a workers compensation "must read," authored by occupational physicians.

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August 28, 2008


Yesterday, at Managed Care Matters, our good friend Joe Paduda published an excellent "how-to primer" for starting a workers' compensation medical network. Essentially, Joe's advice for would-be network creators is:

  • Bring the right physicians into the network - board-certified occupational health specialists, for example, as well as primary care and specialist physicians who understand workers' compensation;
  • Exclude physicians who don't know anything about the subject;
  • Pay the physicians a reasonable rate; and,
  • Support the network physicians by sending them patients.
If the network is formed in that way it should be of gold standard caliber. But that's easier said than done.

We're all familiar with the super-large networks that include anyone with a medical degree - as long as "anyone" agrees to see network patients for a discounted fee, which the network can then tout as "savings" for employers regardless of the quality of care. Most of these networks and the doctors in them came from the group health arena where modified duty, transitional duty, early return to work, the buzzwords of workers' compensation professionals, are foreign concepts. And why should that be surprising? After all, workers' compensation is only one, tiny room in the American health care house that Jack built.

What workers' compensation professionals sometimes forget is that most doctors, whether in or out of these networks, went to medical school because they wanted to devote their lives to healing the sick, not to becoming some company's external medical personnel director. Many, perhaps most, physicians in networks that have physician directories the size of New York City's phone book understand "injuries," but not workers' compensation, and that is not their fault. It is ours. We have not educated them sufficiently regarding workers' compensation, nor have we cohesively partnered with them to help injured workers transition at the right pace back to full duty, which, in my 25-year Lynch Ryan experience, is where injured workers really want to be.

Consider this. Most doctors have small practices that turn them into small business owners. I've never met one who liked that, the business end of medicine. Most are not technologically facile, and workers' compensation injuries comprise a minor share of their "business." Their responsibility focuses totally on their patients and what's wrong with them. They don't see a real need to be overly interested in the workplace; in fact, they most often don't even know what or where that is. On the assembly line that has become American health care, where insurers force physicians to cycle through patients in fifteen minute intervals, who has time to probe deeply about the workplace and what goes on there? When some claims adjuster or nurse case manager wants to pin them down about physical restrictions or a date when their patient can return to work, they err on the side of humongous caution in order, in their minds, to "do no harm." This leaves workers' compensation professionals and employers befuddled, scratching their heads and wondering what is wrong with the doctor. They think, "Why can't the doctor see what's really going on here?" They don't understand the doctors and the doctors don't understand them.

That's the scenario in which workers' compensation professionals very often find themselves. At Lynch Ryan, the only way we have ever found to deal with it successfully is one doctor at a time, sitting face to face and finding common ground. Occupational health specialist or not, an educated physician is a powerful weapon for good in the little world of workers' compensation.

In my next post I'll describe the step-by-step process my colleagues and I went through to build the first workers' compensation medical network in Massachusetts once upon a time. Here's a teaser: It was a thing of beauty, profoundly successful for everyone involved, and would not be legal today.

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July 1, 2008


Back in February we blogged a rather drastic proposal to "restore" the Americans with Disabilities Act (ADA) by expanding eligibility to just about anyone. We feared that blurring the lines between transient conditions and impairments that "substantially limit" major life activities would paralyze American business, clog the courts with trivial cases and divert attention away from the truly disabled, who desperately need ADA protection.

Well, it appears that the "restoration" has been restored and the "fix" has been fixed. Proposed reforms would expand coverage where the U.S. Supreme Court had curtailed it: individuals whose disabilities can be treated - with medication, with prosthetic devices, with assistive technology - would still be considered disabled. In other words, their ADA protection would not end simply because their disability is mitigated through some form of treatment. (Got that, Justice Thomas?)

The fix also addresses the paradox of "regarded as" disability. This involves situations where an individual is discriminated against because he or she is perceived to have an impairment: "Jack looks like an alcoholic." These people do not require accommodation (they are not really disabled), but the ADA will ensure that they are not discriminated against based upon a false perception.

Formidable Support
While disagreement on the nature of disabilities will continue, substantial agreement has been reached on language for the revised ADA statute. Here are some of the organizations that have signed off on the proposed revisions:
- American Association of People with Disabilities
- American Diabetes Association
- Bazelon Center for Mental Health Law
- Epilepsy Foundation

No surprises there. But check out some of the mainstream business organizations that are also on board:
- National Association of Manufacturers
- National Restaurant Association
- US Chamber of Commerce

With such diverse and powerful backing, the ADA fix appears to be headed for passage. That's all well and good. But as we pointed out in February, there is a sad paradox in the ADA itself: since the law was enacted in 1992, overall levels of employment for the disabled have declined. Employers, intimidated by the law's many requirements, apparently take the path of least resistance and avoid hiring qualified disabled applicants. So in some respects the ADA "fix" compounds the problem. The real fix goes beyond the language of this or any other law: it involves transcending stereotypes and embracing people for who they really are and recognizing what they are truly capable of doing.

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June 30, 2008


Risk & Insurance Magazine has announced the 2008 competition for the Teddy Awards, given to organizations demonstrating a long-term commitment to improving workers compensation performance. Creativity and teamwork are major considerations. Four awards will be given: one for a company; one for a nonprofit or government entity; a third award will honor a federal government entity (that will be interesting!). Finally, a Teddy will be awarded to a small employer--a company or organization with fewer than 500 workers.

As you can probably guess, the award is named in honor of President Theodore Roosevelt, who in 1908 introduced and promoted the first piece of important workers' compensation legislation in the United States. The law, called the Federal Employer's Liability Act, covered workers in hazardous industries and workers for common carriers. In signing the new law, Roosevelt said to Congress "the burden of an accident fell upon the helpless man, his wife and children." With that new law, the federal government took the lead in combating on-the-job injuries, which Roosevelt had characterized as "outrageous." In the years immediately following Roosevelt's initiative, states, beginning with Wisconsin, began to implement their own workers comp laws.

In the interests of full disclosure, the Insider is part of the judging panel for these awards (lively narratives preferred!) But you must hurry: Applications are due by July 15.

Safe Talk, Perilous Walk
Roosevelt may have talked the talk, but when it came to personal risk management, he loved adventure and all-too-frequently put himself in harm's way. There is no better example than the ex-President, after losing a third party bid for office in 1912, heading off to explore an uncharted tributary of the Amazon River, dubbed the "River of Doubt." The trip, plagued by haphazard preparation, the wrong type of canoe and 24/7 perils, very nearly killed him. Candice Millard's well-written story makes for a fascinating summer read. Needless to add, Teddy does not deserve a Teddy for his ill-fated journey.

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June 20, 2008


You probably have never heard of Brendan Doyle, a Rhode Island state trooper, but his story, as told by Amanda Milkovits in the Providence Journal, belongs in the hearts and minds of anyone involved in disability management. He exemplifies what great medicine, combined with ferocious determination and discipline, can accomplish.

Just over a year ago, he was punched to the ground by a low life named James Proulx, hitting his head on the pavement. His injuries were so severe, doctors discussed organ donation with his family. He was comatose, hooked up to a respirator, his skull shattered.

But he held on. Eventually, he was moved to Spaulding Rehabilitation Center in Boston, where doctors dismissed any notion that he would be able to return to work. He was paralyzed on his right side and suffered from double vision. But by the fall of last year, after doctors reattached a piece of his skull, Doyle noticed that his fine motor skills started to return. The double vision disappeared and he regained feeling and mobility in his right side.

Against All Odds
By this past spring, Doyle said he wanted to return to his job as a trooper: not a modified duty, desk job in the back of some precinct, but full duty. His supervisors, who supported him from day one, put him through rigorous retraining in firearms, pursuit driving, use of force techniques and through "shoot - don't shoot" scenarios to test his reaction times. He endured the standard three week course of 13 hour days in the police academy. He passed every test with flying colors, even earning a master pin for firearms.

So against all odds, with no small element of luck, Brendan Doyle is back on the job. From the beginning of his ordeal, this was his one goal. By all rights he should have become permanently and totally disabled, drawing 100 percent of his trooper pay tax free for the rest of his life. No one would have questioned it. But Doyle refused to bow to this fate. In doing so, he exemplifies what the human spirit can accomplish despite ridiculous odds.

I would like to see a picture of Doyle, with his humble smile and crescent moon-shaped scar, posted over the desk of every ER and occupational doctor, every nurse case manager and claims adjuster - and every employer - to remind us that the goal of treatment for injured workers is return to full duty. Forget the odds. Look beyond the trauma of the incident itself and the dire prognosis. Anyone seeing Doyle in the days and weeks following his injury would have scoffed at the notion that he would ever be in uniform again. But that is exactly where he is today.

I hope never to meet Trooper Brendan Doyle: to do so would probably mean I was involved in an accident or going a little too fast on I-95 outside of Providence. Nevertheless, I will try to keep his image in mind. For all of us who work in risk management, cost control and safety, who focus on doing the right thing for injured workers, Trooper Doyle embodies the spirit and goal of our work. He is the Insider's Return-to-Work Person of the Year.

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June 19, 2008


Imagine you are an attorney in Massachusetts looking for a little work. The Office of Labor and Workforce Development (OLWD), a state agency, hires you and 10 other attorneys to examine applications for unemployment insurance. Normally, this work would be performed by state employees, but the combination of cost-efficiency lay offs and a bad economy has caused a surge in applications. The state pays you through a 1099 form. You are responsible for your own taxes. And you soon find yourself in the middle of a story concocted by Franz Kafka.

In a parallel operation (bordering on a parallel universe), Governor Deval Patrick has announced a crackdown on employers who commit fraud by misclassifying workers to avoid paying workers comp insurance, plus state and federal taxes. The governor creates an Underground Economy Task Force to ferret out abuses of the independent contractor designation. The task force the OLWD. (You can read the AFL-CIO's endorsement of the task force here.)

These two worlds collided when someone (presumably a state employee affiliated with the unions who lost employees in lay offs) dropped a dime on OLWD, complaining that the 11 attorneys hired as "independent contractors" were performing the job duties of regular employees. So now OLWD is being scrutinized by its own task force. We can only hope that members of the task force are state employees, and not "independent contractors" who have signed on to carry out a short-term project: an image arises of a dog furiously pursuing its own tail.

Management Conumdrum
Many employers face the conundrum embodied in this situation: when you have more work than you can handle - especially on a short-term basis - it's convenient to hire temporary "independent contractor" consultants to carry out the work. Hiring is much easier; there are no long term commitments. When the work has been completed, you simply terminate the contracts.

Because there is such widespread abuse of the "independent contractor" designation (did someone say "FedEX"?), these convenient arrangements are now routinely challenged. At OLWD, the questioners themselves have been called into question.

Suzanne Bump, the state's secretary of Labor and Workforce Development, is not using the word "investigation" to characterize her examination of this particular form of outsourcing. She points out that the practice began in the prior (Republican) adminstration, which had enthusiastically reduced the size of the state's workforce, only to discover they did not have enough people to do the necessary work.

"We are taking steps to reverse this practice and are looking to hire more review examiners on a permanent basis when possible," Bump stated. This in itself raises a problem: by creating regular, full-time positions to handle the jobs, the state will have to grow the budget. Regular employees cost more than "independent contractors" because you have to pay for insurance and taxes (which is one of the reasons they hired independent contractors in the first place).

What used to be routine HR functions have become enormously complicated. I am sympathetic to all employers who have to work through these often paradoxical issues. When it comes to managing a business in these challenging times, we find ourselves lost in a dimly lit, endless corridor, characters in a Kafka story, looking for the room where all the answers are rumored to reside. Like the good folks at OLWD, we eventually conclude that the room does not exist.

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June 4, 2008


California had a long-standing reputation as a workers compensation nightmare: not because injured employees received generous benefits - they did not - but because doctors and lawyers exploited the system to generate enormous fees. Governor Schwarzenegger, AKA the Terminator, put an end to that with his extensive 2003-04 reforms. In the effort to contain costs, the reforms for the first time brought managed care tools into the comp system. The bottom line for employers has improved dramatically.

Among the many provisions of the reform was a limit on physical and occupational therapy treatments for an injury. Injured workers are now limited to 24 visits. Jose Facundo-Guerrero, a worker at a nursery in Half Moon Bay, challenged the limits on constitutinal grounds, alleging that he was entitled to the "full provision for such medical, surgical, hospital and other remedial treatment" promised in the CA Constitution. Jose had visited his chiropractor 76 times and he wanted the carrier to pay.

The First District Court of Appeal in San Francisco has upheld the limits in the comp reform package. They found that the Constitution does not require "unlimited" treatments and leaves the details up to the legislature.

Arbitrary Limits
There is no question that the 24 visit limit is arbitrary. This one size does not fit all. On the other hand, chiropractic treatment can be addicting. It feels good. Jose went 76 times and might well have continued on indefinitely, had the treatments been compensable.

One aspect of the reform language caught my eye: the 24 visit limit can be exceeded if the employer agrees. This raises an intriguing possibility. If valued employees require extensive physical therapy that goes beyond the arbitrary limit, enlightened employers might well authorize the carrier to cover a specific number of additional visits. This makes sense as long as it keeps the employee happy and productive.

As with so many workers comp issues, law makers struggle to find the middle ground between no limits and severely curtailed treatments. What's missing is reliable and effective lines of communication among employers, their employees, medical providers and insurance carriers. The rigid limits on treatment in California are apparently legal, but that does not mean they are fair. There is no question that the reforms of 2003-04 have reduced costs. Ironically, injured workers were not the primary beneficiaries of the state's pre-reform, out-of-control comp system. And it now appears likely that these same workers will pay the price for reforms as well.

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May 28, 2008


The Group Insurance Commission (GIC) in Massachusetts came up with a nifty idea: let's grade physicians based upon efficiency and competence; we'll reward those with high marks and penalize those who are (relative) failures. (The GIC administers health plans for public sector employees.) The GIC worked with the MA Medical Society (MMS) and a number of insurance carriers to come up with a reasonable methodology and metrics for grading doctors. After four years of planning, the GIC rolled out the program. Unfortunately, the MMS rolled out the lawyers: they are suing GIC and a number of health plans for defamation, interference, breach of contract, bad faith and violation of due process. Other than that, Mrs. Lincoln, what did you think of the play?

The suit claims doctors have been capriciously ranked into tiers, from 1 through 3, based upon a faulty analysis of billings. The tiers assigned to a given doctor result in progressively higher co-payments for their patients. For example, the Tufts Health plan has established the following co-pays for doctor visits:
Tier 1 doctor = $15 co-pay
Tier 2 doctor = $25 co-pay
Tier 3 doctor = $35 co-pay

The MMS claims, first, that the tiering system is based upon faulty data. For example, one doctor who specializes in treating severe cases of multiple sclerosis has an inflated "cost per patient" due to her inter-disciplinary approach. She has a tier 3 ranking. But this low score does not take into account the severity of her patients's conditions or her success in treating them. In another example, one doctor simply examined medical records and provided an interpretation: he was held accountable for the ultimate treatment provided to patients he never actually saw.

With low rankings based upon incomplete and often inaccurate data, the MMS concluded that good doctors have been defamed.

In addition, MMS claims that patients have been defrauded, by being directed toward certain doctors for no particular reason. They pay less for tier 1 visits, even though they may not be getting the best available services; conversely, they have to pay substantially more for tier 3 visits, even though the quality may well exceed that of tier 1 doctors.

Dr. Bruce S. Auerbach, president of the MMS, said efforts to improve the tiering program have failed.

"There is a right way to do this, and a wrong way - and the Clinical Performance Improvement initiative is definitely not the right way."

"We have worked with the GIC for four years to improve its program, and the agency has made changes in some limited areas. However, the GIC has refused to correct the CPI's most glaring problem, which is its ranking of individual physicians using inaccurate, unreliable, and invalid tools and data."

Not Close Enough
We all know that there are physicians whose services are mediocre and at times, dangerous. But the problem is in the data: how do you determine the quality of services? How do you distinguish between prudent and outrageous treatment? Data is data, but behind the numbers are stories of lives saved and lives ruined. Number crunching computers cannot tell the difference.

Unless the parties settle prior to trial, the discovery process will expose GIC's methodology for grading doctors as clearly as an MRI. Based upon the MMA's lawsuit, the GIC's metrics appear to be fairly crude. The good news is that a number of mediocre doctors have been exposed. Unfortunately, the broad net cast by the tiering system has tainted the reputations of some very competent and compassionate physicians. In this particular endeavor, "reasonably close" assessments are not sufficient. The margin of error - where the reputation of a doctor is at stake - is very small indeed.

Medicine is both a science and an art. With the livelihoods of medical practitioners at risk, any methodologies for evaluating the quality and effectiveness of services must be precise and accurate to the nth degree. If your methodology cannot distinguish between incompetence and art, if it cannot place virtually every outstanding physician in the top tier, then the metrics are pretty worthless. At first glance, GIC's admirable effort to triage the docs fails to pass muster. In all likelihood, the pending clash in court will send all the parties back to the proverbial drawing board.

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May 22, 2008


What do Bank of America, Citigroup, Merrill Lynch, J.P. Morgan Chase and Morgan Stanley have in common? If you said they all have lost billions in absurdly risky loans, you would be right, but that's not the answer we are looking for. We learn in the latest edition of Cavalcade of Risk, ably hosted by Jason Shafrin of Healthcare Economist, that these companies have all filled new positions entitled Chief Risk Officer (CRO). In fact, you will find that many of the companies involved in the great mortgage fiasco of 2008 are trying to mitigate future risks by hiring into these positions. It would be interesting to read the job descriptions. Being a Risk Manager is one thing; Chief Risk Officer sounds a bit more, well, exposed.

Good management teams empower everyone to focus on risk. Will CROs be able to do this? Or is the CRO just another way for senior managers to toss someone else under the bus? Only time will tell.

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May 12, 2008


Bill Thorness has written an interesting article for NCCI on the relationship of wellness programs to workers comp costs. In some respects, it involves a "duh" thesis: wellness programs can significantly lower comp costs, because healthy workers are less prone to injury and, once injured, recover more quickly than their out-of-shape co-workers. Conversely, obese and out-of-shape workers are more at risk for strains and sprains, because the additional weight they carry compounds the impact of day-to-day workplace functioning.

There is even an overlap between wellness and one of the Insider's favorite topics, the aging workforce. Older workers are more at risk for serious (and expensive) injuries such as rotator cuff tears. A relatively healthy, well conditioned, non-smoking older worker is more likely to avoid these injuries and again, once injured, more likely to shorten the normally extended recovery time.

With all of the compelling logic underscoring the benefits of a healthy workforce, it might be natural to assume that workers comp would jump at the opportunity to provide incentives for wellness programs - dare we say, even pay for them. Perhaps we could find examples among the national carriers, where workers comp safety programs include wellness training. Unfortunately, for the most part wellness remains an afterthought in the comp system. Aside from conventional safety programs, which focus on injury prevention, comp coverage tends to sleep like a hibernating bear, roaring into action only after injuries occur. Even then, wellness is a marginal issue: if, for example, obesity hinders recovery, carriers are unlikely to pick up the cost of a weight-reduction program, because the obesity is not work related.

Who Owns It?
The ultimate cost of most injuries is directly related to the health and conditioning of the injured worker. Logic says comp carriers should embrace wellness programs in both injury prevention and post-injury treatment. But as is often the case, it comes down to a question of who owns it, who benefits and who pays. Wellness is a proven concept, but comp carriers are unwilling to own it and very reluctant to pay. They are, nonetheless, more than happy to reap the substantial benefits.

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April 7, 2008


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

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

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

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

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

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

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March 14, 2008


The RTW Knowledge Base Website is a free service from Australia providing research based information and links to external resources on work disability prevention. We received a notice about this site from Mary Wyatt, an Occupational Physician based in Melbourne Australia. She offered a good overview of the site's features, so we will take the liberty of using her description of the site:

The Return to Work Knowledge Base was developed by ResWorks (a small Australian nonprofit) with the support of the WorkSafe Victoria RTW Fund. The site has been endorsed by the Australasian Faculty of Occupational & Environmental Medicine.

The website is designed to help with return to work. The site includes:

  • Research papers translated into plain language. The articles can be browsed in interest group collections - employee, employer etc. Alternatively all articles can be seen via the 'View all Articles' tab. On the summary pages the article title is the link to the full text. A search facility is available on all pages.
  • Resources - links to useful information on work disability such as patient handouts, work disability reports, treatment guidelines. The link to the Resources Page for each group is at the top of the left navigation menu on the summary pages. Most links are to patient handouts, guidelines, or reports on the topic. Other links are to webcasts or videos relevant to the field.

Research is often difficult to access and for most people research is hard to read. The site translates individual research papers into a format that can be understood and houses the information in a readily accessible format. Topics include consequences of being off work in the long term, medical issues, workplace factors, system factors, and people issues.

There are two broad ways the site can help:
1. Increasing peoples' knowledge and understanding of the area through reading the information provided on the site.

2. Influencing others. Many working in this area practice best evidence care. However it can be difficult to influence others with a less enlightened approach. The site is designed for sharing of information with the ability to send links to colleagues or print articles (eg for patients, HR managers, supervisors).

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March 12, 2008


The Iraq and Afghanistan theaters of war represent the largest deployment of civilian soldiers since WWII. Of the 1.5 million troops that have served, approximately one in every four is a National Guard member or a Reservist. While the Uniformed Services Employment and Reemployment Rights Act offers legal job protections, the road back will not be an easy one for many veterans. Many have suffered profound and life-changing physical injuries; many also face less obvious wounds - Iraq and Afghanistan Veterans of America estimate that about one in three Iraq veterans will face a serious psychological injury, such as depression, anxiety, or PTSD:

These psychological injuries exact a severe toll on military families. Rates of marital stress, substance abuse, and suicide have all increased. Twenty percent of married troops in Iraq say they are planning a divorce. Tens of thousands of Iraq and Afghanistan veterans have been treated for drug or alcohol abuse. And the current Army suicide rate is the highest it has been in 26 years. One of the goals of any disability program is to help the injured party to recover and to return to their normal lives, including return to work. This is true whether the injury occurred in the workplace, at home, or on the battlefield. Work is not only vital for economic security, for most of us it is also a core part of our identity, an integral part of our lives. A good return to work program can be restorative on a financial, emotional, and psychological plane. Both in the short term and over the longer term, employers will play a vital role in helping veterans readjust to civilian life. This requires that employers have awareness of the many challenges that veterans face and the willingness to provide the resources to support a successful transition.

Enter the Workplace Warrior Think Tank, a coming together of The Disability Management Employer Coalition, several of the nation's premier insurers, employers, and military and veteran participants with the purpose of helping veterans to ease the transition from the war to the workplace. The group examined challenges and opportunities facing returning employees and identified employer-based resources and strategies. The end product is a useful guide for employers, Workplace Warriors: The Corporate Response to Deployment and Reintegration Highlighting Best Practices in Human Resources and Disability Management (PDF). The guide includes a list of best practice recommendations to help returning vets reintegrate in the workplace. These include such things as celebrating the employee's return to the workplace, recapping changes that occurred while he/she was gone, and training supervisors to be aware of certain red flags that might indicate a problem. The group also emphasizes that the availability of effective EAP services can be critical to successfully helping veterans to face the many psychological problems that are common in the aftermath of war service.

It's great to hear about the efforts of the think tank and their recommendations for employers - please help to distribute the guide and raise the issue because as the report notes, "Repercussions and delayed effects of the war experience will be felt in the workplace for decades to come." Hopefully, this will be the first step in many by leaders in our industry to dedicate resources and attention to this important issue.

For more information and resources:
The Corporate Response to Deployment and Reintegration - this is the full report from Workplace Warriors, available through DMEC.

Wounded Warriors is a blog that collects veterans coverage from the McClatchy Washington Bureau, McClatchy Newspapers, and other sources. It's a good source of news for items that affect returning vets and their families.

Resources for returning veterans and their families - from the Substance Abuse and Mental Health Administration.

Veterans and Military Health - from MedlinePlus

Iraq and Afghanistan Veterans of America - since 2004, the nation's first and largest group dedicated to the Troops and Veterans of the wars in Iraq and Afghanistan, and the civilian supporters of those Troops and Veterans.

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March 4, 2008


Joe Juran died this week, at the ripe age of 103. You may or may not know him by name, but his remarkable contributions to management are visible in worksites around the globe. In 1937, he coined the Pareto Principle, also known as the 80-20 rule, which states that 80% of effects come from 20% of causes. As a theory it achieved a sort of universality that could be applied to almost anything, from 20% of customers buying 80% of products, to 80% of production errors being made by 20% of workers, or 80% of the medical costs deriving from 20% of the patients.

Juran's story, summarized nicely by Claudia Luther in the Los Angeles Times, is so classically American, it seems a cliche. He was born Dec. 24, 1904, in Braila, Romania, the son of a cobbler. When he was 5, his father left for the United States to try to improve the family's financial situation. (Had his father stayed put in Romania, Joe would have perished in the Holocaust, his name - and his contributions - erased from history).

Small, wiry and smart, Joseph went to work when he was 8, driving a team of horses, selling shoes and bookkeeping for a local icehouse, among many other jobs. The first in his family to attend college, Juran earned a bachelor's degree in electrical engineering at the University of Minnesota and a law degree at Loyola University. In 1924, he went to work for Western Electric's Hawthorne plant in Cicero, Ill.

At that time Joe entered the workforce, quality control generally meant inspection: the products were made, inspected and, if they didn't make the grade, rejected. Juran thought this was backward, that quality should be instilled long before the product got made.

In centuries past, "the typical craftsman was his own customer, over and over and over again," Juran told Jane Gaboury in an interview for the Institute of Industrial Engineers.

"That is to say, because the craftsman himself performed every step of the process of, say, barrelmaking, he could see and correct whatever mistakes he made along the way, and avoid them the next time," Juran said.

That ability was lost as manufacturing became compartmentalized. Juran's solution was to re-empower the managers and workers who had been disempowered by the manufacturing process.

The Making of Japan
Joe was part of the team of consultants who revolutionized manufacturing in Japan. Along with W. Edwards Deming, Philip Crosby and Armand Fiegenbaum, Joe helped transform "made in Japan" from an insult to the highest possible compliment.

"The Japanese found they couldn't sell their products because they had a very bad quality reputation," Juran told Industrial Engineer magazine in a 2002 interview. "Of course when you can't sell your product the chief executives are going to move in, and that's what happened." With the help of Juran and the other consultants, senior management embedded the "quality" message in every aspect of the manufacturing process.

Juran brought a uniquely practical perspective to his work. He believed that the human factors in production were paramount, especially the work of managers, and that quality problems should be solved systemically. Juran focused on the fundamental sequence in production management: market research, product design, product development, production and sales. He believed that quality work had to be properly valued by everyone involved - from the lowest-level worker to the CEO.

Joe Juran's business education began behind a set of horses when he was not quite 10 years old. It ended, finally, after nearly a century of paying attention in his idiosyncratic and brilliant way. If the goal of life is to be of use, then Joe Juran lived a very good life indeed.

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March 3, 2008


If you were to guess which jobs for the city of Philadelphia resulted in the most workers comp claims, you'd probably start with police and fire. These are high risk jobs, for sure, but the losses in these departments pale beside those of the Parking Authority. Patrick Kerkstra at provides the numbers on the cost per claim:
: Firefighters $1,084
: Police $833
: Parking Authority $1,558

The Authority's risk management director, Allen Dunkelberger, thinks that they have a culture problem. "Sometimes people don't want to work." The agency has spent $5.8 million settling comp claims over the last four years. At this point, Dunkelberger cannot tell how much of that was spent on legitimate claims.

He told of one "frequent flyer" who filed claims for being bitten by a spider. Four times. Try as they might, they could not find any spiders in the building where the employee worked.

To be sure, there are significant risks in work performed by the authority: motor vehicle accidents; long hours on foot; slips and falls on icy sidewalks. To which we might add the open-ended risk of motorist rage, where parking enforcement officers (formerly known as "meter maids") are assaulted after vehicles have been tagged.

Any review of the risks in authority jobs must also take into account the stress: the work of the authority is generally despised by the public, who have to pay the fines for exceeding time on meters and who have to retrieve their towed vehicles from remote parking lots. These are stress jobs with a capital "S."

A Culture of Abuse
Kerkstra's article presents images of a work culture run amok. At the top of the food chain, you have problems in the administrative ranks, with the extensive use of high-priced consultants, high salaries and a fleet of SUVs. This type of conspicuous consumption does not go unnoticed by the rank and file. They want their piece of the action; if it involves extending vacation time through the use of workers comp, so be it.

Then there is the authority's attempt to reduce losses through the use of temporary modified duty. It's not a model program, to say the least:

The program is reviled by rank-and-file authority workers, and little wonder. It typically consists of standing watch outdoors at authority impoundment lots, often during late-night and early-morning hours.

"Basically you sit there in the cold, in the rain, from 8 pm to 4 am doing nothing," said an authority parking-enforcement officer, who asked to remain anonymous out of fear of retribution. "It's a punishment."

Dunkelberger knows that the..alternative duty is loathed, but he makes no apologies.

"There are some people here who've had literally a dozen workers' comp claims," he said. "They're going to be inherently negative about any method we have for trying to deal with them."

Note to Dunkelberger: Alternative duty should never be used as a punishment. A punitive program simply reinforces the negative work culture. The authority needs to learn from Ohio State University, whose exemplary program we blogged just last week. Use alternative duty as an incentive for full recovery. Place injured (even allegedly injured) employees into useful positions where their time is valued and their contributions are real. You cannot punish people into recovering; you have to support and nurture them. Modified duty without respect and compassion is ultimately worse than no modified duty at all.

The high cost of comp is symptomatic of much larger culture issues within the organization. There are many paths to improvement, but punishing injured employees by isolating them at night in parking lots is certainly not one of them. That's a "solution" that will make the problem worse.

The work culture needs improvement, so fix it. Good employees need to be rewarded; the bad eggs need to be terminated. Senior management needs to clean up its act. Once these fundamental changes take place, workers comp will no longer be an issue. Under a positive work culture, modified duty will no longer be viewed as a punishment. It will be what it is supposed to be: a clear, well-lit path for returning valued employees as quickly as possible to their full duty jobs.

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February 29, 2008


We came across an article in the Columbus Dispatch by a reporter with the irresistible name of Encarnacion Pyle. It's about the "novel" use of temporary modified duty at Ohio State University. With its workers' compensation costs nearing $10 million a year, OSU finally discovered the idea that has been circulating among enlightened managers for 20 years or more: "moving ill and injured workers to less-demanding jobs instead of leaving them at home while they recover."

The new modified duty program has already saved OSU $4 million -- more than double what the college had expected. That number doesn't include savings from hiring fewer temporary workers and from projected reductions in premiums for workers' compensation insurance. Lower premiums probably will produce $500,000 in savings this year and reach $1.5 million annually within five years.

"We save money, and our employees feel productive and learn new skills and make new friends," said Tori Weeks, who manages OSU's disability programs.

Since January 2007, Ohio State has reassigned 500 employees -- about 95 percent of the workers with temporary medical or psychological restrictions on what they can do. The other 5 percent are in the hospital or are hurt too badly for even light assignments, such as data entry.

I am tempted to ask OSU: "Where have you been?" Modified duty is not something that takes years to develop in a laboratory. You don't have to wait until costs are wildly out of control to implement the program. But rather than criticize OSU for being so low to respond to the problem, let's give them credit for implementing a first class program.

Healing Words
Our esteemed colleague, Dr. Jennifer Christian, CEO of and a guru in occupational health, finds more news in the OSU program than I did. Here is her take on the article:

Two people have sent me this happy story about the financial payback of a stay at work/return to work program from an Ohio newspaper -- and it has some really good phrases that might be helpful to you in marketing these programs to employers. Selling ideas requires skill with language because the words you use are going to create a response in the gut/heart/head of the listener.

1. The first one is in the topic sentence: "moving ill and injured
workers to less-demanding jobs instead of leaving them at home while
they recover." Note this: "moving" instead of "assigning"
or "putting" sounds more benign. "Leaving them at home" is similar
enough to "leaving them alone" that it creates the feeling in the
reader that staying home is like being abandoned.

2. The second one is "We save money, and our employees feel
productive and learn new skills and make new friends." Note this:
this sentence is a list of THREE different areas of benefit to the

3. The third one is "by avoiding the workers' compensation system,
workers receive their regular pay no matter where they end up during
their reassignment." Note this: the word "avoiding" the work comp
system really emphasizes that this is protecting the working!

OK, I admit it. I am a word nut.

Jennifer has done a nice job of diagnosing the spirit and language of the OSU program that make it special. OSU has infused the return-to-work program with positive energy. OSU might have taken its sweet time to develop the program, but they have brought a subtle dimension of compassion and thoughtfulness that is instructive to those of us who have been developing these programs for decades. Thanks to OSU for doing it the right way - and thanks to Jennifer for recognizing their accomplishment.

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February 25, 2008


The fact that a U. S. Senator has filed a bill on independent contractors is not a major news item. But the senator is Barack Obama, and the bill, S. 2044, is entitled "Independent Contractor Proper Classification Act." Obama has zeroed in on an issue of abiding interest to the Insider - and to all who deal with employment issues on a daily basis. (Search this site for our many postings.)

Obama's bill would amend the Revenue Act of 1978 in three key areas:
1. Requires employers to treat workers misclassified as independent contractors as employees for employment tax purposes;
2. Repeals a ban on Treasury regulations or revenue rulings on employee/independent contractor classification issues; and
3. Eliminates the defense of "industry practice" as a justification for misclassifying workers as independent contractors.

The bill enables workers to petition the Treasury Secretary for clarification of their status. It prohibits employer retaliation against any workers filing these petitions. Language describing the petition process would be added to required workplace postings regarding employment rights. Finally, the bill requires any employer hiring an "independent contractor" to provide the following notice to the individual:

Each employer shall notify any individual who is an independent contractor...of the Federal tax obligations of an independent contractor, the labor and employment law protections that do not apply to independent contractors, and the right of such independent contractors to seek a status determinations from the IRS.

The FedEx Factor
Obama's bill may well languish in committee. But to the degree it reveals the presidential candidate's thinking, it is significant. I imagine that FedEx is paying close attention: the embattled delivery behemoth is fighting - and losing - a state-by-state defense of its hiring practices. Those ubiquitous "independent contractor" drivers, in their cool FedEx trucks and natty FedEx uniforms, are looking more like employees every passing day. If S. 2044 becomes law, or if Obama's quest for the presidency succeeds, FedEx will probably have to throw in the towel. In the meantime, FedEx is undoubtedly writing a few hefty checks to a candidate whose name rhymes with "pain."

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February 19, 2008


Our colleague Peter Rousmaniere has a fascinating article on PPOs in the current issue of Risk & Insurance magazine, entitled "Has Competition Vanished?" Coventry has become the 900 pound gorilla of workers comp medical services, with 4,700 hospitals and 580,000 doctors. Through the aggressive use of acquisitions and partnerships, Coventry is approaching monopolistic status. The question, of course, is what this means for the carriers and employers using the network for workers comp. Is the Big Kahuna delivering quality services?

Coventry begins with a promise to their payers: they will secure medical services at a discount. According to one source, Coventry slashes more than 30 percent off state fee schedules. While this might be appropriate in states with inflated fee schedules (Connecticut comes to mind), it is definitely counter-productive where fee schedules are already putting the squeeze on providers. When you are dealing with as many providers as Coventry, it is tempting to grow fat off the small margin of a small margin. Unfortunately, slashing fees is no quarantee of quality. In addition, it's often an invitation for providers to rely on quantity to make for skimpy reimbursements: repeated (and unnecessary) visits become "just what the doctor ordered."

With its sophisticated understanding of the market it now dominates, Coventry is hedging its bets. They struck a deal with Aetna to sell and market the latter's innovative program, Aetna Workers Comp Access. Aetna is building a network of providers selected for good clinical outcomes and economy in treatment. They have built 27 networks so far, with more on the way. Aetna is onto something important: instead of relying on discounts, they are looking for providers who understand return-to-work philosophy. Their primary concern is the quality and effectiveness of treatment.

Aetna is moving in the right direction. I hope they offer medical providers financial incentives for speeding the return-to-work process. Rather than demanding discounts, they should offer a reimbursement scheme that rewards results: fee schedule plus, not minus.

It will be intriguing to watch the partnering ritual between humongous Coventry and willowy Aetna. In many respects they are unlikely partners, with diametrically opposed philosophies. In the struggle between cost cutting and treatment quality, something has to give (and it's usually quality). I'd like to think that Coventry will see the value of paying more for something that produces better results. If they do, we may see something truly unique: a big gorilla that really knows how to dance.

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February 5, 2008


Workers comp in the public sector is like an iceberg: what is visible from year to year does not really tell you how big the problem is. With the budget funding cycle running fiscal year to fiscal year, there is no incentive to close out open claims. It's actually cheaper - in the short run - to keep paying on a monthly basis, as opposed to writing one big check to make the claim go away. There is no incentive for a sitting official to settle old claims.

The problem with this approach, of course, is that governments never confront the real cost of comp. The claims "ball" just keeps getting bigger and bigger - a problem, in effect, that is constantly pushed ahead to the next elected official.

Back in 2001 officials with the Department of Administrative Services in Connecticut recognized the problem and tried to do something about it. They made a deal with ACE Financial Solutions, which agreed to assume up to $150 million in potential liability from 660 workers' comp claims. By privatizing the handling of the claims, the state reduced the number of workers' compensation cases it was handling and saved $13.5 million in both 2002 and 2003. The state used a bond to raise the funds for off-loading the claims. (A bond spreads the cost over many years, as opposed to making a big hit on the "current" fiscal year.)

In return for assuming the $150 million liability, ACE was paid $80 million. Sounds like a good deal for Connecticut, doesn't it? Alas, the state failed to follow its own procurement standards and they apparently way overpaid for the privilege of handing off the claims.

Nothing in Reserve
With private insurance, it's pretty easy to determine the value of claims. You simply take, in this case, the 726 claims, add up the reserves and come up with a number. You cannot really do this in the public sector. With a "pay as you go" mentality, there are no meaningful reserves. You can project how much a claim will cost in a given year, but no one really knows how long the payments will go on and what the ultimate cost of the claim will be.

MRM Consulting,a private firm, was hired to determine the ultimate value of the claims: that's where the $150 million figure came from. Unfortunately, MRM hired untrained college students to make the estimates, at the attractive rate of $105 an hour. That's great for the students, but bad for the state. CT Attorney General Richard Blumenthal has determined that the estimated total value of the claims was grossly overstated. Over 60 of the claims included in the estimate had already closed. As a result, the state overpaid ACE and wasted taxpayers' money.

ACE has paid the state $40,000 to settle a lawsuit by the AG's office that alleged the company paid an illegal $50,000 commission to brokerage giant Marsh & McLennan to get the workers' compensation contract. A similar lawsuit by the state against Marsh & McLennan over the deal is pending.

The AG's bottom line assessment is pretty harsh: "Privatization spawned inefficiency, incompetence and increased costs. We must reform conditions - lack of funding and procedures - that led to this bungled deal."

The Right Way
Privatization is really a good idea. When it is done right, it can save state and local municipalities a lot of money. But you need good fundamentals in three key areas: a professional assessment of the value of the claims; an open and competitive procurement process; and strong management oversight from day one. Yes, you can privatize the handling of claims effectively, but the need for good management does not end with the awarding of the contract. Indeed, good management looks for accountability and performance every step of the way. Privatization is not an invitation to wash your hands of a problem, but to partner with a competent vendor to achieve mutual goals.

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February 1, 2008


As the Super Bowl looms over the weekend, our thoughts turn toward the challenge of personnel management. Most of us are periodically involved in hiring decisions: for some, it's a major responsibility, for others, an occasional task. Some applicants come across as a perfect match (and turn into a bust) while others are nervous and unimpressive, yet turn into the perfect employee. For all the psychological profiling, background checks and careful reading of the resume, it's never an exact science.

Case and point: Tom Brady, the quarterback for the New England Patriots. He was chosen by the Patriots in the sixth round of the draft, the 199th player selected. The physical skills he demonstrated at the "combine" were modest, to say the least. Quite a few quarterbacks were chosen ahead of him. Yet he has risen to the pinnacle of his sport, mentioned in the same breath with the legendary Unitas, Montana and Bradshaw.

This raises some fundamental questions about hiring: how do you distinguish among applicants? How do you ferret out the intangibles that separate a good candidate from a great one? How can you eliminate the candidate who sounds good but lacks passion and identify the one who really wants the job?

In an article in the Boston Globe, John Powers dissects the qualities that made Brady special from the moment he showed up in training camp:

"Nobody expects anything of you," Brady says. "You just show up and you're trying to make the team. You're trying to bring your playbook to the meetings and not forget it in the room. When you're a first-round pick, everybody's counting on you to come in and save the franchise." No one had any notion that Brady was special; unlike Eli Manning, his New York Giant counterpart with an impeccable bloodline and the burden of a number one selection in the draft, Brady was able to develop outside of the limelight.

Early on coach Bill Belichick noticed Brady's knack for command and control. "You could really see some of Tom's leadership taking over at that point, even though it was with other rookies. You could see him handle the team, handle the call, getting people lined up and making sure everybody knew what to do." Brady, the consummate team player, made everyone around him better.

Nobody in the locker room worked harder or studied more diligently, then or now, than Brady. He was driven, he later acknowledged, by the insecurity of the perennial backup, the kid who couldn't play on a winless high school freshman team, who began Michigan as a seventh-stringer. "You don't forget where you came from," Brady once said. "The scars that you have from those days are deep scars."

Good Managers are Hard to Find
As we watch the game this Sunday, it will be fascinating to see the two outstanding quarterbacks carry out their management roles. They represent the full hiring spectrum: the cannot miss, high profile number one versus the after-thought, the long-shot (who is no longer either). Regardless of the outcome, athletic scouts and personnel managers of businesses across the world will share a common thought: how do you find the real deals in leadership? How do you master the art of hiring?

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January 29, 2008


New Hampshire has come up with their own 12 step program to determine whether contractors are truly independent or just employees. Meanwhile, the IRS has come down hard on FedEx, hitting the company with a $319 million fine for misclassifying drivers as independent contractors.

Let's start in New Hampshire. The state has come up with 12 criteria for determining independence, all of which must be met or the system defaults toward an employer-employee relationship. The criteria include the usual focus on control of the work, but there are a few new wrinkles:

A. The person possesses or has applied for a federal employer identification number of social security number or in the alternative, has agreed in writing to carry out the responsibilities imposed on employers under this chapter.

[This appears to imply that undocumented workers - who cannot have federal id numbers or social security numbers - are automatically employees.]
F. The person has continuing or recurring business liabilities or obligations.
G. The success or failure of the person's business depends on the relationship of business receipts to expenditures.

Like Massachusetts, New Hampshire is looking for objective evidence that the independent contractor runs a legitimate business. Both states accept the presence of employees with the IC as compelling evidence - but that will not help the typical sole proprietor without employees. Whereas Massachusetts has stipulated that a subcontractor in the same trade as the contractor is by definition an employee, New Hampshire does not focus at all on the sub's specific trade.

Having issued all this clarification, the states now sit back and let someone else figure out the details. That someone else, alas, is the poor insurance auditor, who has been given the unenviable task of determining the status of each and every subcontractor. You don't suppose that this detective work is contemplated in the current fee structure, do you?

In MA, auditors have some latitude. If the independent contractor/sole proprietor does not have any employees, they are likely to be added to the general contractor's payroll for workers comp. In New Hampshire, auditors are held to a higher standard. They must inspect records and operations of every GC and sub to determine whether the subcontractor meets all 12 criteria for independence. They do this at their own risk: If they make a wrong determination, they are in violation of state law.

Closing in on FedEx
The IRS in December determined that FedEx drivers were misclassified as independent contractors. They slammed the company with a $319 million fine and penalties. Since the fine only covers 2002, FedEx could face additional penalties totaling over a billion dollars after the IRS completes its investigation. FedEx has already lost the argument in a number of states, including California. Now they've lost at the federal level as well. They are going to sit down with the IRS this spring to hash out the implications of their latest losing argument. (For our numerous postings on this important case, just enter "FedEx" in the search box.)

FedEx managers are apparently hanging their hopes on a 1995 agreement between FedEx Ground's predecessor company (Roadway Package System) and the IRS, which reads in part: "The Service agrees that it will not reclassify the RPS owner-operators as employees, except upon a determination after audit, that RPS has exercised control over the RPS Owner-Operators in a manner that conflicts with the 1994 Operating Agreement, Letter of Assurance and Exhibits." Unfortunately for FedEx, there is a growing body of evidence that the company exercises rigid control over every aspect of the relationship with their "independent" drivers, from uniforms and length of hair to schedule of pick up and delivery.

Much has been made of the liability facing FedEx in the area of employee benefits, but little attention has been paid to workers comp. We can safely assume that hundreds of current and former drivers have been injured on the job. When they come up with a total cost for violating fair labor standards, the comp costs will have to be added in. This long-profitable enterprise appears on the verge of accepting retroactive responsibility for as many as 17,000 employees. That's a lot of drivers and a truckload of liability.

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January 23, 2008


If it isn't clear by now, the Insider believes in a sense of humor. A few laughs help us get through the working day. So it is with some ambivalence that we tackle the issue of the Tribune Newspaper's new Employee Handbook. Written by a non-lawyer, the handbook attempts to present the myriad issues contained in a handbook in a light, rather flippant tone. It's a fun read. But alas, it's like "shooting the bird" at a policeman: it might be protected as "free speech," but it's still not a very good idea.

Sexual Harassment
The Handbook opens the section on harassment with a warning to people who might be sensitive to the actions of others:

4.1 Working at Tribune means accepting a creative, quirky, intelligent, odd, humorous, diverse, opinionated and sometimes annoying atmosphere.
4.2 Working at Tribune means accepting that sometimes you might hear a word that you, personnally, might not use. You might experience an attitude that you don't share. You might hear a joke that might not consider funny. That is because a loose, fun, non-linear atmosphere is important to the creative process.
4.3 This should be understood, should not be a surprise and is not considered harassment.

Any joke? In any context? The Tribune is basically telling employees to chill out. The sublimely tasteless Borat would love it. This "values statement" is far too general. It could make anyone squirm, not just a labor attorney.

Drug Policy
Here again, you will find language that is unprecedented for an employee handbook:

7.1 If you use or abuse alcohol or drugs and fail to perform the duties required by your job acceptably, you are likely to be terminated. ..Coming to work drunk is bad judgment.
7.2 If you do not use or abuse alcohol or drugs and fail to perform the duties required by your job acceptably, you are likely to be terminated.

The first section seems to imply that being stoned at work is ok, as long as you can still do your job. Yikes! The second section has nothing to do with drug abuse and certainly does not belong in this section of the handbook. It seems to imply that you'd be better off stoned at work and doing your job well - as opposed to sober and performing badly. That certainly reflects the Hollywood version of the newspaper business, but it does not belong in a handbook.

Disability and Workers Comp
The disability statement is pretty straight forward, although it places the burden squarely on the employee:

3.1 Tribune will make reasonable accommodations if you have a disability and are otherwise qualified to perform your job.
3.2 If you need an accommodation, tell your supervisor.

Here is the complete section on workers comp leave:

17.1 State law dictates how Workers' Compensation is handled.
17.2 Please let your supervisor know immediately if you're hurt on the job.
17.3 If this injury is also considered to be a serious health condition under FMLA, Workers' Compensation Leave will be counted as, and run at the same time as FML.

This a bit thin, to say the least. The handbook should emphasize the importance of working safely, reporting all hazards and management's commitment to speed return to work through the use of temporary modified duty.

Employee Rights: No Laughing Matter
Employee Handbooks are generally regarded as quasi-legal contracts, primarily designed to outline the rights and benefits of employment and limit the employer's exposure to lawsuits. Handbooks are rarely read, and when they are, it's not for the entertainment value. The Tribune's attempt to have their handbook mirror the creativity valued in the workplace is well intentioned, but incredibly risky. It won't take long for labor attorneys to pounce and when they do, the Tribune will have to back-pedal furiously to contain the damage. This particular handbook may get a "high five" from Borat, but it's no way to define the employment relationship.

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November 7, 2007


For 17 years, Tommy Holly worked for Clairson Industries, a plastic injection molding company, as a mold polisher. At age 20, Tommy was in a motorcycle accident which left him a paraplegic. Despite the disability, Tommy established himself as an excellent employee. His job reviews were consistently positive. He was neat, meticulous and well organized. He had one problem: because he was wheelchair bound, he was often late for work. Sometimes the corridors inside the plant were blocked by pallets; sometimes the rain slowed his exit from his vehicle; and on rare occasions, bowel problems sent him back to his home for a change of clothes. Usually his lateness was no more than a minute or two and had no impact at all on his evaluations.

Long into his tenure, the company hired a new personnel director with the intriguing name of Cloteen Kilkelly (scroll down this site for her photo). Cloteen eventually rose to company president (it's not just cream that rises, as you will soon see). Cloteen implemented a new "no fault" tardiness procedure. Whenever employees clocked in late for the shift - with late defined as one second or more! - they were charged with "half an occurrence." After 9 occurrences, the employee was terminated. By "no fault" Clo (let's get informal) meant that no excuses were allowed. Late is late. Needless to add, arriving promptly for the shift was defined as an "essential" component of every job.

Even though Tommy had a problem clocking in on time, he made up his admittedly frequent tardiness without fail on the same day it took place. Tommy would skip his break, work through lunch and work past the end of the shift, as needed. In addition, his job was not on the assembly line, where his tardiness might impact the ability of others to perform their work. Promptness to the nearest second might possibly have been an "essential function" for assembly line workers, but it was marginal for Tommy.

You can surely see where this is going. Tommy hit the 18 incident mark, tipping the scale at 9 occurrences. With no excuses tolerated, he was terminated. For the record, the cumulative late time was one hour and 13 minutes - all made up, as we noted, on the same day.

A Plaque for Clo?
When Tommy filed suit under the ADA, the case was dismissed under summary judgment by the Florida's central district court, which found that he was unable to perform an essential function of the job (getting to work at the precise start of the shift). The court accepted Clairson's contention that such promptness was an "essential function" of the job. Shame on the court for jumping to conclusions.

The appeals court over-ruled the summary judgment and remanded the case for further consideration. Tommy is going to win this case. It's a no brainer. He is certainly disabled. He was able to perform the job with a no-cost accommodation that required very little from the employer. The accommodation would have no impact on the company's ability to perform the essential work in a timely manner.

The most puzzling part of this sad tale is the obtuseness of the employer. They had a highly skilled and motivated worker. Tommy had proven over the course of 17 years that he could perform the job extremely well. Good workers like Tommy are hard to find. Instead of recognizing his unique circumstances and accommodating his obvious disability, the company stood behind a rigid, ill-conceived personnel policy - one that is punitive for every worker, not just someone with a disability. Clairson's tardiness policy - and their unwillingness to accommodate Tommy Holly - merit a "worst practice" plaque on the Insider's Management Wall of Shame.

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October 22, 2007


Hispanic workers suffer fatalities and serious injuries at significantly higher rates than other workers and this is due in large part to language barriers. Previously, we've discussed the importance of keeping the multicultural workforce safe by ensuring that your safety programs address language barriers. We've also discussed how qualified interpreters can save lives.

Recently, some of our readers who run a Spanish translation firm shared an article they authored, which discusses cultural misunderstandings that can jeopardize safety. We thought it was valuable enough to pass along to our blog readers and we secured their permission to feature it here:

Safety for Spanish Speakers: Beyond the Language Barrier
by Ferney Colorado and Melissa Burkhart, Futuro Sólido USA

When providing safety training for Spanish speakers, the most obvious challenge that employers face is the language barrier. However, translation is the easy part. Bridging the cultural barrier - addressing what Spanish speakers actually believe about safety in this country - is much more difficult. And, because these workers will rarely voice their misconceptions, they are rarely addressed. The result is that employers and workers compensation providers can often go to a great deal of trouble to provide quality safety training in Spanish, only to have their workers go back to the job site and do exactly what they had been doing previously.

This can be a source of great frustration, not to mention loss. The reason for it is that many Spanish speakers enter a training session holding very firm beliefs that are contrary to what they are about to be taught. Rather than instructing people who are simply uninformed on the subject, trainers have to “convert” people who believe very staunchly that they are much more valuable as workers or employees when they do not comply with federal regulations.

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October 15, 2007


Back in February of 2005 we blogged the case of Margaret Morse, a member of the Legion of Mary, a volunteer group affiliated with Christ King church in Wisconsin. In the course of delivering a statue of the Virgin Mary to a parishioner, she ran a red light and crashed into a vehicle driven by Hjalmar Heikkinen, an 82 year old barber. Heikkinen was paralyzed. A jury awarded him $17 million - and tapped the liability policy of the church to pay it. The case reached the Wisconsin Supreme Court, where a split ruling (3 to 3) sustained the original award.

There apparently was language in the church's insurance policy that included coverage for volunteers. While the Legion of Mary operated with considerable independence from the church itself, it was founded in 1968 with the support of a parish priest. It's not far fetched to say that the specific action involved here - delivery of the statue - was related to the core function of the church. But then, any act of kindness might fall under that very wide umbrella!

Liability for Volunteers
Beyond the unfortunate circumstances of this case, anyone using volunteers needs to be aware of potential liabilities. In our increasingly litigious society, prudent managers must take the extra step to protect their companies/organizations. Here are a few very basic steps in managing volunteers:
- If they're going to drive at any time, check the driving records. If the record is spotty or poor, do not allow them to drive while carrying out volunteer duties.
- If they are near children or vulnerable adults, or entering private homes, run a criminal background check
- Require a resume. It's important to know who they are and where they come from.
- Train, orient, supervise and document. The services might be free, but proper management requires the commitment of adequate resources.
- If they are not working out, terminate the relationship. As in regular hiring, it's important to take action before serious problems emerge.

It's not at all clear that any actions would have insulated the church from this unexpected liability. The court's ruling has stretched the definition of volunteer and liability to the limits. Nonetheless, when it comes to volunteers in general, it is indeed time to look the gift horse in the mouth. The notion that services do not "cost" anything is attractive, especially in the non-profit world. But in a culture that puts a price on everything, everything has a cost. The cost of volunteers lies in the essential screening, training and supervision. Anything less opens the door to very big liabilities indeed.

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September 12, 2007


As we approach the fourth anniversary of the Workers Comp Insider (September 17, 2003), it's a good time to step back and ask a fundamental question: Why are we doing this? Four years ago Tom, Julie and I observed that there were a lot of bloggers tackling a lot of issues, but they mostly involved isolated individuals pursuing a particular passion. Businesses in general seemed disinterested and our particular focus, the insurance industry, was totally missing in action from the blogsphere.

As a company specializing in designing and fine tuning loss control and risk management programs for employers and insurers, Lynch Ryan saw an opportunity. With its infinite, instantaneous reach, the web offered a virtual forum for exploring the many ramifications of workers comp. As consultants, we wanted to create a meaningful and objective means of communicating issues related to the key comp constituencies:
- helping employers minimize the cost of risk, while still managing their injured employees
- supporting insurance companies in risk selection and in the education of policy holders
- guiding injured employees back to gainful employment
- facilitating medical provider interaction with injured employees, their employers and insurers (and helping them survive increasingly stingy payment schemes)
- guiding states through the complex task of legislative reform, where they must balance the needs of injured employees, employers, insurers and medical providers, without allowing the cost of insurance to drive business out of state
- alerting workers' comp professionals and risk managers to issues of compelling interest which they might not otherwise encounter

Fertile Ground
Over our four years as bloggers, we have examined managed care, coverage for independent contractors, the practices (good, bad and indifferent) of insurance carriers, the impact of designer drugs on the cost of insurance. We have discussed fraud in Ohio, legislative reform in dozens of states, the use (and abuse) of temporary modified duty, myriad safety issues - cell phone use while driving, heat in the summer, cold in the winter. We have highlighted the aging American workforce and the implications for workers comp in the years ahead. We have explored the profound implications for the comp system of the millions of workers lacking health insurance, along with the nation's dilemma dealing with 12 million undocumented workers. And that's just a hint of the fertile ground we have plowed, up to five times a week, for over 200 weeks. Dull it isn't!

We also have created and refined a website that makes accessing web resources as easy as possible, linking our readers to business, risk management and health-related resources. In addition, you can use our robust search engine to explore nearly 800 blog entries by content area. All modesty aside, we think that the Insider has become the best workers comp reference library on the net.

How are We Doing?
We think it's working pretty well. We have as many as 20,000 hits a month, with several thousands of loyal readers and hundreds of casual visitors seeking inforation on a specific issue. Readership has increased steadily from month to month. We are approaching our goal of becoming the "go to" site for workers comp issues.

And, although Google and others call several times a month, we don't allow advertising, except for a small banner that links to LynchRyan, our parent company.

All of which leads to a very fundamental question for any business: is it worth the effort? Is this free service in any way profitable? That's not an easy question to answer - and in some respects, it's the wrong question. But in the interests of full disclosure and the candor to which we are committed, yes, we have established long term and meaningful relationships with a number of insurance companies and employers who found us through the blog. The considerable effort easily pays for itself.

But even if the blog were a "loss leader" we would probably continue the effort. We are filling a definite need on the web, providing a balanced and objective view of risk management and risk transfer issues, with a special focus on workers comp. Our goal is to provide our readers with a reliable, well written and entertaining news source that reflects our abiding passion and our many years in the field. And whatever you think of the Insider, you'll have to agree on one thing: the price is right.

Your comments are always welcome.

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September 4, 2007


What better way to herald the end of summer by returning to the issue that just won't go away: workers comp coverage for sole proprietors and independent contractors. Massachusetts has just taken an extraordinary step that provides a strong incentive for sole proprietors to "opt in" to the comp system.

Under the old rules, any sole proprietor seeking comp coverage was assumed to make the state average weekly wage (SAWW). In MA, that is a whopping $52,000 per year. While MA enjoys some of the lowest rates for comp coverage in the nation, that high wage base drives up the cost of comp:
- for a $5.00 rate, the annual premium would be $2,600
- for a $10.00 rate, the annual premium would be $5,200

Those can be tough numbers for a lone craftsman trying to operate his/her own business. Especially when you consider that the weighted average median wage of all sole proprietors in the state is only $35,843. The result, of course, was that most sole proprietors gave up the notion of participating in the comp system. The coverage was way too expensive. They opted out in droves.

Recognizing the powerful disincentives to select coverage, the MA Workers Compensation Rating and Inspection Bureau decided to make the coverage more affordable. They have dropped the wage base by 30 per cent, to 70 per cent of the state AWW, effective August 1, 2007. Now, when a sole proprietor chooses to be covered, the premium is based upon an annual wage of just $36,400. This means that the cost of coverage is suddenly pretty reasonable:
- for a $5.00 rate, the comp coverage costs $1,820
- for a $10.00 rate, the coverage costs $3,640

A Comp Bargain
For marginal sole proprietors, with annual billings below the $36,400 level, there is still a strong incentive to opt out of the system. However, for the many skilled tradesmen who routinely bill well above the $36,400 level, workers comp has suddenly become a bargain. A skilled mason or carpenter might bill upwards of $75,000 or more per year. Nonetheless, the cost of comp coverage will be based upon a much lower wage level. In effect, well established sole proprietors now enjoy comp rates that might be 50 per cent or more lower than the rate for competitors with employees working in the same trade.

Which leads to one more very important consideration for general contractors in MA: in the construction field, sole proprietors are a common sight. We have blogged about the MA crack down to push coverage deep into the subcontractor and sub-subcontractor levels. (See just a couple of our prior blogs here & here.) At premium audit, if a GC shows a certificate of insurance from a sole proprietor sub who has "opted out" of coverage, the cost of that coverage is added to the GC's payroll for premium calculation. Now GCs have a very compelling argument to encourage their sole proprietor contractors to opt in for coverage: "Don't wait for me to charge back the cost of comp. Take advantage of the suppressed rates and choose coverage on your own. You benefit from a lower rate and you have the advantage of knowing the cost of coverage up front." For sole proprietors who routinely have billings above the $36,400 level, this is truly a no brainer.

It will be interesting to see if other states follow the MA lead in this important policy area. Surrounding states use a very high wage standard for calculating sole proprietor premiums: in Connecticut, $56,200. In New Hampshire, $58,100. When you factor in the very high rates for comp in these states, the cost of insurance for sole proprietors is truly prohibitive. That's no welcome mat. It's a kick in the butt toward the door.

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August 13, 2007


Workers comp coverage for independent contractors is the issue that just won't go away. A while back we blogged reform efforts in Delaware, which almost became the first state to require comp coverage for sole proprietors. Almost, but not quite.

Delaware has a long-established (and well-deserved) reputation for being a comp disaster zone. That may no longer be the case, as they have implemented far-reaching reforms that should bring down costs substantially. They decided, however, not to become the pilot state for requiring coverage on all sole proprietors. There was a tremendous push-back from independent contractors, who argued (not without reason), that the cost of coverage would be prohibitive. It would put many of them out of business.

So Delaware backed down. The revised statute [s. 2311(a)(4)] reads as follows:

All independent contractors governed by this subsection shall be covered under this chapter. Independent contractors shall have an option to purchase coverage to satisfy this requirement, or alternatively shall be insured by the general contractor, subcontractor or other contracting entity for which they perform work or provide services...Partners and sole proprietors, when working in an independent contractors role, shall be subject to the requirements of this subsection...

Delaware, in effect, has chosen to implement the Massachusetts's solution: allow sole proprietors to choose coverage, but don't force it. However, when sole proprietors exercise their opt-out option, the burden of their coverage falls unambiguously on the general contractor. At premium audit, Delaware GCs who cannot produce a certificate of insurance with proof of coverage for their sole proprietor subs will be billed for the payroll portion of the subcontract. My guess is that many will try to pass this cost back down to the sole proprietors, who might well end up paying for the coverage they said they cannot afford.

New Jersey
John Geaney, Esq., our go-to guy in New Jersey, summarizes a new law that comes down hard on employers who deliberately misclassify employees. Bill no. 4009 makes it a criminal offense to knowingly fail to properly classify an employee. In other words, general contractors are presumed to be the employer of everyone on the job site, unless they can prove otherwise. Proof would likely require a certificate of insurance and a contract for the work. In addition, New Jersey will probably follow something similar to the three step test currently in use in MA:
1. The sub must run an independent business and be in complete control of the work at all times
2. The sub must work for others
3. The sub must be in a trade distinct from the trade(s) performed by employees of the GC.

Crack Down
These recent actions in New Jersey and Delaware are part of a strong national trend. States are determined to crack down on the wide-spread practice of avoiding the payment of benefits in the construction industry: not just workers comp benefits, but social security and unemployment insurance as well. Historically, when independent contractors have been injured on the job, state funds have provided coverage. Now it appears that general contractors are going to be held accountable: when sole proprietors opt out, GCs - willingly or not - will have to pick up the tab.

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July 23, 2007


Back in June we blogged the interesting case of Tony Boyle, who was awarded over $600,000 for wrongful termination after his employer, Weyerhauser, put him in a modified duty job that aggravated his work-related condition. I half expected to hear from the employer, defending their modified duty program. Instead, I am on notice from Mr. Boyle's attorney that we have defamed his client.

The point of contention was my conjecture (and it was a conjecture), that Boyle had been prescribed narcotic pain medication for his serious lower back injury (two herniated discs). After all, such drugs are the most frequently prescribed medications in the workers comp system (see prior blog here.) Attorney Richard Yaskin asserts that there is no evidence for the claim that Boyle "failed a company drug test." He further asserts that Boyle was taking anti-inflammatories and muscle relaxers.

As a blogger, I rely on a variety of sources: in this case, two newspaper articles. Renee Winkler wrote in the Courier-Post that "when (Boyle) was terminated, company officials said he was violating the substance abuse policy." I (mis)interpreted that to mean he had failed a drug test. In the other source, Pete McCarthy wrote in the Gloucester County Times that Boyle "was prescribed two painkillers by the company's workers' compensation doctor, and told to work light duty...Within two months, Boyle was fired. He had been accused of violating company policy by taking prescription medication while operating machinery."

So here's where my reading of the articles led me astray: both articles refer to violation of the company substance abuse policy. McCarthy referred to painkillers (which frequently involve narcotics). I was wrong to assume that the violation involved prescribed narcotics and also mistakenly assumed that the violation involved a failed drug test. Indeed, the situation is even more bizarre than I originally had thought: Boyle was fired for operating equipment while taking anti-inflammatories and muscle relaxers, both necessitated by his work-related injury.

So in the interest of keeping the Insider outside of the courtroom, we publish the following retraction:

LynchRyan and reporter Jon Coppelman regret the erroneous statements concerning Mr. Tony Boyle of Washington, Twp., NJ in the Workers' Comp Insider welog of June 26, 2007. The posting inaccurately states that Mr. Boyle was taking prescribed "narcotics" and that: "...he failed a company drug test."

Indeed, Mr. Boyle's prescribed medications, Soma (Carisoprodol) and Celebrex, are not "narcotics." Further, Mr. Boyle never failed a drug test in connection with his Weyerhauser employment.

LynchRyan regrets any misunderstanding caused by publication of the original Weblog.

Our sympathies in this situation clearly remain with Mr. Boyle. We had no intention of defaming him. In fact, given the severity of his injury, a short-term prescription for a narcotic medication would have been medically appropriate. Good for him that he worked through the pain and the injury with non-narcotics, and good for him that he is back to productive employment. And thanks to Attorney Yaskin for helping to clarify the situation.

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June 26, 2007


On September 10, 2001, just one day before this country's sense of security collapsed along with the World Trade Center towers, a smaller world collapsed around Anthony Boyle, an employee of the Weyerhauser Company in New Jersey. A 600 pound bale of waxy cardboard material fell from a conveyer belt. Boyle used his back to prop it up. He suffered two herniated discs in the accident.

Then Weyerhauser tried to do the right thing. Or did they? They sent Boyle to their doctor, who prescribed some strong medication (presumably narcotics) and released him for light duty. What happened next is a little unclear, as the two available press reports (available here and here) are not consistent. It appears that the light duty work involved operating a sweeper, which had no power steering and stressed Boyle's arms and shoulders, thus aggravating the injury to his lower back. In addition, in order to operate equipment, Boyle had to forego use of the narcotics prescribed by the company doctor. He tried to rely on aspirin to manage the excrutiating pain.

In too much pain to comfortably operate the sweeper, I'm guessing that from time to time Boyle continued to take the prescribed narcotics. At some point, he failed a company drug test. He was terminated for violating substance abuse policy.

Boyle sued for wrongful termination. A Camden jury recently awarded him $606,000, including $86,000 for lost wages, $70,000 for emotional distress and $450,000 in punitive damages. Clearly, the jury did not buy Weyerhauser's approach to modified duty: knowing that Boyle was in a lot of pain, they put him in a position that aggravated the injury and at the same time prevented him from taking prescribed medication for that pain. Their mistake was in requiring him to operate equipment in his modified duty position. A more reasonable accommodation would have involved Boyle doing lighter tasks that did not require the operation of equipment. If such a position were not available, the company should have allowed Boyle to collect indemnity until his back improved to the point where narcotics were no longer needed.

A Word to the Wealthy
Boyle is probably satisfied with the work of his attorney, Daniel Zonies. The attorney made a good case and secured a pretty substantial payment. But a word of caution to Mr. Boyle. If he googles his attorney's name, he will find Mr. Zonies in some pretty dubious company. He is listed among the New jersey attorneys who were disciplined in 2003. Zonies's problem? The Office of Attorney Ethics reprimanded him for failing to safeguard client funds, failing to deliver funds properly to clients and third parties and for record keeping violations (page 57). Zonies was ordered to submit quarterly reconciliations of his trust account for two years; unfortunately for Boyle, the order expired in 2005. Boyle, currently the manager of a hardware department for Home Depot, might be better off managing the money himself.

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June 12, 2007


Frank Lima works for the Los Angeles Fire Department, where he oversees the screening of recruits. Back in 2004 he was supervising a training drill that involved hoisting heavy ladders against a building. A woman trainee later complained that she was singled out and harassed during the drill.

Soon after, Assistant Fire Chief Andy Fox told Lima that women have to be treated differently, in order to boost their numbers in the department. Women had to receive preferential treatment. Lima was at first suspended two days for the ladder incident. Then the suspension was rescinded and Lima received a reprimand.

Lima sued the city, alleging that he suffered heart problems and stress after the department tried to punish him and subsequently denied him certain assignments. A jury recently awarded Lima $3.75 million, including $2.96 million for pain and suffering. That seems like a lot of money under the circumstances, but this is, after all, California. And there is no doubt that Lima was put in an untenable position. In the aftermath of the lawsuit, Andy Fox, formerly in charge of the Department's disciplinary system, was reassigned. He now oversees risk management. (I will let our risk management readers figure out the logic of this particular demotion...)

In its haste to increase the number of women fire fighters - with pressure coming directly from City Hall - the department clearly put Lima in an impossible bind. He was given specific criteria for evaluating all applicants, and then told to fudge the criteria for one particular group. He was ordered to cut women some slack. The fundamental questions, of course, are what the essential functions of the job are and the degree to which women can perform them. I wonder whether moving those heavy ladders is something any and every fire fighter has to be able to do. Essential functions are not necessarily performed frequently, but in this specific job they might well involve the ability to save lives under very challenging circumstances.

The Fire Department unfairly asked Lima to compromise his standards. They should have examined the standards objectively and determined whether they were reasonable and necessary, or whether they simply created artificial barriers to women who want to fight fires. This is an organization issue, not something that should have been dumped into the lap of one individual.

Testing the Tests
Given the liabilities that accompany the decision to hire someone, employers are trying to reduce risk by learning more and more about job applicants. Some of the approaches are crude: eliminating any applicant who fails a drug test. Some are more sophisticated: the use of credit and medical histories, psychological testing and physical profiling (no obese people need apply). Ultimately, all screening techniques boil down to a single issue: who is eliminated and why?

The EEOC is looking into the whole issue of pre-employment testing and employee profiling. Clearly, this is an area with a lot of potential for discrimination and abuse. The EEOC is examining written tests, the use of criminal and credit histories as a basis for selection, medical exclusions in hiring, and employer best practices.

Firefighter Lima's lawsuit should serve as a reminder: whatever tools and standards employers use to screen applicants, they must strive for transparency. Establish reasonable criteria and apply them uniformly. If the criteria have a disproportionate impact on one segment of applicants, re-examine the criteria carefully. (We blogged just such a situation here.) Make sure that your standards are up to standard. This is not easy, nor is it static. Today's accepted standard is tomorrow's act of discrimination. Employers are being buffetted by powerful and conflicting pressures. As Lima's story clearly demonstrates, the consequences for doing the "right thing" in the wrong way are severe. His saga is a lesson for us all.

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April 9, 2007


Dillard's is a major department store chain, with 330 stores in 29 states, mostly in the south. Their motto is "The Style of your Life." I am not sure what that is supposed to mean, but one thing is clear: Dillard's does a lot of hiring. Their website, featuring a handsome African American in a three button suit, tells you what they are looking for in an employee:

Are you a professional person of integrity who enjoys working with the public, is outgoing, energetic, reliable and who wants to join a dynamic retailer?

We can assume that they are not looking for bigoted individuals with a particular hatred of African Americans. But they hired one (with a spotty employment record) and they kept her (after several ugly incidents with customers). Now they find themselves on the defending end of a lawsuit.

A federal appeals court ruled that a Kansas City couple could pursue its racial discrimination lawsuit against Dillard’s. The 8th U.S. Circuit Court of Appeals reversed a lower-court judge, who had thrown out the lawsuit filed by Rodney and Charlan Green in 2004.

Big Trouble in a Simple Purchase
In August 2002, the Greens went to a Dillard's store in Kansas City to buy a handbag, purse and watch. They asked a clerk to help them, but she refused and then followed them around, glaring at them and muttering something under her breath. When the Greens made a $500 purchase from a different clerk, the first clerk questioned their ability to pay for it.

Rodney Green asked the clerk to leave them alone, then asked the other clerk to call the manager. While Green waited for his wife to purchase the watch, the clerk used a racial epithet and walked away.

After the manager arrived, the Greens decided that they had had enough of the Dillard's life style and returned their just-purchased items.

The manager apologized for the clerk's behavior and admitted that the store had had past problems with her. The clerk was fired the next day.

The Sales "Contract"
The Greens sued Dillard's two years later, alleging the company had violated their right to "make and enforce contracts," a civil rights protection adopted shortly after the Civil War and amended in 1991. In the Greens' case, that right was in the context of a simple retail purchase.

The federal court determined that "their evidence includes not only a most egregious racial slur, but also a series of actions which a trier of fact could find as a whole thwarted their attempt to make and close a contract with Dillard's for the wristwatch."

If you are thinking that it's a stretch to include the purchase of a retail item as a "contract," you're right. This is a new interpretation of a long-standing law. The Greens are hoping to parlay this innovative interpretation into $5 million. While the federal court allows the case to continue, that in itself is no guarantee of success. Given that the Green's voluntarily returned their purchases, the lawsuit may be a long shot.

HR Fundamentals
Win or lose, Dillard's careless approach to human resource management raises an important issue for all employers whose workers are in contact with the general public. Dillard's apparently hired a woman with some serious attitude problems. They compounded this mistake ("negligent hiring") by keeping her on the job ("negligent retention"), despite racist behavior toward certain (minority) customers. Regardless of whether the purchase of a watch ends up being a "contract," I suspect that Dillard's will settle with the Greens. Dillard's put the wrong person on their sales team. They kept her there, despite poor performance. They have deep pockets, so they are going to pay.

One final thought: I sure hope Dillard's followed their own written procedures when they terminated the racist sales clark. The prior problems had better be well documented. If not, Dillard's could find themselves defending a wrongful termination claim filed by the ("misunderstood, maligned") clerk. It's the American way.

Thanks to Overlawyered for the heads up on this situation.

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March 26, 2007


I was in an Asian restaurant last week, enjoying a meal with my extended family. At a nearby table, I noticed a dad with two young children, a boy about 6 and a girl about 4. The boy was leaning against his dad and gazing at the ground; the girl stared listlessly into space. Dad was scrolling through his emails on a Blackberry. I took in the scene briefly. When I glanced back, fifteen minutes later, the kids were still bored and restless and dad was still sorting through his electronic messages. Not a word had been spoken. In his mind, I suppose, dad was multitasking work and fatherhood. He was kidding himself. His real focus was on his work (or who knows, maybe his girlfriend); he was sitting at the table, but he had literally abandoned his kids.

Steve Lohr writes in the New York Times that multitasking is beginning to look like a delusion. There is emerging science that shows the brain is really unable to handle parallel tracks. We think we can manage more than one task at a time, but we are almost always switching back and forth. The brain shifts from one locus to the other. What's lost is concentration and focus. We're not everywhere at once. We are nowhere.

The article quotes David Meyer, a cognitive scientist at the University of Michigan: "Multitasking is going to slow you down, increasing the chances of mistakes. Disruptions and interruptions are a bad deal from the standpoint of our ability to process information."

Safety and Productivity
We have blogged the dangers of multitasking: specifically, the risks involved in the use of cellphones while driving. Beyond the safety issue, there is a significant issue of productivity. We think we can listen to music, respond to phone calls and emails, talk, think, write and get done what needs to be done. In fact, once distracted, it can take a long time to get our focus back. A study by Jonathan Spira at Basex estimates that 28 per cent of our time is spent on "interruptions and recovery" before returning to the main task.

Another study, involving Microsoft employees, showed that after responding to incoming emails or instant messages, it took, on average, 15 minutes to return to serious mental tasks, like writing reports or computer code. Employees took time to reply (to presumably less important matters) and then often shifted into browser mode, checking out the latest news, sports or entertainment Web sites.

Who's In Charge?
The scientists - generally people with a formidable ability to focus - have a few recommendations for the rest of us.
- Check emails no more than once an hour (To which I would add, if you are with your family, shut off electronic devices at least for the duration of the meal)
- Listen to soothing background music if you must, but avoid music with lyrics, instant messaging or TV shows on your Ipod.
- When you get into your car, shut off the cell phone and focus on driving. You will have a better chance of avoiding a collision with the other (distracted) drivers
- Think of your mind as having one point of attention and choose your point wisely

The real challenge is to learn how to manage the ingenious technology that surrounds us, as opposed to allowing that technology to manage us. Sure, it's great to be connected to everyone and everything at every moment. But these connections are meaningless when compared to the miracle of a simple moment in the company of colleagues, family and friends - in the presence, perhaps, of our children, who look into our eyes with the expectation and hope that they have our undivided attention.

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March 16, 2007


As if we don't have enough distractions as we hurtle ourselves from Point A to Point B in four ton vehicles, we read that DWT - driving while texting - has become an issue of sufficient magnitude to warrant legislative intervention. Lawmakers in Washington state have moved to establish stiff fines for this absurdly dangerous practice. You can make a case that a vehicle can be operated safely while the driver talks on a cell phone - preferably with a head piece - but no case can be made for safe driving while the operator's eyes are actually focused on the mobile device. Texting, like alcohol, does not go with driving.

Dying to Text
Which brings us to the sorry tale of Lucas Rolin. Lucas may be the first person in this country to die while texting. State troopers believe that he lost control of his pick up truck while trying to send a message. It was the last thing he ever did. A memorial established by family and friends can be found here. In England, we read about Marni Triggs, of Rousham Road in Tackley, who died after her Peugeot 205 swerved into the path of a truck. The coroner mentioned evidence that Miss Triggs' phone had been receiving and sending text messages just before the crash.

As with a number of other safety issues, the UK is ahead of us on this particular unsafe practice. Drivers caught texting are subject to $100 fines plus 3 points on the driving record. In South Wales, it's far more severe. You can be fined a whopping $1,800 for texting while driving. That's a lot of money for a little (and presumably trivial) message.

A Criminal and Negligent Act?
Here's the part that should get the attention of every employer with employees on the road. Police in England will routinely obtain mobile phone records of drivers involved in serious or fatal road accidents. The use of a phone during an accident may be regarded by the courts as an aggravating factor in the same way as drunk driving. It may result in jail time for the employee. And employers may pay through the legal theory of negligent entrustment: by allowing employees to text while driving, the employer made the accident possible. UK employers have been advised to prohibit cell phone talk for employees who are on the road. That's an extreme measure and one that might seem impractical, but there's no denying the potential exposure.

For employers who have already gone to the trouble of issuing policies on cell phone use while driving, a modification of the policy is in order, explicitly prohibiting the sending of text messages while driving. That may seem like something from "Department of Duh," but given that written policies are a key part of the discovery process in determining negligence, the language is now needed. Be forewarned.

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February 5, 2007


Ted Johnson was a linebacker for the New England Patriots. His specialty was stopping the run. As any viewer of the recent NFL playoffs knows, run stoppers use their heads: first, to think strategically -- where to go in the course of a given play - but then literally: torpedoing head first into the body of an opposing player. That's how you "stop the run." The result? All too often what football practitioners call "dings" and what the rest of us call concussions.

Ted Johnson has three superbowl rings, a broken marriage, a life in tatters and, it appears, a broken brain. At age 34, he has incipient Alzheimers. His persistent depression has led him to abuse medications. The brain damage he suffered in football appears to be permanent, placing him on an inexorable downward path (see our recent blog on permanent brain damage and depression among football players here).

Johnson thinks he knows exactly when the brain damage occurred. In 2002, he suffered a concussion in a game. In middle of the following week, he was given a "no contact" jersey for practice, which legendary coach Bill Belichick converted for unknown reasons to "full contact." In a subsequent drill, Johnson suffered another concussion. He eventually returned to full action, again, suffering countless "dings" over the course of three more seasons in the NFL. We may never know whether the two successive incidents were the cause of his current problems, but there is little question that he has suffered permanent brain damage.

All of which brings us to the issue of sports medicine and the concept of returning to work as quickly as possible.

Modified Duty in the Working World
Workers comp practitioners understand that injured workers recover quicker if they are able to return to the workplace and perform some or all of their pre-injury duties. Treating doctors determine what the employee can and cannot do. Employers match the restrictions with available work. For some employees with extensive restrictions, that might mean performing job functions totally unrelated to the original job. Any work can be performed, as long as it is valuable to the employer and within the capacities of the recovering employee. The important part of modified duty is getting dressed and going to work: the worker feels productive and feels like part of the team.

The whole system falls apart if two conditions are not met: the doctor must accurately specify the restrictions necessitated by the injury, along with appropriate time frames; and the employer must make sure that the employee follows those restrictions carefully, never exceeding the doctor's limits. If any ambiguity or doubt arises, the employer communicates with the doctor to clarify which work activities are acceptable and which are not.

Modified Duty in the NFL?
Now let's return to the violent world of the NFL. There is a lot of money at stake. The pressure to win from week to week is intense. Indeed, winning is the only way the entire league measures performance. As Vince Lombardi said, "If winning isn't everything, why do they keep score?"

With all this focus on winning, it's not surprising that the league itself does not know how to handle concussions. There is no explicit protocal for treatment and no required period for "time away from work." (With high profile cases of brain damage such as Johnson's, maybe that will change.) At the same time, there really is no "light duty" available for injured players. Whenever a player takes the field, it's all full duty - full duty with a vengeance. The opposing side shows no mercy. If they can exploit the injury to their advantage, they will do it. Players whose injuries prevent them from returning to the playing field indefinitely are placed on "injured reserve." Once on this dreaded list, they are ineligible for the remainder of the season.

In Ted Johnson's case, the doctor apparently restricted his activity for a few days following the initial concussion. The trainer set him up for limited duty. For reasons that may never be clear, the coach ordered him to participate in full contact drills. Johnson did not object. As one teammate said of him, "Teddy was one of those guys who...played by the code. He played hurt. He played tough, he played physical and he never let his teammates down. He was there for you every play.’’ Despite all of his recent problems, despite his bitterness directed at his former coach, he talked about returning to the Patriots as an active player just a few months ago.

Ted Johnson has become a symbol of all that is ambiguous about professional football. His precipitous demise reminds us that sports medicine analogies have their limits. The pressures of our working world - the need to get valued employees back to "full duty" as quickly as possible - must always be tempered by the needs of the worker and the time frame of the healing process itself. Life, fortunately, is not a football game. We have many ways to measure success and accomplishment, only one of which involves the final score.

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January 12, 2007


Gina Kolata has a provocative article in the New York Times (free registration required), which outlines a very proactive approach to the treatment of strains and sprains. Dr. William Roberts, a sports medicine specialist, says "we want to keep you moving."

Dr. James Weinstein, an orthopedic surgeon, hurt his back while lifting a box. He was in a lot of pain. He could not sit and after lying down, he could barely get up. (Been there, done that.) So, contrary to conventional wisdom, he decided to go out for a run.

"I took an anti-inflammatory, iced up and off I went." When he finished running, he felt "pretty good."

The theory here is that injured tissue heals better if it's under some sort of stress. Beyond that, if the injury is not severe, resting it will probably prolong recovery. In other words, in treating many of the routine strains and sprains that occur in the workplace, the best course of action may be to keep people active - very active.

Conversely, the worst approach may well be the most common: take a steady stream of anti-inflammatory drugs and stay off your feet. One study suggests that taking anti-inflammatories is fine at the onset of injury (and just prior to vigorous exercise). But once the inflammation has set in, the drugs can make matters worse.

Dr. Weinstein's advice is pretty radical: Before exercise, take one anti-inflammatory pill. Ice the area for 20 minutes. Then start your usual exercise or activity - the one that caused the injury! When you finish, ice the injured area again. The anti-inflammatory reduces pain and swelling and forestalls new inflammation from the pending exercise. The icing constricts blood vessels before and after exercise, thereby preventing some of the inflammatory white blood cells from reaching the injured tissue.

As one doctor put it, if the pain is no worse after exercising than it is when the person simply walks, then exercise is the preferred course of action. These doctors are operating with a sense of urgency: "If you take athletes or active people out, they get depressed, they get wacky." The same goes for many disabled workers.

Implications for Workers Comp
This article focuses on athletes in training. While we might like to think of workers as "industrial athletes," that's not always the case. People training on their own are highly motivated. Injured workers run the gamut from highly to marginally motivated. Some are in good physical condition; many are not. People exercise for themselves and their own well being. We work, well, to make a living. In too many instances, not working for a while, or performing only very light duty tasks, are more attractive than speeding back to our regular jobs.

I wonder what a return to work plan from Dr. Weinstein might look like. Perhaps a workday divided like this: some time spent in the original, physically demanding job that caused the injury, with icing before and after. Then some time on lighter duty functions that give the affected body parts a rest. Such a plan may seem far fetched, but what strikes me in this situation is the difficulty in "doing no harm." When the conventional doctor prescribes pills combined with no work or with light duty, he or she may be prolonging disability. It may seem counter-intuitive, but the best treatment plan for the patient immobilized with pain may be to get up and get moving.

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January 2, 2007


We begin the new year, alas, with a nightmare: You're barreling down a three lane highway at 70 mph, when a tractor trailer rig pulls up behind you. All you can see in your rear view mirror is the ominous grill of a Mack truck. What runs through your mind? Do you console yourself with the notion that the driver is at least trained to operate the 10 ton rig? Can you safely assume he knows what he's doing? Maybe not.

Commercial drivers are supposed to go through an elaborate training and certification process. They are drug tested randomly and after every accident. Prior employers must fully disclose their actual job performance. They must pass bi-annual physicals - and if they fail, there is no protection from the ADA to put them back behind the wheel. That's reassuring, isn't it? Well it would be, if the system were being run the way it's supposed to.

In an alarming article by Stephen Franklin and Darnell Little in the Chicago Tribune, we learn that there are literally thousands of commercial drivers on the nation's highways who obtained their licenses under suspicious circumstances. In the last five years, the federal government has discovered licensing fraud in 24 states. The payment-for-license schemes usually center on so-called third-party examiners who are hired by states to perform driver testing. In other words, the aggressive driver coming up behind you in a 10 ton rig may have no idea what he's doing.

There are about about 1.5 million commercial drivers operating in the country. That's up from just 200,000 in 2002. Commercial driving is one of our fasting growing occupations. Trucking tends to pay well, so it attracts a lot of people who might not otherwise qualify for the jobs. The gap between available jobs and skilled workers gives rise to the entrepeneurial spirit. If you look closely at states with relatively lax enforcement (Illinois under disgraced Governor Ryan, Missouri, Wisconsin), you will find CDL license mills that offer phony certifications (for the right price).

How many commercial drivers are operating with fraudulant licenses? At one point the federal government tallied up 15,000 licenses nationally that it believed were obtained under suspicious circumstances. But it didn't have any details from the states on nearly 7,000 of those drivers. They have become highway ghosts, beyond detection and potentially lethal. If the government is pretty sure that one percent of the drivers are not qualified. It's no great extrapolation to assume that as many as three or four percent may be illegitimate: that's anywhere from 45,000 to 60,000 drivers operating, in the words of one judge,"10 ton torpedoes." One study of 300 drivers with illegitimate licenses found that 200 of them were certified to haul toxic waste. Does that make you feel any different about the truckers who surround you on your morning commute?

Safe Driving is Essential
One of Lynch Ryan's fundamental themes is the importance of safe driving. We recommend that employers annually check the licenses and driving records of any and all employees who drive during "the course and scope" of employment, whether or not they operate company vehicles. Your great salesman might be a terrible driver - and because employers are responsible for the actions of their employees, that salesman might become a huge liability. (We blogged one dramatic example here.)

Even if you are confident that your people drive safely, their ultimate well being is dependent upon the actions of other drivers on the road. Given the fraud and abuse in the CDL system, that's not exactly a reassuring thought.

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November 6, 2006


Here’s a question for you: If you were to ask any employer in America how his or her workers’ compensation costs compare to similar employers in other states, what do you think the answer would be? Well, I’ve been doing that with employers I meet for a long time, and I have yet to meet one who thinks his or her costs are lower than those of employers in other states.

Moreover, if you expand the question to inquire about employee benefits, most employers will venture that indemnity benefits paid in other states are most likely lower than what’s doled out in theirs.

It’s the old, “The grass is always greener” thing. But is it really, and how would you know? And here’s one last question: Suppose those employers really wanted to know the comparative cost and benefit data for their state and decided to ask a room full of insurance professionals about it. What do you think the insurance professionals would say?

For many years, we at Lynch Ryan have tracked research reports from three highly credible organizations that produce state rankings of workers’ compensation costs and benefits, one a private actuarial firm, another an Oregonian governmental entity and the third a non-profit, Washington, DC, foundation.

Actuarial & Technical Solutions, Inc, an actuarial consulting firm located in Ronkonkoma, NY, has been publishing state cost and benefit data annually since 1992. Its 2006 report, Workers’ Compensation State Rankings – Manufacturing Industry Costs and Statutory Benefit Provisions, has been released within the last month.

The Oregon Department of Consumer & Business Services publishes comparative cost data every two even-numbered years. Oregon’s 2006 Workers’ Compensation Premium Rate Ranking Summary Report was released this past Friday, 4 November 2006 (the complete report won’t be published for another two to three months).

And the National Foundation for Unemployment Compensation and Workers’ Compensation (UWC), headquartered in Washington, DC, has, since 1984, published annual, and class specific, comparative state data in a report titled, Fiscal Data for State Workers’ Compensation Systems. In this report. you’ll find annual data and total indemnity and medical benefit payments over the last 12 years.

The UWC has also published a Research Bulletin called, State Workers’ Compensation Legislation and Related Changes Adopted in 2005. Perusing that somewhat eye-glazing, 77 page report offers up such tidbits as Maryland’s House Bill 461, which “Applies workers’ compensation occupational disease presumptions to Montgomery County correctional officers who suffer from heart disease or hypertension (my italics) resulting in partial or total disability or death,” effective 1 October 2005. Wow!

The Oregon reports are free; Actuarial & Technical Solutions charges $105 for a single report, and the UWC reports costs $25 for those who are not members of the Foundation ($20 for those who are).

The first thing you need to know about the three comparative cost reports is that, while they use different methodologies, they all pretty much arrive at the same place. For the most part their rankings are in general agreement. One state may be ranked #5 in one report and #7 in another. Personally, that’s close enough for me.

All three reports contain some rankings that appear predictable, but there are surprises and paradoxes, too. For example, notwithstanding changes to its law, most workers’ compensation professionals would expect California to be at or near the top of the cost rankings, and they’d be right. But who knew that my home state, Massachusetts, which so many of my conservative friends continue to call Taxachusetts, would rank way down at the bottom, either 43rd or 47th, depending on whose report you read? That’s a surprise, and here’s a paradox: Despite ranking as the least costly of the major industrial states in which to buy workers’ compensation, Massachusetts provides higher benefits than any other state except Nevada, which ranks in the middle of the pack in terms of cost.

We have found the data mined from these reports, as well as others, invaluable as we consult to employers and insurers around America. Searching out and understanding this research, and doing our own, as well, allows us to put costs and benefits in perspective and is very helpful in designing reasonable and achievable cost reduction targets for our clients.

I urge the workers’ compensation professionals among our readers to get and read the reports. It’s time well spent. If you’d rather not do that, but have some questions about them, you can email us at communicationsATworkerscompinsiderDOTcom (insert the @ and "." where indicated - we avoid spelling it out to foil the spam bots). Or, if you’d prefer, call anyone at Lynch Ryan (my direct line is 781-431-0458, Ext 1). We’d love to hear from you.

By the way, if you do get in touch, let us know what you think of the Insider and if there’s anything you‘d like to see us do to make it even better.

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October 30, 2006


The Insider recently participated in the Aging Workforce Summit, a meeting of the minds focused on retirement in America. The conference took place on the 80th floor of the Aon Center in Chicago. The views of Chicago and Lake Michigan were supposed to be spectacular, but for the duration of the conference the building was socked in a fog, so all you could see from the windows was an indeterminate white haze - rather appropriate, given the foggy futures confronting a huge proportion of workers in America.

One participant quoted the late Ernest Hemingway: "Retirement is the ugliest word in the language." Setting aside Hemingway's horrendous approach to his own pending retirement (he blew his brains out with a rifle), the quote raises a valid point. The boomer generation, long a staple of the American workforce, is starting to make its slow, inexorable exit from work, but in typical boomer fashion, they are not "going gentle into that good night." In fact, many boomers are planning to work well beyond the conventional retirement ages of 62 and 65. They are doing this for two fundamental reasons:
: Many want to work because they view retirement as boring
: Many must work, because they lack the financial means to retire

Are you saving enough?
Experts in a variety of fields presented some pretty startling data. Jack VanDerhei, director of research at Employee Benefit Research Institute (EBRI), discussed the paradigm shift in retirement funding: employers have abandoned "defined benefit" programs, which offer a guaranteed monthly benefit that would ensure a secure retirement (and which cost companies billions because retirees are living longer). Instead, employees are offered "defined contribution" programs, through which they essentially fund their own retirement, with no guarantees. They set aside a certain amount each month, which is matched to some degree by the employer. The money is invested in stocks and bonds. If the investments do well, the employee might be OK. If the investment tanks (or the employee cannot put enough money in the account), there is virtually no prospect of a secure retirement.

Guess what? Most of us are not setting enough aside. If you're wondering where you stand, check out EBRI's "choose to save" calculator (there's a lot of useful information at this website). Here's a hint: if you're saving less than 15%, you're probably not saving enough. And if you're unfortunate enough to work in the lower quartile of the economy, and you are approaching retirement with very little in your retirement account, the projected required savings might actually exceed your total income! Yikes!

Welcome Mat from the Labor Market
Fortunately for the boomers, the labor market really needs their continued participation. Ed Vitalos, from IBM's consulting arm, pointed out that there simply aren't enough replacement workers ready to take on the jobs currently performed by (aging) boomers. In fact, there are already substantial shortfalls in a number of areas, including long haul trucking, engineering, mining, healthcare, government, aerospace and utilities. Because it takes time to train for these professions, employers are trying to incentivize current workers to stay on the job. They are offering very creative packages to accomplish this goal, including flex-time, creative benefit packages and work-from-home options. One company had the brilliant idea of offering scholarships for the grandchildren in return for the continued participation of their valued older workers.

Steven Sass, from Boston College's Center for Retirement Reseach, offered a sober assessment of the crisis facing many American workers. He anticipates cuts in social security, as fully one third of the population enters retirement. Because we are living longer, we have to work longer. Sass projects that working until age 70 is the most efficient way of overcoming a lack of savings prior to retirement. Sass's solution is likely to work for white collar workers, but what happens to the blue collar worker, the tradesman, the factory worker, the driver, the utility worker? How well will their bodies hold up after a lifetime of wear and tear on the job? How can you be sure that they are able to perform physically demanding jobs safely ? Finally, what about the workers whose bodies succomb to the wear and tear of a lifetime - who cannot continue working and who have little or nothing saved for retirement? These folks have the prospect of living out their "golden years" in abject poverty.

As we track the evolving issue of older and older workers, the Insider will focus its attention on the implications for workers comp. We know from prior blogs that older workers have fewer injuries, but when they get hurt, it takes longer for them to recover. We know that they are more prone to suffer from shoulder and repetitive motion injuries. We also know that the cost of treating an injured worker goes up with age. The Aging Workforce Summit has shown that many older workers lack retirement resources. They cannot stop working without plummeting into poverty. When you combine the injury and disability implications of an aging workforce with the economic necessity that drives worker behavior, you truly have a potentially toxic mix for workers comp system.

Looking ahead, managers need to shift their focus onto the unique challenges of an aging workforce. The continuing participation in the labor market of older workers is basically both positive and necessary. At the same time, managers need to keep their eyes open to new and unprecedented risks as these valued people labor on past normal retirement age. Managers need to take proactive steps to ensure that workers comp does not become the default retirement program for employees who either are performing tasks they can no longer handle safely or for workers who happen to have no retirement funding at all.

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October 2, 2006


It's only Monday, so it might be too early in the week for this. But the Insider is committed to keeping our readers informed on the latest developments in risk and human resource management. Today, we confront the physical, emotional and legal time bomb of BlackBerry addiction.

We first tracked the health implications of using tiny keyboards in our "BlackBerry Thumb" posting in February of last year. Well, repetitive motion is certainly a potential problem, but that may prove to be the least of the worries for employers who hand out these devices. We now find that the seductive technology embodied in PDAs is leading workers into hospitals, mental health facilities and courtrooms."Crackberry" devices are addictive. Workers find themselves unable to put the little contraptions down. By connecting workers 24/7 to their jobs, employers suddenly find themselves on the hook for unanticipated liabilities.

The Independent out of Great Britain tells us of Nada Kakabadse (now that's a splendid name!), a professor at England's Northampton Business School. The good professor warns British employers that they could face multi-million-pound legal actions from BlackBerry-addicted staff on a similar scale as class law-suits taken against tobacco companies. That's a pretty big scale, indeed! Research by the University of Northampton has revealed that one-third of BlackBerry users showed signs of addictive behaviour similar to an alcoholic being unable to pass a pub without a drink. "Just one more email for the road..."

Textbook symptoms
The report found that some BlackBerry users displayed textbook addictive symptoms - denial, withdrawal and antisocial behaviour - and that time with their families was being taken up with BlackBerry-checking, even at the dinner table.

As a result, Professor Kakabadse notes that employers are being sued for failing in their duty of care to staff and in following health and safety guidelines. In one case in the US, a female business consultant claimed that her marriage fell apart because she was constantly checking messages. She ended up losing custody of her children and sued her employer for damages. [Note to our lawyer readers: I have no citations for this and the subsequent cases.]

Written Policies
"Enlightened companies that issue BlackBerrys as standard like pen and paper should also have policies on how to use them, so that people can use technology in a way that doesn't have an addictive side," said Professor Kakabadse. So perhaps your written policy should require that the device be turned off during dinner, during any interactions with spouse and children, during love making for sure and at bedtime. [Just how such a policy would be enforced is beyond the scope of this posting.] One Chicago hotel has even offered to lock up your Blackberry, so you can enjoy your stay unencumbered and unconnected.

The Independent article cites another recent case, where a woman sued after putting cleaning fluid on her baby's nappy instead of baby oil because she was distracted by her BlackBerry. [We sympathize with this poor working mom for making such a common mistake in the nursery. No question, it's her employer's fault.]

One study reveals that nine out of every 10 users have a compulsive need to check for messages and that nearly half experience long-term negative consequences associated with carrying a BlackBerry. A survey of business workers by researchers at the Sloan School of Management at Massachusetts Institute of Technology in the US found that employees were constantly tired because they were waking up in the middle of the night to check or send messages. One interviewee likened the sense of potential gain from staying in touch with work to "pulling the lever of a slot machine".

24/7 = Always at Work
A professor at Rutgers's School of Business, Gayle Porter, predicts in a soon-to-be-published study that disgruntled workers who feel they are unable to turn off their personal digital assistants and mobile telephones will begin suing their employers for their technology addictions -- and that such lawsuits could potentially cost corporate America hundreds of millions of dollars.

"If companies develop a culture in which people are expected to be available 24 hours a day, then they should be prepared for the physical and psychological consequences," Mrs. Porter said. "Addicts exhibit extreme behavior and have no control over themselves. So a corporation handing someone a BlackBerry on his first day of work could be seen as enabling, even accelerating, a serious addiction to technology."

Be Forewarned
The trends are clear, the dangers incontrovertible. Uncontrolled use of Blackberry-type devices can lead to physical, mental and social debilitation. Someone is bound to announce the development of a new 12 step program for Crackberry addicts. The road to recovery will begin with the assertion that "I am an addict." Meanwhile, employers should develop comprehensive written warnings to accompany the provision of any PDAs. These guidelines should set clear parameters for appropriate Blackberry use. With half the marriages in this country already ending in divorce, employers need to avoid any possible inference that work - and work-provided equipment - is a significant cause of marital discord. In the ever-expanding definition of risk management, this is one area where increased vigilance - and a few disclaimers - are definitely in order.

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September 28, 2006


We recently blogged a ruling in the U. S. 6th District Court, in which the judges determined that morbid obesity is generally not a disability. The judges’s thinking in this particular case appears to have powerful implications for the ADA and for all employers with obese workers who have difficulty performing their jobs. HR professionals might be tempted to assume that morbid obesity is not a disability protected by the ADA. So if severely overweight employees cannot handle the job, you just terminate them, right? Not so fast!

Christopher Cornell examines some of the ramifications in the current issue of HR Executive (free registration required). [In the interests of full disclosure, the Insider is quoted in the article.]

The 6th district court assertion that most morbid obesity does not entail a disability was contained in a single footnote, written by a single justice. It would take a ruling from the U. S. Supreme Court (or an act of Congress) to have a definitive answer as to whether morbid obesity is covered by the ADA. Meanwhile, it would be foolish and counter-productive to incorporate the 6th district’s ruling into basic HR policies.

The Accommodation Process
Why does it matter? The EEOC brought the action against Watkins Motor Lines on behalf of Stephen Grindle, a 400 pound driver/dock worker. The EEOC appears to believe that morbid obesity is inherently a disability. If it is, employers would be required to “reasonably accommodate” obese workers through the ADA’s formal accommodation process. That means going through a specific series of steps to determine which essential job functions need accommodation and the degree to which the accommodations can be “reasonably” accomplished without “undue hardship” for the employer. If the employer cannot accommodate the worker in the current job, they are required to offer the employee any open and available positions for which the worker is qualified (at the same or a lower rate of pay). Only after going through these additional steps – and documenting each action - can the employer terminate a morbidly obese (“disabled”) employee.

If, on the other hand, morbid obesity is not a disability, employers would not have to go through this step by step accommodation process and document the results. If employees are unable to perform the job’s essential functions, you can just let them go, which is what Watkins Motor Lines did ten years ago.

To Accommodate or Not to Accommodate, That is the Question
So what should managers do? Despite the 6th district ruling, we believe that managers should assume that morbid obesity is still a disability and approach any situations involving obese employees through a formal accommodation process. First of all, some courts are likely to view morbid obesity as a disability. So if you terminate someone without going through the formal process and end up in one of these courts, you will lose. In the world of the ADA, process trumps results. In other words, even if your ultimate decision to terminate is found to be valid, you can lose your case simply for failing to follow the accommodation process.

In addition, accommodation is usually the right thing to do. You hired the individual because he or she had the needed skills for the job. The worker is able to handle some if not most of the job functions. In all likelihood, you value the contribution that the employee makes toward the success of your organization. It’s worth an effort to keep the person on board.

Working with Obesity
Employers have the right to define the nature and the essential functions of a job. So employers should keep their eyes on those essential functions. Make sure employees - disabled or not – can do the work safely. If you’re not sure, require the employee to undergo a “fitness for duty” functional capacity exam at a reputable occupational health provider. If employees cannot do the job, try to accommodate them: identify the functions they can handle; explore “off-loading” the activities they cannot perform safely to other workers. If that proves impossible – if the employee can no longer perform the essential job functions – then explore any open and vacant positions within the company for which the individual is qualified. (It’s easier and less risky to move an incumbent into a vacant position than to hire a stranger.) If there are no such positions available and none likely to become available in the near future, the employee can be (safely) terminated.

It’s important to note that even though Watkins Motor Lines eventually prevailed in their decision to terminate Grindle, it took them ten years and countless hours of work to do it. I suspect that if they had simply gone through the formal accommodation process back in 1995, they would have been much better off. Even if at the end of the process they had still decided to terminate Grindle, they would have demonstrated a good faith effort to acknowledge his physical issues and to work with him. In retrospect, that would have been cheaper, more efficient and fairer – in all, a solid management approach to what is fast becoming a widespread problem in the workplace.

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September 20, 2006


In our three years of blogging, the Insider has developed a few persistent themes, one being the impact of an aging workforce on risk management. We know that older workers tend to work safer - they have lower frequency rates for injuries - but once injured, they are slower to recover. The older you are, the longer it takes to bounce back (we write from personal experience). We also know that older workers are more prone to shoulder injuries (one of the more expensive injuries in the comp system).

Given our premise that good management takes a proactive approach to any pending problems, we believe that managers have to plan for the inevitable transition to a younger workforce. Managers need to identify the older workers whose skills and experience are essential to the company's success and take steps to preserve their knowledge and experience. At the same time, managers must be alert to aging workers whose ability to perform the job is eroding. Good managers keep their eyes open. They are always alert. And they don't expect potential problems to solve themselves.

The Tennessee Valley Authority tackled the problem of knowledge retention in an interesting manner. Confronted with the retirement of skilled older workers and the need to train their young replacements, they came up with three simple questions for managers:

What knowledge is likely to be lost when particular employees leave? (the "What?")
What will be the business consequences of losing that knowledge? (the "So what?")
And what can be done to prevent or minimize the damage? (the "Now what?")

Get Talking
On the workers comp side, the challenges are a little different. Employers are worried about exposures that increase with age. At a workers comp seminar in the Lakes region of New Hampshire yesterday, company managers raised a number of questions relating to older workers:
- "We have a 73 year old maintenance man. Truly indespensible. He's just coming back from knee surgery. Should we take him back? Is our comp going to pay for the next surgery?"
- "We have a morbidly obese hairdresser, in her mid-60s. She has to stand to perform her job. If her knees or hips give out, will that be work related?"
- "I have a electrician who went out on comp for his right knee about two years ago. Now he's out for his left knee. The right knee is giving him trouble again. Do I take him back?"
- "I have an auto mechanic who is losing his eyesight. In a year or so, he'll be blind. What should I do?"

These are very difficult questions. The answers begin with a simple but not necessarily easy task: opening lines of communication with employees (and their doctors) in areas where communication has not existed in the past. When in doubt, talk it out. I've often found that workers whose skills are eroding, whose bodies are breaking down, respond with a sense of relief to have the issue out in the open. (To be sure, some are in complete denial, in which case you have to focus consistently on the specific job functions that are not being performed to company standards.) Ideally, managers should try to reach a mutual accommodation that satisfies all parties. It's not always possible, but it's surely the optimum goal.

For example, in the case of the mechanic losing his eyesight, the employer could help this person begin the transition to a sightless life. Help the worker access services for the visually impaired. Work closely with the treating physician on phasing out job responsibilities. Perhaps the worker could mentor a younger replacement. This worker is confronted with a life management situation for which he is not really prepared. The employer's good management skills, along with his sincere respect and concern for the worker, can help facilitate a successful transition.

When confronted with a challenge relating to an aging workforce, managers should keep in mind the process outlined by the TVA: identify the issues, explore the implications and then figure out what you can do about it. The what, the so what and the now what.

Let's Talk some More?
The challenges of an aging workforce are formidable. As is so often the case in the 21st century, we are dealing with unprecedented problems and issues. Just as we need to find ways to encourage a new dialogue between managers and aging workers, managers need to find ways to access the latest information. The Insider is participating in an "Aging Workforce Summit" in Chicago at the end of October. We think the summit offers a great opportunity to confront the full gamut of issues relating to older workers. We expect to learn a lot, even as we try to help managers answer the kinds of questions raised in the New Hampshire seminar.

Check out the conference website here. You'll find some interesting articles that carry the above discussion a little further.

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September 8, 2006


Does an investment in mechanized patient lifting equipment pay for itself? Yes, according to a recent NIOSH study. In an article entitled Making the Case for a Safe Lifting Program in Nursing Homes, Josh Cable discusses the NIOSH study in Occupational Hazards. The agency's six-year study encompassed 1,728 nursing personnel at six nursing homes ranging in size from 60 to 120 beds. Each of these facilities used mechanical lifting equipment and re-positioning aids, trained workers, and implemented a zero-lift policy. Among the results:

"The initial investment of $158,556 for lifting equipment and worker training was recovered in less than three years based on post-intervention savings of $55,000 annually in workers' compensation costs," the authors concluded.
Other quantifiable improvements in worker safety, according to NIOSH, included a 61 percent reduction in resident-handling workers' compensation injury rates; a 66 percent drop in lost workday rates; and a 38 percent decline in restricted workdays.
Also, the rate of post-intervention assaults during resident transfers was down 72 percent based on workers' compensation claims, 50 percent based on OSHA 200 Logs and 30 percent based on first reports of injury data.

No doubt about it, these numbers are impressive. But aren't patient handling injuries a problem that proper training in safe lifting and body mechanics can prevent? According to NIOSH, training alone is ineffective as a prevention strategy because "lifting the weight of adult patients is intrinsically unsafe." It's also important to note that the equipment alone won't do it - workers also need to be trained how to use the equipment, and management must implement and enforce a "zero lifting" policy.

For more information, see Safe Lifting and Movement of Nursing Home Residents from NIOSH. Also, see our previous post, Washington passes "Safe Patient Handling" legislation.

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August 29, 2006


As the summer draws to a close, it's a good time to step back and take the long view. In this case, the view goes all the way back to 1200 AD. My daughter's high school summer reading included an intriguing book entitled: Genghis Khan and the Making of the Modern World, by Jack Weatherford. The great Khan's name probably does not come to mind when you think of the world's management innovators. Indeed, most of us think of the "Mongol Hordes" as a scourge of civilization, a brutal and merciless force that arose in the far deserts of China and swept westward in a destructive path. There's some truth to that image, but a huge dose of western-centric prejudice as well.

Weatherford has set out to revise the historical perspective on Khan. He sees him as a great innovator, a master strategist and a brilliant manager. As the first person to unite the Mongol tribes, Khan created the largest and last of the great nomadic powers, conquering all the way from India to the gates of the west.

While Weatherford has made no attempt to translate Kahn's experience into lessons for today's managers, the Insider has leapt into the void and done just that. Here are a few of the management lessons that emerge from a reading of Weatherford's book:

Reward merit: Khan moved away from hereditary privilege by promoting his most talented followers. As a result, his organization benefitted from the best talent, not just Khan's relatives.
Discipline is key: demand self-control and discipline from every warrier and every leader. He abolished the long-established practice of stealing wives, which fragmented the tribes into warring camps. After a conquest, the spoils were carefully inventoried and then divided for the benefit of all.
Organize, Organize, Organize: Contrary to the "mongol horde" image, Khan developed a meticulous system for organizing his army. Using a sequence of tens, his basic unit was a squad of 10 warriers, united in a company of 10 squads, eventually reaching an army of multiple thousands. Every camp had the same physical lay out, so messengers could move from camp to camp and find the leadership without the delay of having to ask directions.
Turn your opponents strengths into a weakness, part one: confronted with great walled cities, Khan built a higher wall of logs around the outer wall of the city, so his men could look down into the city and strike fear in the hearts of its people.
Turn your opponents strengths into a weakness, part two: Khan would have his armies flee in mock terror of armed knights. The knights, in all their splendid (and cumbersome) gear, would pursue his army to the point of exhaustion. Khan's disciplined warriers then swung back and easily obliterated the bewildered knights. Khan's destruction of the princes of Russia was a blow from which that country never recovered.
Use psychology and trickery: Khan's amassed troops might prepare for battle with an eerie silence, spooking their opponents. Khan's troops would light multiple fires, so they appeared to have more troops than they actually did. Using selective violence, Khan struck terror into the hearts of his opponents, while offering all but the leaders an opportunity to join his ranks.
Be fast: Khan never used an infantry. All his warriers were on horseback and all carried or acquired their own provisions as they rode. They didn't need a long baggage train. They crossed the desert in winter, to minimize the need for water. They tightly wrapped their bodies in scarves to keep internal organs from bouncing around during their 60 mile a day rides. His warriers wore leather, not metal armor, so they were much more mobile than their western counterparts.
Embrace new technologies. Khan invited his captives to join him. In this manner, he brought in skilled masons, architects, engineers and writers whom he encountered in both the far east and the west.
Have faith in your own faith, but be tolerant of others: Unique among leaders of his time, Khan tolerated all religions. While confident in his own faith, he tolerated the faiths of others. He even sponsored perhaps the first religious debate in history. By contrast, Louis IX of France, convinced that the mongols were the lost tribe of Israel, punished Jews in France with extraordinary brutality - for which, naturally, he was dubbed "St. Louis."

To be sure, Khan's own legendary brutality severely limits his utility as a role model for contemporary managers. He was fond of rolling his opponents into carpets and stashing them beneath his tent floor, where they starved to death. He was known to use catapults to hurl men, women and children over the walls of a beseiged city. He rounded up peasants from the countryside, pushing them ahead of his troops to absorb the first blows of his opponents and to fill up the moats in front of walled cities. Upon capturing a city, he immediately slew all the leaders and all of the wealthy.

Admittedly, this is not exactly an "I'm OK, You're OK" approach to leadership. (Then again, it might remind some people of "Chainsaw" Al Dunlop, the legendary CEO of Sunbeam Corp.) In any event, Genghis Khan cast a long, long shadow in history, so in the waning days of summer, we thought it was worth a few moments to reflect on some of the innovations he brought to the ever-evolving menu of management tools.

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May 8, 2006


The Insider is determined to do its part in preparing the nation for a flu pandemic. Although the President did not specifically mention bloggers in his mobilization plans, we think that blogs offer a unique tool for getting out the word and for maintaining communications under adverse circumstances. Best of all, you don't have to come within three feet of a blogger to access the information.

The President states that "our efforts require the participation of, and coordination by, all levels of government and segments of society. State and local governments must be prepared, and my Administration will work with them to provide the necessary guidance in order to best protect their citizens. No less important will be the actions of individual citizens, whose participation is necessary to the success of these efforts."

Initial response to the President's plans have tended toward scepticism. There seems to be a sense at the state level that the feds don't plan to take much responsibility; that much of the burden will fall at the state and local levels; and that not much in the way of federal resources will reach the states as they confront the awesome challenges of a pandemic. It's like waiting for Katrina without a storm track.

Unity or Chaos?
The President tells us that "our Nation will face this global threat united in purpose and united in action in order to best protect our families, our communities, our nation, and our world from the threat of pandemic influenza." The Insider is not so sure about the unity in action. If the pandemic is as horrific as some project, we may see more chaos than unity. But one way or the other, we'll probably muddle on through.

For larger businesses who want to give it a shot, the CDC has put together a comprehensive planning checklist. It's full of generic advice that is certainly useful, but may prove really difficult to implement. For example, one recommendation is to "establish policies for employees who have been exposed to pandemic influenza, are suspected to be ill, or become ill at the worksite (e.g., infection control response, immediate mandatory sick leave)." How would you define and implement "immediate mandatory sick leave"? Many employers will balk at the prospect of uniformed guards, in protective masks, escorting unwilling workers to their cars. Most HR departments would need a few months to work out the kinks in this one policy area.

Basic Hygiene
No matter how sophisticated your planning may be, executing a flu game plan may come down to the basics. People should not get too close to one another (stay at least three feet apart). Most important, people have to know how to cough and sneeze. The government has a poster (available in five languages) here.

Here's the text of the poster, with a few annotations:

To help stop the spread of germs,

Cover your mouth and nose with a tissue when you cough or sneeze. [Have you ever noticed how many people routinely fail to do this? For people who do it wrong, should progressive discipline apply, or is it "one unprotected sneeze" and you're tossed out of the workplace?]
If you don't have a tissue, cough or sneeze into your upper sleeve, not your hands. [Might work in a factory, but not practical for those in Armani suits.]
Put your used tissue in the waste basket. [Most industrial workplaces I've toured lack waste baskets.]
Clean your hands after coughing or sneezing. [If you wash after each cough/sneeze, as you're supposed to, there will be a lot of lost productivity.]

Wash with soap and water. {Assumes that these are readily available.]
Clean with alcohol-based hand cleaner.
[Might not be practical in many work environments.]

Just-In-Time Management
I have a strong suspicion that very few companies (and few families) will take the necessary steps to prepare for the Big One. When it comes to what appear to be remote risks, we all practice just-in-time management and hope for the best.

In a pandemic, as long as electrical power is available, people should be able to access computers and communicate over the net. Many, the Insider included, will be able to work from remote locations. Sooner or later you may want to check out an interesting, net-grown resource called fluwiki. Based upon the open-sourced format of Wikipedia, fluwiki is public flu compendium, focused in a very practical way on managing families and businesses during a pandemic. The home-grown survival lists are more entertaining that those provided by the CDC. Even if you are convinced that this pandemic will never happen, you might want to save this site under your favorites for future reference. You never know when it might come in handy.

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May 2, 2006


The Insider is feeling a bit annoyed with plagiarists (not that we're aware of anyone copying us lately). We think it is very peculiar that talented people borrow the work of others writers and then immediately forget they did it. These same people never forget who owes them money. They never forget the name of a reporter (or blogger?) who criticized them. They never forget to execute stock options in a "timely" manner. Yet they copy whole paragraphs from other writers and immediately suffer a profound memory lapse. Whether you’re a sophomore at Harvard or the CEO of Raytheon, you are where you are because you have a steel trap for a memory, formidable intelligence and over-weening ambition. Can a poor memory be part of the same package? I doubt it.

"How Opal Got Caught..."
Harvard sophomore Kaavya Viswanathan’s novel, "How Opal Mehta Got Kissed, Got Wild, and Got a Life," was recently pulled from the market by her publisher. (The title alone should have been reason enough not to publish the book!) Ms. Viswanathan has called the borrowing of some 40+ verbatim passages from another book about adolescent angst "unintentional and unconscious." Given the relentless ambition, the unwavering intent and the conscious planning required for getting into Harvard these days, I am not convinced.

Mr. Swanson, Raytheon's CEO, suffered a similar spate of adverse publicity when a reader happened upon the 1944 book "The Unwritten Laws of Engineering" by W. J. King, an engineering professor at the University of California, Los Angeles. It turns out that Swanson’s rules 6 through 22 can be found virtually word for word in the King book. In a press release, Swanson says that “While many of [his book’s] sources remain anonymous, clearly, the similarity of the language between Professor King’s 1944 book and some [ie. most] of the rules within the ‘Unwritten Rules’ is beyond dispute." “Similarity of language” makes it sound almost innocent. This is copying, pure and simple. (It's interesting to note that "Swanson's Unwritten Rules," like Viswanathan's book, has been pulled off the market.)

Swanson's Rules, Revisited
Before Swanson's unwritten rules fade into a richly deserved oblivion, let’s review them one last time. When we first blogged these rules, we assumed that Swanson had indeed written them. Even then, the rules often veered perilously close to cliche and platitude. This time we’ll look at them from the perspective of a memory-challenged CEO.
o Learn to say, "I don't know." If used when appropriate, it will be often. For example, if someone asks you if you were you aware that you copied extensively from another writer, simply look puzzled, say you don't know and assure them that the "similarity of language" was inadvertant.
o It is easier to get into something than it is to get out of it. Like passing something off as your own work, when someone else wrote it.
o If you are not criticized, you may not be doing much. And if you’re criticized for plagiarism, you may be doing too much of the wrong thing.
o Look for what is missing. Many know how to improve what's there, but few can see what isn't there. What isn't there is candor. If you steal someone's work and get caught, own up to it.
o Viewgraph rule: When something appears on a viewgraph (an overhead transparency), assume the world knows about it, and deal with it accordingly. You might also assume that when a book has been published, someone somewhere has a copy of it.
o Don't be timid; speak up. Express yourself, and promote your ideas. Heck, promote someone else’s ideas. Just promote!!
o Be extremely careful of the accuracy of your statements. Where exactly did these "unwritten rules" come from?
o Don't overlook the fact that you are working for a boss. Keep him or her informed. Avoid surprises! Whatever the boss wants takes top priority. Even when you consider that Swanson is the boss, being charged with plagiarism comes under the general heading of “surprises” to be avoided.
o Cultivate the habit of making quick, clean-cut decisions. Do I bother giving credit to Professor King or not? Nah, go for it, Swanie!
o Don't ever lose your sense of humor. Agreed, but it’s tough to laugh your way through this one!
o Have fun at what you do. It will reflect in your work. No one likes a grump except another grump. Go away! No more interviews. Mr. Swanson is feeling a bit grumpy at the moment.

Rule #34a
Swanson’s damage control press release ends with the following statement: “This experience has taught me a valuable lesson – new Rule #34: ‘Regarding the truisms of human behavior, there are no original rules.’” Does that mean Mr. Swanson has no original ideas about good management? I doubt that’s his real message. Here’s the Insider version, rule #34a, applicable to Mr. Swanson and Ms. Viswanathan (with their eerily similar names): "Either express your ideas (regardless of the source) in your own words or give credit where credit is due.”

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April 27, 2006


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.

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March 7, 2006


As part of its public relations offensive, Wal-Mart has taken to the blogwaves. They are encouraging bloggers sympathetic to their cause to publish positive news about the ubiquitous company. According to an article by Michael Barbaro in today's New York Times, the bloggers are using the tidbits, but not necessarily identifying the source.

Here's a sample: One blogger in Iowa wrote that a new Wal-Mart opening in Illinois had received 25,000 applications for 325 jobs. "That's a 1.3 acceptance rate," the message read. "Consider this: Harvard University (undergraduate) accepts 11 percent of applicants." Insider readers can probably figure out the difference between applying to Harvard and applying for a job at Wal-Mart, but as they say, the numbers speak for themselves. My guess is that any new jobs in a depressed area will generate a lot of interest. But the original source of the unusual comparison is not the blogger, but Wal-Mart itself.

According to Wal-Mart's Mona Williams, this is "part of our overall effort to tell our story. As more and more Americans go to the Internet to get information from varied, credible, trusted sources, Wal-Mart is committed to participating in that online conversation."

As one who tries to represent a "varied, credible and trusted source," I beg to disagree with Mona. There is a significant difference between setting up your own blog and ghost-writing your way into the blogs of others. Even in the wide open frontiers of blogging, there is a strong notion of integrity. Wal-Mart "participates" in the conversation in the same way they "provide jobs in local communities": on their terms, using their own value system, and with zero consideration for the local businesses they are nudging toward oblivion.

The author of Wal-Mart's "blog feeds" is someone named Marshall Manson (no relation, no relation?), a senior account supervisor at the Edelman pubic relations firm, a contractor to Wal-Mart. Manson writes for a number of conservative Web sites trying to limit the role of government. Obviously, Manson - and many others - are alarmed by state initiatives to force Wal-Mart into higher levels of health insurance coverage for its many employees. These bloggers are more than willing to use the Wal-Mart feeds, some with attribution, others without.

Wal-Mart has invited a number of bloggers to attend a media conference in Bentonville, Arkansas. Alas, they are not footing the bill for the trip. I would point out to the behemoth retailer that the Insider has consistently covered Wal-Mart news: we are fascinated by their locking in (illegal immigrant) cleaning crews, targeting loyal employees for termination, forcing employees onto public assistance to survive, and telling managers with differing views to find another job. We're doing our part to "tell Wal-Mart's story." Nonetheless, I am still waiting for my invitation to Bentonville.

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January 17, 2006


In today's ferociously competitive marketplace, it's all too easy to drive bids to a rock bottom level. We've blogged Walmart's"big squeeze" strategy that forces cost-cutting deep into the subcontractor level. But everyone - not just Walmart - loves a bargain. Sometimes the penny wise strategy to cut costs leads to the pound foolish result of a cherished building in ruins. Today we read a fascinating article by Antonio Olivo and Ron Grossman in the Chicago Tribune of a simple repair that ended up destroying an historic landmark.

The Pilgrim Baptist Church on the southside of Chicago was an architectural masterpiece designed by Louis H. Sullivan. It's known as the birthplace of gospel music. When new gutters were needed, the congregation first received a bid of $365,000. Having already spent a half million on renovations, they were able to find a much lower bid from Conrad Roofing and Construction - a mere $125,000. The temptation of a bid 60 per cent lower than the initial offer proved irresistable, even after Conrad revealed that a subcontractor would do the work. In retrospect, the congregation might well see that temptation as the work of the devil.

Up in Smoke
The installation of the gleaming copper gutters was nearly completed when two roofers discovered that they had started a small fire. After their ineffective effort to put the fire out failed, they gathered their tools and went home! The workers paused only long enough to alert their boss by cell phone. On the way out, as a Pilgrim deacon frantically sought to learn the source of a burning smell in the building, one of the roofers, his face singed, replied, "No speak English" and drove off.

The workers later told police that they went home because they were scared. (I wonder if their fear related to the damage they had caused or, possibly, their immigration status...) They also told police that they had been using a propane torch, which led directly to the fire. Torches in the hands of roofers have been known to produce hot slag and sparks, which can ignite a building.

Faith vs. Due Diligence
This sad situation raises many questions that should resonate not just with large church congregations, but with homeowners renovating a kitchen or small, expanding businesses needing to hire subcontractors. How do you find quality people? How can you be sure that the person bidding on the job has the competence, experience and know- how to complete the work to your standards?

The answer lies in the dogged due diligence that we've all been taught, but which the prospect of saving a few dollars all-too-often trumps. We need to ask the right questions, not just of the general contractor, but of any proposed subcontractors:
- What experience do you have in doing this type of work?
- Have you ever been sued? (Conrad Construction was involved in a lawsuit where one of their subs had burned down a building, using torches)
- Do you have up-to-date certificates of insurance with adequate coverage? (Show me!)
- What kind of training do you provide your workers?
- How are you able to complete the work for the stated amount? (If the bid is artificially low, the work and the workers inevitably suffer.)
- How much do you pay your workers?
- What standards, controls and accountability are built into your subcontracting procedures?

A Pilgrim Church trustee was interviewed inside a drab church center across the street from a blackened pile of rubble that used to be an historic sanctuary. "All I knew was he was going to get the job done for X amount of money." He regretted being too naive and not having investigated whether the subcontractor was qualified and competent. This is one area where an act of faith just doesn't suffice. Faith has its place, but it's no substitute for due diligence.

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December 12, 2005


Our colleague Peter Rousmaniere, a regular contributor to Risk & Insurance Magazine, raises an interesting issue in a recent column. How do you establish productive lines of communication with the employee's own doctor, especially when you meet with resistance? Peter presents the recommendations of Joseph Fortuna, an occupational physician working for (pension-troubled) auto-parts manufacturer Delphi.

One of the most challenging aspects of communication is simply getting the employee's doctor on the phone. Fortuna advises talking first to the key administrative person in that doctor's office. Provide the office with the information they really need. This means faxing them the job description, along with possible accommodations that can be made for any medically necessary restrictions. If the employer is well known in the community (as Delphi certainly is), use this as part of your leverage. But even the names of lesser known employers who are motivated to bring people back to work would be helpful. The medical provider really needs to know that the employer is connected to the recovery process -- a call from an insurance adjuster carries less weight than one from an occupational doctor or the employer.

The Right Questions
Fortuna aptly points the occupational doctor -- and the employer -- toward asking the right question. All too often, a question is phrased in a way that produces an unsatisfactory response. For example:

Don't ask: "Can Mr. Jones return to work?"
Ask: "Have you specifically instructed Mr. Jones to stay out of work?"

Wrong question: "When can Mr. Jones return to work?"
Right question: "Can Mr. Jones return to work on Monday?"

Wrong question: "What are Mr. Jones's restrictions?"
Right question: "Can Mr. Jones return to work with a ten-pound lifting restriction?" (If the doctor answers "no," follow it up: "How about a five pound lifting restriction?")

Organized Persistance
In his role as an occupational medicine specialist, Fortuna often has to make calls to a treating physician. If he doesn't hear back promptly, he works through an orderly sequence of calls that increases the likelihood of a call back. Because his approach would work both for doctors and employers, I have added in parentheses some variations of his questions targeted for employers.

Day one: "Please ask Dr. X to call Dr. Y concerning Mr. Jones."
(If the employer is calling: "Please ask Dr. X to call us concerning our [valued] employee, Mr. Jones.")

Day three: "I am Dr. Y, an occupational-medicine physician in city A. I need to speak with Dr. X concerning patient Jones's work restrictions. I have a signed medical-information release from him. I need to speak to Dr. X by (day six) so that Mr. Jones's benefits will not be interrupted."
(If the employer is calling: "We need to speak to Dr. X concerning our employee, Mr. Jones. We have a signed medical release from him. We need to speak to Dr. X by (day six) so that we can get Mr. Jones back to work. Mr. Jones is an important member of the team."

Day five: "This is Dr. Y. I am still trying to reach Dr. X about Mr. Jones. I left messages on (day one) and (day three), but have not received a call back. Please ask Dr. X to call me as soon as possible."
(If the employer is calling: "This is Mr. Jones's employer calling again. We left messages on (day one) and (day three), but have not received a call back. We are very anxious to bring Mr. Jones back to work, so please have Dr. X call us by (day 6).")

You can see that Fortuna's questions attempt to build a line of communication where there is resistance. I particularly like the proactive slant built into the questions. It's less a matter of assuming the doctor has the answer than of guiding the doctor to the answer you (and the employee) really need. Savvy advice - well worth a try when the employee's doctor is reluctant to participate in the return-to-work process.

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December 8, 2005


One of the most important questions confronting disability managers is how long a disability should last. During Lynch Ryan's 20+ years in the business, we have seen the loss of a finger tip turn into a permanent total disability, while the loss of three fingers resulted in only a month of lost time. One employee injures his back and is gone forever; another with a more serious back strain is back to work on modified duty within a week. What accounts for the differences? How many days of disability are medically necessary?

What are Disability Duration Guidelines?
If you study a lot of injuries, over a long period of time, you can develop a strong sense of how long a disability should last, ranging from no time lost to years and years of disability. The data can encompass many diagnoses and can take into account the occupation of the individual (sedentary to physically demanding) as well as co-morbidities (health problems that may impact the speed of recovery). The data can reveal optimum results (minimal time away from work), average and mean durations (the middle of the bell curve) and the outlyers on the wrong side (many months of what is often medically unnecessary disability). This type of data should be very useful for claims adjusters, nurse case managers, sophisticated employers and insurers in general for setting goals in returning disabled individuals to fully productive lives. There are a number of these data bases available; the Reed Group has one that is both comprehensive and user-friendly.

Like managed care, disability duration guidelines are a hot topic, one of the new buzz words in the world of cost control. A lot of people are now using these guidelines - but are they using them effectively? I doubt it. Our esteemed colleague, Dr. Jennifer Christian, head of Webility MD, has done a great job of listing the uses and misuses of disability duration guidelines in one of her "Ask Dr. J" columns, available here in PDF format.

What not to do!
Jennifer notes that people often simply match the guideline numbers with the current length of disability for a given situation. The adjuster tends to feel that there is no need to do anything until the mid-point has been reached. And of course, the red flags really start blowing in the wind once the claim approaches the maximum durations. As happens all too often in the world of insurance, this approach results in too little being done too late. You are shutting the barn door long after the horse has wandered into the field.

Aligning Incentives
Jennifer suggests that people focus on the optimal side of the distribution. Adjusters should set a goal of beating the best: returning disabled people to work faster than is normally expected for the given disability. In doing this, you ensure that the proper resources are directed with a laser-like focus on the situation. In Lynch Ryan's experience, you have to treat every disability with a sense of urgency from day one. Too many things can and often do go wrong if you sit back and wait for a situation to resolve itself.

Jennifer acknowledges that the "worst case" number might be useful for setting reserves, but absolutely not for setting the agenda. She suggests that adjusters be rewarded for taking risks early on - for drawing upon the full range of options before the claim drifts toward long-term duration. With this strategy, you are likely to find yourself spending a little more in the short run and much less in the long run.

Jennifer's column contains a lot of interesting detail. It's well thought out and very comprehensive. If you are interested not just in using disability guidelines, but in using them well, this would be a good place to begin.

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November 11, 2005


Workers comp can be frustrating for employers of all sizes -- from the mom & pop store on main street to Fortune 500 giants. But somehow most problems in the private sector seem pretty managable when compared to public sector entities. Take the city of Pittsburgh. We read in the Tribune Review that they have an annual budget of $23 million for workers comp, which includes over 1,000 claims, 3,700 employees and 10 collective bargaining units. Despite a declining city workforce, the budget for comp is growing.

As we have pointed out in the past, one of the major problems for public sector entities is the budgeting process itself. There is no incentive to clean up old claims, because that would only increase your short term costs. It's cheaper in the short run to pay monthly indemnity benefits for out-of-work employees than confront the issue by settling out the claims, thereby reducing your long term costs. Today's mayor is not really concerned about making the job easier for his successors.

Settling the Old Claims
Over 21% of Pittsburgh's workers comp payments in 2003 went to employees who were injured over 20 years ago! The city is paying over $2.5 million a year to support these claims. My first thought is how much needless waste is contained in those numbers: here are skilled people being paid to do nothing because the system could not bring them back to work. Many (but not all) of these claimants would prefer a productive life.

As part of a massive government restructuring project entitled the Act 47 Recovery Plan (PDF with 230 pages), Pittsburgh is working with a number of consultants to improve basic government functions. One of these consultants, Philadelphia based Public Financial Management (PFM), Inc., has made a number of recommendations for lowering workers compensation costs, including a pilot program to settle out old claims. They have settled 14 claims in the current year, with a total cost of $652,000. The average settlement cost $50,000 with an average worker age of 47.

After the pilot settlement project has been evaluated, with particular reference to future savings, additional money is likely to be set aside to continue the program. Settling old claims can be grueling and thankless work. As a cost control measure, it's akin to closing the barn door after your horses have already wandered into your neighbor's field. Nonetheless, it's worth the effort.

Collective Bargaining & Modified Duty
The Act 47 report identifies a number of obstacles to controlling costs in Pittsburgh. Perhaps the biggest one lies in the collective bargaining area. Under the current contracts, modified duty assignments can only be offered in the injured employee's home department. Injured employees cannot be moved among city departments to find appropriate jobs. This is unfortunate, because the vast operations of a major city offer numerous opportunities for lighter duty jobs. Virtually any physical limitations could be accommodated. To be sure, there may be wage equity issues, as higher paid employees (police and fire) are moved into lower paying positions. Nonetheless, these problems are solvable. And the bottom line is simple: keeping injured employees productive will speed their recovery and lower the costs of workers comp.

I must note, however, that an expanded light duty program does not even make the list of recommendations. Perhaps the political ramifications are more than the city is willing to take on at this time. I think Pittsburgh has done an admirable job of identifying the sources of their workers comp costs. Many of their recommendations are solid and will bear fruit in the months and years ahead: settling out old claims, adding a safety manager to the citywide risk management team, tightening the managed care contract, holding monthly case management conferences. But modified duty is the single most important tool in controlling losses. Unless they are able to expand the modified duty program through the collective bargaining process, their efforts will fall far short of what can and should be done to control comp costs in a major American city.

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November 2, 2005


A federal judge has ordered the Dial Corporation to pay over $3 million to resolve a sex discrimination suit brought by the Equal Employment Opportunity Commission (EEOC) against The Dial Corporation's Armour Star Meat Packing plant in Fort Madison, Iowa. Fifty two women who were rejected for entry-level production jobs because they had failed a strength test will be offered jobs at Dial and will share approximately $3,390,000. The Bureau of National Affairs (BNA) has a summary here.

The case began with a single rejected job applicant. Paula Liles had performed "heavy physical work" in the past, met the other job requirements and was given a conditional job offer pending her passing of a physical test. The test required the repeated lifting of 35 pounds to a height of 65 inches (Ms. Liles herself was only 62" tall, so she was lifting the racks 3" above her head). Despite her lack of height, she past the test, but she was still not hired because at times during the test she had to stand on her tiptoes. The company was concerned that this stretching might increase her risk of injury. (They are probably right -- our posts on rotator cuff injuries highlight the risks of working "above the shoulder.")

But failing the test does not correlate with Ms. Liles and other female applicants being unable to perform the work. That's where Armour Star went astray of the law.

A Test of Strength
The judge determined that the test discriminated against women, since fewer than 40% of female applicants passed the test, while nearly all male applicants passed. Here are three critical facts that hurt the company's case: first, prior to the testing, women had been successfully performing the jobs in the sausage making department. Second, injury rates for male and female employees doing this work were virtually identical. And finally, the test was more difficult than the job itself.

No one questions Dial's goal of reducing workplace injuries. However, testing does not occur in a vacuum. Prior to implementing the test, 46 percent of the individuals hired for the job had been women. The new test resulted in most of the women losing their jobs.

Given the disparate impact of the test on female employees, the court determined that the test violated Title VII of the 1964 Civil Rights Act. So now the company must pay.

Dialing Back
Where did an apparently well-intentioned employer go wrong? After all, implementing pre-employment testing is considered a "best practice" in reducing workplace injuries. Unfortunately, Dial's program appeared to be missing several critical elements:
- a feedback loop, where test results were analyzed to ensure that the impact was fair and equitable. The high failure rate of women should have raised flags.
- a re-engineering loop, where the work itself is examined to ensure that it is organized as efficiently and safely as possible. To my mind, the 65" lifting on a repetitive basis is an ergonomic problem that might well be solved through re-engineering.
- Finally, a common sense loop. Because many women had been performing the work safely in the past, their high failure rate should have brought the test itself into question.

This is a case where apparently well-intentioned management became too enamored of their new hiring process. They were convinced that the strength test would lower the risk of injury to workers. On a superficial level, you could certainly make this case. But the test results, with the high failure rate of women, should have brought the entire process into question. It didn't and the company has now paid the price. Let that be a fair warning to any other employers contemplating pre-placement testing to reduce the risk of injuries.

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October 20, 2005


Bill Swanson, CEO of Raytheon, has become famous for his leadership at the company. In an article published in US Black Engineer and available as a PDF at Raytheon's website, Swanson receives high praise for his support of minority engineers. The article also presents his "25 Unwritten Rules of Management." Not to quibble, but if I can read the rules in this article, what exactly makes them unwritten? You can even request a written copy of the unwritten rules from Raytheon, but be advised that they are currently out of stock.

As part of the Insider's ongoing commitment to keep our readers informed of the latest trends in management philosophy, we are presenting an abbreviated version of Mr. Swanson's 25 rules, with a little annotation, of course.

Excerpts from Bill Swanson's Twenty Five Unwritten Rules of Management:

1. Learn to say, "I don't know." If used when appropriate, it will be often.
Ah yes, but if used too often, you will be out of a job.

2. It is easier to get into something than it is to get out of it.
And if you never get into anything, you are likely to be out of a job.

3. If you are not criticized, you may not be doing much.
And if you are criticized, you may be screwing up.

6. Work for a boss with whom you are comfortable telling it like it is. Remember that you can't pick your relatives, but you can pick your boss.
Easily said by the CEO, but most of us get stuck from time to time with bosses who won't listen. As for relatives, if they don't behave, fire them. They can always reapply for the job.

12. Don't be timid; speak up. Express yourself, and promote your ideas.
Unless, of course, you have a boss as in #6. In which case you'd best keep your mouth shut.

13. Practice shows that those who speak the most knowingly and confidently often end up with the assignment to get it done.
Is this akin to volunteering in the army (never do it!)? Is Swanson encouraging speaking up or shutting up?

14. Strive for brevity and clarity in oral and written reports.
How about: "Be brief, be clear?" And while you are at it, could you perhaps reduce your 25 rules to 10?

15. Be extremely careful of the accuracy of your statements.
If I am too careful, I might not say anything.

16. Don't overlook the fact that you are working for a boss. Keep him or her informed. Avoid surprises! Whatever the boss wants takes top priority.
Easily said by the CEO! And what are we to do with the boss as in #6?

18. Never direct a complaint to the top. A serious offense is to "cc" a person's boss.
By my calculation, this means that Swanson never hears any complaints, as he is the boss of the bosses. Works for him, I'm sure.

21. Don't get excited in engineering emergencies. Keep your feet on the ground.
All depends on which wires you have in your hands!

22. Cultivate the habit of making quick, clean-cut decisions.
Unless, of course, they are the wrong decisions. Then see # 1 & 2 above.

23. When making decisions, the pros are much easier to deal with than the cons. Your boss wants to see the cons also.
Unless, of course, your boss is a con, in which case see #6.

24. Don't ever lose your sense of humor.
With all due respect, there is absolutely nothing funny in these 25 rules.

25. Have fun at what you do. It will reflect in your work. No one likes a grump except another grump.
I'm not sure a grump likes another grump, but other than that, I agree.

Swanson's subordinates are in the best position to determine whether these unwritten rules embody what it's like to work for him. I sincerely hope he walks the talk. Surely, there are some genuine nuggets of wisdom in the complete list, but as with any wisdom, careful scrutiny is in order. You have to judge for yourself.

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October 18, 2005


The Insider has written with some frequency about older workers. With a majority of the workforce now over 40, employers and risk managers face a new set of challenges in keeping older workers healthy and productive. One recent post notes the increase in the incidence of rotator cuff injuries among older workers. We also have blogged the financial necessity that leads people to work longer. They might want to retire, but they are simply unable to do so.

One reader responded to our most recent blog on older workers by questioning whether the Insider has a bias. With all our dire warnings about risks of injury increasing with age, are we signaling to management to avoid older workers? Are we encouraging discriminatory practices?

As one who meets any known definition of older worker, I can state personally that we have no interest -- and would not support -- any movement to discriminate against older workers. The Insider's job is to keep track of the data and alert our readers to any significant trends in risk and loss management, whether they involve a 16 year old summer hire or a 75 year old driver. We are not focused on age per se, but on risk. If certain risks increase with age, management needs to be aware of it and take appropriate steps to ameliorate the risk.

Carpal Tunnel Syndrome
The National Council on Compensation Insurance (NCCI) has published an interesting study (PDF) of carpal tunnel claims in the workers compensation system. Carpal Tunnel Syndrome (CTS) ranks second behind back injuries as the leading lost-time diagnosis. In terms of the total costs of all claims, CTS also ranks second. Here's the kicker: compared with back strain cases, CTS claimants are more likely to be higher paid...and more likely to be older. In addition, the severity of the claim tends to rise with age.

So here we go again: The Insider is alerting management that older workers are more likely to get CTS (not a surprise, really, as CTS involves trauma that accumulates over time). And we are reminding managers that the older the worker, the more expensive the claim. Before we draw any conclusions, let's look a little closer at the data.

Among all claims tracked by NCCI between 1996 and 2000, CTS ranks second behind lumbar disc displacement in terms of total loss costs, with just under $1 billion incurred for CTS claims 18 months after the injury. Lumbar disc problems resulted in $1.4 billion incurred at the same point in time. Here are some additional details in the comparison of CTS to lumbar strains:
: CTS cases are more likely to result in lost-time claims
: Women suffer relatively more CTS injuries, while men incur more back injuries
: Workers suffering CTS injuries are more likely to be higher paid than workers incurring back injuries.
: Compared with back strain cases, CTS claimants tend to be older (over 35)

[We need to note that NCCI defines "older" as 35 and up, which is certainly one of the more generous definitions we have seen. For most purposes, including most age discrimination laws, older work begins at 40.]

The average total incurred cost at 18 months for CTS was $12,181, compared to $29,701 for lumbar disc displacement. However, CTS accounted for 1.8 per cent of total claims, while lumbar disc comprised only 1 per cent. In other words, the severity of CTS was lower, but the frequency higher. It's worth noting that rotator cuff sprains (another big risk as you get older -- see our blog here) ranked fourth in total incurred and averaged $21,907 per claim. Once again, injuries with age-related risk factors are among the most expensive.

Responding to the Data
NCCI's conclusion is rather blandly worded: "As the workforce ages over the coming decades, these findings suggest that insurance companies and employers need to carefully monitor some of the financial and demographic characteristics of CTS injuries."

This wording is a bit too circumspect for the Insider. An aging workforce presents serious problems and requires concerted action. As workers get older, managers need to focus safety and prevention programs on age-related risks. Cross-train people to the degree possible, rotating them through jobs that call upon different body mechanics. If people must do the same task every day, all day, bring in a wellness expert to teach stretching and conditioning.

The solution to age-related risk is surely not discrimination. Let's face it, given the experience of your aging workers, they are a far greater asset and less of a risk than hiring young, inexperienced strangers, assuming you could even find them. Savvy employers make the commitment to keeping all workers safe, healthy and productive, regardless of age. That's where risk management begins and where it rightly ends.

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August 22, 2005


Malcom Gladwell, author of a book called Blink, was recently on a news show discussing the tragic death of Jean Charles de Menezes, the innocent Brazilian who was erroneously killed by British police in their zeal to prevent another London subway bombing. Among the many interesting observations Gladwell made was one that particularly resonated with me. He noted that once police have framed someone as a criminal, all subsequent decisions are made in this context. Innocent behaviors may appear ominous when viewed through the prism of criminality.

In this terrible case, we first heard that the deceased was exhibiting suspicious behaviors - wearing a bulky, seasonably inappropriate coat, running from police, jumping turnstiles, etc. In retrospect, we learned that most of these reports were simply not true. Menezes was on his way to work like every other day, but on this day he had the misfortune to be framed as a terrorist suspect. When a group of police identified and pointed him out as he sat on a subway car, he apparently stood to face them. In the context of an imminent terrorist threat, a simple action became a death sentence.

I haven't yet read Gladwell's book, but his commentary sent me to Amazon reviews. The book is about decision making based on "rapid cognition" - first impressions, snap judgments, framing, and the like - it looks like an interesting addition to a late summer reading list.

"Problem" as the default assumption
We frequently see this type of "rapid cognition" and framing when someone is injured at work. For many employers, workers comp is a hot button issue. It is expensive, confusing, and fraught with potentially sticky employment issues. It may involve litigation. Suspicion runs high. It is an issue that is generally framed as problematic right from the outset. Because the overall context is problematic, every dealing with the employee is viewed through a problem prism. This negative framing can be a self-fulfilling prophecy. A *good* employee is mystified as to why he or she is suddenly treated with suspicion.

When I first came to workers comp, I was quite ignorant of the issue beyond the fact that it was serious enough to be driving some employers here in Massachusetts out of business. The word "fraud" was bandied about readily. Lynch Ryan founder, Tom Lynch, did not think fraud was the nub of the problem. While he allowed that fraud existed, he saw problems as emanating more from the fact that employers were treating what is essentially a human issue as simply a financial equation. He wondered why two very similar injuries could evoke such vastly different responses depending on whether they occurred on or off the job. As an insurance industry outsider viewing the issue as purely a business problem to be solved, he did not bring the baggage of negative framing. Essentially, he approached things much the way my Mom approached the job of raising her seven kids: treat people fairly and consistently, reinforce good behaviors, expect the best, and treat problems as exceptions, not the rule.

Can something as simple as reframing the issue so that the default position in approaching an injured worker is not from the problem perspective yield better results? We obviously feel strongly that it can, and we think that the hundreds of clients weve worked with over the years would largely agree. At minimum, it is certainly a good place to start.

Shortly after thinking of the issue of framing and how it relates to workers comp, I was surfing some blogs and came upon an interesting item courtesy of Judge Robert Vonada's blog. Judge Vonada points to a thoughtful poem about an injured worker that speaks to the issue of framing. It is written from the perspective of a son reflecting on his Dad's experience with a work injury. To read No Work Poem #1, scroll down to the August 17 entry.

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August 1, 2005


Early in my working life, I was employed for a local plastics manufacturer. Among my responsibilities, I was charged with the happy task of planning an annual recognition dinner for longterm employees. It was a big event because we had many 15-, 20-, and 25-year veterans in the work force. Sadly, the concept of longterm employment seems almost quaint today, but at that time, it was held in high regard by both employers and employees alike.

The employment landscape has changed considerably over the last two decades. By and large, neither employers nor employees seem to have much loyalty to each other today. The influence of Wall Street has been corrosive. With companies facing intense pressure to maximize each quarter's results, many have found that mass layoffs and outsourcings have met with approbation in the form of a few penny gain in stock price. This tendency to immediate gratification has had other negative consequences on the business climate, as well. It appears that at least a few business executives may have sufficient time to meditate on these matters from the privacy of their jail cells.

Breaking away from the herd
It's a breath of fresh air to read a business success story about Costco, a retail company that is bucking this trend, and its forward-thinking CEO, Jim Sinegal. In a New York Times article entitled How Costco Became the Anti-Wal-Mart, Steven Greenhouse reports on how the companys strong commitment to its employees has enhanced its mission to provide excellence in quality, service, and pricing for its customers:

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."

While the article doesnt mention anything about workers comp, if we had to guess, we would think that Costco probably outperforms others in its industry in this regard, too. We generally find that employers get the workers compensation results they deserve.

Does good management pay off?
Does Costco's employee loyalty and social responsibility pay off? Don't investors favor the Chainsaw Al approach to employee management? Apparently not:

Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19. Mr. Dreher said Costco's share price was so high because so many people love the company. "It's a cult stock," he said.

And despite the company enjoying such success, in Sinegal we have a CEO that earns somewhere in the neighborhood of a half million dollars a year, salary and bonuses combined - a pittance for the CEO of a company that ranks in the top 30 of the nation's largest revenue producing companies.

Yet some Wall Street gurus are dissatisfied with results. Some think Costco is being too generous to its employees. Some think that raising prices would produce better margins. Go figure these are the same people that cheered on the high tech bubble.

Meanwhile, some Costco workers are hunkering down for a long stint of employment.

Beth Wagner, 36, used to manage a Rite Aid drugstore, where she made $24,000 a year and paid nearly $4,000 a year for health coverage. She quit five years ago to work at Costco, taking a cut in pay. She started at $10.50 an hour - $22,000 a year - but now makes $18 an hour as a receiving clerk. With annual bonuses, her income is about $40,000.
"I want to retire here," she said. "I love it here."

You can read more on the Costco story at Seattle Weekly's story, Company of the People.

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July 29, 2005


A little over a year ago we cautioned employers to be careful with summer hires. Make sure summer hires are qualified to do the work. Don't allow them to operate heavy equipment. And perhaps most important, don't just "toss them the keys" when driving is required.

Today we read in the New York Times (registratoin required) of a tragic accident in upstate New York. A car full of aspiring dancers was on its way to a lake for a swim. The driver sped along narrow roads, reaching speeds of 80 mph or more, until she lost control and slammed into a county dump truck. The small Toyota disintegrated upon impact, killing six people, the driver and five youngsters.

It turns out that the driver, 25-year-old Irina Mironova of Miami Beach, Fla., had a suspended Florida license for driving more than 100 mph. To be sure, many people get speeding tickets, but how many involve going 107 mph? This is a blatant case of negligent entrustment: Mironova should never have been allowed to drive. Not only did she have a poor driving record, if asked, she could not have produced a valid license.

I have no idea what the finances for running a small camp in the Catskills are like, but the camp would be required to carry liability insurance. In addition to suffering the pain of losing her youngest son, the camp's owner, Anna Kapitannikov, in all likelihood faces protracted legal actions for this single act of negligence. For lack of a simple check on her counselors's licenses, her life and her business are in ruins.

Due Diligence
Good management takes nothing for granted. The fact that someone is 25 and knows how to drive does not mean you can trust them behind the wheel. A little due diligence is always in order. For the few moments that might take, you could be spared a lifetime of grief.

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June 1, 2005


Ever wonder why your loss costs continue to rise despite your organization's strong safety programs? Or why one of your company's locations has a much stronger safety performance than another? Larry Hansen does, and he has written an excellent and lengthy article entitled Stepping up to occupational hazards in this month's edition of Occupational Hazards that explores these issues. He singles out culture as the X Factor (or the 'excellence differentiator') in achieving stellar safety performance. Here's an excerpt:

"In his October 2003 Occupational Hazards article, "Getting the Culture Right," Don Eckenfelder contends that organizational attitude ultimately determines whether safety initiatives succeed or fail, and proposes three core truths: "1 - Culture predicts performance; 2 - Culture can be measured; and 3 - Nothing is more important than getting the culture right!" The culture of an organization - its basic beliefs and values concerning people - is what drives safety excellence.

Tom Peters and Bob Waterman spent a decade In Search of Excellence, attempting to discover what lies at the core of operational excellence. After years of research, they summarized their findings in a simple, yet powerful message to American management: "Figure out your values system!" Values lie at the core of an organization's culture, and are the predictors of, and ultimate determinants of, all operational outcomes ... safety included."

Hansons article goes on to describe four stages of safety that produce varying levels of effectiveness depending on how evolved a company is in their approach:

1. S.W.A.M.P. - safety without any management process, or "costs are the problem"
2. N.O.R.M. - naturally occurring reactive management, or "people are the problem"
3. Excellence - safety excels to the 4th quartile - safety is "managed"
4. World Class Safety - Safety is "non is led"

The above offers just a brief recap, the article itself offers much more food for thought. Check it out to see how evolved your organization is in the safety hierarchy.

It's refreshing to see best practice management thinking applied to organizational safety, an area that is all too often given short shrift or that is delegated down. When it comes to safety, we ascribe to the Mahatma Gandhi philosophy of "Be the change you want to see." We firmly believe that no organizational change happens unless it starts with a commitment from the corner office and permeates every level of the organization.

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May 12, 2005


We have been tracking a tragic accident in Michigan that illustrates a very open-ended liability for employers. According to an article in the Detroit Free Press, Thomas Wellinger was a well-regarded employee of Unigraphic Solutions, a high tech company in Michigan. After his marriage failed last year, he apparently developed a drinking problem. On May 3, a little after 3 pm, he left work and drove his SUV at 70 miles per hour into a car driven by Judith Weinstein. The 49 year old mother and her two sons, Alexander, 12, and Samuel, 9, were killed instantly. Wellinger had a truly amazing blood alcohol level of 0.43 -- a clear indication that he routinely maintains a high level of alcohol in his system (his blood alcohol level would kill most of us outright). As is so often the case, Wellinger survived the crash, suffering a broken neck. He has been charged with vehicular homicide.

Here's the issue for his employer: how long have they known about Wellinger's drinking problem? What have they done about it? While Wellinger may not have the deep pockets to cover the inevitable liability for his negligence, his employer does have liability insurance. The burden of proof shifts now to the employer: they have to prove that their actions in controlling Wellinger were prudent and reasonable. It's worth noting that the employer intends to cooperate with the investigation, but their counsel has recommend that they repond only to a subpoena.

What did you know and when did you know it?
It appears that Wellinger may have spent a late night drinking at a local casino (note to attorneys: additional deep pockets here...) He showed up for work, then left the office early. Here's the crux of the Unigraphic's potential liability: Wellinger returned briefly to the office around 3 pm. Was anyone aware of his drunken state? (Even for a steady drinker like Wellinger, the 0.43 blood alcohol level must have been visibly evident.) And if the employer was aware of his acute intoxication, what if anything did they do about it?

The Free Press article quotes Bill Judge, a Chicago-area attorney who works with corporations to develop drug-prevention programs and policies dealing with substance-abusing workers. Judge states that although there is no Michigan law mandating that employers stop drunken employees from driving, they can face serious civil liability.

"You have to understand that once a worker shows up drunk, the employer must act ... he becomes the employer's responsibility.You put him in a cab, or you call the emergency contact person on his application and say come get him. If he decides he's going to drive anyway, you call the police."

While attorneys often obfuscate matters, Judge has nailed this one perfectly. If the employer is aware of the danger to the employee and others, action must be taken. You are not obligated to restrain someone (that's a police function), but you do need to ameliorate the risk. If the employee insists on driving away, call the police and give them a description of the vehicle.

Written Policies Are not Enough
The American Management Association estimates that over half of American companies have pre-employment drug and alcohol testing, but only 38 percent have post-hire testing programs. In any event, written policies are pretty useless if you don't walk the talk. When a volatile situation occurs -- when an employee shows up intoxicated -- the employer must take immediate action. Supervisors need training in what to do and how to do it. If you let an impaired employee drive off, you are endangering innocent people like the Weinsteins. If it can be proven that the employer was aware of the danger, our legal system will hold that employer accountable, even though the employee is no longer in the "course and scope" of employment.

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May 9, 2005


We've blogged before about language in the workplace, the impact that language has on safety, and the increased risk of death that non-English speaking immigrants face at work. We've also talked about the need for cultural competence in health care in the face of changing worker demographics.

In a post entitled People are dying because of their language, Jordan Barab at Confined Space carries a speech that Elisabeth Milos, an interpreter for injured workers, gave at a Workers Memorial Day rally at the state Capitol in Sacramento, California. It's well worth reading. The points that Milos makes are further bolstered by a recent New York Times article by Nina Bernstein entitled Language Barrier Called Health Hazard in E.R.

Both Milos and Bernstein point out the many problems with leaving translation up to family members or untrained persons. It is important to have a qualified interpreter when serious matter about health or safety must be conveyed. In What does an interpreter do?, the author discusses the role an interpreter can play and distinguishes interpretation from translation.

Employer Resources
How can an employer cope with the challenges that a diverse and multilingual work force poses? I once worked for a progressive manufacturer that offered English-as-a-second-language courses on site, and that regularly brought community interpreters in to acclimate new immigrant employees, such as Vietnamese and Hmong workers. Many immigrant groups have local cultural support centers, and they can be a good source for interpretation or translation.

One other alternative is for telephonic translation services via a three-way conference call. An advantage of such services is that they can be available on short notice, 24 hours a day, 7 days a week. We can't vouch for the quality of any of these services, but here are a few you might explore:
Certified Languages International
LLE Languge Services

Our legal system faces the need for interpreters on a daily basis, so their experience might be instructive. See the Court Interpretation Resource Guide (PDF), or the state links for court interpretation (PDF) which might provide a cookie trail to certified local resources.

If any of our readers have resources to suggest, I would welcome them. This is a topic of growing urgency.

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May 4, 2005


Many large companies that would do anything possible to outperform competitors may be overlooking a surefire path to success: having motivated, enthusiastic employees who are committed partners in achieving the company's goals. If you are a business owner or a manager, take the time to read this excellent interview with David Sirota, co-author of the book The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want - I'm pretty sure you'll be glad you did. The article is from the current edition of Knowledge@Wharton, an online resource from The Wharton School, University of Pennsylvania. (This is a great resource - free registration may be required.)

Sirota and his co-authors, Louis A. Mischkind and Michael Irwin Meltzer, have conducted more than 2.5 million employee surveys since 1994. Their research demonstrates that companies with high employee morale outperform companies with low employee morale. In a group of 28 companies employing 920,000 workers, the share price for the high morale companies increased by an average of 16%, versus about 3% for low-morale companies.

The authors reject the "get-tough" managerial tactics that were adopted widely in the last decade in an effort to increase share price and satisfy stakeholders. Rather, they favor a managerial approach that aligns company goals with the goals of its workers. Sirota describes the three basic goals of workers as:

  • Equity, or being treated fairly - fair pay, fair benefits, and security.
  • A sense of achievement - being proud of what you do and the company you do it for.
  • Camraderie - being part of a team effort, working well together.

Every tool a hammer
Sirota states that about 16% of the companies he deals with have a hostile work force. Often, this is the result of a reactive managerial style that we frequently encounter in companies that are suffering from high workers compensation losses. Sirota states:

About 5% of every workforce is allergic to work. These employees are shirkers. But managers in many companies, especially where there are large numbers of blue-collar workers or back-office operations such as call centers, treat the entire workforce as if it is the 5%. They set up rules and punitive measures for taking too long a rest break, etc. There is close supervision, so people who come in wanting to work, and hoping to take pride in their work, find themselves treated as if they are children or criminals.

Such a punitive style of management - treating everyone like the worst performing few - is a common reactive approach to the high costs of workers comp. We see this frequently. In frustration to one or several high-cost claims, some employers react by treating every comp claim as fraud, and treating all claimants in an adversarial manner. This serves to worsen any problems, creating a corrosive air of mistrust between managers and employees. It often becomes a type of self-fulfilling prophecy, even in instances when high comp costs are actually more the result of outside market forces or a fundamental lack of basic preventive of managerial measures.

A better way: employees as partners
Sirota discusses various managerial styles that have been in vogue over the last few decades, and presents an alternative that we ascribe to:

"First there is paternalism, where workers are treated as children. Then there is adversarial where workers are the enemy. Then there is transactional, where workers are like ciphers. Management does not know what they are like as individuals. The attitude is, 'We paid you, now we are even. We don't owe you anything.' That's where most companies have gone today. Loyalty is dead.

The fourth is what we have been talking about, which is the partnership organization. It does not mean that because I paid you, we are now even. You don't treat partners that way because you might need them to help you out sometime, and they might need you. It's more like a relationship between mature adults -- not like children or enemies, but allies."

We endorse this latter approach fully, and have seen it work well in those companies that embrace it as a model. The breakdown in employer-employee loyalty has been pervasive in recent years, resulting from massive and repeated layoffs, outsourcing, and other organizational measures that convey the underlying message that employees are a commodity. It may take years for employers to bridge the chasm that has been created and recreate a loyal work force, but the benefits are many for those few high-performing organizations that make the effort.

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April 21, 2005


In working with thousands of employers across the country, one of the refrains we have heard all too often after a lost time injury is: "I was planning to fire him, but I never got around to it." We advise our clients to terminate employees who are not working out before they get hurt. After an injury, workers are protected by workers compensation statutes which presume that any termination is simply retaliation based upon the injury. Workers compensation is not a good way to end the employment relationship.

But how do you terminate people? Termination is full of risk. It's not easy. It's not comfortable. Indeed, it is tempting to overlook poor performance, in the vain hope that the problem will go away. All too often, the problem simply migrates to a company's comp loss run.

Michael Fitzgibbon, an attorney based in Toronto, has put together an interesting blog on safe termination. He raises a number of compelling issues that are worthy of attention, especially for smaller employers who lack a dedicated human resource department to handle such issues. Here is an abbreviated version of Fitzgibbon's pointers:

1. You can't eliminate risk you can only manage it - you cannot eliminate the risk that an employee will sue. All you can do is position the company in the best light in the event that the employee does sue.
2. It is personal - While the termination should not be personal for the manager, don't ever think that it's not personal for the employee - it is.
3. It is emotional - Never lose sight of the fact that deep and strong emotions are at play here. A termination always affects people, even when you suspect that the employee knows its coming.
4. Never lose sight of the fact that you have initial control - In most cases, and while it may sometimes feel otherwise, the employer is in control of the pre-termination process.
5. Use employment contracts or letters of offer - Many employers wish they had these carefully drafted and properly entered into employment contracts in place when the point of termination comes and they hear the bad news about how much, at common law, they will likely be required to pay the employee.
6. Do your homework - If there is something to investigate, do so, thoroughly and completely. Document your investigation through careful notes (dated, signed etc...). Keep the notes and other file material in a safe and secure location and preserve the evidence. If you're going to terminate for just cause, then make sure you have the goods.
7. Get advice - This may seem self-serving (as Fitzgibbons is an attorney) but it's generally better to be proactive and get some legal advice before carrying out the termination. It's generally easier to place the pieces on the board than to pick them up off the floor.
8. Prepare, prepare prepare - here's a partial list of things to think about (by no means is this complete):
* Try to get into the head of the employee - who is this person? what's he/she going to be concerned about? how can we best deal with this individual? Resist the cookie-cutter, one size fits all termination approach.
* Assuming you're terminating without cause, and are providing a severance package, what will that package be?
* If you're terminating for just cause, how much detail should you provide the employee? Have you done your homework?
* In most cases, a termination letter should be prepared and available at the termination meeting along with all other documents (i.e. a release) that the employer will require the employee to sign. Give the employee reasonable time to obtain legal advice.
* Who will attend the termination meeting? Who will do the talking?
* Be sensitive to issues of location (you want a private location) and timing (you want to carry out the termination at a time when the office is quiet). In short you want to avoid the employee having to take the long-walk through the office past co-workers and customers carrying a box of personal belongings.
* What day of the week? There's no rule here, but Friday terminations should be avoided, if possible, because the employee will not be able to get legal advice over the weekend and will turn to anyone with an opinion (typically family who will supply well meaning, though possibly less than qualified, "legal" advice with the effect that, come Monday, the employee will be all fired up and itching for a fight).
* Does the day on which you are intending to carry out the termination have any significance for the employee (i.e. it's his/her birthday)? If so, think of another day.
9. Don't let the meeting get out of hand - Be firmly and politely decisive. Once the business has committed to terminate, the sole purpose of the meeting is to carry out that decision. Keep the discussion focused.
10. Terminate the employee as if he/she was your best friend -
11. Don't say or do anything that you wouldn't want to have published in your local paper -
12. Eat crow while it's young and tender - Translation: be fair and reasonable (that's not the same, by the way, as writing a blank cheque to the employee).

For a little more detail, visit Fitzgibbon's weblog. In the meantime, this might be a good time to review your team roster. Make sure you want these people with you and they want to be with you. When the employment relationship is not working out, it's best for all parties to end it. As Fitzgibbon's blog points out, how you end it will go a long way to determine whether the termination is truly the end, or just the beginning of a litigation nightmare.

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March 31, 2005


A reader asks: Is there a guide for employers' rights? Who makes the final decision to award a disability retirement? Who checks to insure that there is no fraud being committed?

The short answer to these questions is "prevailing state law." All jurisdictions have variations in the laws that govern the rights and responsibilities of both the employer and employee. Each state insurance authority also has a mechanism for reporting suspected fraud. While your workers comp insurer might investigate a claim and accept or deny it based on the circumstances of the claim, their interpretations are subject to review by state workers comp boards and authorities if challenged by the employee. You can find a link to your state workers comp authority on the All 50 States' and D.C.'s Home Pages and Workers' Compensation Agencies site. Or the Department of Labor offers a an overview of State Workers Comp Laws that allows you to compare provisions and benefits state by state.

There is a longer answer to this question too, perhaps too long for us to address fully in one fell swoop, but we'll try. Behind these questions, we pick up a familiar air of frustration. Many employers - particularly small employers - are pretty much in the dark about workers comp until something wakes them up and makes them take notice. That "something" is usually an adverse event: premium rates that suddenly skyrocket, being thrown into the state's assigned risk (or "insurer of last resort") pool, or an award of benefits to an employee in a situation the employer perceives as fraudulent or unfair. Many employers we've talked to feel mugged by workers comp - they feel like unwitting victims of a system run amuck.

To those employers, we would have a few words of advice: take charge. If you rely on your insurer or some outside party to manage your workers comp experience, you are likely to be frustrated on more than one occasion. Think of your insurer as essentially a financier who finances the risk. A good insurer might provide services to help you prevent, mitigate, or control losses, but essentially their raison d'etre is about money, not the people issues.

Taking control of your experience
At its very essence, workers compensation is not really an insurance problem or a money issue ... it's a people issue, a "human" issue. It's about your employees and your relationship to your employees. It's about people who get hurt on the job and how you take care of them. When it comes to your work force and your relations with your work force, the real person in the driver's seat is you.

There may not be a lot you can do about a past judgment, even if it seems unfair. But the worst thing you could do going forward would be to communicate your frustration to your work force in the form mistrust, suspicion, or unfair practices designed to prevent a repeat occurrence. A punitive approach will tarnish your good relations with your workers and will be unfair to the many good employees that comprise the overwhelming majority of your work force.

The best thing you could do going forward would be to educate yourself about your rights & responsibilities about the law in advance, and to develop a proactive rather than a reactive workers comp program to protect both your business and your employees. Some important components in that program include:

Prevention. We can't say this enough: the cheapest injuries - both in human and financial costs - are the ones that never occur.

Good communication. Take the mystery out of workers comp. Educate employees about their rights and responsibilities in advance.

A pre-established plan. Train your managers and supervisors in what to do if an injury occurs.

Excellent medical care. Develop a relationship with a superior and responsive physician who understands workers comp and how to treat occupational injuries.

Early reporting. Set an expectation that all injuries be reported promptly; also, have a "same-day" reporting standard for communicating any claims to your insurer.

Good, ongoing communication. Stay in frequent communication with the injured employee throughout the recovery process.

Return to work program. Build a plan to help the injured employee to return to work as soon as possible, including modified duty.

Fairness and consistency. Think of the "Golden Rule" - how would you want to be treated if you had an on-the-job injury? Be consistent and apply the same principles to all.

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March 24, 2005


At the heart of workers compensation is -- or should be -- the concerted effort to treat workplace injury and illness and get people back to productive employment. Sounds reasonable, but how do you do it? What exactly is "disability management?"

Our esteemed colleague, Dr. Jennifer Christian, host of the informative WebilityMD website, takes a shot at defining disability management, in response to a simple question from someone new to the field. Just click on her link for the February Q & A. We think her casual outline deserves wider notice.

Comp Benefits
Dr. Christian's list begins with the effort to control indemnity losses. Over the past two decades, this effort has centered in state legislatures across the country. Once workers comp came onto the national radar screen, legislatures tried a variety of strategies to lower costs. These ranged from the highly successful Qualified Loss Management Program (QLMP) in Massachusetts, to Governor Schwarzenegger's recent efforts in California (where a 10% rate reduction is finally in the offing). In the ongoing effort to cut costs, it's always tempting to cut benefits, which many states have done. (We happen to believe that you control the costs of comp without cutting benefits -- but that is fodder for another blog.)

Workers Comp and Medical Care
Dr. Christian looks at three areas related to medical care, not surprisingly, as she is Board Certified in occupational medicine. First, she thinks that vocational rehabilitation programs represent a missed opportunity in many instances. We agree. The problem may be in the current disconnect between the employer where the injury occurred and future employment. There should be a better way to tie voc rehab to real employment opportunities.

Dr. Christian next examines the need to speed up medical care, specifically, through the prudent use of nurse case managers. While recognizing the utility of nurse case management, she believes strongly that these services require more than just a conventional nursing background. The key is developing a strategy for every open claim -- a strategy that maximizes the return-to-work probabilities.

In addition, Dr. Christian takes a very interesting look at her own profession. I especially enjoyed her laundry list of the ways doctors can be the problem: they can be incompetent, disorganized, enabling, erratic, inattentive, neglectful, inappropriate, corrupt, greedy and unethical. She singles out the "predatory physicians" who provide serial, unnecessary services to unsuspecting and often innocent workers. (This has been a huge problem in California.) Needless to add, she has much to say about the positive role of doctors in solving the disability problem.

"Delayed Recovery"
Finally, Dr. Christian focuses on what may be the single greatest cost driver in the entire workers compensation system: we often use the word "malingering," -- injured workers staying out of work longer than is medically necessary -- but Dr. Christian has coined a more neutral and more compelling terminology: "delayed recovery." Under delayed recovery, even though there is no medically necessary reason for people to be out of work, they do not return to work. These delays may stem from actions (or inactions) of the employee, the doctor, the employer or even the insurance carrier. And as injured workers drift on their own through the medical maze, they begin to lose their identity as workers. They often succumb to a "disability syndrome" and begin to believe that they are never going to be able to work again. Dr. Christian sees the need for a multi-disciplinary assessment, one that looks at more than just an injured body part. Through such an assessment, we can identify the people most at risk for delayed recovery and plan effective interventions so that the delays are minimized.

The Employer Role
Dr. Christian recognizes the importance of employer involvement, without which success in controlling losses will remain a distant goal. Educated employers know how to respond to injured workers. They secure first rate medical treatment and use temporary modified duty to accommodate medically necessary restrictions. Educated employers treat every injury with a sense of urgency, because they care about their people and because they understand the risks involved in a "delayed" recovery process.

Even though Dr. Christian's brief paper is just the beginning of a working definition of disability management, there is plenty of food for thought for all of us. Every once in a while, we need to step back and refocus on the big picture. We need to redefine what we are trying to do in managing disabilities and the best ways for accomplishing our goals. Dr. Christian's paper is an excellent starting point in this effort.

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March 11, 2005


Yesterday's blog on the extraordinarily high injury rates for airport baggage screeners came at an interesting time for me. I had just spent 7 hours waiting for a plane in the Philadelphia airport, for a 40 minute flight to Harrisburg that could have been (and next time will be) driven in two hours. The rule of travel these days seems to be "hurry up and wait." For baggage screeners, it is "hurry up and get hurt."

The massive hiring of 45,000 security people in the Transportation Security Administration is a classic case study in "not-exactly the best" management practices. Indeed, LynchRyan cautions employers that the "good times" of expansion come with a very high risk for injuries and losses, simply due to the fact that you have to hire so many strangers. Safe hiring, under the best of circumstances, is a huge management challenge. When you combine a new occupation with difficult working conditions and ambiguous job descriptions, you have a recipe for serious trouble.

Here are just a few of the mishandled items (no pun intended) in the ramp up of airport baggage screeners:
First, set yourself unrealistic deadlines for getting up and running. This results in a mad scramble to find live bodies. When you hire 45,000 people in a short period of time, you are going to make a lot of mistakes.
Then, develop your job description as you go. In this case, it turns out that the job involves a lot more heavy lifting than originally contemplated. On a busy shift, baggage screeners might lift a bag every 7 seconds, with bags routinely weighing over 50 pounds. Handlers usually have no way of knowing how much a bag weighs, so they are often injured by misjudging the weight. The original hiring did not look for exceptional physical fitness -- and if it had, qualified candidates might have been hard to come by.
Next, set up a production system where the ergonomic stresses are maximized. In this case, there is a lot of awkward lifting from conveyer belt (low to the ground) to X-ray machine (waist high), then back to conveyer belt. Again, the under-estimated weight of the luggage became a big factor in subsequent injuries.
After that, when you have a rash of injuries, wait for OSHA to come in and tell you what you are doing wrong. Under no circumstances should you listen carefully to employee concerns and address them in a timely manner.
Finally, add in ferocious time pressures: the baggage must get on the planes, so create a frantic pace for the work, thereby maximizing the opportunity for injury. If safety stops in the x-ray machines slow you down, simply by-pass them, even if doing so creates additional hazards for workers.

A Better Way
A massive undertaking of this nature has unavoidable risks. But if the goal is to ensure the security of the traveling public, we might begin by trying to keep our new employees safe and secure! Even under the most trying conditions, there are "best practice" steps that prudent managers can take to mitigate the risk of injury to workers.
First, study your lines of production: in this case, anticipate the flow of baggage throughout the system. Minimize the ergonomic strains. Either align conveyer belts with X-ray machines, or provide mechanical lifts. Sure this costs money, but in the two years between 2002 and 2004 taxpayers have already spent $67 million on lost work days and medical bills for injured workers; a comparable investment in good ergonomics would pay for itself!
Be clear about the essential job functions. If constant heavy lifting is in fact an essential part of the job, make sure applicants understand this. Perform pre-employment physicals to ensure that they can handle these challenges.
Make sure every worker receives the requisite training. Many airports are so short-staffed, they cannot release employees for training. That is a poor excuse and an invitation to disaster. Indeed, if a baggage screener skips the training, how effective a screener will he or she be?
When your employees identify serious concerns, take immediate steps to address them. In this case, it's clear that the unknown weight of bags moving through the system poses a constant hazard. Every bag is weighed a check in. Why not label them at that time with color-coded tags to alert handlers?

I doubt that anyone really believes that baggage screening is inherently more dangerous than mining or construction. But the data is proving just that. Haste indeed makes waste, in this instance, the waste of disabling injuries for hundreds of workers who thought they were just beginning their new careers in federal service.

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February 22, 2005


During the recent tight job market, employers were calling the shots, but in 2004, turnover exceeded 20% for the better part of the year. In addition to some of the obvious problems created by high turnover - reduction in productivity and quality, increased costs for training and recruitment, decrease in morale - a very significant problem we see with high turnover is the effect on safety. Newer employees are at higher risk or injuries on the job. They don't know the job as well, they don't know the dangers, and they are generally eager to please a new boss.

A recent article in Business Week discusses ways to motivate and retain your star performers. George's Employment Blawg has more tips and links to other news stories on turnover and the steps that several large employers are taking to retain staff. There are excellent suggestions for improving retention in both sources. We particularly liked these tips from Cracker Barrel:

"Regardless of the task, the common thread for employees is a need to be valued and to be part of a larger whole." "Shared expectations and how it feels to be part of the culture and how we support each other is a huge part of creating a sense of belonging and sense of affiliation."

Estimate your companys turnover, absence costs

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January 6, 2005


As we embark on the new year, many weblogs and business publications have been recapping 2004 or making predictions for the coming year. Here are a few we've noted.

George's Employment Blawg suggests that a good way for employers to begin the new year is to update the employee handbook and offers some tips for key areas to address.

Rough Notes offers a looks ahead to the insurance market in an article entitled Analysts foresee bottom-line woes for insurers in 05, seeing higher costs due to the Spitzer investigation and soft market pressures as leading concerns. Other issues of concern include TRIA, reinsurance issues and insurance regulation.

The cost of medical care is now the single biggest segment of workers compensation expenses, representing more than half of every benefit dollar paid. In workers' comp, the issues and trends in the group health market often have an impact on workers comp. Joe Paduda opines on three top trends in health insurance markets and identifies them as: more consolidation among health insurers, the return of the hospital, and cuts in Medicaid and Medicare.

Confined Space reviews the Top Ten Workplace Safety & Health Stories of 2004. Among the stories on his list: the attempted reorganization of NIOSH, John Henshaw's retirement from OSHA and OSHA's overall do-nothing stance, the popcorn lung trial, and asbestos compensation.

Anita Campbell at Small Business Trends has been posting a series on business trends that will impact the small business market in 2005 and beyond. Yesterday's post was the tenth in the series and highlighted e-business trends. It also links to the other 9 trend lists. FC Now also points to several 2005 business trend lists, including workplace and HR issues.

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October 6, 2004


George's Employment Blawg (which, incidentally, is always a good read) treats the legal downside of incentive-based compensation, pointing us to an article by Chiree McCain of the Birmingham Business Journal entitled Compensation systems also have legal negatives

The article uses examples of bonuses that may inadvertently encourage drivers to short-shrift safety or drive beyond legal limits and bonuses for accident-free days that may impede accident reporting. While the article doesn't discuss piecework, we'd put that in the category of a compensation system that often leads to safety problems. It certainly wreaked ergonomic havoc in the textile industry, although today, with much of that industry being outsourced offshore, injuries are probably less in evidence here in the U.S.

In most instances, incentives are intended to be a positive force, motivating employees to excellence but they can be a fertile playing ground for the law of unintended consequences, bringing to mind the age-old saw about the road to hell being paved with good intentions. We've certainly seen bonuses for accident-free days backfire, particularly because they are often awarded to a group of workers or a manufacturing division so you have the carrot of financial gain AND the stick of peer pressure at play.

The article suggests possible initeneded consequences of incentive-based compensation:

"They're [the employer] not saying, 'I'll give you extra money if you go break the law' ... but the company can face liability for the conduct that is illegal," he says.

Gittes says employers could face liability for on-duty actions by an employee or an independent contractor because, either way, that person is acting as an agent for the company.

And if a plaintiff can identify a pattern of accidents or illegal behavior, a compensation system that encourages that behavior might raise the stakes from negligence to deliberate disregard and therefore introduce punitive damages into the mix.

"If they were put on notice that their policy was being interpreted by employees in ways that threatened the safety of others and they continued to do it anyway, there could be an issue about punitive damages," Gittes says.

The downside can be costly. In January, we reported on a $12 million lawsuit based on bad faith for a claims handling practice allegedly involving incentives to claims staff for lowering the cost of claims ouch.

In relation to bonuses for accident-free days, George offers the sensible advice that bonuses could be "coupled with training on legal reporting obligations and strict disciplinary enforcement of failure to report even relatively minor accidents. " We often recommend that employers build safety goals and expectations into job descriptions at all level of an organization so safety becomes an integral part of everyone's job.

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September 28, 2004


Twenty years ago, as I was founding Lynch Ryan, the nation's workers' compensation crisis was beginning to bubble to the surface.

As I interviewed employers, a couple of things amazed me. First, for most of them workers' compensation represented the biggest insurance check they would write. Second, those same employers knew next to nothing about the subject.

Since then, employers, insurers and legislatures, alike, have devoted much attention to taming the high costs of workers' compensation.With the exception of a few states that remain very problematic, such as California, Texas, New York and Florida, costs around the nation have abated dramatically. Employer education and training, as well as changes in the various state laws, have caused premium rates to fall precipitously in many cases. In my own home state of Massachusetts, for example, rates have fallen nearly 68% in the last nine years. In addition, medical fee schedules, in some states, have reined in medical costs associated with workplace injuries.

However, lately I have noticed, creeping into the mix, what I choose to call the "Diminishing Attention Principle," or, the DAP. The DAP states that the attention an employer gives to workers' compensation is directly proportional to the amount of money the employer pays for workers' compensation.

To prove the point, let me call your attention to the workers' compensation experience modification factor.

In the mid to late 1980s, employers admitted that they didn't know much about experience modification, were mystified about the thinking behind how reserves were established and had never heard of the unit stat report. Gradually, with heavy education, employers saw how important these three very esoteric things were to their bottom lines, how they were inextricably connected. It was not uncommon for me to encounter employers who personally calculated their own mods with their basic, Radio Shack hand held calculators. Why? Because they were paying a fortune for workers' compensation and they knew that they had to do something about it. Sadly, one doesn't see that too often, anymore.

Why is that? Perhaps the answer can be found in the normal generational changes that occur in management. Most men and women who are owning and running American companies today were not doing so in the late 1980s and early 1990s and, therefore, were not exposed to the staggering economic problems brought on by the workers' compensation crisis of those times. Top schools, such as Harvard and Stanford, don't devote even an hour in their MBA programs to dealing with workers' compensation and the workplace injuries that drive its costs.

So, over the next few weeks, every once in a while we're going to go back to basics and offer some of what we consider to be the essential management best practices for dealing with the various components that ultimately determine the amount of that biggest insurance check any employer will ever write.

Our first subject? The curious relationship between experience modification, claim reserves and the unit stastical report. Stay tuned.

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September 13, 2004


Ford Motor Company has been tallying up the cost of chronic absenteeism and finding that it is taking a toll on the bottom line. For every one percentage point change in absenteeism, the company states that it spends $100 million. In an article discussing the automakers and UAW partnership to target chronic absenteeism, The Detroit News recently reported that:

Absenteeism among hourly workers in the automotive industry runs about 10 percent annually, about three times higher than in other industries, according to a study published this year by the Automotive Supplier Action Committee, a trade group. At some Big Three plants, absenteeism runs as high as 20 percent.

The figures include vacations, paid personal days off and medical leave, but the most crippling problem is employees who just skip work. Managers must scramble to find hundreds of replacements from pools of fill-in workers to perform tasks for which they may not be trained.

... Automakers and many UAW workers say there is no excuse for high absenteeism. Line workers receive up to five weeks of vacation and 17 paid holidays. When plants are idled for retooling or slow sales, workers also collect pay. "Sick days" are not provided and are supposed to come out of vacation time unless its a prolonged illness that requires a leave.

At contract talks last year, automakers and UAW agreed to crack down on abuses, and in a Ford pilot program, union leaders are communicating the issue to members, and the company is instituting disciplinary procedures for chronic offenders.

It is expected that the Big Three will all continue to focus on absenteeism and roll out similar programs to the one at Ford. While UAW is supportive of the measures overall, officials dispute some of the cost figures that the automakers use, pointing out that some of the absences that are being tracked are actually vacation or personal leave.

The article also mentions that the Japanese automakers experience less absenteeism, and they employ a carrot and stick approach: "Honda Motor Co.s Ohio plants offer bonuses of up to $2,600 annually, but workers who do not maintain a 98 percent attendance rate are put into counseling programs. Toyota Motor Co.s Georgetown, Ky., plant conducts drawings for employees with perfect attendance. The prizes: free vehicles.

Absenteeism is a topic that's much on the mind of employers in other industries as well, and it's an issue that's well worth addressing. It's certainly worth a second look to see why it is such an issue in some companies, and less so in others. Absence comes in many flavors. Our friend Dr. Jennifer Christian often speaks about medically necessary disability vs. medically unnecessary disability; there is also "earned absence" such as vacation or personal time, and many other variations on the issue of absence.

There are clearly abuses, and it's valid to drive out the abuses, but we would also caution that a one-size-fits-all solution to this complex issue might inadvertently throw the proverbial baby out with the bath water. We find that, often, programs are built to address the outliers rather than the average employee, and that building a program to the outliers can be unwittingly punitive to the "good" employees who represent the vast majority of the workers. We think that establishing fair policies, setting clear advance expectations, engaging in good communications, enforcing policies consistently, and exercising a degree of flexibility can go a long way to preventing or reducing absenteeism. Return-to-work programs can be a key strategy, and one that could often be better utilized to minimize work absence. Using RTW effectively often takes creativity and flexibility on the part of the employer. We've frequently encountered employers who have an "all or nothing" view - they wait until an employee is 100% recuperated before returning them to work, even though the employee could be productive with some temporary job modifications. Likewise, a doctor's visit doesn't have to mean a full day's absence.

Thanks to rawblogXport for pointing us to this article.

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September 8, 2004


A Towers Perrin report entitled Is It Time to Take the SPIN Out of Employee Communication? (pdf) reveals that in a survey of 1,000 working Americans, only 51 percent believe that their company generally tells the truth in its communications to employees, and one in five employees believes that their employer generally does not tell the truth.

Among the other survey findings:

  • Company communications about the business are viewed as credible by less than half of employees and appear dishonest to roughly a quarter of the workforce.
  • Senior leadership is viewed as less credible than front-line managers and supervisors.
  • Employees generally believe their companies are more honest with shareholders and customers than they are with employees.
  • Longer-service and older employees tend to be more skeptical about company communications than newer recruits.
  • 55% of those surveyed believe their company tries too hard to put a positive spin on issues in its communication with employees.

The Towers Perrin study notes that this break in trust follows both a recessionary period and a relatively recent spate of corporate scandals. We think that the survey also reflects an ongoing attenuation of the good faith between employers and employers that characterizes an increasingly transient work force. Layoffs, outsourcing, and benefit cuts all take their toll, and perhaps the more so if communication about these events is viewed as inauthentic.

The survey authors make the point that credibility is essential for work force retention; we would state that maintaining the credibility of management and your corporate communications programs should be part of your overall risk management program. Employers who are perceived as dishonest will not command loyalty. It can be all too easy for employees to justify dishonesty or entitlement in response to perceived deceit on the part of the employer, perhaps by taking a few extra sick days, or magnifying a slight back ache into a full blown disability claim.

We are always surprised by how many employers are reluctant to provide basic communication about workers compensation to their employees -- almost as though by mentioning the very words, claims will follow. Yet we believe that the advantages of open, honest, and proactive communications far outweigh any potential disadvantages. Far better for an employer to explain the rights, benefits, and protections afforded by workers compensation before an injury occurs than to leave it to a neighbor, relative, or attorney to provide potentially inaccurate or biased information after an injury has occurred. We would encourage employers to discuss the rights and responsibilities of all parties in advance - to thoroughly explain what workers compensation is and how it works, coupled with a message about the organization's commitment to maintaining a safe working environment and expectations for working safely and adhering to safety policies.

The Towers Perrin survey offers some good suggestions for improving communications. These include:

  • Recognize that communication must start at the top.
  • Understand your audience - use surveys and other feedback mechanisms to ensure that you understand your audience.
  • Audit your communication channels and match the message to the channel
  • Train leaders and managers in how to communicate effectively.
  • Tell the whole story - provide not just the facts but the context and the business rationale.
  • Ensure a two-way dialogue.

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August 13, 2004


The Associated Press has a fascinating story of a lawsuit being brought against UPS by a former employee who was ordered by UPS to stop taking a legally prescribed medication for anxiety. The story reveals that the employee had completed an alcohol treatment program (and thus likely qualifies as an individual with a disability under the Americans with Disabilities Act). Suffering from anxiety and depression, the employee took low doses of a medication prescribed by her personal physician. Apparently UPSs Employee Assistance Program forced the employee to reveal that she was taking the drug, which showed up on a drug screening. (Drug screening generally focuses on searching for illegal substances, but thats matter for a separate blog.) As the employees attorney puts it, the message being sent to UPS is simple: Stop playing doctor.

There are several interesting components to this dispute. Does taking the specific anxiety medication put the employee (a package sorter) at immediate risk for injuring herself or causing harm to others? (If there is no immediate risk, the company has no business proceeding any further!) Does the company have a right to over-rule the employees own doctor? Is the treatment for alcoholism a factor in the companys position? Has UPS compromised the integrity of the employee assistance program by using it to force disclosure of private medical information in this manner?

Ultimately, the courts will decide if UPS exceeded the bounds that constrain employers in private medical matters. LynchRyan believes in trying to resolve these issues before they reach the courts. This is usually a matter of keeping the lines of communication open. If an employer has concerns about the potential side effects of a medication that may directly impact safety, they should sit down with the employee to talk about it. With the employees permission, they should discuss their concerns with the employees personal physician. In most cases, the personal physician is in the best position to determine the degree of safety exposure. The bottom line is simple: employers must narrowly limit their focus to the potential impact of medications on the employees ability to perform the job safely. They have no business venturing beyond that point.

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July 26, 2004


The Public Entity Risk Institute (PERI) has a wealth of resources on its site so we'll be adding it to our sidebar under "organizations." In digging through the site we came upon a symposium topic that was presented last December by Massachusetts plaintiff attorney Alan S. Pierce entitled Top Ten List as to Why Injured Workers Retain Attorneys. (pdf) The article presents a good overview of practices that are fairly guaranteed to drive an injured worker into the arms of an attorney - all from the perspective of an attorney who has seen his share of worker grievances. It's instructive reading in how not to treat an employee who has been injured on the job. You can read his full remarks in the linked article, but here's an overview of his top ten reasons:

1. Claim is denied
2. No contact by employer or insurer
3. Overbearing or intrusive contact by the employer
4. Bills unpaid, prescriptions unreimbursed
5. Lawyer advertising/solicitation
6. Advice of friends, family, or medical provider
7. Lack of modified duty work/employer harassment after return to work
8. Worker/employer dissatisfaction
9. Loss of health insurance; other benefits
10. The accident that never should have happened

PERI offers access to a wealth of other risk management articles and papers by industry experts from past symposiums, and while some are geared to topics that are specific to the needs of its member organizations, (e.g., fire departments) many cover general employer-related issues.

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July 19, 2004


If you want to talk on a cell phone and operate a motor vehicle in Washington DC, New York or New Jersey, you have to use a head set. A number of other states are contemplating requiring these head sets. But a July 19, 2004,article in the Wall Street Journal questions whether these headsets really make talking safer. Written by Jesse Drucker and Karen Lundegaard, the article raises some very interesting concerns about the headsets. (NOTE: Journal articles are available only via paid subscription, so we are not providing a link.)

Citing number of sources including the National Highway Traffic Safety Administration, the article points out that using headsets might actually increase the risks for drivers. Some studies show that drivers with headsets spend more time talking on the phone. More time on the phone translates into more time at risk. As it is, American drivers spend one billion minutes a day on cell phones, 40% of total cell phone minutes. That's an amazing number! In addition, some research indicates that drivers with head sets tend to drive faster, which obviously increases the risk. And even with a headset, the driver is still likely to fumble with key pads to dial the next call or check voicemail -- all of which places the driver at increased risk.

Many researchers feel that talking on a cell phone while driving is a always a distraction, whether or not a headset is used. Have you ever noticed how people on the phone tend to look up and away while maintaining the flow of conversation?

Safe driving is a bottom line issue: Your eyes are either on the road or not. Your focus is either on what other drivers are doing, or it is somewhere else. Any distraction from the issues of the road -- whether it's talking to a hot business prospect, changing CDs or switching channels on the radio -- contains the potential for tragic results. As for trying to take notes while driving, that is truly "over-the-top" risky behavior.

LynchRyan cautions employers to establish written policies on cell phone use. If a company encourages employees to conduct work while driving, the company may be liable for the driving mistakes that employees make while chatting away. Encourage employees to do any serious and detailed phone work at a rest stop.

We are a long way from fully understanding the risks of cell phone use while driving. But good managers will take steps to alleviate the exposures now, before an accident forces a re-examination of all your "on-the-road" policies.

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July 13, 2004


The business section of the New York Times features a light-hearted look at the problem of misbehaving at the company picnic. While this article focuses on controlling damage to your career, LynchRyan has traditionally focused on keeping injuries at social events off of workers compensation loss runs.

This is the season for company outings -- picnics, golfing, perhaps even an Outward Bound experience. Depending upon how the events are structured, employees who are injured might be able to file workers compensation claims. For example, if your company sponsors a golf tournament, and if you ask employees to staff the booths and provide support, they are in effect "working" and any injuries (slip and fall, lifting a box of beverages) would likely be compensable. The exposure may go a step further. For example, an employee out golfing with valued clients who tears his rotator cuff swinging a 7 iron could reasonably claim that the injury occurred "in the course and scope of employment."

Generally, to fall under workers compensation the employee must be engaged in an activity that explicitly furthers the interests of the company. Another important criteria is whether or not the activity is voluntary. If employees are compelled -- or strongly encouraged -- to attend and participate, any injuries are more likely to be considered work related. So put up the volley ball net, but never tease people into participating.

Are we recommending that companies avoid sponsored recreation and the entertaining of clients? Not at all. But as with all risks, we think it's important to keep your eyes open. Make sure the event is safely structured. Don't ask normally sedentary employees to take on physically demanding tasks. And above all, make sure any alcoholic beverages are dispensed by a licensed and fully insured professional. Have fun, but be careful.

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June 7, 2004


As we near the summer hiring season, LynchRyan reminds employers that workers compensation laws do not distinguish temporary hires from regular year-round employees. Anyone who works for you, no matter for how long, is protected by workers compensation. This is as it should be.

We caution employers to hire carefully. There is no such thing as an unimportant hire. When it comes to offering work experience to young people -- still in high school or college -- a few cautions are in order:

First, do not allow these new hires to operate heavy equipment. Indeed, you should probably not allow them to operate any equipment that entails risk. In one tragic case from last summer, a high school student in Massachusetts was killed when he ran a fork lift off of a loading ramp.

In addition, never assume that a summer hire knows how to do the work, no matter how simple the task may appear. Whether it's pounding nails or filing, summer hires need guidance and supervision. Doing a job the right way is not necessarily something students have learned in school.

Finally, if you have young people on the summer payroll, don't just "toss them the keys." Young people are, by definition, inexperienced drivers. Unless you know them and their driving habits very well, keep them busy in safe activities other than driving. Youthful exuberance is a wonderful quality -- but not when it comes to driving or operating equipment. It's your responsibility as an employer to make sure that this first or second job experience is not the student's last.

For more information on safe driving, see our article entitled, "Where the Rubber Meets the Road."

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April 19, 2004


In the April issue of Risk Management, Morgan O'Rourke discusses protecting your reputation as a risk management strategy, and makes the case that reputation management is just plain good business sense.

"A good reputation can convince the undecided to choose a certain product or service and dissuade existing customers from moving to a competitor. But a damaged reputation can be irreparable and, in extreme cases, lead to a companys downfall. One need look no further than the demise of Arthur Andersen in the aftermath of the Enron scandal to see an example of the perils of a damaged reputation."

O'Rourke suggests that ethics and fiduciary responsibility go hand in hand:

"Fiduciary responsibility means that in its quest to be profitable, an organization must consider the balance between the duty of obedience and the duty of care, or put more simply, the balance between legal obligations and ethical practices. Sometimes what may be legal may not be ethical, putting the reputation of the organization at risk."

The article also discusses active reputation management through public relations, crisis management planning, and brand building, although O'Rourke is quick to point out that such measures can't merely be skin deep - a company must have a deep and true commitment that is part of the very corporate culture.

We would take the issue one step further by suggesting that reputation management starts with your internal constituencies and radiates out. To be truly authentic - not just an external PR ploy - reputation management has to begin with your own employees. Yes, it's an old adage, but charity really does begin in the home, or on the shop floor, the assembly line, or the cubicle, as the case may be. And there is perhaps no better barometer of employer-employee relationships than workers comp. How seriously a company works to protect the safety of its workers is telling.

Right after reading this article, I came upon a series of weblog posts on corporate social responsibility (CSR) by guest blogger and author Jeffrey Hollender at FC Now. Hollender is author of a book entitled What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening. I haven't read the book yet, but it will definitely have a place on my upcoming-books-to-read list. Among the many benefits of CSR that Hollender discusses:

" ... businesses who integrate their values throughout their value chain, reduce risk, build stronger partnerships and achieve higher quality. Also, with value-chain responsibility the social and environmental costs of products and services are more fairly distributed to specific suppliers and consumers, as opposed to the society at large. Externalities then can be fairly internalized."

The series of postings are worth a read...some also have interesting comments tagged on to the post:

What Matters Most
A Definition of Corporate Responsibility
The Business Case for CSR
The Business Case for CSR II

Im sure well be discussing this topic again CSR is a theme that resonates with us.

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April 6, 2004


Donald Trump's TV series has everyone joking about firing or being fired, although for anyone who has ever been on either end of the equation - as the manager who fires, or as the employee who is fired - it is rarely a joking matter.

Some would make the case that in today's litigious society, most companies don't 'fire' employees outright anymore, fearing a charge of discrimination or wrongful termination. It does seem as though downsizing, outsourcing, re-engineering, plant closings, mergers, and a host of other euphemistic group actions have all but replaced the plain vanilla one-to-one termination, at least for large companies. Nevertheless, when there's a continuing employee performance issue, terminating employment is sometimes the only course of action. And, in some instances, an employer may even be sued for not terminating an employee, such as when that employee poses a danger to other employees.

What about firing an employee who is out on leave for workers compensation? That's a question we often get. In these cases, we will often hear a long litany of complaints about the employee, sometimes going back years. From the employer's perspective, the workers comp claim is often viewed as the final straw in a continuing series of problems with that particular employee; at other times, it simply may appear to be a convenient, neat way to resolve an ongoing problem.

Firing an employee while he or she is out on workers compensation disability leave is almost always a bad idea. For one thing, many states have laws that prohibit retaliatory firings for workers who file claims. Even if this were not the case, it's not a good idea to use workers comp as a tool to resolve human resource issues.

There may indeed be some instances where termination would not violate the law, such as in cases of business necessity. In an article entitled The Problem with Firing an Employee on Workers Compensation Leave, author Sharyn Alcaraz suggests that (in California) the following reasons may be legitimate:

"(1) the employer is severely shorthanded, other employees could not cover the work, and the employer could not replace the worker without expensive training of others; (2) violations of important company policies (e.g., drinking on the job); (3) chronic absenteeism and failures to report to work or call in; (4) failure to keep employer advised of condition and date of anticipated return to work; (5) the employees substandard work performance; (6) the employee was unable to do the work (or any substitute work) at the company due to the disability. As a practical matter, an employer must establish that it had good cause to terminate an employee after learning about a workplace injury (even for at-will employees)."

Note that these reasons would generally be valid for any employee under such a set of circumstances, and are not in reaction to past performance issues. When there is a history of performance issues with an employee, we would suggest that these issues be dealt with separately. We recommend that employers treat the employee in question the same way they would any other injured employee - providing excellent medical care, staying in communication through the recovery period, and helping the worker to recuperate and return to work as soon as feasible. When back on the job, the employer can address the performance issues.

All too often in these cases, the performance issues had not been adequately addressed in the past, and workers comp is seen as a way to sweep everything under the rug. Managers should deal with performance issues as they occur, and except in gross violations of company policy that dictate immediate dismissal, should use a progressive disciplinary process that allows the employee to understand and address problem areas. This is both the most fair and the most effective way to handle problems.

Why isn't this done consistently? Often, managers and supervisors are promoted to their positions with little in the way of training in the art and skills of being a manager. New managers should be taught how to supervise, coach, train, give positive and negative feedback, keep written records, and enforce company policies. It's critical to help managers and supervisors learn how to take disciplinary action in a fair, impersonal, and consistent way. Training in this area will not only help protect you, the employer, from litigation, it will help foster better manager-employee relations and a more productive work environment for all.

The Small Business Blog posted an article, How to Fire Employees, that discusses the issue of termination. At the end of the article, there are some excellent links to a variety of resources - it's a good tool kit on the topic of termination when remedial alternatives don't work.

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April 2, 2004


It's long been our contention that when there is bad blood between employers and employees over workers comp, the issue is often one of communication. It might be helpful if employers thought and spoke in terms of "injured workers" rather than the depersonalized "claimants." Similarly, employers and insurers often speak in terms of "incidents," an officious euphemism that can trivialize what are often painful and bloody human occurrences. Work injuries are generally referred to as "accidents" as if they were inevitable or an act of God rather than the preventable events that they generally are. It seems impossible to prevent "accidents," but most reasonable people would agree that preventing workplace injuries would be a worthwhile goal, and with some effort, largely achievable.

Much of the language that we use in the industry comes from the business of insurance and, let's face it, the insurer approach to workers compensation is coming almost entirely from the financial perspective. That may well be as it should be - it's the insurer's job to assess compensability, and if suspicious circumstances are present, it is their job to raise the questions.

But employers shouldn't fall in the trap of reducing what is essentially a human event to a simple financial transaction. In our experience, when employers address the human event of a work injury, and do so fairly, consistently, and with a focus on the employee's recovery and return to work, a better financial outcome ensues than when focusing on the money.

That's why we don't encourage employers to build their workers comp system around fraud. Indeed, there are some fraudulent employees -- it would be naive to think otherwise. (And let's not forget that there are fraudulent employers and providers, too). But building a management system around the bad egg results in a punitive system that punishes the majority for the sins of the few. People generally live up to expectations, so expectations are better set to high rather than low standards.

When we meet with an employer who identifies fraud as one of their primary workers comp issues, that is often a sign that we are dealing with an employer that has more problems than just a high workers comp bill. With some exceptions - as in states like California where the issues are systemic - a serious workers comp problem is often the he tip of an iceberg representing a host of festering employer-employee issues and problems; it is the symptom rather than the disease. Either that, or in some cases, poor experience can be racked up to simple ignorance -- a fundamental lack of knowledge about what workers comp is, and the misguided notion that some outside party will solve problems that must be owned and addressed from within.

An employer must build a system of management controls at every intervention point on the spectrum: first and foremost, prevention -- the injuries that don't occur are the least expensive ones, both in human and financial terms; second, immediate and appropriate point-of-injury response in the event an injury should occur -- what an employer does to respond in the first few hours can set the tone for the future trajectory of events; and finally, post-injury management -- a focus on the employee's recovery and return to work. Communication is at the very heart of such a system, and good communication might best start for employers with thinking in terms of "people" rather than "claimants."

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March 29, 2004


Is your workers comp provider network culturally competent? If not, you may fostering needless disability. Georgetown University's Center on an Aging Society has an excellent article on the issue of cultural competence in healthcare, and defines the concept as "the ability of providers and organizations to effectively deliver health care services that meet the social, cultural, and linguistic needs of patients."

The article addresses the specialized medical needs that the changing demographics demand, both for reasons of language and other cultural and socio-economic factors. It makes the case that positive outcomes require that physicians and other providers develop cultural competence in service delivery. Barring this competence, minorities are more likely to be dissatisfied with care.

If the providers, organizations, and systems are not working together to provide culturally competent care, patients are at higher risk of having negative health consequences, receiving poor quality care, or being dissatisfied with their care. African Americans and other ethnic minorities report less partnership with physicians, less participation in medical decisions, and lower levels of satisfaction with care. The quality of patient-physician interactions is lower among non-White patients, particularly Latinos and Asian Americans. Lower quality patient-physician interactions are associated with lower overall satisfaction with health care.

In workers comp, poor quality care and dissatisfaction hinder recovery and may well prolong disability. Dissatisfaction often also turns into lawsuits that might have been prevented. The issue of cultural competence has relevance to workers compensation in terms of health-care services delivered by workers compensation provider networks, but also in other aspects of prevention and claims management as well. We've previously discussed some of the challenges posed by an increasingly multilingual workforce, as well as the fact that some immigrant workers are at high risk of injuries or death.

The article suggests the following strategies for improving the patient-provider interaction and institutionalizing changes in the health care system:

1. Provide interpreter services

2. Recruit and retain minority staff

3. Provide training to increase cultural awareness, knowledge, and skills

4. Coordinate with traditional healers

5. Use community health workers

6. Incorporate culture-specific attitudes and values into health promotion tools

7. Include family and community members in health care decision making

8. Locate clinics in geographic areas that are easily accessible for certain populations

9. Expand hours of operation

10. Provide linguistic competency that extends beyond the clinical encounter to the appointment desk, advice lines, medical billing, and other written materials

This list might be a useful adjunct to an employer's current gating issues when screening medical providers for a workers comp program. It also provides a checklist of considerations for loss control, risk management, and claims staff as well.

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February 11, 2004


I have long suspected that the way this country treats back pain for work-related injuries is not only ineffective, it's actually destructive. I have seen countless back claims degenerate into permanent and total disability following surgery. We are now beginning to see data that bears this out. In an article with profound implications for employers, insurers and workers with lower back pain, New York Times (free registration required) reporter Gina Kolata demonstrates the futility and the ineffectiveness of our current approach to back pain. The data calls for a transformation of the treatment paradigm itself.

Here's the way it works now: A worker suffers a lower back strain. He's in a lot of pain. He goes for an MRI, which reveals a herniated disc. The insurer assumes that the herniation is work related, the condition is compensable and treatment begins. Perhaps surgery is performed. However, a number of studies have suggested that in 85% of the cases it is impossible to say why a person's back hurts. Beyond that, many studies have found that abnormal disks are usually inherited, with no links to occupation, sports injuries, or weak muscles. So the use of the MRI to confirm compensability is indeed questionable.

Then there is the issue of treatment. Studies confirm that there is little evidence that aggressive treatment is in any way helpful to the patient. One doctor quoted in the article says, "Maybe you are better off not going to a doctor." Under the current system, if the employee is lucky, neither the treatment nor the surgery will permanently disable him and, eventually, he will return to work. The irony is that in most cases, doing nothing at all would be equally or even more effective than treating the injury with conventional medicine!

So what is the new treatment paradigm? In the view of Dr. James N. Weinstein, a professor of orthopedics and editor in chief of Spine, we should teach people to live with pain, to put aside the fear that any motion will aggravate their injury. This is a concept that many Americans have trouble accepting. If we experience pain, we seek an immediate cure. For back injuries, this approach just doesn't work. We have to learn that "hurt doesn't mean harm." There will be pain for a while. During the natural recovery process, treatment should focus on "functional restoration:" That means working on training, strength, flexibility and endurance. And let's not forget to offer the needed counseling that addresses fears of reinjury, anxiety, and depression.

Which brings me back to the employer's best tool for fostering an active (but not necessarily pain free) recovery: Modified duty. Once we recognize that the vast majority of back injuries resolve themselves in a few months, with little or no treatment required, the need for proactive employers to help injured employees through the process - and the pain - becomes paramount. By providing modified duty, we give injured employees a reason for getting up in the morning and a place to go. We give them meaningful tasks, which help take their minds off the pain. Above all, we help them maintain their identities as productive workers. This is by far the most effective and the least expensive approach to lower back injuries. As with so many other workers compensation issues, proactive management is the best solution.

Also see: Study shows active recovery fosters return to work

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January 29, 2004


A recent study on lower back pain and return to work was conducted by a Dutch research team, and the findings were unsurprising to those of us who espouse the idea of an active rather than a passive recovery whenever possible. In the study, workers with nonspecific low back pain who engaged in a graded activity program returned to regular activities - including work - sooner than those who got "normal care." On average, the active recovery path cut one month off a three-month recovery period, and follow-up studies showed no difference in the reinjury rate.

This study bolsters the case for employers to have a safe, progressive return to work program that eases injured workers back to their normal jobs. The study author comments:

"Athletes and other professionals are highly motivated, have high self-esteem, are not depressed, and have a strong motivation to keep doing what they always do," he suggests. "Can we imbue the injured worker with some of the ideals and motivation of the injured athlete?" Based on the van Mechelen team's study, the answer appears to be "yes." Their program changes how disabled workers see -- and cope with -- their lower back pain."

Dr. Jennifer Christian is an occupational physician who has worked in settings ranging from an insurer's office to right on the shop floor. She often uses "the grocery store test" as a barometer of fitness for work. It goes something like this: If you worked in your family grocery store, would you be back at work, or would the injury or illness preclude that? Of course, it goes without saying that any worker's return to work after an injury of illness must be planned carefully within physician restrictions.

The hidden key in both this study and the grocery store test may well center on that all-important word, motivation. If you are an employer, ask yourself this: would your employees be motivated to come back to your workplace?

By the way, if you ever have the chance to hear Dr. Christian speak at a national meeting or forum, do be sure to sign up...she is quite a forward thinker on workers compensation and disabilty issues.

And thanks to Judge Robert Vonada and his always excellent PAWC weblog for pointing us to this study.

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January 20, 2004


When disaster happens, every decision made by management is scrutinized. After a recent oil tanker crash which killed four people on Interstate 895 in Maryland, investigators opened the books on the company's safety record (below average) along with a careful review of the employee's driving and health history (inconclusive). While the primary goal of the investigation is to determine the cause, investigators are always looking for a "smoking gun" -- the crucial information management should have known but did not; the key steps management or the employee should have taken, but did not. It boils down to "what should you know? What did you know? And what did you do about it?" First, investigators try to determine responsibility (the cause of the accident). Then comes the blame. After a disaster like this one, more than a company's reputation is on the line. The company's future is at risk.