Column: Workers' Comp

Ahead of the Curve

By: | December 14, 2017 • 3 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

Proactive risk managers can directly impact the direction of the workers’ comp industry.

It often takes a few passionate risk managers to force substantial, yet limited, shifts in workers’ compensation.

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Fair example: More than a decade ago, a few focused risk managers launched strategies for curbing doctors’ opioid prescribing practices for injured workers.

They laid the groundwork for approaches widely applied in workers’ comp today, years before opioids would be labeled a national emergency or become a common household term.

These risk managers were early to spot the problem, and a few of them even shared their strategies publicly, discussing their approaches at risk management conferences.

You can imagine their corporate public relations departments frowned on publicly associating their company brands with worker addictions — had their PR departments known about these conference presentations, of course.

But that is how positive shifts occur in otherwise convoluted state workers’ comp systems resistant to change. Sophisticated employers encounter a problem, push their vendors to help find solutions and share their results.

Workers’ comp now leads the rest of the nation in addressing the opioid-abuse epidemic.

I don’t expect to see any radical structural changes occurring within state workers’ comp systems in the next few years. Positive shifts will occur, however, in smaller ways that can be substantial — with risk managers often at the forefront.

That happened during the earlier 2000s, when California risk managers joined labor representatives to kick insurers and workers’ comp vendors out of the room in order to negotiate for improvements that increased worker benefits while easing employer burdens.

Fixing workers’ comp won’t come from taking the input of people whose self-interest is well served under the current structure.

It wasn’t a radical reset of California’s worker’s comp system; but the changes they brought were substantial enough to reverse difficult insurance-purchasing market conditions.

Two years ago, ProPublica launched its journalistic investigation spotlighting workers’ comp system shortcomings that left disabled workers without care.

ProPublica’s stories caused some introspection within workers’ comp, followed by highly touted conversations on improving workers’ comp across America.

But I don’t see major changes emerging from that.

Fixing workers’ comp won’t come from taking the input of people whose self-interest is well served under the current structure. Significant change is more likely to come when employers take the lead by either working with labor or by bringing about change that isn’t one sided and that genuinely improves the lives of injured workers.

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This might be what is happening with some large employers who are adopting serious worker advocacy strategies. The advocacy approach limits challenges on claims that are only marginally questionable.

The worker advocacy approach redirects resources formerly spent on questioning claims to programs that make sure workers are well cared for.

This strategy is being practiced by customer-service focused employers such as Disney and Delta Air Lines.

Just as the battle to stem opioid use began with a few risk managers, this positive development might also find a wider practice.

It’s not a given yet, but it is more likely than imaginary white knights in the form of workers’ comp special interest groups riding in to “save” the day. &

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

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But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

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Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

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Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]