Teddy Awards: Progress Report

Fit for Duty

2013 Teddy Award winner Miami-Dade County Public Schools is managing comorbid risk factors by getting employees excited about healthy living.
By: | November 2, 2016 • 5 min read

When evaluating Teddy Award applicants, one of the qualities judges look for is a program that’s built to last, with a commitment to continuous improvement.

So it’s no surprise that Miami-Dade County Public Schools (M-DCPS), a 2013 Teddy Award winner, is still aggressively pursuing strategies to reduce its injury frequency, claims costs, medical costs and lost time.

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Case in point: Through regular reviews of claims data, M-DCPS identified a significant volume of claims where comorbidities were compromising the recovery of injured workers, and negatively impacting the severity of claims.

A wellness-focused injury recovery program called Rebuilding Me had been in place since 2007, but it was not having the desired impact on recovery outcomes. Rather than scrap the program, though, M-DCPS wanted to revive it.

The Rebuilding Me program focused on the Transportation department, which had the highest concentration of employees with comorbid conditions such as obesity, diabetes and hypertension.

“We finally thought — we need to take this to a different level,” said Rosa Royo, supervisor, workers’ compensation for M-DCPS. “This isn’t really doing what we want it to, and we need to put some money into it.”

Together with partners Gallagher Bassett and Coventry, M-DCPS rebranded and re-energized Rebuilding Me, what Royo calls a “targeted loss prevention program.” The pilot for the relaunch focused on the Transportation department, which had the highest concentration of employees with comorbid conditions such as obesity, diabetes and hypertension.

“They have range of motion issues, they have strength issues, weight is a real problem,” said Royo, noting that 87 percent of the department is overweight or obese.

An angioscreening of 650 employees revealed that only 98 had blood pressure within the normal range, while 250 tested abnormal and the other 302 registered as morbidly high. The comorbid conditions were taking a toll on claims cost and duration.

Even for something as minor as an employee whacking a knee against a steering wheel, said Royo, “You’re taking someone who’s very heavy and you’re immobilizing the joint. So maybe now you have a pulmonary embolism. You go from what would have been a $500 claim and now it’s a half a million dollar claim.”

Clamoring for More

Rebuilding Me includes the use of dedicated nurses to conduct one-on-one sessions with injured workers who are at increased risk for lost time based upon their health and wellness conditions.

It also features fitness classes, nutritional education and ergonomic awareness activities. The core Rebuilding Me team — comprised of Royo, Naomi Kuker of Gallagher Bassett, and Caroline Sauve of Coventry — is present at all events.

Strength and range of motion are key targets for the program. Royo related a story about an employee who showed up for a class and did an entire workout while clinging to a pillar. A short while later, she approached Royo and said, “Look I can raise my leg now.”

“That’s exactly what the program is for,” said Royo. “If you happen to lose weight, great. But it’s that range of motion and strengthening and those kinds of issues that we were really trying to address.”

“We’re spending $100,000 a year on this. But that wouldn’t even pay for one shoulder repair.” — Rosa Royo, supervisor, workers’ compensation, Miami-Dade County Public Schools

The response has been gratifying, said Royo. The initial pilot was conducted one day a week at the North East transportation depot. But soon, she said, “I had people chasing me in the parking lot saying, ‘You need to come more!’ ” It now runs three days a week with two trainers, and they have maxed out their available space and are seeking space for expansion.

M-DCPS has a solid program running now in five of its eight bus yards, with a sixth launching in January. At another location where lack of space has been a challenge so far, the workers’ labor union is clamoring for the program to be put in place.

The unions, in fact, wholeheartedly support Rebuilding Me, especially now that new U.S. Department of Transportation rules on medical fitness for duty could disqualify workers with significant health risks.

“Some of their members were at peril for losing their jobs,” said Royo. “This is a way for us as an employer to say, ‘We don’t want to throw you away. We don’t want to fire you. Here’s an opportunity for us to help you with this.’ ”

Well Worth the Cost

Because Rebuilding Me is a voluntary program, Royo and her team look for creative incentives to get people through the door initially, including lots of small branded swag items like sunglasses and lip balms.

But once an employee has committed to the program, the incentives ramp up. Employees get a towel after completing their first workout, and a T-shirt after the fifth. By the time they reach their 75th workout, they’re rewarded with a hybrid bicycle worth more than $400.

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“Our offices look really funny right now, because we’ve got stacks of scales and Fitbits and bicycles.”

That may make it sound like an expensive program to pull off, but Royo is quick to put the cost in perspective.

“We’re spending $100,000 a year on this,” she said. “But that wouldn’t even pay for one shoulder repair.”

The team is highly invested in the program’s success. They work to ramp up excitement within the Transportation centers, and created an online social media presence as well, through Instagram (@rebuildingmemdcps). The Instagram feed includes photos of events and classes, nutrition and fitness tips, recipes and motivational messages.

Royo hopes to build on the program’s success and popularity and keep it growing in order to maximize the impact.

“The hypertension issues, the weight issues, the musculoskeletal issues … I know this program can’t address all of these things as much as we’d like, but the better the penetration, the better the outcomes we’re going to have,” she said.

“We always try to do something that is innovative in our program, and I really think that this is special.” &

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Read more about the 2016 Teddy Award winners:

target-150x150Bringing Focus to Broad Challenges: Target brings home a 2016 Teddy Award for serving as an advocate for its workers, pre- and post-injury, across each of its many operations.

 

hrt-150x150The Road to Success: Accountability and collaboration turned Hampton Roads Transit’s legacy workers’ compensation program into a triumph.

 

excela-150x150Improve the Well-Being of Every Life: Excela Health changed the way it treated injuries and took a proactive approach to safety, drastically reducing workers’ comp claims and costs.

 

harder-150x150The Family That’s Safe Together: An unwavering commitment to zero lost time is just one way that Harder Mechanical Contractors protects the lives and livelihoods of its workers.

 

More coverage of the 2016 Teddy Awards:

Recognizing Excellence: The judges of the 2016 Teddy Awards reflect on what they learned, and on the value of awards programs in the workers’ comp space.

Fit for Duty: 2013 Teddy Award winner Miami-Dade County Public Schools is managing comorbid risk factors by getting employees excited about healthy living.

Saving Time and Money: Applying Lean Six Sigma to its workers’ comp processes earned Atlantic Health a Teddy Award Honorable Mention.

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Caring for the Caregivers: Adventist Health Central Valley Network is achieving stellar results by targeting its toughest challenges.

Advocating for Injured Workers: By helping employees navigate through the workers’ comp system, Cottage Health decreased lost work days by 80 percent.

A Matter of Trust: St. Luke’s workers’ comp program is built upon relationships and a commitment to care for those who care for patients.

Keeping the Results Flowing: R&I recognizes the Metropolitan Water Reclamation District of Greater Chicago for a commonsense approach that’s netting continuous improvement.

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

Alternative Energy

A Shift in the Wind

As warranties run out on wind turbines, underwriters gain insight into their long-term costs.
By: | September 12, 2017 • 6 min read

Wind energy is all grown up. It is no longer an alternative, but in some wholesale markets has set the incremental cost of generation.

As the industry has grown, turbine towers have as well. And as the older ones roll out of their warranty periods, there are more claims.

This is a bit of a pinch in a soft market, but it gives underwriters new insight into performance over time — insight not available while manufacturers were repairing or replacing components.

Charles Long, area SVP, renewable energy, Arthur J. Gallagher

“There is a lot of capacity in the wind market,” said Charles Long, area senior vice president for renewable energy at broker Arthur J. Gallagher.

“The segment is still very soft. What we are not seeing is any major change in forms from the major underwriters. They still have 280-page forms. The specialty underwriters have a 48-page form. The larger carriers need to get away from a standard form with multiple endorsements and move to a form designed for wind, or solar, or storage. It is starting to become apparent to the clients that the firms have not kept up with construction or operations,” at renewable energy facilities, he said.

Third-party liability also remains competitive, Long noted.

“The traditional markets are doing liability very well. There are opportunities for us to market to multiple carriers. There is a lot of generation out there, but the bulk of the writing is by a handful of insurers.”

Broadly the market is “still softish,” said Jatin Sharma, head of business development for specialty underwriter G-Cube.

“There has been an increase in some distressed areas, but there has also been some regional firming. Our focus is very much on the technical underwriting. We are also emphasizing standardization, clean contracts. That extends to business interruption, marine transit, and other covers.”

The Blade Problem

“Gear-box maintenance has been a significant issue for a long time, and now with bigger and bigger blades, leading-edge erosion has become a big topic,” said Sharma. “Others include cracking and lightning and even catastrophic blade loss.”

Long, at Gallagher, noted that operationally, gear boxes have been getting significantly better. “Now it is blades that have become a concern,” he said. “Problems include cracking, fraying, splitting.

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“In response, operators are using more sophisticated inspection techniques, including flying drones. Those reduce the amount of climbing necessary, reducing risk to personnel as well.”

Underwriters certainly like that, and it is a huge cost saver to the owners, however, “we are not yet seeing that credited in the underwriting,” said Long.

He added that insurance is playing an important role in the development of renewable energy beyond the traditional property, casualty, and liability coverages.

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine. Weather risk coverage can be done in multiple ways, or there can be an actual put, up to a fixed portion of capacity, plus or minus 20 percent, like a collar; a straight over/under.”

As useful as those financial instruments are, the first priority is to get power into the grid. And for that, Long anticipates “aggressive forward moves around storage. Spikes into the system are not good. Grid storage is not just a way of providing power when the wind is not blowing; it also acts as a shock absorber for times when the wind blows too hard. There are ebbs and flows in wind and solar so we really need that surge capacity.”

Long noted that there are some companies that are storage only.

“That is really what the utilities are seeking. The storage company becomes, in effect, just another generator. It has its own [power purchase agreement] and its own interconnect.”

“Most projects operate at lower capacity than anticipated. But they can purchase coverage for when the wind won’t blow or the sun won’t shine.”  —Charles Long, area senior vice president for renewable energy, Arthur J. Gallagher

Another trend is co-location, with wind and solar, as well as grid-storage or auxiliary generation, on the same site.

“Investors like it because it boosts internal rates of return on the equity side,” said Sharma. “But while it increases revenue, it also increases exposure. … You may have a $400 million wind farm, plus a $150 million solar array on the same substation.”

In the beginning, wind turbines did not generate much power, explained Rob Battenfield, senior vice president and head of downstream at JLT Specialty USA.

“As turbines developed, they got higher and higher, with bigger blades. They became more economically viable. There are still subsidies, and at present those subsidies drive the investment decisions.”

For example, some non-tax paying utilities are not eligible for the tax credits, so they don’t invest in new wind power. But once smaller companies or private investors have made use of the credits, the big utilities are likely to provide a ready secondary market for the builders to recoup their capital.

That structure also affects insurance. More PPAs mandate grid storage for intermittent generators such as wind and solar. State of the art for such storage is lithium-ion batteries, which have been prone to fires if damaged or if they malfunction.

“Grid storage is getting larger,” said Battenfield. “If you have variable generation you need to balance that. Most underwriters insure generation and storage together. Project leaders may need to have that because of non-recourse debt financing. On the other side, insurers may be syndicating the battery risk, but to the insured it is all together.”

“Grid storage is getting larger. If you have variable generation you need to balance that.” — Rob Battenfield, senior vice president, head of downstream, JLT Specialty USA

There has also been a mechanical and maintenance evolution along the way. “The early-generation short turbines were throwing gears all the time,” said Battenfield.

But now, he said, with fewer manufacturers in play, “the blades, gears, nacelles, and generators are much more mechanically sound and much more standardized. Carriers are more willing to write that risk.”

There is also more operational and maintenance data now as warranties roll off. Battenfield suggested that the door started to open on that data three or four years ago, but it won’t stay open forever.

“When the equipment was under warranty, it would just be repaired or replaced by the manufacturer,” he said.

“Now there’s more equipment out of warranty, there are more claims. However, if the big utilities start to aggregate wind farms, claims are likely to drop again. That is because the utilities have large retentions, often about $5 million. Claims and premiums are likely to go down for wind equipment.”

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Repair costs are also dropping, said Battenfield.

“An out-of-warranty blade set replacement can cost $300,000. But if it is repairable by a third party, it could cost as little as $30,000 to have a specialist in fiberglass do it in a few days.”

As that approach becomes more prevalent, business interruption (BI) coverage comes to the fore. Battenfield stressed that it is important for owners to understand their PPA obligations, as well as BI triggers and waiting periods.

“The BI challenge can be bigger than the property loss,” said Battenfield. “It is important that coverage dovetails into the operator’s contractual obligations.” &

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at [email protected]