Universal Risk Management
Risk management theory and practice fascinates — and can also appear so complex — because it resides in so many different professional realms and takes such different shapes.
Some of this year’s Risk All Stars work for widely known companies with billions in assets. Others work for a nonprofit that cobbled its solutions together with government grants.
In some examples, winners of the award were armies of one, who either through specialization or a unique perspective effected sweeping change. But creativity, passion and perseverance, the traits that we base this award on, are found in every winner.
In the person of Dr. Mike Tomecek, of the Oklahoma Spine & Brain Institute, Risk & Insurance® gives an award for the first time to a neurosurgeon; perhaps it won’t be the last.
Dr. Tomecek uses electrodiagnostic functional assessments to determine whether medical hardware removal surgery is really necessary. His specific knowledge of nerve function, coupled with technology, allows him to determine whether the movements that are actually causing pain or immobility are connected to medical hardware or are coming from some other place.
With his assessments, Dr. Tomecek acts as a patient advocate who is reducing surgeries and recommending site-specific physical therapy, a far less costly and intrusive treatment.
Risk All Stars winners Chris Chathams and Latitia Estrada are working-class heroes. These safety and human resources specialists work for the Timber Products Manufacturers Association.
The association is a trade group for smaller operators in the extremely hazardous timber industry in the Pacific Northwest. Using massive, unforgiving chain saws to bring down big trees, workers in the timber industry get hurt badly when something goes wrong.
The forestry companies that depend on the association as a safety education resource don’t have the resources to offer safety training on their own, even though such training is drastically needed.
Using grants from OSHA, Chathams and Estrada created a safety training program that in a three-year span reduced injuries for some member companies by 75 percent. That’s a lot of workers and their families suffering less trauma.
Richard Pcihoda, the director of risk management for the Pennsylvania Real Estate Investment Trust, moved with speed and effectiveness when Superstorm Sandy struck. One of PREIT’s shopping malls suffered millions in damage when the storm hit.
But Pcihoda had planned ahead, lining up a reconstruction contractor so he didn’t have to wait in line for help after the fact. Pcihoda’s planning, and his great relationships with his adjusters, resulted in the Hudson Mall reopening a mere 17 days after the storm.
Business interruption was lessened and many jobs saved as a result.
Risk management can be a thankless job. It demands hard work and attention to detail that some people would rather not think about.
But we think about it. The 2014 Risk All Stars awards are our way of saying thanks.
Complete coverage of the 2014 Risk All Stars winners begins here.
Leading From the Front
Making your fellow employees safer and creating more risk resiliency in your organization requires much more than simply doing your job.
It means doing the hard work to find a unique and practical solution, and then having the backbone and drive to implement that solution despite whatever obstacles you might face. In effect, doing the right thing over the easy thing.
These eight Responsibility Leaders do that and more. Through their drive and passion, they are the ones creating solutions that benefit not only their organizations but their employees and their communities.
Leslie Lamb works for Cisco Systems, with 75,000 employees and more than $100 billion in assets. You could count the members of her risk management team on one hand.
But Lamb’s Global Risk & Resilience Management team is bold and acts strategically. They dig deeper into the business, to take the time to meet with department heads in the effort to better understand their risks.
Lamb and her team created that most precious of dynamics. They created a dialogue among company leaders that is risk-focused. The award-winning Lamb reports that after a five-year effort, that dialogue is not only ongoing, it is expanding.
Sprague Operating Resource’s David Hershey displayed courage and dedication in standing up for his fellow risk managers. When insurance carriers decided in one fell swoop to stop notifying designated third parties that policies naming them as insureds were cancelled, he stood up to take a leading role.
In demanding that such notification be restored contractually, Hershey was insisting that insurance be what it says it is: a backstop that enables the smooth and productive flow of commerce.
“Commerce is not in business to justify the insurance industry, insurers, agents and brokers,” Hershey said, in one of the most relevant statements that may have ever appeared in this publication.
His status as a Responsibility Leader® stems from the essence of the definition of the award. He made a difference for an entire industry by leading when no one else stepped forward.
Hershey also furthers the profession of risk management by being a frequent speaker and author on risk management topics. He talks to college students about careers in risk management and teaches insurance at the Insurance Library of Boston.
Hershey and the rest of the 2014 Risk All Stars Responsibility Leaders® are not only doing what needs to be done, they are helping others to do it as well.
Here are the 2014 Risk All Stars Responsibility Leaders.
Champion for Change
Workers’ Compensation Manager Patty Hostine created dramatic gains for Cooper Standard Automotive by championing a fundamental change in the way both management and employees perceived the company’s approach to injury treatment and recovery.
That kind of transformation is never an easy sell. But Hostine’s ability to clearly communicate the benefits of the change to people at every level of the organization is the hallmark of a Responsibility Leader®.
“When she came on board we had all kinds of new management — nobody was on board with our thought process,” said Gerry King, who hired Hostine to manage workers’ compensation at Cooper Standard.
“So it was taking them and making them see the business side of workers’ compensation that a lot of people don’t look at,” King said.
Hostine is also committed the members of her team, and to making sure that everyone involved has the tools and knowledge they need to excel.
“Her ethics are above reproach,” said Mick Altherr, coordinator of health, safety and environment, and workers’ compensation at Cooper Standard Automotive, “and that drives her theme of being fair, firm and friendly. … She’s an amazing talent with her drive for knowledge. She shares her thought process to educate the people who work with her.”
Filling a Need for Safety
Saws and heavy lumber make the timber and wood products industry inherently dangerous. But many small companies lack resources to provide adequate safety training to employees.
Enter Latitia Estrada and Chris Chathams of Timber Products Manufacturers Association (TPM). The duo leveraged their nonprofit status to win government grants to create and provide training to member organizations at no cost.
The training programs, consisting of webinars, worksheets, and videos, bring awareness to the highest-risk areas of the industry, all the way from logging in the forest to working a sawmill on the factory floor.
Over the past two years, more than 80 employers and 2,200 employees in seven different states have received training.
The pair estimates they’ve saved participating companies more than $134,000 in training costs alone, not including costs saved by lowering injury rates.
One company was able to slash their injury rates by 50 percent.
Chathams and Estrada have also widened TPM’s involvement within the safety industry.
They’ve worked with different chapters of the American Society of Safety Engineers, the Northern Idaho Safety Fest and the Montana Safety Fest.
Looking to the future, they’ve also helped TPM create a safety scholarship and internship program.
Making a Difference
David Hershey is a prolific speaker and writer on risk management topics. The list of industry awards he has won and industry leadership positions he occupies runs longer than most restaurant menus.
He serves as a board member, president, vice president, and committee member — both now and in the past — for the New Hampshire chapter of the CPCU, the Massachusetts and Delaware Valley chapters of RIMS, the Philadelphia Area Risk Managers Association, the Governor’s Council on Insurance Fraud, and the Association of Certified Fraud Examiners.
He has also volunteered his creativity and passion about risk management by serving on the External Affairs Committee and Standards & Practices Committee of the national RIMS organization.
Sharing his knowledge with others, Hershey taught classes for the Insurance Society of Philadelphia and the Independent Insurance Agents & Brokers of New Hampshire.
In challenging insurance carriers to restore their obligation to inform named insureds when a policy is cancelled — and establishing a process to make sure his company was protected — Hershey made a difference to countless others in the risk management community, not just himself or his company.
“Notification is one of the core concepts of risk management,” he rightly noted.
Taking on a Mighty Challenge
You sign on to share the burden of managing risk for a high-profile $15 billion company. Months down the road, you’re bidding “Happy Retirement” to half of your team and wondering how you’re going to manage it all alone. That scenario could send a chill down the spine of any seasoned risk professional.
But Dan Holden took on the challenge, and he thrived —identifying multiple savings opportunities in the insurance and risk management programs of Daimler Trucks North America.
Holden made a critical assessment of his responsibilities. He carved out the pieces that needed his attention most, and sought alternative means to get the rest accomplished, like relying more heavily on the company’s TPA and on the company’s existing online portal.
He also skillfully leveraged his resources, tapping into the expertise of his brokers, other vendors, and former colleagues to gather the tools he needed to succeed.
Taking on the work of two men, Holden persevered by looking at the big picture and restructuring his priorities.
That freed him up get creative in making adjustments to DTNA’s insurance program, negotiating better policy terms by highlighting the impact of the economic downturn. The determination to rise above every challenge is what makes Holden a Responsibility Leader®.
Worth Her Weight in Gold
The company Leslie Lamb works for has more than 75,000 employees and $100 billion in assets.
Imagine the amount of work involved to break down department silos and gain a better understanding of risk on a department by department basis.
It can’t have been easy to go to company leadership and say that you want to conduct risk meetings with each department, to get a better understanding of not only each department’s risk but how risk straddles the entire company.
But that’s what Leslie Lamb and her risk management team of three did.
Senior leaders who didn’t before are now talking to one another about risk as a result of Lamb’s drive to unify all stakeholders.
The result is a sharing of information about exposures, risk scenarios and how best to mitigate them.
Because of Lamb’s leadership, Cisco can take to its underwriters a story that is far more educated and nuanced. Underwriters like that; they like it very much.
As a Responsibility Leader® and winner of a Risk All Stars Award, Leslie gets a plaque and mention in this magazine. But to the company that employs her, she is worth her weight in gold.
Running to the Fight
Maybe it’s his history in emergency management and current service as a volunteer firefighter that gives Richard Pcihoda the reflexes to run to the fight, because that is what he did as Superstorm Sandy threatened in October of 2012.
Pcihoda, the director of risk management for the Pennsylvania Real Estate Investment Trust, based in Philadelphia, wasn’t the only risk manager whose job got a lot tougher when Sandy hit, but it looks like he outperformed many of his contemporaries.
Not only did Pcihoda conduct the necessary planning and preparation to reduce his own company’s business interruption, he went out of his way to counsel his company’s Jersey City (N.J.) Hudson Mall tenants on coverage and recovery methods after the mall suffered millions in damage.
Pcihoda looked at the whole picture and acted on it. The day after the storm struck, Pcihoda jumped in his truck and drove to Jersey City, getting there before formal travel bans were in place to jump start the recovery process.
He had his contractors in place ahead of the storm to get a jump on reconstruction. He had the adjuster relationships to pull it together seamlessly.
Pcihoda is a Risk All Star because he possesses passion, creativity and perseverance. He’s a Responsibility Leader® because through his actions, he shows others how it’s done.
Creating His Own Solution
When the 16 institutions comprising Wisconsin Technical Colleges faced persistent problems obtaining insurance coverage suited to their unique needs, Steven Stoeger-Moore didn’t just find the solution — he created it.
Stoeger-Moore helped to establish Districts Mutual Insurance (DMI) in 2004 to represent the colleges and provide better insurance and risk management services.
Under his self-implemented “Rule of 16,” he ensures that if any school has a problem, all 16 colleges benefit from DMI’s solution. That dedication led to the development of comprehensive risk management programs — provided to each school at no cost — for electrical and fire safety inspections, emergency response planning, legal consultations, and employee health and safety consultations, among many others.
And when those programs were tested, Stoeger-Moore sprang into action. In the past 10 years, the Wisconsin Technical College System has weathered both a tornado and a major fire. Both times, he was at the scene within 24 hours of the event, providing claims and insurance guidance as well as comfort for shaken colleagues.
Stoeger-Moore has also worked to bolster the industry’s future by encouraging young people to consider a career in risk management. Through DMI, he creates opportunities for young people to learn about the colleges’ unique challenges and the programs created to meet them.
The Promise of Technology
The field of workers’ compensation claims management seems ideally suited as a proving place for the power of technology.
Predictive analytics in the hands of pharmacy and medical management experts can give claims managers the data they need to intervene in troublesome claims. Wearables and other mobile technologies have the potential to give healthcare providers “real-time” reports on the medical condition of injured workers.
Never before have the goals of quick turnaround and transparency in managing claims appeared so tantalizingly achievable.
In the effort to learn more about technology’s potential, in September, Risk & Insurance® partnered with Duluth, Ga.-based Healthcare Solutions to convene an information technology executive roundtable in Philadelphia.
The goal of the roundtable was to explore technology’s promise and to gauge how advancements are serving the industry’s ultimate purpose, getting injured workers safely back to work.
Big Data, Transparency and the Economies of Scale
Integration is a word often heard in connection with workers’ compensation claims management. On one hand, it refers to industry consolidation, as investors and larger service providers seek to combine a host of services through mergers and acquisitions.
In another way, integration applies to workers’ compensation data management. As companies merge, technology is allowing previously siloed stores of data to be combined. Access to these new supersets of data, which technology professionals like to call “Big Data,” present a host of opportunities for payers and service providers.
Through accessible exchange systems that give both providers and payers better access to the internal processes of vendors, a service provider can show the payer the status of the claim across a much broader spectrum of services.
“One of the things I see with all of this data starting to exchange is the ability to use analytics to predict outcomes, and to implement workflows to intervene.”
–Matthew Landon, Vice President of Analytics, Bunch CareSolutions.
“Any time that we can integrate with a payer across multiple products such as pharmacy, specialty and PPO services, what it does is gives us a better picture of the claim and that helps us to drive better outcomes,” said roundtable participant Chuck Cavaness, chief information officer for Healthcare Solutions.
Integration across multiple product lines also produces economies of scale for the payer, he said.
Big Data, according to the roundtable participants, also provides claims managers an unparalleled perspective on the cases they manage.
“One of the things that excites us as more data is exchanged is the ability to use analytics to predict outcomes, and to implement workflows to intervene,” said roundtable participant Matthew Landon, vice president of analytics with Lakeland, Fla.-based Bunch CareSolutions, A Xerox Company.
Philadelphia roundtable participant Mike Cwynar, vice president of Irvine, Calif.-based Mitchell International, agrees with Landon.
“We are utilizing technology to consolidate all of the data, to automate as many tasks as we can, and to provide exception-based processing to flag unusual activity where claims professionals can add value,” Cwynar said.
Technology is also enabling the claims management industry to have more productive interactions with medical providers, long considered one of the Holy Grails of better case management.
Philadelphia roundtable participant Jerry Poole, president and CEO of Malvern, Pa-based claims management company Acrometis, said more uniform and accessible information exchange systems are giving medical providers access to see how bills are moving through the claims manager’s process.
“The technology is enabling providers to call in or to visit a portal to figure out what’s happening in the process,” Poole said.
Another area where technology is moving the industry forward, according to the Philadelphia technology roundtable participants, is mobile technology, which is being used to support adjustors and case managers and is also contributing to quicker return to work and lower costs for payers.
The ability to take a digital tablet to a meeting with an injured worker or a health care provider is allowing case managers to enter data and give feedback on a patient’s condition in real time.
“Our field-based case managers have mobile connectivity to our claims systems that they use while they’re out of the office attending doctor’s appointments, and can enter the data right there into the system, so they’re not having to wait until they are back at the office to enter critical clinical documentation,” said Landon.
Injured workers that use social media, e-mail and the texting function on their mobile phones are staying in better touch with those that are charged with insuring that they are in compliance with their treatment plans.
Wearable devices that provide in-the-moment information about an injured workers’ condition have the potential to recreate what is known in aviation as the “black box,” a device that will record and store the precise physical state of an employee when they were injured. Such a device could also monitor their recovery process.
But as with many technologies, worker and patient privacy also needs to be observed.
“At the end of the day, we need to make sure that we approach technology enhancement that demonstrates value to the client, while ensuring patient advocacy,” Landon said.
As payers and claims managers set out to harness the power of computing in assessing an injured worker’s condition and response to treatment, the cycle of investment in companies that serve the workers’ compensation space is currently playing a significant role.
The trend of private equity investing in companies that can establish one-stop shopping for such services as medical case management, bill review, pharmacy benefit management and fraud forensics has huge potential.
“Any time that we can integrate with a payer across multiple products such as pharmacy, specialty and PPO services, what it does is gives us a better picture of the claim and that helps us to drive better outcomes.”
— Chuck Cavaness, Chief Information Officer, Healthcare Solutions.
The challenge now facing the industry, one the information technology roundtable participants are confident it can meet, is integrating those systems. But doing so won’t happen overnight.
“There’s a lot of specialization in the industry today,” said Jerry Poole of Acrometis.
Years ago there was a PT network. Now there’s a surgical implant guy, there’s specialized negotiations, there’s special investigations, said Poole.
The various data needs to be integrated into an overall data set to be used by the carriers to help lower the cost of risk.
Securing Sensitive Information
Long before hackers turned the cyber defenses of major national retailers inside out, claims management professionals have focused increased attention on the protection of data shared across multiple partners.
Information security safeguards are changing and apply to what technology pros refer to “data at rest,” data that is stored on a particular company’s servers, and “data in flight,” data that is transferred from one user to another.
Mitchell’s Cwynar said carriers want certification that every company their data is being sent to needs to have that information and that both data at rest and data in flight is encrypted.
The roundtable participants agreed that the industry is in a conundrum. Carriers want more help in predictive analytics but are less willing to share the data needed to make those predictions.
And as crucial as avoiding cyber exposures and the corresponding reputational damage is for large, multinational corporations, it is even more acute for smaller companies in the workers’ compensation industry.
Healthcare Solutions’ Cavaness said the millions in loss notification and credit monitoring costs that impact a Target or a Home Depot in the case of a large data theft would devastate many a workers’ compensation service vendor.
“They’d be done in a minute,” Cavaness said.
The barriers to entry in this space are higher now than ever before, continued Cavaness, and companies wishing to do business with large carriers have the burden of proving that its security standards are uncompromising.
Workers’ compensation risk management in the United States is by its very nature, complex and demanding. But keep in mind that those charged with managing that risk get better results year after year.
Technology has a proven capability to iron out the system’s inherent complications and take its more mundane tasks off of the shoulders of case adjustors.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Healthcare Solutions. The editorial staff of Risk & Insurance had no role in its preparation.