2015 NWCDC

Focus on Behavioral Issues

Technology is helping to transform medical services, but employers and providers need to focus more on socioeconomic factors.
By: | November 12, 2015 • 2 min read

As a keen observer of the evolution of health and medical care, Dr. Arthur Southam points to socioeconomic factors and fee-for-payment health care as major issues for workers’ compensation professionals.

In his keynote address opening the National Workers’ Compensation & Disability Conference® and Expo in Las Vegas on November 11, Southam, executive vice president, health plan operations, Kaiser Foundation Health Plan Inc., said medical care must focus on quality, not volume.

“The more you do, and the more it costs and the more times you do it, the more you get paid,” he said of the current fee-for-payment system.

The Affordable Care Act, with its emphasis on accountable care organizations, is beginning to change that, by focusing on “paying providers by the package rather than the price.”

“Improving the walkability of our workforce is the highest thing we can do.” — Dr. Arthur Southam, executive vice president, health plan operations, Kaiser Foundation Health Plan Inc.

He noted that a study by the RAND Corp. found that socioeconomic issues are “the most powerful determinant of health,” and that chronic diseases, primarily driven by behavior, are one reason America spends 50 percent more on medical care than any country in the world.

“A large portion of our costs in America could be dramatically reduced if we ate less, moved more, stopped smoking, slept sometimes and we were careful with the substances we ingest,” he said.

The issue of an inactive workforce “should be front and center in your workplace,” Southam said. “Improving the walkability of our workforce is the highest thing we can do.”

Depression also is a leading cause of morbidity, he said.

A striking cause of death, he said, is medical error.

Every year, he said, 98,000 people die from medical errors. That’s equivalent to two 747 jets crashing into each other each week, killing all passengers.

“Our hospitals and medical care system are not as safe as they should be,” he said.

“We have some spectacular outcomes but also some shortcomings.”

The increasing use of electronic health records will help medical providers be more effective and efficient as well as enhance transparency and coordination of care, he said.

But the ubiquitous cell phone, which offers access to tens of thousands of health-related apps and hundreds of biometric measurement tools, may be “the most important advance” in medical treatment.

That digital transformation “takes much of medical care out of the offices and institutions to put it in your home, to put it in your place of work, to put it in your pocket, to put it in your hand.”

The use of voice, video and data in telehealth operations – which is “just starting to scratch the surface” — will also transform health care delivery by improving access to primary and specialty care.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2018 Most Dangerous Emerging Risks

Emerging Multipliers

It’s not that these risks are new; it’s that they’re coming at you at a volume and rate you never imagined before.
By: | April 9, 2018 • 3 min read

Underwriters have plenty to worry about, but there is one word that perhaps rattles them more than any other word. That word is aggregation.


Aggregation, in the transferred or covered risk usage, represents the multiplying potential of a risk. For examples, we can look back to the asbestos claims that did so much damage to Lloyds’ of London names and syndicates in the mid-1990s.

More recently, underwriters expressed fears about the aggregation of risk from lawsuits by football players at various levels of the sport. Players, from Pee Wee on up to the NFL, claim to have suffered irreversible brain damage from hits to the head.

That risk scenario has yet to fully play out — it will be decades in doing so — but it is already producing claims in the billions.

This year’s edition of our national-award winning coverage of the Most Dangerous Emerging Risks focuses on risks that have always existed. The emergent — and more dangerous — piece to the puzzle is that these risks are now super-charged with risk multipliers.

Take reputational risk, for example. Businesses and individuals that were sharply managed have always protected their reputations fiercely. In days past, a lapse in ethics or morals could be extremely damaging to one’s reputation, but it might take days, weeks, even years of work by newspaper reporters, idle gossips or political enemies to dig it out and make it public.

Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.

These days, the speed at which Internet connectedness and social media can spread information makes reputational risk an existential threat. Information that can stop a glittering career dead in its tracks can be shared by millions with a casual, thoughtless tap or swipe on their smartphones.

Aggregation of uninsured risk is another area of focus of our Most Dangerous Emerging Risks (MDER) coverage.

The beauty of the insurance model is that the business expands to cover personal and commercial risks as the world expands. The more cars on the planet, the more car insurance to sell.

The more people, the more life insurance. Brand new technologies, brand new commercial covers. It all works well; until it doesn’t.

As Risk & Insurance® associate editor Michelle Kerr and her sources point out, growing populations and rising property values, combined with an increase in high-severity catastrophes, threaten to push the insurance coverage gap to critical levels.

This aggregation of uninsured value got a recent proof in CAT-filled 2017. The global tally for natural disaster losses in 2017 was $330 billion; 60 percent of it was uninsured.


This uninsured gap threatens to place unsustainable pressure on public resources and hamstring society’s ability to respond to natural disasters, which show no sign of slowing down or tempering.

A related threat, the combination of a failing infrastructure and increasing storm severity, marks our third MDER. This MDER looks at the largely uninsurable risk of business interruption that results not from damage to your property or your suppliers’ property, but to publicly maintained infrastructure that provides ingress and egress to your property. It’s a danger coming into shape more and more frequently.

As always, our goal in writing about these threats is not to engage in fear mongering. It’s to initiate and expand a dialogue that can hopefully result in better planning and mitigation, saving the lives and limbs of businesses here and around the world.

2018 Most Dangerous Emerging Risks

Critical Coverage Gap

Growing populations and rising property values, combined with an increase in high-severity catastrophes, are pushing the insurance protection gap to a critical level.

Climate Change as a Business Interruption Multiplier

Crumbling roads and bridges isolate companies and trigger business interruption losses.


Reputation’s Existential Threat

Social media — the very tool used to connect people in an instant — can threaten a business’s reputation just as quickly.


AI as a Risk Multiplier

AI has potential, but it comes with risks. Mitigating these risks helps insurers and insureds alike, enabling advances in almost every field.


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