Risk Insider: Terri Rhodes

Treat the Individual, Not the Stigma

By: | April 20, 2015 • 2 min read
Terri L. Rhodes is Executive Director of the Disability Management Employer Coalition (DMEC). Prior to returning to DMEC, Terri was an Absence and Disability Management Consultant for Mercer delivering strategic absence and disability management solutions to clients of all sizes, Director of Absence and Disability for Health Net and Corporate IDM Program Manager for Abbott Laboratories.

The recent tragedy of the crashed Germanwings flight and the deaths of 150 people raise a number of workplace concerns about employees with mental illness, including depression.

Depression is a common disease. According to a study by the Centers for Disease Control, the rate of “current depression” in the U.S. general population averages about 9 percent, with state rates ranging from 4.8 percent in North Dakota to 14.8 percent in Mississippi.

Any disease of this scale and scope poses risks; risks to individuals, risks to families and risks to employers.

If we learn anything from the Germanwings tragedy, it’s that mental illness, like all illness, is normal. It can be situational, acute or chronic.

So what can employers do to reduce those risks?

First, we must think and act as though mental illness is just that, an illness, a disease. And by the way, that’s what the law says. But stigma attached to mental illness has not gone away.

As a matter of fact, according to a 2014 survey conducted by the Disability Management Employer Coalition, stigma around mental health is not decreasing among employers.

Only when society, and not just employers, treat mental illness like “any other disease” will screening and treatment become effective. Many employees give false information about their mental state to avoid the potential negative workplace repercussions of mental illness.

Screening tools are most effective when employees truly believe revealing mental health issues is an avenue that will help them access treatment options so they can better perform their jobs.

Employers in particular need to become educated about recognizing signs and symptoms of depression and anxiety. This alone sends a powerful message that mental illness, like all illness, respects no title or position.

Next, employers should make better use of Employee Assistance Programs (EAPs). In the DMEC 2014 Behavioral Risk Survey, fully 97 percent of employers surveyed had an EAP program. But as prevalent as EAPs are, they are woefully underutilized.

Employers must do a better job of communicating the services they provide and continue to emphasize that they can be used confidentially with no impact on an employee’s work status — just like any other health care service.

When employers effectively communicate about EAPs, the results are impressive. How a company uses an EAP reflects the diversity of its organization, employees, market and other HR resources.

Although detailed EAP performance statistics are limited, studies suggest that employer-sponsored EAPs can reduce company disability, medical, pharmacy and workers’ compensation costs.

If we learn anything from the Germanwings tragedy, it’s that mental illness, like all illness, is normal. It can be situational, acute or chronic.

We need to offer unfettered treatment for mental illness that doesn’t imply or make the individual feel something is “wrong with them.” And we need to have more education and training in the workplace and in our schools to identify the high-risk individual that has the potential to wreak havoc on the workplace or public.

It is sad that we find out after an event that an individual had significant mental issues and we didn’t see the signs or symptoms. When we all embrace that fact, we can effectively identify this illness, treat it, and reduce the risks it imposes on all of us.

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Risk Insider: Chris Thorn

The Threat From Within

By: | April 8, 2015 • 2 min read
Chris Thorn is a recently retired Southwest Airlines Senior Risk Manager and is currently a risk consultant. He is a CPA with 15 years of aviation risk experience including navigating through war risk insurance during the 9/11 crisis. He can be reached at chris.thorn@sbcglobal.net.

When you are a risk manager for an airline, hearing the news about a plane crash gets your attention immediately.  The first thing that goes through your mind is, “was it one of ours?”

When you discover it isn’t, you feel an overwhelming sense of relief as you can dismiss the next hundred thoughts that would immediately follow an affirmative response.  Next, you feel a little guilty as you realize one of your counterparts at another airline is not so lucky.

During the first few hours that follow an accident, speculation as to the cause consumes the media.  Was it mechanical?  Was it human error?  Was it terrorism?

This is important to discover so improvements can be made to prevent the next accident.  Thanks to the hard work of the NTSB, aircraft manufacturers, and airlines, many mechanical weaknesses have been addressed and improvements to pilot training have been made.

But what can be done about terrorism?

The FAA requires two people to be in the cockpit at all times.  Therefore, when a pilot goes to the lavatory, a flight attendant must enter the cockpit and lock the door.

In response to terrorists accessing the cockpits of four aircraft on 9/11, airlines reinforced and locked the cockpit doors of their aircraft to diminish the threat of unauthorized access.

Some airlines also decided to allow their pilots to carry firearms in the cockpit for an additional layer of protection.  This has worked very well to reduce outside threats.

However, sometimes our efforts to eliminate risk create new risks.  Creating a fortress of the cockpit has now created a weakness if the threat is already inside the cockpit.

What if a pilot is the threat?  This has been the leading theory for the missing Air Malaysia flight of last year and the recent Germanwings crash.

Some have suggested automating the flight controls by overriding the pilots if an unsafe condition is detected.  While this might solve a few instances of pilot error or maliciousness, it creates new risks such as tampering or sabotage.

Commercial aircraft have used the art of redundancy successfully for risk mitigation for a century.  There are two of every vital instrument, two pilots, two or more engines, etc.  This allows for a safe operation when something goes wrong with the first.  The second person or piece of equipment can take over.

The FAA requires two people to be in the cockpit at all times.  Therefore, when a pilot goes to the lavatory, a flight attendant must enter the cockpit and lock the door.

This is not required for some international carriers.  I expect to see many countries adopt the rule this year to prevent a recurrence of the Germanwings type incident.

After an accident, there is tremendous pressure to rectify the weakness in the process.  Just make sure the solution you put into place is effective and not creating even more risk than before.

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Sponsored: Berkshire Hathaway Specialty Insurance

Healthcare: The Hardest Job in Risk Management

Do you have the support needed to successfully navigate healthcare challenges?
By: | April 1, 2015 • 4 min read

BrandedContent_BHSIThe Affordable Care Act.

Large-scale consolidation.

Radically changing cost and reimbursement models.

Rapidly evolving service delivery approaches.

It is difficult to imagine an industry more complex and uncertain than healthcare. Providers are being forced to lower costs and improve efficiencies on a scale that is almost beyond imagination. At the same time, quality of care must remain high.

After all, this is more than just a business.

The pressure on risk managers, brokers and CFOs is intense. If navigating these challenges wasn’t stress inducing enough, these professionals also need to ensure continued profitability.

Leo Carroll, Senior Vice President, Healthcare Professional Liability, Berkshire Hathaway Specialty Insurance

Leo Carroll, Senior Vice President, Healthcare Professional Liability, Berkshire Hathaway Specialty Insurance

“Healthcare companies don’t hide the fact that they’re looking to reduce costs and improve efficiencies in practically every facet of their business. Insurance purchasing and financing are high on that list,” said Leo Carroll, who heads the healthcare professional liability underwriting unit for Berkshire Hathaway Specialty Insurance.

But it’s about a lot more than just price. The complexity of the healthcare system and unique footprint of each provider requires customized solutions that can reduce risk, minimize losses and improve efficiencies.

“Each provider is faced with a different set of challenges. Therefore, our approach is to carefully listen to the needs of each client and respond with a creative proposal that often requires great flexibility on the part of our team,” explained Carroll.

Creativity? Flexibility? Those are not terms often used to describe an insurance carrier. But BHSI Healthcare is a new type of insurer.

The Foundation: Financial Strength

BrandedContent_BHSIBerkshire Hathaway is synonymous with financial strength. Leveraging the company’s well-capitalized balance sheet provides BHSI with unmatched capabilities to take on substantial risks in a sustainable way.

For one, BHSI is the highest rated paper available to healthcare providers. Given the severity of risks faced by the industry, this is a very important attribute.

But BHSI operationalizes its balance sheet in many ways beyond just strong financial ratings.

For example, BHSI has never relied on reinsurance. Without the need to manage those relationships, BHSI is able to eliminate a significant amount of overhead. The result is an industry leading expense ratio and the ability to pass on savings to clients.

“The impact of operationalizing our balance sheet is remarkable. We don’t impose our business needs on our clients. Our financial strength provides us the freedom to genuinely listen to our clients and propose unique, creative solutions,” Carroll said.

Keeping Things Simple

BrandedContent_BHSIHealthcare professional liability policy language is often bloated and difficult to decipher. Insurers are attempting to tackle complex, evolving issues and account for a broad range of scenarios and contingencies. The result often confuses and contradicts.

Carroll said BHSI strives to be as simple and straightforward as possible with policy language across all lines of business. It comes down to making it easy and transparent to do business with BHSI.

“Our goal is to be as straightforward as we can and at the same time provide coverage that’s meaningful and addresses the exposures our customers need addressed,” Carroll said.

Claims: More Than an After Thought

Complex litigation is an unfortunate fact of life for large healthcare customers. Carroll, who began his insurance career in medical claims management, understands how important complex claims management is to the BHSI value proposition.

In fact, “claims management is so critical to customers, that BHSI Claims contributes to all aspects of its operations – from product development through risk analysis, servicing and claims resolution,” said Robert Romeo, head of Healthcare and Casualty Claims.

And as part of the focus on building long-term relationships, BHSI has made it a priority to introduce customers to the claims team as early as possible and before a claim is made on a policy.

“Being so closely aligned automatically delivers efficiency and simplicity in the way we work,” explained Carroll. “We have a common understanding of our forms, endorsements and coverage, so there is less opportunity for disagreement or misunderstanding between what our underwriters wrote and how our claims professionals interpret it.”

Responding To Ebola: Creativity + Flexibility

BrandedContent_BHSIThe recent Ebola outbreak provided a prime example of BHSI Healthcare’s customer-centric approach in action.

Almost immediately, many healthcare systems recognized the need to improve their infectious disease management protocols. The urgency intensified after several nurses who treated Ebola patients were themselves infected.

BHSI Healthcare was uniquely positioned to rapidly respond. Carroll and his team approached several of their clients who were widely recognized as the leading infectious disease management institutions. With the help of these institutions, BHSI was able to compile tools, checklists, libraries and other materials.

These best practices were immediately made available to all BHSI Healthcare clients who leveraged the information to improve their operations.

At the same time, healthcare providers were at risk of multiple exposures associated with the evolving Ebola situation. Carroll and his Healthcare team worked with clients from a professional liability and general liability perspective. Concurrently, other BHSI groups worked with the same clients on offerings for business interruption, disinfection and cleaning costs.

David Fields, Executive Vice President, Underwriting, Actuarial, Finance and Reinsurance

David Fields, Executive Vice President, Underwriting, Actuarial, Finance and Reinsurance, Berkshire Hathaway Specialty Insurance

Ever vigilant, the BHSI chief underwriting officer, David Fields, created a point of central command to monitor the situation, field client requests and execute the company’s response. The results were highly customized packages designed specifically for several clients. On some programs, net limits exceeded $100 million and covered many exposures underwritten by multiple BHSI groups.

“At the height of the outbreak, there was a lot of fear and panic in the healthcare industry. Our team responded not by pulling back but by leaning in. We demonstrated that we are risk seekers and as an organization we can deploy our substantial resources in times of crisis. The results were creative solutions and very substantial coverage options for our clients,” said Carroll.

It turns out that creativity and flexibly requires both significant financial resources and passionate professionals. That is why no other insurer can match Berkshire Hathaway Specialty Insurance.

To learn more about BHSI Healthcare, please visit www.bhspecialty.com.

Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, and homeowners insurance. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has regional underwriting offices in Atlanta, Boston, Chicago, Los Angeles, New York, San Francisco, Toronto, Hong Kong, Singapore and New Zealand. For more information, contact info@bhspecialty.com.

The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Berkshire Hathaway Specialty Insurance. The editorial staff of Risk & Insurance had no role in its preparation.




Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, and homeowners insurance.
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