A Driven Visionary
Jeff Driver was an 18-year-old orderly in a hospital emergency room when a child died before his eyes. The child had been misdiagnosed and moved to the wrong floor before his respiratory tract closed up.
The experience launched Driver into health care risk management, where he’s been for a quarter-century, always “chasing the effectiveness” of loss control and patient safety. One could say he’s caught it.
Driver is no stranger to the risk management limelight — he was president of the American Society for Healthcare Risk Management in the past decade — but Risk & Insurance® is placing him back in the light in large part for the creativity of his most recent efforts as chief risk officer at the Stanford University Medical Center.
The highlight is his creation of a new reciprocal risk retention group (RRG) called the Professional Exchange Assurance Co. (PEAC) to help Stanford keep ahead of mandates from the Affordable Care Act.
All health care entities, particularly hospital groups, are feeling the urge to consolidate because of the efficiencies of size and the drive to create Accountable Care Organizations (ACOs). In California, Stanford faces the twist that state law prohibits hospitals from directly employing doctors; they must be employed through “physician foundations.”
Stanford has two such foundations with plans to include 500 community physicians within three years. Driver had to devise a way to bring these doctors into the Stanford risk management and patient safety program, while mitigating liability and brand risk.
The particular RRG structure, now in place for nearly two years, works for a few reasons. Namely, it gives the affiliated physicians “skin in the game” because they technically own the captive and will enjoy profit-sharing if losses are kept low.
It also works because Stanford Medical’s other captive—the 20-year old, segregated cell, Bermuda-based SUMIT—cannot provide insurance to for-profit physician groups because of tax rules. So SUMIT still provides coverage and services to its in-house faculty physicians while PEAC steps in for affiliated doctors.
With both, Driver can ensure risk management consistency across the enterprise and that effectiveness he has pursued his whole career.
“He has created a vehicle to kind of indoctrinate these newly acquired physicians in much more modern risk management practices,” said Gigi Norris, Aon managing director.
“Jeff is very visionary … and he is very mission driven.”
Driver and his risk management team of 25 are spreading Stanford’s best practices beyond the university as well. One benefit of the RRG structure is that Driver created another entity, The Risk Authority, to serve as its necessary attorney-in-fact, as well as a service provider for external health care entities.
It delivers Stanford risk management products and services — like tools for early resolution and loss, claims and litigation management, patient safety consulting and value-driven enterprise risk management — around the world.
Driver’s success comes in part because of his leadership. He is able to build a team, empower its members, and motivate them toward success with his vision.
Success builds trust with senior management, which leads to larger teams, bigger projects and more success.
And he’s succeeded because he’s willing to try anything to succeed.
“If people really focus in on how they can do things better rather than doing the same thing, that would serve our patients and our communities very well,” he said.
Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and/or passion.
Reducing Patient and Workers’ Comp Pain
Unnecessary surgery is bad for almost all parties involved. It results in more pain and more hospital time for the patient, greater susceptibility for pain medication abuse, larger claims for workers’ comp carriers, and a poorer level of overall health care quality.
Dr. Frank Tomecek, a neurosurgeon with the Oklahoma Spine & Brain Institute, saw a way to lessen that basket of troubles.
By using electrodiagnostic functional assessments (EFA) to collect more data on muscle and nerve function, he could determine if a patient complaining of pain from hardware in the neck or back really needed to have it removed.
“The EFA determines if muscles are functioning properly, or if there are other nerves or muscles away from the hardware that may be causing the pain,” Tomecek said.
That’s relevant, he said, because in a workers’ compensation case, a patient could attempt to cheat the system by lobbying for a second surgery to increase the size of the settlement.
By attaching electrodes to a patient’s body and then asking him to perform activities like standing, bending and lifting, Tomecek can see whether the muscles in question are contracting and relaxing as they should, or if the patient is purposely giving no effort in order to exaggerate their pain and strengthen their case for hardware removal.
Other than through EFA, in conjunction with X-rays and other tests, “there’s no true way to diagnose if hardware really needs to be removed,” said MaryRose Reaston, founder of Emerge Diagnostics, who developed the technology — and won a 2012 Risk Innovator™ award for it.
“He took EFA to a new level and developed a procedure to see if it could objectively assess whether removal was necessary and what alternative treatments could help.”
Working on this new application of EFA for just under a year, Tomecek has used it for only about 20 patients, but the results, Reaston said, have been “phenomenal.”
“In the realm of workers’ compensation,” said Sheila Harless, workers’ compensation manager at the Spine & Brain Institute, “I know that Dr. Tomecek has been able to eliminate the need for many hardware removal surgeries.”
“This has protected the patient from the risks of a surgery that may not even help them, and has saved money for the insurance company in the cost of the surgery and in permanent impairment rewards related to additional surgery.”
Hardware removal has posed a particular problem because its criteria are subjective; all it took was a complaint of pain to justify an invasive surgery to extract hardware.
Favorable outcomes were achieved in only 50 percent to 60 percent of patients, according to Reaston.
With the help of EFA, Tomecek has been able to reduce these surgeries and recommend site-specific physical therapies to treat the root cause of pain, which in turn decreases dependency on high-strength painkillers.
“We’re one of the highest states for prescription drug-related deaths,” Tomecek said. “We’re trying to prevent those events.”
Reaston called Tomecek a “big patient advocate.”
Workers’ comp carriers are likely happy to have him on their side as well.
Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and/or passion.
A New Dawn in Civil Construction Underwriting
Pennsylvania school children know the tunnels on the Pennsylvania Turnpike by name — Blue Mountain, Kittatinny, Tuscarora, and Allegheny.
San Francisco owes much of its allure to the Golden Gate Bridge. The Delaware Memorial Bridge commemorates our fallen soldiers.
Our public sector infrastructure is much more than its function as a path for trucks and automobiles. It is part of our national and regional identity.
Yet it’s widely known that much of our infrastructure is inadequate. Given the number of structures designated as substandard, the task ahead is substantial.
The Civil Construction projects that can meet these challenges, however, carry a unique set of risks compared to other forms of construction.
“The bottom line is that there is always risk in a Civil Construction project. If the parties involved don’t understand what risk they carry, then the chances are there are going to be some problems, and the insurers would ideally like to understand the potential for these problems in advance.”
– Paul Hampshire, Vice President – Civil Construction, LIU
The good news is that recent developments in construction standards and risk management techniques provide a solid foundation for the type and risk allocation of Civil Construction projects they are underwriting. Carriers need to be able to adequately assess the client and design and construction teams that are involved.
For Builder’s Risk Programs, a successful approach prioritizes a focus on four key factors. These factors are looked at not only during the underwriting phase of the project but also in the all-important site construction phase, under the umbrella of a Risk Management Program, or RMP.
Four key factors
Four key factors that LIU focuses on in underwriting and providing risk management services on a Civil Construction project include:
1. Resource knowledge and experience: When creating a coverage plan, carriers work to understand who is delivering the project and how well suited key staff members are to addressing the project’s technical and management challenges. Research has shown that the knowledge and experience of those key players, combined with their ability to communicate effectively, is a big factor in the project’s success.
“We look to understand who is delivering a project, their expertise and experience in delivering projects of similar technical complexity in similar working conditions, even down to looking at the resumés of people in key positions,” said Paul Hampshire, Houston-based Vice President with Liberty International Underwriters.
2. Ground conditions and water: Soil and rock composition, the influence of ground and surface water, and foundation stability are key additional considerations in the construction of bridges, tunnels, and transit systems. If a suitable level of relevant ground (geotechnical) investigation and study has not been undertaken, or the results of such work not clearly interpreted, then it’s a red flag to underwriters, who would then question whether the project risk profile has been adequately evaluated and risks clearly and transparently allocated via suitable contract conditions.
“As we all know, ground is very rarely a homogenous element within Civil Construction projects,” LIU’s Hampshire said.
“It tends to vary from any proposed geotechnical baseline specification with the consequential potential for changes in behavior during construction. We need to understand who has assessed the condition of the ground, its behavior and design parameters when compared with a particular method of construction, and all importantly, who has been allocated the ground risk in a project and the upfront mechanisms for contractual ground risk sharing, if applicable,” he said.
Knowing how much water is associated with the in-situ ground conditions as well as the intensity, distribution and adequate accommodation (both in the temporary as well as in the permanent project configurations) of rainfall for a site location and topography are also key. Tunneling projects, for example, can be hampered by the presence of too much or unforeseen quantities of groundwater.
“In major tunneling infrastructure projects, the influence of in-situ groundwater pressures and /or water inflows is a major factor when considering the choice of excavation method and sequence as well as tunnel lining design requirements,” LIU’s Hampshire said.
According to a recent article in Risk & Insurance, tunneling under a body of water is one of the most challenging risk engineering feats. Adequate drainage layouts and their installation sequence for highway projects and, in particular, the protection of sub-grade works are also important. “But under all circumstances, we need to understand how the water conditions have been evaluated,” Hampshire said.
3. Technical Challenges: This risk factor encompasses the assessment of the technical novelty or prototypical nature of the project (or more often, specific elements of it) and how well the previously demonstrated experience of both the design and construction teams aligns with the project’s technical requirements and the form of contract determined for the project. The client can choose the team, but savvy underwriters will conduct their own assessment to see how well-suited the team is to technical demands of the project.
4. Evaluation of Time and Cost: With limited information generally provided, we need to be able to verify as best as possible the adequacy of both the time and cost elements of the project. Our belief is simply that projects that are insufficient in either one or both of these elements potentially pose an increased risk, as the construction consortium tries to compensate for these deficiencies during construction.
Small diameter Tunnel Boring Machine designed for mixed ground conditions and water pressures in excess of 2.5 bar.
In the 1990s and early years of this millennium, a series of high-profile tunnel failures across the globe resulted in major losses for Civil Construction underwriters and their insureds.
In the early 2000s, both the tunnel and insurance industries worked together to create new standards for high-risk tunneling projects.
A Code of Practice for the Risk Management of Tunnel Works (TCoP) is increasingly relied on by project managers and underwriters to define the best practices in tunnel construction projects. This process ideally starts at project inception (conceptual design stage or equivalent) and continues to the hand-over of the completed project.
LIU’s Hampshire said alongside TCoP, the project-specific Geotechnical Baseline Report and its interpretation and reference within the project contract conditions gives the underwriter greater clarity as to who recognizes and carries the ground risk and how it’s allocated.
“The bottom line is that there is always risk in a Civil Construction project,” Hampshire said. “Is the risk transparently allocated or is it buried? If the parties involved don’t understand what risk they carry, then the chances are there are going to be some problems, and the insurers would ideally like to understand the potential for these problems in advance,” Hampshire said.
Paul Hampshire can be reached at Paul.Hampshire@libertyiu.com.
To learn more about how Liberty International Underwriters can help you conduct a Civil Construction risk assessment before your next project, contact your broker.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.