2017 Teddy Award Winner

Getting It Right

Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.
By: | November 1, 2017 • 6 min read

Imagine juggling an armful of flaming batons — all in different sizes. While blindfolded. And hopping on one foot.

That’s what it may have felt like a decade ago to lead the workers’ compensation program of the Massachusetts Port Authority, which owns and operates Boston Logan Airport and a number of additional airfields, as well as cargo and cruise ship terminals, piers and real estate holdings.

Advertisement




Massport’s complex program covers 1,300 direct employees, plus hundreds of high-risk public safety employees, including police, firefighters and International Longshoremen’s Association (ILA) union members working at Conley Terminal.

Every day, Massport faces issues related to multiple labor unions, a diverse mix of risk environments and hazards and a variety of state workers’ comp statutes that need to be navigated with utmost care.

Ten years ago the authority decided to stop juggling, and start managing — strategically reshaping a program that was largely fragmented.

Since then, Massport logged $21 million in savings, including more than $2 million in medical cost savings alone. It achieved significant reductions in frequency, severity, lost-time days and claims duration.

Time for a Change

When Frank Rivera took the position of director, risk management and workers’ compensation for Massport in 2007, the program was self-insured and self-administered within a different authority unit and suffered from structural problems, administrative burdens and decentralization. It also lacked the resources to capitalize on cost-containment programs and drive results.

Moreover, Massport’s risk management team struggled to obtain excess coverage for workers’ compensation exposures.

Frank Rivera, director, risk management and workers’ comp, Massachusetts Port Authority

“Workers’ compensation is an insurance program, but Massport is not an insurance company. We didn’t have the tools to administrate a proper program internally,” Rivera said.

It became clear that collaboration would yield better results for the program and the Authority as a whole. Rivera led the charge to enlist the services of a third-party administrator (TPA), eventually selecting PMA Management Corp. of New England.

“Partnering with a TPA freed up resources to centralize, streamline and better manage the whole workers’ compensation process, including designing a new workflow to communicate with departments and employees.” Rivera said.

With everything under a single workers’ compensation umbrella, Massport eliminated a lot of confusion and inefficiency, creating greater transparency and communication between units rather than being hindered by silos.

The authority instituted weekly meetings attended by risk management, human resources, labor relations and the legal and safety departments. In addition to fostering collaboration on existing claims, the meeting helps keep all units focused on how tangible and intangible costs associated with workers’ comp can go off the rails if not managed appropriately, Rivera said.

Three years after the shift to a TPA, Massport made another significant move: transferring its program for one group of workers from a guaranteed cost policy to a self-insured program.

The risk management team had been considering the move for a while. Then the price for the guaranteed-cost program jumped from $1.9 to $3.9 million. The Massport team seized that opportunity to introduce the self-insured program — already successfully adopted for other groups within the workers’ comp program.

The change produced dramatic savings, and also helped to garner more union leadership buy-in for risk management, Rivera said. Better still, the self-insured program provides more control in addressing worker safety with the best possible methods, Rivera said, proving that Massport can save money while protecting workers.

Communication Is Key

Sheri Bowles, client services manager in the Waltham, Mass., office of PMA, said Rivera and his risk management team understand that it may not be possible for a work environment to be completely free from injuries.

Advertisement




“Massport’s approach focuses on both what can be done to prevent incidents from occurring in the future and ensuring injured workers obtain prompt medical treatment,” Bowles said. “Prompt medical treatment is vital for injured workers’ recovery and helps facilitate a safe return to work.”

To that end, Massport and PMA have “continuous communication” throughout the claims process — beginning with timely reporting of each injury through claim resolution.

Better communication also has been the key to getting all stakeholders on board with the authority’s return-to-work goals.

Ten years ago, managers would often allow workers to linger off work because it was simply less complicated.

But Rivera and his team now make managers part of the solution, making sure they have the necessary information about an injured workers’ capabilities, appointments and expected injury durations.

“I think the only way to have a successful program is to view our employees as our most valuable assets.” — Frank Rivera, director, risk management and workers’ compensation, Massachusetts Port Authority

That allows managers to plan better for the distribution of tasks and manages everyone’s expectations. All but one of Massport units now have modified duty programs — and that one exception addresses it by a collective bargaining agreement. Massport’s successful return-to-work efforts have helped the authority obtain excess coverage more readily and negotiate lower rates from carriers.

Massport’s commitment to employees’ health and safety — a mandate within its workers’ comp program — is drilled “from the top-down,” Rivera said.

“I think the only way to have a successful program is to view our employees as our most valuable assets,” he said. “Massport insures physical assets like buildings and vehicles, and I believe it only makes sense that the same approach be extended to employees.”

“Our collective efforts ensure that Massport’s vision is executed and its goals are achieved,” Bowles said, which also applies to Massport’s philosophy on getting the very best treatment for its people.

While the organization participates in a medical cost reduction network, Massport doesn’t require that workers get treated by a network doctor.

It will recommend qualified providers with a proven track record, but allows workers to seek treatment elsewhere if they feel an alternate provider is better suited to return them to work sooner, Rivera said.

In addition, Massport provides a medical case manager, or a nurse, to help workers get treatment if it’s not readily available in their area.

“Working to provide employees with the right tools in a properly managed structure helps employees, in most cases, return to work sooner,” Rivera said.

“By our accounts this approach also helps Massport lower its overall medical costs per case.”

Advertisement




Rivera’s statements receive substantial support if you look at the data. The changes implemented at Massport lowered its medical costs about 50 percent per claim.

“From our vantage point, assembling the right tools, continuous communications with injured employees and being attentive to their medical needs can help you lower your cost — a win-win for the employee and the organization,” he said.

Rivera believes the success of any program requires collaboration between injured employees, leadership and the people and tools offered by the workers’ compensation program.

“This team approach creates the best success — and that approach is why I want to thank my team and everyone else at Massport who helped make these positive results happen,” he said. &

_______________________________________________________

More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

Pinnacle Entertainment’s VP of enterprise risk management says he’s inspired by Disney’s approach to risk management.
By: | November 1, 2017 • 4 min read

R&I: What was your first job?

Bus boy at a fine dining restaurant.

R&I: How did you come to work in this industry?

I sent a résumé to Harrah’s Entertainment on a whim. It took over 30 hours of interviewing to get that job, but it was well worth it.

R&I: If the world has a modern hero, who is it and why?

Advertisement




The Chinese citizen (never positively identified) who stood in front of a column of tanks in Tiananmen Square on June 5, 1989. That kind of courage is undeniable, and that image is unforgettable. I hope we can all be that passionate about something at least once in our lives.

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

Cyber risk, but more narrowly, cyber-extortion. I think state sponsored bad actors are getting more and more sophisticated, and the risk is that they find a way to control entire systems.

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

Training and breaking horses. When I was in high school, I worked on a lot of farms. I did everything from building fences to putting up hay. It was during this time that I found I had a knack for horses. They would tolerate me getting real close, so it was natural I started working more and more with them.

Eventually, I was putting a saddle on a few and before I knew it I was in that saddle riding a horse that had never been ridden before.

I admit I had some nervous moments, but I was never thrown off. It taught me that developing genuine trust early is very important and is needed by all involved. Nothing of any real value happens without it.

R&I: What about this work do you find the most fulfilling or rewarding?

Advertisement




Setting very aggressive goals and then meeting and exceeding those goals with a team. Sharing team victories is the ultimate reward.

R&I: What is the most unusual/interesting place you have ever visited?

Disney World. The sheer size of the place is awe inspiring. And everything works like a finely tuned clock.

There is a reason that hospitality companies send their people there to be trained on guest service. Disney World does it better than anyone else.

As a hospitality executive, I always learn something new whenever I am there.

James Cunningham, vice president, enterprise risk management, Pinnacle Entertainment, Inc.

The risks that Disney World faces are very similar to mine — on a much larger scale. They are complex and across the board. From liability for the millions of people they host as their guests each year, to the physical location of the park, to their vendor partnerships; their approach to risk management has been and continues to be innovative and a model that I learn from and I think there are lessons there for everybody.

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

We are doing a much better job of getting involved in a meaningful way in our daily operations and demonstrating genuine value to our organizations.

R&I: What could the risk management community be doing a better job of?

Educating and promoting the career with young people.

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

Being able to tell the Pinnacle story. It’s a great one and it wasn’t being told. I believe that the insurance markets now understand who we are and what we stand for.

R&I: Who is your mentor and why?

Advertisement




John Matthews, who is now retired, formerly with Aon and Caesar’s Palace. John is an exceptional leader who demonstrated the value of putting a top-shelf team together and then letting them do their best work. I model my management style after him.

R&I: What is your favorite book or movie?

I read mostly biographies and autobiographies. I like to read how successful people became successful by overcoming their own obstacles. Jay Leno, Jack Welch, Bill Harrah, etc. I also enjoyed the book and movie “Money Ball.”

R&I: What is your favorite drink?

Ice water when it’s hot, coffee when it’s cold, and an adult beverage when it’s called for.

R&I: What does your family think you do?

In my family, I’m the “Safety Geek.”

R&I:  What’s your favorite restaurant?

Vegas is a world-class restaurant town. No matter what you are hungry for, you can find it here. I have a few favorites that are my “go-to’s,” depending on the mood and who I am with.

If you’re in town, you should try to have at least one meal off the strip. For that, I would suggest you get reservations (you’ll need them) at Herbs and Rye. It’s a great little restaurant that is always lively. The food is tremendous, and the service is always on point. They make hand-crafted cocktails that are amazing.

My favorite Mexican restaurant is Lindo Michoacan. There are three in town, and I prefer the one in Henderson as it has the best view of the valley. For seafood, you can never go wrong with Joe’s in Caesar’s Palace.




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