2017 Teddy Award Winner

Proactive Approach to Employee Safety

The Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.
By: | November 1, 2017 • 6 min read

The Valley Health System embarked on a journey to completely transform its workers’ compensation program. Now, five years later, Valley can boast it did just that.

Valley Health  is a regional healthcare system that serves residents in northern New Jersey and southern New York. From 2012 to today, Valley reduced its annual workers’ compensation budget by 69 percent while the number of employees increased 14 percent. Lost-time claims per year went from 171 to 79 and workplace violence injuries decreased by 50 percent in just one year.


“This culture of safety has really made everybody, from the top down, more aware of their areas to see what’s in place for the safety of our employees,” said Linda Carey, a registered nurse at Valley who witnessed the changes firsthand.

In 2011, Valley’s workers’ comp budget reached a staggering $2.1 million and its incident rate was 5.72, leading to a two-and-a-half month-long site evaluation by OSHA. At the end, OSHA presented the health system with a list of safety recommendations.

It was just the catalyst Valley needed.

“Back in 2011, the workers’ comp program — while our nurses give excellent care — was not being run as it should be and a lot of our claims were going to the excess carrier,” explained Barbara Schultz, director of employee health and wellness, Valley Health.

When OSHA gave its recommendations, Valley began its own assessment to move in a more proactive and strategic direction.

Enhancing Safety

Health care workers are highly susceptible to workplace violence, whether it be a combative patient, a confused patient or even an outside force like an active shooter.

“Hospitals are soft targets. We embrace the role of the family,” explained Schultz.

Barbara Schultz, director, employee health and wellness, Valley Health

“Visiting hours are almost around the clock. We are a welcoming institution, which makes us very porous in terms of access.”

On top of that, regulations and rules have changed for hospitals over the past few decades. Where once a nurse or physician could use restraints to hold back a combative patient, laws prevent the use of such force unless in extreme circumstances.

“More staff is vulnerable. We’re caregivers, we’re meant to be there, and sometimes these patients lash out and swing.”

Once OSHA gave its recommendations, Valley tracked incidences of patient-on-caregiver violence, benchmarking the unit, the shifts incidences occurred and the type of patient involved. They used this data to further educate and train employees on safe work practices, creating the Safety and Security Director role in the process. This role reviews best safety practices across the system’s facilities.

Dan Coss, Valley’s Director of Security, Public Safety and Environmental Services, is an important asset to the safety protocols at Valley, Schultz said. With a PhD in the science of safety and security, Coss made employee safety paramount.

“He strengthened relationships with local authorities,” said Schultz, “he helped with workplace violence as a whole and brought in the Code Atlas team.”

Code Atlas is a 50-member team of trained staff members ready to address combative patients 24/7. This team is prepared to handle disruptive patients from the moment they arrive to the point where they are stabilized and cooperative. Overall, this team reduced workplace violence claims by half.

Also included in Coss’s job was incorporating active shooter training.

Valley hosts three to four small drills per month and one large drill per year involving local law enforcement.


During the smaller drills, “Dan will come in as a relative with a bill complaint or someone who’s lost a loved one. He comes in yelling at the top of his lungs. The whole point is to get out of the situation safely,” Schultz explained.

“The staff is expected to respond by fleeing — run and get out of the way. If they don’t have the ability to run, they’re told to hide. If Dan sees you, he will pretend to shoot you.”

“I’ve been briefed on the drill [afterwards],” said Carey.  “It’s frightening even when you know it’s a drill. It gives people an idea of what they’ll feel and how they might react.”

Lissette Carcano, workers’ compensation care coordinator, Valley Health, once volunteered to be a patient during a drill.

“Visiting hours are almost around the clock. We are a welcoming institution, which makes us very porous in terms of access.” — Barbara Schultz, director, employee health and wellness, Valley Health

“I was an ER patient locked in a room with a nurse. You shake in your boots. It becomes real, but I felt very comfortable with the nurse,” she said.

The larger drill takes a year to plan. Valley must get EMS, fire rescue and local law enforcement on board before enacting an active shooter drill. Instead of Coss acting as the perpetrator, the police volunteer an officer to enter the selected facility holding a red gun to indicate that it is fake.

Sometimes, Schultz added, they will use simulation rounds, or training ammunition. In these instances, the fake gun makes a loud sound — similar to the sound of a real gun being fired — but the ammunition is fake and non-lethal.

“It’s scary for the employees, but they have an opportunity to handle the situation in a relatively safe way,” said Schultz.

“We’re looking at patient safety and employee safety like never before.”

Aligning Comp Philosophies

The biggest challenge Valley faced was aligning each individual nurse case manager with the new philosophy for safety and security. Before, Schultz said, each nurse had their own way of providing care to injured workers. To get workers back safely and efficiently, Valley knew it had to set one standard of care.

Lissette Carcano, workers’ compensation care coordinator, Valley Health

The Workers’ Compensation Care Coordinator role was created to oversee the entire workers’ comp process, guaranteeing that the quality and type of care was uniform across the Valley network. This role, according to Schultz, was pivotal for the success of the workers’ comp program.

“I needed someone who was kind, compassionate but firm. Someone who could manage with consistency,” said Schultz. Carcano fit the bill.

“She’s one of the best I’ve ever seen,” said Cari Burhenne, regional claims service manager, PMA Companies.

Carcano entered Valley and provided the adjusters with what they needed while continuing to care for each worker, Burhenne explained.

Valley’s philosophy used to be “full-duty or no duty.” Carcano worked to get injured workers into temporary duty roles suitable for them while they recovered, and thanks to her return-to-work advocacy, Valley’s lost-time claims decreased from 171 per year to 79.

“The focus on return to work, I think, is number one in what reduced Valley’s overall claims costs,” said Burhenne.

“Valley is very invested in doing what’s right for their employees. There’s the business sense but also that sense of caring for their employees. It’s a great combination.”

When a worker is injured on the job, Schultz and Carcano have worked hard to get their employees seen by physicians and other health care providers as quickly as possible.


“The way Barbara and Lissette established great relationships with physicians has made the [workers’ comp] process streamlined and effective; it’s very expeditious,” said Carey. “They are looking for the best care for employees and patients.”

The health care system also implemented a full-scale safe patient handling program, overhauled its dining and environmental services safety committees and implemented health awareness among its employees.

Carey added, “When our employees are healthy and safe at work, our patients benefit.” &


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.


Autumn Heisler is a staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Focus: Cyber

Expanding Cyber BI

Cyber business interruption insurance is a thriving market, but growth carries the threat of a mega-loss. 
By: | March 5, 2018 • 7 min read

Lingering hopes that large-scale cyber attack might be a once-in-a-lifetime event were dashed last year. The four-day WannaCry ransomware strike in May across 150 countries targeted more than 300,000 computers running Microsoft Windows. A month later, NotPetya hit multinationals ranging from Danish shipping firm Maersk to pharmaceutical giant Merck.


Maersk’s chairman, Jim Hagemann Snabe, revealed at this year’s Davos summit that NotPetya shut down most of the group’s network. While it was replacing 45,000 PCs and 4,000 servers, freight transactions had to be completed manually. The combined cost of business interruption and rebuilding the system was up to $300 million.

Merck’s CFO Robert Davis told investors that its NotPetya bill included $135 million in lost sales plus $175 million in additional costs. Fellow victims FedEx and French construction group Saint Gobain reported similar financial hits from lost business and clean-up costs.

The fast-expanding world of cryptocurrencies is also increasingly targeted. Echoes of the 2014 hack that triggered the collapse of Bitcoin exchange Mt. Gox emerged this January when Japanese cryptocurrency exchange Coincheck pledged to repay customers $500 million stolen by hackers in a cyber heist.

The size and scope of last summer’s attacks accelerated discussions on both sides of the Atlantic, between risk managers and brokers seeking more comprehensive cyber business interruption insurance products.

It also recently persuaded Pool Re, the UK’s terrorism reinsurance pool set up 25 years ago after bomb attacks in London’s financial quarter, to announce that from April its cover will extend to include material damage and direct BI resulting from acts of terrorism using a cyber trigger.

“The threat from a cyber attack is evident, and businesses have become increasingly concerned about the extensive repercussions these types of attacks could have on them,” said Pool Re’s chief, Julian Enoizi. “This was a clear gap in our coverage which left businesses potentially exposed.”

Shifting Focus

Development of cyber BI insurance to date reveals something of a transatlantic divide, said Hans Allnutt, head of cyber and data risk at international law firm DAC Beachcroft. The first U.S. mainstream cyber insurance products were a response to California’s data security and breach notification legislation in 2003.

Jimaan Sané, technology underwriter, Beazley

Of more recent vintage, Europe’s first cyber policies’ wordings initially reflected U.S. wordings, with the focus on data breaches. “So underwriters had to innovate and push hard on other areas of cyber cover, particularly BI and cyber crimes such as ransomware demands and distributed denial of service attacks,” said Allnut.

“Europe now has regulation coming up this May in the form of the General Data Protection Regulation across the EU, so the focus has essentially come full circle.”

Cyber insurance policies also provide a degree of cover for BI resulting from one of three main triggers, said Jimaan Sané, technology underwriter for specialist insurer Beazley. “First is the malicious-type trigger, where the system goes down or an outage results directly from a hack.

“Second is any incident involving negligence — the so-called ‘fat finger’ — where human or operational error causes a loss or there has been failure to upgrade or maintain the system. Third is any broader unplanned outage that hits either the company or anyone on which it relies, such as a service provider.”

The importance of cyber BI covering negligent acts in addition to phishing and social engineering attacks was underlined by last May’s IT meltdown suffered by airline BA.

This was triggered by a technician who switched off and then reconnected the power supply to BA’s data center, physically damaging servers and distribution panels.

Compensating delayed passengers cost the company around $80 million, although the bill fell short of the $461 million operational error loss suffered by Knight Capital in 2012, which pushed it close to bankruptcy and decimated its share price.

Mistaken Assumption

Awareness of potentially huge BI losses resulting from cyber attack was heightened by well-publicized hacks suffered by retailers such as Target and Home Depot in late 2013 and 2014, said Matt Kletzli, SVP and head of management liability at Victor O. Schinnerer & Company.


However, the incidents didn’t initially alarm smaller, less high-profile businesses, which assumed they wouldn’t be similarly targeted.

“But perpetrators employing bots and ransomware set out to expose any firms with weaknesses in their system,” he added.

“Suddenly, smaller firms found that even when they weren’t themselves targeted, many of those around them had fallen victim to attacks. Awareness started to lift, as the focus moved from large, headline-grabbing attacks to more everyday incidents.”

Publications such as the Director’s Handbook of Cyber-Risk Oversight, issued by the National Association of Corporate Directors and the Internet Security Alliance fixed the issue firmly on boardroom agendas.

“What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.” — Jimaan Sané, technology underwriter, Beazley

Reformed ex-hackers were recruited to offer board members their insights into the most vulnerable points across the company’s systems — in much the same way as forger-turned-security-expert Frank Abagnale Jr., subject of the Spielberg biopic “Catch Me If You Can.”

There also has been an increasing focus on systemic risk related to cyber attacks. Allnutt cites “Business Blackout,” a July 2015 study by Lloyd’s of London and the Cambridge University’s Centre for Risk Studies.

This detailed analysis of what could result from a major cyber attack on America’s power grid predicted a cost to the U.S. economy of hundreds of billions and claims to the insurance industry totalling upwards of $21.4 billion.

Lloyd’s described the scenario as both “technologically possible” and “improbable.” Three years on, however, it appears less fanciful.

In January, the head of the UK’s National Cyber Security Centre, Ciaran Martin, said the UK had been fortunate in so far averting a ‘category one’ attack. A C1 would shut down the financial services sector on which the country relies heavily and other vital infrastructure. It was a case of “when, not if” such an assault would be launched, he warned.

AI: Friend or Foe?

Despite daunting potential financial losses, pioneers of cyber BI insurance such as Beazley, Zurich, AIG and Chubb now see new competitors in the market. Capacity is growing steadily, said Allnutt.

“Not only is cyber insurance a new product, it also offers a new source of premium revenue so there is considerable appetite for taking it on,” he added. “However, whilst most insurers are comfortable with the liability aspects of cyber risk; not all insurers are covering loss of income.”

Matt Kletzli, SVP and head of management liability, Victor O. Schinnerer & Company

Kletzli added that available products include several well-written, broad cyber coverages that take into account all types of potential cyber attack and don’t attempt to limit cover by applying a narrow definition of BI loss.

“It’s a rapidly-evolving coverage — and needs to be — in order to keep up with changing circumstances,” he said.

The good news, according to a Fitch report, is that the cyber loss ratio has been reduced to 45 percent as more companies buy cover and the market continues to expand, bringing down the size of the average loss.

“The bad news is that at cyber events, talk is regularly turning to ‘what will be the Hurricane Katrina-type event’ for the cyber market?” said Kletzli.

“What’s worse is that with hurricane losses, underwriters know which regions are most at risk, whereas cyber is a global risk and insurers potentially face huge aggregation.”


Nor is the advent of robotics and artificial intelligence (AI) necessarily cause for optimism. As Allnutt noted, while AI can potentially be used to decode malware, by the same token sophisticated criminals can employ it to develop new malware and escalate the ‘computer versus computer’ battle.

“The trend towards greater automation of business means that we can expect more incidents involving loss of income,” said Sané. “What’s possibly of greater concern is the sheer number of different businesses that can be affected by a single cyber attack and the cost of getting them up and running again quickly.

“We’re likely to see a growing number of attacks where the aim is to cause disruption, rather than demand a ransom.

“The paradox of cyber BI is that the more sophisticated your organization and the more it embraces automation, the bigger the potential impact when an outage does occur. Those old-fashioned businesses still reliant on traditional processes generally aren’t affected as much and incur smaller losses.” &

Graham Buck is editor of gtnews.com. He can be reached at riskletters.com.