Column: Workers' Comp

Risk Complexity Breeds Stress

By: | May 24, 2016 • 2 min read

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

Risk managers are straining under a workload beset by increasingly complex exposures and limited resources to ensure they are adequately addressing them.

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“There is this absolute grind of increasing complexity,” the treasurer overseeing risk management at a nationwide retailer agreed when I mentioned the growing stress placed on risk managers.

He can no longer afford the time to take calls from service providers vying for his business, he added. In years past, added the retailer’s risk management director, meeting with new providers gave him the opportunity to learn about risk-management trends and service options.

It’s easy to understand why risk managers have had to make such adjustments.

Current corporate profitability levels are placing risk management department expenses under pressure.

The complexity of traditional risks, like workers’ compensation, has grown substantially, demanding more time to manage. No longer does mitigating that risk just require reducing accident frequency and establishing a relatively straightforward return-to-work program for injuries that do occur.

There are now more regulatory considerations, like how the RTW efforts mesh with Americans with Disabilities Act mandates, for example.

Additionally, workers’ health conditions coupled with the rising cost of emerging drugs and medical treatments require more specialized expertise and services to manage their appropriate use. The rise of predictive analytics, case management and drug-utilization monitoring come to mind.

So while the workers’ comp manager and risk manager have more service providers touching their workers’ comp claims, they have less time to converse with competing service vendors to help ensure they are tapping the best options.

Then there are the new, emerging risks.

Corporate boards have taken a direct interest in their companies’ preparations for cyber exposures. So the risk manager must respond, taking his attention away from those growing workers’ comp challenges to devote additional resources to evaluate cyber risk preparations.

Yet according to Aon’s “Global Risk Management Survey 2015,” risk management department staffing levels have held constant since 2009. That is the year the “Great Recession” ended.

Current corporate profitability levels are placing risk management department expenses under pressure. So it’s growing common for companies to cut risk management program expenses — that might produce short-term savings, but result in additional long-term costs, several sources told me.

Risk managers who know better can’t feel good about making such decisions.

“I am seeing stress,” said Mark Noonan, managing principal, casualty at broker Integro USA Inc.

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“You have to cut here to cover there. It’s the stress of, ‘Did I do enough with what I have? Am I making the best financial decisions that result in the coverage I need to let my company continue to grow and prosper?’ And that is very stressful.”

It would be less stressful if risk managers and workers’ comp managers were the kind of people who didn’t make their work responsibilities a high priority.

But the risk managers I have met over the years are smart, hard-working individuals interested in being the best at what they do. They care about their responsibilities and want to contribute to their organizations’ success.

But facing more regulations,more risks and an “absolute grind of increasing complexity,” they could use more support. &

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.

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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.

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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]