Ebola Sends Employers Wake-Up Call
Finally, it happened. The United State is experiencing its first cases of Ebola. A Liberian national living in Dallas died after being diagnosed with the virus, and now two of his treating nurses have now come down with the disease.
While the nation’s Ebola threat remains relatively minor right now, that’s hardly the case, of course, in the West African countries of Liberia, Nigeria, Guinea and Sierra Leone.
With the media reports as a backdrop, experts stress that recent Ebola media coverage on domestic shores is the perfect lynchpin for employers to review their emergency contingency plans already in place and update them, if necessary.
“The Ebola virus in Africa and the chikungunya virus in the Caribbean both demonstrate the need for employers and their employees to think about personal safety while traveling outside the United States,” said Dominick Zenzola, vice president and employee benefits manager for Chubb Accident & Health in Chicago.
“Employers have a duty of care to their employees who travel. Some prudent companies even have relocated business meetings and events to alternative destinations.” — Dominick Zenzola, vice president and employee benefits manager for Chubb Accident & Health
“Employers have a duty of care to their employees who travel. Some prudent companies even have relocated business meetings and events to alternative destinations,” he said.
Chicago-based Ed Hannibal, global leader of Mercer’s Mobility Practice, said that as more and more companies push deeper into global markets, safety and emergency planning for mobile employees has become an even more serious issue — from the executive on a single business trip to someone who locates to a country on a permanent basis.
Hannibal said employers should ensure their people systems are “linked up,” so they know where their employees are at all times, and where they have been or may be going.
Robert Quigley, U.S. medical director and senior vice president of medical assistance for International SOS, a Trevose, Pa.-based global medical and travel security risk services company, said employers have a “duty of care” to all their employees, but especially those who may need to work in high-risk countries or regions.
“The recent unfortunate Ebola outbreak should serve as a wake-up call for employers, to ensure they are doing the right thing,” Quigley said.
“Companies are reaching out to us, wondering if they are doing enough, or what is the benchmark in their industry segment. We have more than 10,000 clients, and many have a footprint in West Africa.”
Quigley also said it may be surprising that the companies with business in West Africa represent a wide spectrum of industry segments.
“Many of them want to know what everyone is doing in their segment, or what is [a] best practice for their industry,” he said. “One of our jobs is to help educate them, but depending on the sector, they will have a different risk tolerance.”
For example, a nongovernmental organization would have higher risk tolerance because their work typically takes them into some of the world’s most dangerous places.
Different clients have decisions to make, but the one thing they can’t do is make them on the fly, Quigley said.
Many plans, he added, are still based on the last pandemic with influenza, so it makes sense for employers to take a look at their current plan. For others who may not have any solution, they need to have something in place even if it’s somewhat generic and can be customized to meet special situations like Ebola.
“It’s not a decision to be made on the run and it must involve many levels of decision makers, from the C-suite down,” he said. “It requires systemic ownership and involvement.” — Robert Quigley, U.S. medical director and senior vice president of medical assistance, International SOS
“It’s not a decision to be made on the run and it must involve many levels of decision makers, from the C-suite down,” he said. “It requires systemic ownership and involvement.
“Having a pandemic plan on the shelf is not good [enough],” Quigley said, adding that employers should create a specific task force responsible for making sure such protocols and procedures are constantly updated.
Quigley compares the situation to company fire drills, which most employers conduct two or three times a year.
“You don’t want to [have to] invent protocol when there actually is a fire,” he said. “Call it whatever you want, but it needs to be planned and rehearsed. Having an updated plan is also a good morale builder, because it lets those employees know they mean something to the company because it is being proactive and taking measures to protect them.”
Mercer’s Hannibal emphasizes the importance of communications. He said plans must be very clear when sending employees out around the globe, noting that different locations will mean different levels of communication.
“For example, they should know that Ebola is not an easy virus to contract; they need to make sure they have briefed employees about the specifics for any potential risk,” he said.
At a basic level, Chubb’s Zenzola said, employers need to remind global travelers to check the list of travel alerts and warnings from the U.S. Department of State — which now includes Russia, Ukraine, Israel, Thailand, Egypt and Mexico — and from the Centers for Disease Control and Prevention before they book their trips and pack their bags.
“Right now, Ebola is the flavor of the month, but before it there was Mad Cow, SARS (severe acute respiratory syndrome), bird flu, West Nile. There will always be something,” said SOS’ Quigley.
“The Ebola outbreak must remind employers to ensure they have updated, effective emergency procedures and protocols in place.”
University Risk Managers Share Concerns
Higher education risk managers converged on Louisville, Ky., last week for the annual conference of the University Risk Management and Insurance Association, where several themes emerged as key areas of focus.
“ERM seemed to be the biggest theme, but there was a enough variety in the sessions to cover all the basics,” said Mark Logel, director, administrative services & risk management at the University of Evansville and a first-time conference attendee.
More than six in 10 (61 percent) survey respondents said they have not conducted an enterprise risk management process at their institution in the past two years, or don’t know if such work was done, according to data shown during one session, “Managing Risk Intelligently: A New Normal.”
And yet, nearly three-fourths (73 percent) said they are more focused on institutional risk now than five years ago, and 63 percent reported having more full board discussions about institutional risk.
Paradoxically, only 39 percent of respondents said they were getting enough information about their exposures, down from 43 percent in 2008.
However, according to Gary Langsdale, university risk officer at Pennsylvania State University (PSU) and a session speaker, these statistics are not as negative as they appear. Such conflicting opinions may demonstrate that institutions are growing more aware of the complex web of risks they face and therefore asking for more information, not necessarily receiving less.
“There’s an impetus for thinking more holistically about risk,” said Andre LeDuc, executive director, enterprise risk services at the University of Oregon. “It’s a continual struggle to promote a risk-aware culture.”
Such a culture needs to be built from the top down, with buy-in from board members and more communication between academic and student affairs offices. The publicity surrounding the Sandusky scandal at PSU revealed a need for greater board involvement, Langsdale said.
But, he noted, there is a limit.
“Board members should have their noses in but fingers out,” he said, meaning the board’s role is to be informed but not overly involved in risk management.
Langsdale identified ways risk managers can help set the culture for a true ERM effort:
• Look for leadership opportunities.
• Break down organizational silos.
• Understand the analytical tools and methodologies available.
• Elicit views from across the organization.
“Establishing ERM is an evolution,” LeDuc said. “Check back in two or three years to see what works and what doesn’t. Every institution is unique. … We have to take lessons learned back to our home institutions and help the thematic thread spread.”
Changing demographics and enrollment challenges, lack of funding and regulatory compliance are three major strategic risks faced by universities.
According to Christine Eick, executive director, risk management and safety at Auburn University, some schools saw hundreds of millions of dollars’ worth of cuts in government funding during the recession.
That is compounded, Langsdale said, by a lack of funding on students’ end as well. As costs rise, fewer students and their families are able to contribute much from their own pockets.
“We have to make choices about which programs to support,” he said.
Many attendees acknowledged that funding for sports programs, while ultimately accounting for a very small percentage of a school’s overall budget, should be the first to take cuts because of their high visibility.
Enrollment has also fallen as demographics shift. There are simply fewer 18-year-olds in the prospective student pool now than there were a decade or more ago, which increases competition among schools vying to keep classrooms full.
“One help has been recruiting returning military members,” Eick said, “who often come with the support of government funding” and have incentives to obtain a degree as they re-enter the mainstream workforce.
Compliance has also risen as a priority, especially with adherence to Title IX and the handling of sexual assault cases coming under tighter scrutiny.
Along with the increased risk, however, comes the benefit of putting “risk managers at the right tables,” said LeDuc, as universities need to discuss such risks among different offices and with board members.
Like any other organization that collects personally identifiable information, higher education institutions are more concerned with cyber threats.
“Data, data, data. Are we fully aware of our exposures?” LeDuc asked, picking out cyber security as a risk to watch related to students’ personal and financial records, as well as the potential for theft of intellectual property, especially at research institutions.
“Cyber is an increasing threat,” Eick agreed. “There has to be a shift in culture that mandates security training for all faculty to be completed by a certain date. Schools should be employing more privacy officers and CIOs to handle those challenges.”
Universities may have a higher exposure for data breach, Langsdale said, because networks are “designed to be open” to allow access for prospective and current students, alumni, faculty, and researchers from other facilities.
“You need to be on top of your cloud providers and know where your servers are located,” he said. “There should be no deemed export of information.”
Along with the increase in study abroad programs comes the increased need for colleges and universities to do more to ensure the safety of students in such programs, including keeping track of their whereabouts and the conditions of the countries they visit.
Until recently, schools have had limited ways to track and communicate with students abroad, and have kept limited records of incidents. Both nonprofit organizations and businesses offer resources to help risk managers expand their efforts.
One way to conduct due diligence is through site visits, which “are not terribly expensive,” according to Eick, but which usually are only done by larger, better-funded schools.
In addition to scoping out the conditions of hosting school and the surrounding communities, site visits allow risk managers an opportunity to analyze local coverage and ensure that the right policies are in place. Language barriers can result in improper coverage.
Six Best Practices For Effective WC Management
It’s no secret that the professionals responsible for managing workers compensation programs need to be constantly vigilant.
Rising health care costs, complex state regulation, opioid-based prescription drug use and other scary trends tend to keep workers comp managers awake at night.
“Risk managers can never be comfortable because it’s the nature of the beast,” said Debbie Michel, president of Helmsman Management Services LLC, a third-party claims administrator (and a subsidiary of Liberty Mutual Insurance). “To manage comp requires a laser-like, constant focus on following best practices across the continuum.”
Michel pointed to two notable industry trends — rises in loss severity and overall medical spending — that will combine to drive comp costs higher. For example, loss severity is predicted to increase in 2014-2015, mainly due to those rising medical costs.
Debbie discusses the top workers’ comp challenge facing buyers and brokers.
The nation’s annual medical spending, for its part, is expected to grow 6.1 percent in 2014 and 6.2 percent on average from 2015 through 2022, according to the Federal Government’s Centers for Medicare and Medicaid Services. This increase is expected to be driven partially by increased medical services demand among the nation’s aging population – many of whom are baby boomers who have remained in the workplace longer.
Other emerging trends also can have a potential negative impact on comp costs. For example, the recent classification of obesity as a disease (and the corresponding rise of obesity in the U.S.) may increase both workers comp claim frequency and severity.
“The true goal here is to think about injured employees. Everyone needs to focus on helping them get well, back to work and functioning at their best. At the same time, following a best practices approach can reduce overall comp costs, and help risk managers get a much better night’s sleep.”
– Debbie Michel, President, Helmsman Management Services LLC (a subsidiary of Liberty Mutual)
“These are just some factors affecting the workers compensation loss dollar,” she added. “Risk managers, working with their TPAs and carriers, must focus on constant improvement. The good news is there are proven best practices to make it happen.”
Michel outlined some of those best practices risk managers can take to ensure they get the most value from their workers comp spending and help their employees receive the best possible medical outcomes:
1. Workplace Partnering
Risk managers should look to partner with workplace wellness/health programs. While typically managed by different departments, there is an obvious need for risk management and health and wellness programs to be aligned in understanding workforce demographics, health patterns and other claim red flags. These are the factors that often drive claims or impede recovery.
“A workforce might have a higher percentage of smokers or diabetics than the norm, something you can learn from health and wellness programs. Comp managers can collaborate with health and wellness programs to help mitigate the potential impact,” Michel said, adding that there needs to be a direct line between the workers compensation goals and overall employee health and wellness goals.
Debbie discusses the second biggest challenge facing buyers and brokers.
2. Financing Alternatives
Risk managers must constantly re-evaluate how they finance workers compensation insurance programs. For example, there could be an opportunity to reduce costs by moving to higher retention or deductible levels, or creating a captive. Taking on a larger financial, more direct stake in a workers comp program can drive positive changes in safety and related areas.
“We saw this trend grow in 2012-2013 during comp rate increases,” Michel said. “When you have something to lose, you naturally are more focused on safety and other pre-loss issues.”
3. TPA Training, Tenure and Resources
Businesses need to look for a tailored relationship with their TPA or carrier, where they work together to identify and build positive, strategic workers compensation programs. Also, they must exercise due diligence when choosing a TPA by taking a hard look at its training, experience and tools, which ultimately drive program performance.
For instance, Michel said, does the TPA hold regular monthly or quarterly meetings with clients and brokers to gauge progress or address issues? Or, does the TPA help create specific initiatives in a quest to take the workers compensation program to a higher level?
4. Analytics to Drive Positive Outcomes, Lower Loss Costs
Michel explained that best practices for an effective comp claims management process involve taking advantage of today’s powerful analytics tools, especially sophisticated predictive modeling. When woven into an overall claims management strategy, analytics can pinpoint where to focus resources on a high-cost claim, or they can capture the best data to be used for future safety and accident prevention efforts.
“Big data and advanced analytics drive a better understanding of the claims process to bring down the total cost of risk,” Michel added.
5. Provider Network Reach, Collaboration
Risk managers must pay close attention to provider networks and specifically work with outcome-based networks – in those states that allow employers to direct the care of injured workers. Such providers understand workers compensation and how to achieve optimal outcomes.
Risk managers should also understand if and how the TPA interacts with treating physicians. For example, Helmsman offers a peer-to-peer process with its 10 regional medical directors (one in each claims office). While the medical directors work closely with claims case professionals, they also interact directly, “peer-to-peer,” with treatment providers to create effective care paths or considerations.
“We have seen a lot of value here for our clients,” Michel said. “It’s a true differentiator.”
6. Strategic Outlook
Most of all, Michel said, it’s important for risk managers, brokers and TPAs to think strategically – from pre-loss and prevention to a claims process that delivers the best possible outcome for injured workers.
Debbie explains the value of working with Helmsman Management Services.
Helmsman, which provides claims management, managed care and risk control solutions for businesses with 50 employees or more, offers clients what it calls the Account Management Stewardship Program. The program coordinates the “right” resources within an organization and brings together all critical players – risk manager, safety and claims professionals, broker, account manager, etc. The program also frequently utilizes subject matter experts (pharma, networks, nurses, etc.) to help increase knowledge levels for risk and safety managers.
“The true goal here is to think about injured employees,” Michel said. “Everyone needs to focus on helping them get well, back to work and functioning at their best.
“At the same time, following a best practices approach can reduce overall comp costs, and help risk managers get a much better night’s sleep,” she said.
To learn more about how a third-party administrator like Helmsman Management Services LLC (a subsidiary of Liberty Mutual) can help manage your workers compensation costs, contact your broker.
Debbie discusses how Helmsman drives outcomes for risk managers.
Debbie explains how to manage medical outcomes.
Debbie discusses considerations when selecting a TPA.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Helmsman Management Services. The editorial staff of Risk & Insurance had no role in its preparation.