Column: Risk Management

A Slanted Field

By: | August 29, 2017 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

I recently underwent a surgical procedure. At my pre-op appointment, I met with my surgeon and other supporting medical staff. Upon entering the room, the surgeon asked me: “How are you, Jennifer?” I worryingly answered: “Um. My name is Joanna.”


The doctor hastily looked through his records, realized he had the wrong chart, the wrong sample labels, and likely was preparing for the wrong procedure. We all joked at the error, but I won’t lie, before they put me under, good risk management forced me to ask the anesthesiologist if he knew my name. “All will be ok, Joanna.” And it was.

It is a somewhat funny story, only funny as nothing went wrong. But for some people, this is not the case. Medical malpractice and errors happen. These errors can be devastating.

A 2011 study in the New England Journal of Medicine reported that 75 percent of physicians in “low-risk” specialties and virtually 100 percent of physicians in “high-risk” specialties could expect to face a malpractice claim during their careers, with 73 percent of those settled malpractice claims involving medical error.

These torts are real, people do suffer. A $250,000 damage limit feels wrong. It feels too low.

Every professional, myself included, obtains professional liability insurance to assist with costs of potential lawsuits that stem from our errors or misconduct. This is no different for doctors.

But for some reason, doctors appear to be receiving preferential consideration. The House recently passed medical tort reform legislation, Protecting Access to Care Act (H.R. 1215), intended to lower the cost of health insurance by 25 to 30 percent, according to the CBO, by lessening the burden of medical lawsuits. The bill caps non-economic damages such as punitive damages at $250,000 for medical malpractice.

This reform made me pause. How can we allow such discrimination between victims of medical malpractice and victims of other torts? Why handcuff our judicial system and limit a jury as to what they can award victims for non-economic damages – pain, suffering, diminished enjoyment of life?

These torts are real, people do suffer. A $250,000 damage limit feels wrong. It feels too low.

I think of the infamous McDonald’s hot coffee burn claim. In 1994 Stella Liebeck received $160,000 to cover medical expenses after suffering third degree burns for coffee split on her lap.

In addition, the jury felt it important to affect behaviors at McDonald’s when they learned that such burns where not unique to Liebeck. Allegedly 700 persons reported burns from their coffee over a decade only to be ignored.

The jury felt this safety hazard needed addressing. It awarded punitive damages equivalent to two days’ worth of coffee revenues at McDonald’s, which amounted to $2.7 million. The trial judge reduced the final verdict to $640,000. Nonetheless, McDonald’s heard the message and has since lowered the temperature of its coffee.


Let’s not get duped into thinking that tort reform is needed to curtail greedy claimants and frivolous lawsuits. Punishment is intended to change bad behavior. Punishment has to be painful to truly deter repeated misconduct.

What would McDonald’s think of a $250,000 punishment? What is that — four hours’ worth of coffee sales?

We have to look at what these tort reforms are actually reforming: Insurance companies’ bottom lines, supported by predictable budgets and litigation outcome certainty.

But these kind of tort reforms also impact victims’ rights and liberties and judges’ ability to dispense justice. The biggest damage here is to democracy itself. What is that worth? &

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

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. &

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