The Existential Threat of Talent Risk in Workers’ Comp and Why It Can’t Be Ignored

By: and | September 27, 2020

Barry D. Bloom, Managing Principal of The bdb Group, has extensive executive business experience with private and public entities & quasi-governmental groups, spanning the healthcare, education, retail, manufacturing, staffing, trucking, banking, telecommunications, hospitality and high-tech industries in the fields of workers’ compensation, absence management and disability, group health benefits, liability and risk management information technology. He is currently one of the Editors-In-Chief of The California Workers Compensation Handbook “The Herlick” (31st thru 39th Editions) 2012-2020.

I have been involved in workers’ compensation since 1978. Actually, more than just workers’ comp, as I’ve also been engaged in the liability, group health and non-occupational disability industries as well as being the national practice leader with Aon for nine years.


I also had the honor of helping develop and implement Rising Medical Solutions’ Benchmarking Study that surveyed our industry about both the present conditions and the future outlook. So not only am I a Baby Boomer who has seen a lot of history, but I am also entering my sixth decade of observing the evolution of the insurance industry.

From that experience I have come to this conclusion: We are confronting an existential threat to the long-term viability of our industry due to the huge and complex passing of the torch to subsequent generations.

Whether you call it the “Silver Tsunami” or a brain drain or simply retirement, the transition underway will make or break the next one hundred years (or less) of workers’ compensation. Simply put, the only way to be successful in this turmoil is to Create A Plan.

As with every big decision in our lives, personal or professional, there is always a do-nothing alternative. Typically, that alternative applies to only 5% of decisions because a vast majority of the time we choose to do something. But do-nothing is, in fact, a choice in 100% of our decisions.

This is not the first transitional period for our industry, but something about this particular transition is different. The current economy and workforce has significantly more options from which to choose. Claims, risk management and work comp competes with other industries perceived to be “cooler” than professionals focused on saving, holding and protecting money.

Statutes and regulations are not sexy … until they bring clarity on how to address COVID-19 presumptions (for one highly relevant current example). We have not effectively communicated to the job market that insurance delivers a safety net for society with a service that provides great value that can have a profound positive or negative effect on an individual’s life. Talk about purpose!

As with every big decision in our lives, personal or professional, there is always a do-nothing alternative. Typically, that alternative applies to only five percent of decisions because a vast majority of the time we choose to do something. But do-nothing is, in fact, a choice in 100 percent of our decisions.

One issue making this transition even more difficult is the antagonism between the different “sides” that can poison the process of not just managing claims but can also impact recruitment and retention of talent.


I worked with a large employer with a very adversarial relationship with their union that used workers’ compensation risk management techniques as a threat to deal with a collectively bargained workforce. The litigation rate and total cost of risk (TCOR) are part of their labor relations. They have high defense costs, litigation rates and a higher than normal TCOR in a highly dissatisfactory environment for all stakeholders.

In contrast, I worked with another employer that had a very altruistic and paternalistic relationship with their workforce, going out of their way to show how much they care for them. Their defense costs, litigation rates, expenses and TCOR are low due to their non-adversarial approach.

If you are part of the younger generation looking for a career or even just a job, which employer would you want to work for/with? Antagonism does not fit in with new generations and how they interact. A do-nothing approach here would be to ignore the toxic culture.

Another challenge is our technological and operational evolution. The upcoming generation that does their banking, buys houses and cars, and conducts their health care on a smartphone expects that kind of technology at their job. In fact, the use of automation and self-service tools and artificial intelligence could be “table stakes” for career interest.

While we have made limited progress — in many ways accelerated by COVID-19 — I do not think our industry’s current technology sufficiently lives up to that standard. It takes many years, millions of dollars and the automation of billions of decision and data points to divest those actions to machines. Balancing that with the continued need of human touch is complex. Creating administrative efficiency and learning how to do more with less while providing the best service for the best price is an expectation of every business.

The good news is that how we do things now is dramatically different and better than what I encountered back in the day. However, we still have far to go and leaders, staff and processes that are in denial are a problem. A do-nothing approach here would be to overlook the critical need to fundamentally transform how we do business.

The expectations of upcoming generations does not always align with how we do business. As we embark upon this transition, our ability to evolve is now more than just altruism — it is a practical matter. It is an existential threat. Doing nothing in the face of that kind of threat leads to obsolescence. I care about this topic so deeply that I am joining a panel to address this threat.


In our panel, you will hear from other industry experts – that happen to be part of the rising generation – about the need for a dramatic-not-incremental philosophical change. You will hear from us that doing nothing is no longer an option.

We are recommending to everyone, from Fortune 500 to mom-and-pop businesses, to Create A Plan for how your organization will address these issues (and many more) to survive this threat and be given the opportunity to provide services for generations to come.

Right now, we are not ready. The hope is our discussion will lead you to not do nothing, but to act decisively on what you need to do differently. &

Would you like to hear more about how to Create A Plan? The panel discussion “Passing the Torch Without a Stumble: The Coming Decade of Transition from Old to Young” at the National Workers’ Compensation and Disability Conference, including live Q&A, will be held on October 21st from 3:30-4:30PM EST. The panel, comprised of Baby Boomers and Millennials alike, will speak to the challenges we face with generational transitions and how we can create a successful roadmap for recruitment, mentorship, advancement, and retention of talent along with retention of clients.

This session will be led by Mark Pew – Senior VP, Product Development & Marketing, Preferred Medical. Panelists include:

  • Barry Bloom – Managing Principal at The bdb Group
  • Marques Torbert – CEO of Ametros
  • Claire Muselman – Director of Workers’ Compensation, Continental Western Group
  • Drew Cortese – Senior Manager, United Airlines

You can register for the session here.

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.


Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.


As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.


Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &


Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]