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Risk Insider: Bill Minick

Cost Shifting: Candy Stores and Scapegoats

By: | June 15, 2016 • 3 min read
Bill Minick is president of PartnerSource, a risk management consulting firm specializing in workers’ compensation alternatives. He can be reached at [email protected]

Listening to a workers’ compensation insurance company trade group at a conference these days is like watching a kid in a candy store. They are so very happy and excited about the opportunity to deflect their own industry’s shortcomings to the evil “Option” to workers’ compensation.

Carefully avoiding any discussion of comparative data, they cast allegations of Option program operations and results that often have no factual or legal support.

A favored treat says that Option injury benefit plans shift costs to government programs more than workers’ compensation systems. Professor John Burton and others continue to point to fiscal challenges for the Social Security Disability Insurance (SSDI) Trust Fund due to (1) the shifting of responsibilities (i.e., “coordination of benefits”) from workers’ compensation, and (2) inadequate workers’ comp cash benefits.

However, this wide-scale, data-proven problem of cost-shifting within workers’ compensation systems has not been demonstrated within Option injury benefit programs.

In fact:

As confirmed by an independent, former NCCI actuary in the review of more than 160,000 claims over a 10-year period, Option programs have a shorter average duration of disability, and both the initial and sustained return to work rates are much higher.

Until these fundamental, systemic failures to reasonably cooperate and practice evidence-based medicine are addressed, meaningful progress on cost-shifting by workers’ compensation to SSDI will not occur.

Also relevant is the fact that many (including almost all large) Option employer programs pay wage replacement benefits from the first day of disability, at a higher percentage of pay, and with no weekly dollar cap. This is far more generous than workers’ compensation systems.

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Recent trends also show the percentage of disability benefits in Option programs to be increasing, moving from 85 percent up to 90 percent or 100 percent of pre-injury pay.

Lastly, Option employers are now rallying behind injury benefit plan provisions making clear that benefits will not be reduced by or coordinated with benefits from government programs, such as social security disability or survivor benefits. Such changes are easy to make when any coordination of benefits with government programs has rarely occurred.

This ability of Option programs to bear more of the direct costs of occupational injury is the result of requiring more employee and medical provider accountability.

Workers’ compensation systems could also better address SSDI’s cost-shifting concerns if state legislatures would seriously consider the toll taken upon injured workers and the economy by:

  • Late reporting of known accidents and injuries
  • Delays and a lack of persistence in medical treatment
  • Failures to follow medical provider treatment instructions, and
  • Medical providers who do not obtain a comprehensive medical history, do not perform an adequate physical examination, do not review current and past diagnostic tests and imaging, and instead rely on speculative reasoning.

Until these fundamental, systemic failures to reasonably cooperate and practice evidence-based medicine are addressed, meaningful progress on cost-shifting by workers’ compensation to SSDI will not occur.

Instead, we will continue to see workers’ compensation insurance company trade groups (supported by some regulators and trial lawyers) search for scapegoats, while Option program sponsors emphasize the more common-sense pursuit of better medical outcomes and a higher level of social responsibility.

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

The risk manager for Boyd Gaming Corp. says curiosity keeps him engaged, and continual education will be the key to managing emerging risks.
By: | May 1, 2018 • 4 min read

R&I: What was your first job?

I was trained as an accountant, worked in public accounting and became a CPA. Being comfortable with numbers is helpful in my current role, and obviously, the language of business is financial statements, so it helps.

R&I: How did you come to work in risk management?

Working in finance in the corporate environment included the review of budgets and the analysis of business expenses. I quickly found the area of benefits and insurance — and how “accepting risk” impacted those expenses — to be fascinating. I asked a lot of questions. Be careful what you ask for — I soon found myself responsible for those insurance areas and haven’t looked back!

R&I: What is the risk management community doing right?

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I have found the risk management community to be a close-knit group, whether that’s industry professionals, risk managers with other companies or support organizations like RIMS and other regional groups. The expertise of the carriers and specialty vendors to develop new products and programs, along with the appropriate education, will continue to be of key importance to companies going forward.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As I’m sure many in the insurance field would agree, Hurricanes Katrina and Rita in 2005 changed our world and our industry. It was a particularly intense time and certainly a baptism by fire for people like me who were relatively new to the industry. This event clearly accelerated the switch to the acceptance of more risk, which impacted mitigation strategies and programs.

Bob Berglund, vice president, benefits and insurance, Boyd Gaming Corp.

R&I: What emerging commercial risk most concerns you?

The fast-paced threat that cyber security represents today. Our company, like so many companies, is reliant upon computers, software and IT expertise in our everyday existence. This new risk has forged an even stronger relationship between risk management and our IT department as we work together to address this growing threat.

Additionally, the shooting event in Las Vegas in 2017 will have an enduring impact on firms that host large gatherings and arena-style events all over the world, and our company is no exception.

R&I: What insurance carrier do you have the highest opinion of?

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With the various types of insurance programs we employ, I have been fortunate to work with most of the large national and international carriers — all of whom employ talented people with a vast array of resources.

R&I:  How much business do you do direct versus going through a broker?

We use brokers for many of our professional coverages, such as property, casualty, D&O and cyber. We are self-insured under our health plans, with close to 25,000 members. We tend to manage those programs internally and utilize direct relationships with carriers and specialty vendors to tailor a plan that works best for team members.

R&I: Who is your mentor and why?

I have been fortunate to have worked alongside some smart and insightful people during my career. A key piece of advice, said in many different ways, has served me well. Simply stated: “Seek to understand before being understood.”

What this has meant to me is try everything you can to learn about something, new or old. After you have gained this knowledge, you can begin to access and maybe suggest changes or adjustments. Being curious has always been a personal enjoyment for me in business, and I have found people are more than willing to lend a hand, offer information and advice — you just need to ask. Building those alliances and foundations of knowledge on a subject matter makes tackling the future more exciting and fruitful.

R&I: What have you accomplished that you are proudest of?

Our benefit health plan is much more than handing out an insurance card at the beginning of the year. We encourage our team members and their families to learn about their personal health, get engaged in a variety of health and wellness programs and try to live life in the healthiest possible way. The result of that is literally hundreds of testimonials from our members every year on how they have lost weight, changed their lifestyle and gotten off medications. It is extremely rewarding and is a testament to [our] close-knit corporate culture.

R&I: What’s the best restaurant you’ve ever eaten at?

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Some will remember the volcano eruption in Iceland in spring of 2010. I was just finishing a week of meetings in London with Lloyd’s syndicates related to our property insurance placement when the airspace in England and most of northern Europe was shut down — no airplanes in or out! Flights were ultimately canceled for the following five days. Therefore, with a few other stranded visitors like myself, we experimented and tried out new restaurants every day until we could leave. It was a very interesting time!

R&I: What is the riskiest activity you ever engaged in?

I am originally from Canada, and I played ice hockey from the time I was four years old up until quite recently. Too many surgeries sadly forced my recent retirement.

R&I: What do your friends and family think you do?

That’s a funny one … I am a CPA working in the casino industry, doing insurance and risk management, so neighbors and acquaintances think I either do tax returns or they think I’m a blackjack dealer at the casino!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]