Ebola in the Workplace

Ebola’s Impact on the Health Care Industry

Though risk to US health care workers remains low, an Ebola outbreak could pose a workers’ comp risk to the industry.
By: | October 17, 2014 • 6 min read

Now that a second nurse at Texas Presbyterian Hospital in Dallas has been infected with the Ebola virus, the risk to U.S. health care workers has been thrown into the limelight.

“Health care workers are at more risk than any other worker,” said Ron Leopold, M.D., health outcomes practice leader for Willis North America. “But I think there is an overwhelming tendency for all of us and the national media to overblow the risk.”

The virus is highly contagious, but only through direct contact with an infected person. “That’s a very small number of health care workers in this country,” he said. “Being alerted to what’s going on but not alarmed is critical.”

“Being alerted to what’s going on but not alarmed is critical.” — Dr. Ron Leopold, health outcomes practice leader, Willis North America

However, as more doctors, nurses and other clinical staff are exposed to the virus, the potential spread of Ebola on U.S. soil could pose a considerable workers’ comp risk for the health care industry.

“What if doctors treating patients in the U.S. are exposed? For every doctor, you have multiple staff working beneath them. That could have a quick and dramatic effect on personnel at the hospital and the financial consequence would be large,” said Pete Reilly, health care practice leader at retail broker William Gallagher Associates.

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In the case of nurses Nina Pham and Amber Joy Vinson, who both cared for Liberian Ebola patient Thomas Duncan at Texas Health Presbyterian Hospital in Dallas and subsequently contracted the disease, illness clearly arose out of the course and scope of employment.

Arguments could be made that breaches in safety protocol led to their exposure, placing fault on the nurses and precluding coverage. But given the CDC’s admission of mishandling its approach to Ebola safety training and not offering enough assistance to the hospital, that rationale may not stand up.

At a hearing of the House Subcommittee on Oversight and Investigations, CDC director Thomas Frieden even said, “While we do not yet know exactly how these transmissions occurred, they demonstrate the need to strengthen the procedures for infection-control protocols which allowed for exposure to the virus.”

Several of the nurses’ co-workers also said that they followed CDC guidelines and wore full hazmat gear while caring for Duncan.

“There are details about every case that would come to bear, but it all depends on the carrier, the policy and other things we can’t address until a scenario is presented,” said Eric Justin, M.D., chief medical officer at Lockton Cos.

Workers’ comp carrier and large health systems, which are typically self-insured, simply don’t have enough information to determine coverage at this point.

It’s tough to understand what all the risks are at this point.”– Dr. Eric Justin, chief medical officer, Lockton Cos.

“It’s a small numbers problem. It’s tough to understand what all the risks are at this point,” Justin said.

Even if few health care workers become infected, the impact on workers’ comp could be significant for any individual hospital because of the high costs associated with caring for a patient in isolation.

“You may not have to close or quarantine your emergency room, but certainly you’ve had to quadruple your order for some type of vaccine or other medications,” Reilly said. Additional expenses may be incurred for hazmat suits, the proper disposal of those suits, additional steps needed for disinfection of hospital rooms and equipment, and even public relations messaging that may be necessary to reassure the public that a facility is safe.

“Normal business services may be 50 percent more expense in this type of situation because you have to go through additional steps to comply with CDC protocol,” Reilly said.

It’s up to hospital risk managers to plan for the admission of Ebola patient, however unlikely, to ensure staff is up to date on safety protocols.

CDC Guidelines

The transmission of the disease on U.S. soil has sparked renewed vigor from the CDC, including clearer and more rigorous guidelines for the proper wear and removal of protective gear, and a plan to send larger, more experienced teams of experts to any hospital caring for an Ebola patient.

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Initially, the CDC indicated that any hospital in the U.S. should have the essentials to treat Ebola on their own. The experiences of Emory Hospital in Atlanta and then Texas Presbyterian prove that assumption to be naïve and unsafe.

“In a very short time, mostly due to the situation in Dallas, we’re learning [about the virus] rather rapidly, and one sign of that learning is that the CDC announced that they will start to be much more assertive about providing not just teams to go wherever an Ebola case is confirmed, but larger teams that are experienced not just with working with Ebola but also training others to work with the isolation gear and decontamination procedures,” Justin said.

Most doctors and nurses are aware of the guidelines issued by the CDC and OSHA regarding protective gear, but many have likely not practiced them since early days of job training.

“Even people with experience are finding, ‘This isn’t so easy,’” Justin said. “They’re becoming aware of the need to actually practice them.”

Current CDC protocol also calls for any worker to be observed while removing protective gowns, masks and gloves to ensure that everything is done correctly.

Justin called this “buddy system approach” a necessary methodological step, which allows observers to both step in in a critical moment to correct a problem, and also record information to suggest process changes in the future.

The CDC has also backtracked on earlier assertions that any hospital can handle an isolation patient.

Future cases will most likely end up in one of the four larger, specialized centers that house their own biocontainment units, including Nebraska Medical Center in Omaha, the National Institutes of Health in Bethseda, Md., and St. Patrick Hospital in Missoula, Mont., along with Emory Hospital.

Third-Party Relationships

Health care risk managers should make sure to keep third party service providers informed about Ebola response plans and safety procedures.

The experience at Emory, the first U.S hospital to receive an Ebola patient, revealed shortcomings in the U.S.’s plan to manage the virus.

Several third-party vendors working with the hospital balked at the idea of dealing with any potentially infected materials.

Their waste removal company, for example, refused to haul away the high volume of waste generated by someone afflicted by the disease. A transport company would not take blood samples a few blocks away to be tested.

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“People on the waste management side are a step or two removed from the clinical setting, so I can see why they’d be concerned,” Justin said. “The best thing to do to allay those anxieties is to have discussions between infection control and those companies, and also let them know of the procedures available.”

Having these third-party vendors on board not only help care for an infectious patient run more smoothly, but also mitigates the risk of a contracted worker making claims of negligence against a hospital.

“As part of your disaster recovery plan, you should be checking with those vendors and making sure they are going to respond,” said Deana Allen, SVP at Willis North America’s national health care practice. “These are the critical services we’ll need.”

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

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.

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Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.


R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.

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We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?

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Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.

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Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.

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More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]