Nancy Grover

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

2016 NWCDC Keynote Preview

Disney’s Tim East Tapped for NWCDC Keynote

The 2016 opening keynote speaker for NWCDC is passionate about harnessing technology to keep injured workers engaged with their recovery.
By: | May 19, 2016 • 5 min read
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When your brand is synonymous with happiness, there’s a lot riding on making everything look effortless — no easy feat when you’re managing risk. Tim East knows that better than most — he’s been doing it for decades.

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Burbank, Calif.-based East, one of the risk management directors for The Walt Disney Company, is positioning his company to keep pace with a world that’s moving faster than a ride on Space Mountain.

That is why the advisory board of the 25th annual National Workers’ Compensation and Disability Conference® & Expo selected East to deliver the opening keynote presentation at this year’s event, scheduled for Nov. 30-Dec. 2 at the Ernest N. Morial Convention Center in New Orleans.

From the Ground Up

East currently oversees risk financing, construction insurance programs, risk management government affairs, and risk management for the company’s international theme parks.

Tim East, director of risk management, The Walt Disney Company

Tim East, director of risk management, The Walt Disney Company

But he got his start in 1974, in the administrative services area.

“I was in the janitorial department at Disneyland. That’s where I started,” he said. By 1982, he was Supervisor of Safety, involved with “training and preparing the policies and procedures and training the executives of the park’s operations.” He was also involved with training and supporting the opening of Tokyo Disneyland.

From there, East served in a variety of risk management positions at The Disneyland Resort in Anaheim. From his role in safety, he went on to head the workers’ compensation claims department and implemented the first Limited Work Program at Disneyland. He assumed his current role in January 1996.

Outside his company role, East is the chair of the California Self-Insurers Security Fund, a past chair of the California Coalition on Workers’ Compensation, and a trustee of the California Self Insurers Trust Fund. He regularly meets with lawmakers, policy advisors, trade organizations, and the California governor’s office on insurance and workers’ comp issues.

East’s resume boasts an impressive list of degrees and certifications. He was named the Insurance Institute of America’s Distinguished Graduate in 1995. That same year, he also received the Christy Award from the Risk and Insurance Management Society for having the highest composite score of 1,400 associate risk management candidates.

Change With the Times

If, like East, you were in the industry in the ’80s, you may recall it was common to see mail clerks walking through claims offices pushing carts loaded with files for claims examiners. When a claim went before an appeals board, it was typical to see attorneys and others on both sides carrying 10-inch files.

The move to a paperless system was a sea change in that era. East believes the time has come for another profound shift in the way the workers’ comp system conducts business.

In his keynote address, East will explore strategies for leveraging rapidly changing technology to engage injured workers and facilitate recovery.

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“We have to make another transformation in our use of technology, and we’ve got to link technology and social media change so we bring the two together in a way that makes us more effective in our roles,” East said.

Communicating with injured workers is a key piece of managing claims, and East says that’s one area where the power of technology can effectively be harnessed.

“Twenty or 30 years ago we would send a ‘hello’ letter [to the injured worker]; a two- to three-page letter with everything they needed to know. It was very personal,” he said. “Nobody reads a two-page letter. That is so counterproductive today. It’s like horse and buggies at an Indy 500.”

Instead, East said, many people, especially younger workers, use electronic forms of communication. The industry needs to take notice.

“The injured worker of today, the next generation, wants shorter communication from employers. Brief bits of information that help them, and that they find useful and relevant,” East said. “Young people want to know, ‘How is this going to help me?’ We’ve got to find a way to communicate.”

The same applies to physicians’ offices and supervisors. Snail mail, he says, “is not necessarily the way they want to be communicated with. We have to change that.”

As businesses are increasingly driven by attaining better outcomes, East says many are starting to come around to the idea of providing shorter, more frequent, succinct information to their employees and others involved in the workers’ comp system.

“Young people want to know, ‘How is this going to help me?’ We’ve got to find a way to communicate.” — Tim East, director of risk management, The Walt Disney Company

“It is finding new platforms, new ways of communicating,” he says, “be it text, Twitter, and social networks to actually parse information down to small little packets to injured workers who don’t want a letter, form, or phone call. Letters, forms, and phone calls were the biggest tools in the toolbox once. They are bygones.”

The same changes need to occur throughout the industry’s efforts to attract and retain talent, East said. Outdated modes of communication are hampering recruitment efforts.

“Young people are looking for relevancy in their roles,” he said. “I don’t think there is anything more relevant than helping people maintain their jobs and health. We have the relevancy, but we are not communicating it. I don’t think we help people feel the relevancy and see how important their roles are.”

East also says it’s time for a move away from what he calls the focus on big massive claims administrative systems.

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“It’s a necessary infrastructure, but it needs to change in two directions — toward the injured worker and the employer,” he says. “The first is leveraging these massive claims administration systems and data systems to provide better analytics, better information that [employers] can make decisions more accurately, more timely, and formatted so employers can grasp the message.”

That involves extracting information from the huge amounts of robust data. Additionally, there’s a need to link the systems to better focus on the injured worker and manage the process more effectively.

To hear more of East’s thoughts on the future of employee engagement, join your fellow industry professionals at NWCDC this fall.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Reining in Opioids

Opioid Abusers Cost Employers $8 Billion Annually

A new report suggests that the prescription opioid crisis is getting worse, not better.
By: | May 9, 2016 • 3 min read
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Opioid-abusing employees cost their employers up to $8 billion a year, according to a new study.

Castlight Health, a health benefits platform provider, found that companies paid nearly twice as much in health care expenses for opioid abusers than non-abusers — $19,450 compared to $10,853.

“Based on Castlight’s estimate, opioid abuse could be costing employers as much as $8 billion per year,” according to “The Opioid Crisis in America’s Workforce.”

“Considering that absenteeism and presenteeism tied to opioid misuse and abuse is costing employers an additional estimated $10 billion, this crisis represents a significant drain on America’s employers.”

“Many employees do not recognize the serious risk of addiction before they accept or fill an opioid prescription of any length.” — “The Opioid Crisis in America’s Workforce,” Castlight Health

Castlight examined nearly 1 million health care claims involving opioid prescriptions for the period 2011 to 2015 for workers at large, self-insured companies.

Leveraging Analytics and Education

Employers may save money by leveraging data and analytics to identify opportunities to help employees who abuse opioids.

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“Whether it’s guiding an employee away from unnecessary back surgery (and the resulting opioid prescriptions) or offering programs that provide access to opioid abuse treatment, Castlight believes that data and analytics are part of the solution.

“For example, better insights can help a benefit leader identify where lower back pain or depression, two conditions closely associated with opioid abuse, are most prevalent in their company.”

Targeting educational content to such employees will help inform them of the dangers of opioids.

Individuals with a behavioral health diagnosis of any kind are three times more likely to abuse opioids than those without such a diagnosis.

“Many employees do not recognize the serious risk of addiction before they accept or fill an opioid prescription of any length,” the study said.

Abuse Factors

The report also identified some common themes about workers more likely to abuse opioid prescriptions.

• Individuals with a behavioral health diagnosis of any kind are three times more likely to abuse opioids than those without such a diagnosis, and nearly 9 percent of people with a single behavioral health diagnosis such as anxiety or depression were found to abuse opioids, compared to 3 percent of individuals without a behavioral health diagnosis.

“This finding is striking given the prevalence of behavioral health issues in the workforce,” the report said. “Twenty-five percent of employees have a diagnosable behavioral health condition; yet 70 percent of impacted employees go untreated.”

• Opioid abusers also have twice as many pain-related conditions as non-abusers, especially joint, neck and abdominal pain.

• Baby boomers are four times more likely to abuse opioids than millennials. More than 7 percent of workers age 50 and older were classified as opioid abusers, compared to 2 percent of those aged 20 to 34.

• States with medical marijuana laws are nearly twice as likely to have a lower opioid abuse rate than those that don’t, by a margin of 5.4 percent to 2.8 percent.

• Opioid abusers are more likely to live in the rural South and live in low-income areas.

• Opioid abuse rates range from 11.6 percent of individuals in Wilmington, N.C., to 7.5 percent of individuals in Fort Smith, Ark..

• Alabama, Florida, North Carolina, Oklahoma, North Carolina, Tennessee and Texas have multiple cities that are in the top 25 for opioid abuse rate. The three non-southern cities in the top 25 are: Terre Haute, Ind.; Elmira, N.Y.; and Jackson, Mich.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Medical Cost Trends

Higher Fee Schedules Lead to Case Shifting

Where higher reimbursement rates exist for workers’ comp, physicians may be more inclined to categorize an injury as occupational.
By: | May 6, 2016 • 3 min read
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Workers’ comp payers in some states may be footing the bill for injuries that are not necessarily work-related, suggests a new study. It found that in states where fee schedules translate to higher reimbursement rates for workers’ comp than group health, physicians may be more inclined to categorize an injury as occupational.

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The study by the Workers Compensation Research Institute looked at workers’ comp and group health medical data from a large commercial database based on a large national sample of patients. It found that the practice of “case shifting” was more prominent for injuries where causation is questionable.

“The decision of where to send the bill for treatment should align with the physician’s assessment of whether the cause was work related or not,” the study says. “The amount of uncertainty about the cause of the medical condition provides the opportunity for financial incentives to influence the decision. And in most states, workers’ compensation systems rely heavily on the treating physician to determine whether a specific patient’s injury is work-related or not.”

A broken tibia, for example, is typically caused by a specific event and determining whether the incident was work-related is fairly straightforward. “By contrast, the cause may be less certain for a patient presenting with a soft tissue condition (e.g., non-specific back pain or strain/sprain of knee or shoulder,)” according to the research. “For example, the medical literature shows that there is little consensus about identifying the precise cause of back pain in a specific individual.”

“The amount of uncertainty about the cause of the medical condition provides the opportunity for financial incentives to influence the decision.” — Workers’ Compensation Research Institute

Currently, 43 states have fee schedules for their workers’ comp systems. Many of the larger states — California, Florida, New York, Massachusetts, and North Carolina — base their fee schedule rates to be within 15 percent of Medicare rates as of July 2011. Other states, including Alaska, Illinois, Idaho, Delaware, and Oregon, set their rates at levels more than double Medicare’s rates.

“The finding of most interest is that case shifting was more common in states with higher workers’ compensation payments,” the study explained. “In particular, 20 percent growth in workers’ compensation payments for physician services during an office visit resulted in a 6 percent increase in the likelihood of a soft tissue injury being deemed work-related.”

The case shifting can add up to significant dollars in some states. As an example, the authors looked at the added costs to various states if just 1 percent of group health cases with soft tissue conditions were shifted to the workers’ comp system. Such a scenario in Pennsylvania could increase costs by nearly $35 million; in California the increase would be more than $80 million.  Even in a smaller state such as Iowa, the increase would be about $9 million.

Case shifting from group health to workers’ comp can affect payers in four ways, the authors said:

  • Workers’ comp typically pays higher prices for medical care.
  • The income benefit payments in workers’ comp generally exceed nonoccupational disability insurance payments.
  • Many more workers are covered by workers’ comp than disability insurance.
  • Higher income benefits lead some workers to stay out from work longer.
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“This research shows that in addition to the more direct effect of high fee schedules (or no fee schedules) on workers’ compensation costs via higher payments for medical treatments, higher fee schedules contribute to higher workers’ compensation costs by increasing the number of injuries paid by workers’ compensation through the case shifting mechanism,” the report said.

“As we show in this research, this type of case shifting is greater in states with higher reimbursement rates for medical services as well as in states with fast growing payments.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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