6 Emerging Risks to Health Care Workers
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A distracted driver rear-ends the car stopped in front of him at a red light. Who’s at fault?
Ten years ago, the immediate answer would be, “The distracted driver, of course.” But what if that driver was distracted by a text message from his boss regarding a high-priority project? What if the car was in autonomous mode? What if the driver was drowsy because he’s a delivery worker at the end of a 14-hour shift? Is someone else to blame?
When there are other forces at play beyond the driver and the road, the lines of accident liability get blurry. “Determining culpability is no longer black and white,” said Doug Manwaring, Chief Underwriting Officer, Excess Casualty, Liberty Mutual Insurance. “Employers, third-party vendors, and even original equipment manufacturers are being drawn into liability battles that can spill out into lengthy, expensive litigation.”
Expanding liability has yielded progressive upticks in both the frequency and severity of liability claims — a trend insurers expect to continue. That will come back to businesses in the form of more expensive risk transfer — unless they can make significant improvements in their risk management programs.
The first step is to better understand how the following macro trends are complicating the liability landscape for businesses across the board:
The central role that technology plays in nearly all areas of life has served to alter some historical demarcations of responsibility. Smartphones, for example, and cloud-based communication platforms mean employers and employees can be connected 24 hours a day.
While that makes it easier for people to work remotely, it also may expand an employer’s liability exposure outside of the office walls.
In the above example, “if an individual is driving his or her own car and is off work hours, but then gets distracted by a work-related text and causes an accident, that introduces a new complication. Plaintiff attorneys are making the argument that the employer that sent the message is a responsible party for any damages that occur,” Manwaring said.
The rise of semi-autonomous vehicles may similarly impact auto manufacturers. When the car is in charge, accident liability is called into question. Is the owner of the car responsible? The original equipment manufacturer? The company that built and installed the car’s software? A component manufacturer?
Manwaring said technology introduces new variables to the liability equation by potentially broadening the “foreseeability” of an incident. When technology gives an entity more power or more control, it also introduces an opportunity for plaintiffs to allege that ‘you knew or should have known.’
As an example of that theory, a plaintiff could argue that a manufacturer of an autonomous vehicle that promises it will drive safely, with limited human involvement, should have foreseen the possibility of an accident due to malfunction. Or, an employer that gives its workers smartphones should have foreseen that an employee would answer a call or text while driving.
Often, however, companies fail to foresee such events because there is no precedent for them — another consequence of rapidly advancing technology.
“Technology creates gray area, and more opportunities to connect companies to events that they traditionally wouldn’t have been connected to,” Manwaring said.
Complicated liability scenarios are making their way into courtrooms, where juries increasingly favor the claimant. The escalation of jury awards may be attributed to a broader notion of social justice espoused by younger jurors.
“There’s a different sense of social responsibility among jurors in their mid-twenties and thirties,” Manwaring said. “You see a shift in what’s viewed as personal responsibility versus corporate responsibility.”
These younger jurors expect companies to be good corporate citizens, to go above and beyond to protect their employees, and use their resources to benefit society. That includes stepping up to pay for physical damages and atone for the non-physical damage done to the injured party.
As a result, jury awards for non-economic components like punitive and pain-and-suffering damages are steadily rising.
“We are definitely seeing an increase in the ratio of non-economic to economic damages for claims that do go to verdict. That’s driving up valuations across the board,” Manwaring said. “Claims are more frequently piercing higher layers of coverage, for larger amounts than they have in the past.”
While the strong economy is good for business, it comes with a tightening labor market. The U.S. unemployment rate currently sits around 4 percent – down to pre-recession levels. But the need for workers — especially drivers — has never been higher.
A growing e-commerce industry and consumer demand for fast turnaround have driven up the volume and speed of deliveries, putting the pressure on manufacturers and distributors to move product quickly. To meet increased demand, companies often outsource delivery to third parties — including individuals using their personal vehicles.
“That introduces a whole new element,” Manwaring said. “Often, companies will outsource thinking they’ve eliminated their auto exposure. But they may still be responsible for ensuring that a qualified driver is behind the wheel, even if it’s not your vehicle or your employee.”
The tightening market has made it more difficult to find those qualified drivers. If filling open positions comes at the expense of safety, it leads to increased accident frequency.
All of these elements together should drive companies to reassess their exposures and their risk mitigation strategies. In today’s environment of rapid change, insurance solutions that worked five years ago may not work today.
The first step is education — something insurance carriers are well-positioned to provide as they see how these trends interact in their own claims experience. “We have an obligation to make our clients aware of what we’re seeing in the current environment, especially as exposures and losses evolve,” Manwaring said.
On the table for review should be a company’s safety policies, including those on distracted driving and use of personal vehicles. Regularly check to verify that staff are complying, follow through on consequences for those who do not, and updates policies as needed so that employees— and even potential jurors— take them seriously.
In addition, work with your legal department to evaluate contracts with third parties to ensure they adhere to specified service standards and hiring and safety practices.
At the same time, increasing frequency and severity likely mean that risk transfer solutions will become more expensive. Companies should revisit and consider raising their limits on core as well as umbrella and excess liability coverages. Carriers can help companies understand what’s needed to improve both their risk mitigation and risk transfer programs.
“We can help on the risk control side, we can help on the claims management side, and then certainly our underwriters are discussing this changing landscape with brokers so we can develop programs that best fit the needs of our customers,” Manwaring said.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty Mutual Insurance. The editorial staff of Risk & Insurance had no role in its preparation.
Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.
Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.
That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.
“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.
Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.
That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.
“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks
Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.
For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.
Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.
Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.
“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.
MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.
“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.
Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.
Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.
“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.
Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.
At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.
Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.
UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.
Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &