Risk Insider: Chris Mandel

Opioids an Obstacle to Better Claim Outcomes

By: | September 14, 2016 • 2 min read
Chris Mandel is SVP, strategic solutions for Sedgwick and Director of the Sedgwick Institute. He is a long-term risk management leader and a former president of RIMS. He can be reached at [email protected]

On a weekly if not daily basis, there are media reports about the growing impacts of addiction to opioids. The Centers for Disease Control and Prevention (CDC) reports that 78 people a day are dying from the effects of opioid overdose. Families are being systematically destroyed by the multiplicity of effects of this increasingly pervasive problem.

In 2014, there were more than 47,000 drug overdose deaths in the United States and more than 28,000 of those deaths were caused by opioids. The American population makes up only 5 percent of the global population, and yet it consumes 80 percent of all opioids produced in the world.

This strongly implies there is a societal, cultural profile in America that is unlike anywhere in the world, driving such demand and overuse.

As the national “epidemic” of opioid abuse continues to get increasing attention, it’s important to realize the effect it has on employers. Prescription opioid abuse alone cost employers more than $25 billion in 2007.

The American population makes up only 5 percent of the global population, and yet it consumes 80 percent of all opioids produced in the world.

In addition, when injured workers are prescribed opioids long term, the length of the claim increases dramatically — even more so when other addictive medications like benzodiazepines (alprazolam, lorazepam) are prescribed.

Perhaps the most troubling statistic of all, 60 percent of injured workers on opioids 90 days post-injury will still be on opioids at 5 years.

Strategies for the Claims Team

While there is certainly responsibility and accountability on behalf of the patient and his/her doctor to mitigate this risk, here are a few final things workers’ comp claim professionals should consider in the overall strategy of managing claims involving opioid prescriptions and which, if not managed closely, may lead to abuse and addiction.

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Develop and define a strategy for identifying and then monitoring physician prescribing patterns and the specific use patterns in each affected case. Some of the tactics that should be considered include:

  • Leveraging pharmacy utilization review services
  • Directing patients to doctors who won’t overprescribe opioids, and those who use prescription drug monitoring programs and tools, which are available in most states
  • Engaging nurse case managers early and regularly; their involvement and intervention can help deter addiction. Nurses can advocate for other more clinically appropriate options, and advocate for best practices including risk assessments, opioid contracts, pill counts and random drug screens
  • Ensuring that injured workers are getting prescriptions through pharmacy benefit management networks
  • Leveraging fraud and investigative resources that are often useful in uncovering underlying, unrelated patterns of behavior that would indicate a propensity for opioid abuse
  • Considering the cost of opioids versus alternatives; while many alternate treatment modalities are on the front-end more expensive, certain drugs may be much more expensive in the long term, especially if they lead to addiction
  • Addressing the opioid issue well before case settlement; as with most longer term open claims scenarios, those with opioid use will only produce worse outcomes and get more expensive over time without appropriate early interventions

Continued vigilance by claims professionals can enable and facilitate a better result at closure and avoid a lot of potential pain for the injured worker along the recovery path.

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Risk Insider: Jack Hampton

High Five to the Spencer Foundation

By: | September 6, 2016 • 2 min read
Jack Hampton is a Professor of Business at St. Peter’s University in New Jersey and a former Executive Director of the Risk and Insurance Management Society (RIMS). He was named a Risk Innovator in 2008 by Risk and Insurance®. He can be reached at [email protected]

Each September, the Spencer Educational Foundation holds an annual gala for insurance industry professionals in New York City. The fundraiser provides support for college and university students in insurance and risk management programs across the United States and Canada.

The Foundation arranges internships for students and supports risk manager-in-residence programs on college campuses. Some students, known as Spencer Scholars, receive substantial financial aid.

Risk management and insurance at the undergraduate level? Many people scoff at the idea.

Colleges should focus on developing skills in critical thinking and written and oral communications, they say. Students should learn how to analyze problems and work on teams. Liberal arts is the way to go. The formative college years should not be wasted on vocational training.

Rather than debate the merits of a liberal arts foundation, supporters of Spencer applaud it. The 80 or so programs in insurance and risk management all build on a liberal arts foundation. Spencer scholars take the same history, psychology, and English courses as majors in theology, philosophy, and sociology.

The first two years provide breadth in thinking, writing, and communicating for all students, whether they finish in the arts, sciences, business, or education. The last two years offer depth in a single discipline, building skills and knowledge.

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As an example, a Spencer Scholar studying risk management examines issues like those facing Etna Confectionery. The company owns three facilities within five miles of the crater on Mount Etna in Sicily. It converts locally-grown fruit into candy sold throughout Europe.

The European Union issued a mandate to the company to build a larger facility. Students were asked to recommend a location.

Rather than debate the merits of a liberal arts foundation, supporters of Spencer applaud it. The 80 or so programs in insurance and risk management all build on a liberal arts foundation. Spencer scholars take the same history, psychology, and English courses as majors in theology, philosophy, and sociology.

Options included staying on the slope of the most active volcano in Europe or moving to Messina, a safe distance from the crater but still local enough for supply of raw materials. The Messina location involves a higher capital cost, more expensive operations, and likely lower profits.

Question for the students. What are the major risks? Financial, economic, strategic, and management challenges were identified, but they needed to go deeper.

The discussion came alive when students realized the stark consequence of operating a few kilometers away from the crater of an active volcano.

They learned about an organization’s risk appetite. How much risk is it willing to take to gain the benefits that accrue from taking it?

The discussion on the issues facing the Etna Confectionery helped them move from the theoretical to the practical. This is the skill they need to start their careers.

The Spencer Foundation supporters realize the challenge is to help students learn that some risks matter and some not as much. Spencer Scholars, and for that matter all students exposed to risk managers-in-residence and supervised internships, learn to apply the lessons of liberal arts to solve problems that require critical thinking and creativity.

Students and parents are the customers of colleges. We all kind of know that.

Students are also the products of colleges. Colleges mold them, shape them, form them, and send them out into their professional lives.

Contact with industry professionals during one’s college years is not merely vocational training. Rather, it is a critically important component of developing an educated person.

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Sponsored Content by Hiscox USA

Your Workers’ Safety May Be at Risk, But Can You See the Threat?

Violence at work is a more common threat than many businesses realize.
By: | September 14, 2016 • 5 min read
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Deadly violence at work is covered extensively by the media. We all know the stories.

Last year, ex-reporter Bryce Williams shot and killed two former colleagues while they conducted a live interview at a mall in Virginia. In February of this year, Cedric Larry Ford opened fire, killing three and injuring 12 at a Kansas lawn mower manufacturing company where he worked. Also in 2015, 14 people died and 22 were wounded by Syed Farook, a San Bernardino, California county health worker, and his wife, who had terroristic motives.

Active shooter scenarios, however, are just the tip of the iceberg when it comes to violence at work.

“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees,” said Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA. “We just don’t hear about them.”

According to statistics compiled by the FBI, the chance that any business will experience an active shooter scenario is about 1 in 457,000, and the chance of death or injury by an active shooter at work is about 1 in 1.6 million.

The fact that deadly attacks — which are relatively rare — get the most media attention may lead employers to underestimate the risk and dismiss the issue of workplace violence as media hype. But any act that threatens the physical or psychological safety of an employee or that causes damage to business property or operations is serious and should not be taken lightly.

“One of the core responsibilities that any organization must fulfill is keeping employees safe, and honoring that duty is becoming more challenging than ever,” Spunberg said.

Hiscox_SponsoredContent“Workplace violence is much broader and more pervasive than that. There are smaller acts of violence happening every day that directly impact organizations and their employees. We just don’t hear about them.”
— Bertrand Spunberg, Executive Risks Practice Leader, Hiscox USA

Desk Rage and Bullying: The Many Forms of Workplace Violence

Hiscox_SponsoredContentBullying, intimidation, and verbal abuse all have the potential to escalate into confrontations and a physical assault or damage to personal property. These violent acts don’t necessarily have to be perpetrated by a fellow employee; they could come from a friend, family member or even a complete stranger who wants to target a business or any of its workers.

Take for example the man who killed three workers at a Colorado Spring Planned Parenthood in April. He had no affiliation with the organization or any of its employees, but targeted the clinic out of his own sense of religious duty.

Companies are not required to report incidents of violence and many employees shy away from reporting warning signs or suspicious behavior because they don’t want to worsen a situation by inviting retaliation.  It’s easy, after all, to attribute the occasional surly attitude to typical work-related stress, or an office argument to simple personality differences that are bound to emerge occasionally.

Sometimes, however, these are symptoms of “desk rage.”

According to a study by the Yale School of Management, nearly one quarter of the population feels at least somewhat angry at work most of the time; a condition they termed “chronic anger syndrome.”  That anger can result from clashes with fellow coworkers, from the stress of heavy workloads, or it can overflow from family or financial problems at home.

Failure to recognize this anger as a harbinger of violence is one key reason organizations fail to prevent its escalation into full-blown attacks. Bryce Williams, for example, had a well-documented track record of volatile and aggressive behavior and had already been terminated for making coworkers uncomfortable. As he was escorted from the news station from which he was terminated, he reportedly threatened the station with retaliation.

Solving Inertia, Spurring Action

Hiscox_SponsoredContentMany organizations lack the comprehensive training to teach employees and supervisors to recognize these warning signs and act on them.

“The most critical gap in any kind of workplace violence preparedness program is supervisory inertia, when people in positions of authority fail to act because they are scared of being wrong, don’t want to invade someone’s privacy, or fear for their own safety,” Spunberg said.

Failing to act can have serious consequences. Loss of life, injury, psychological harm, property damage, loss of productivity and business interruption can all result from acts of violence. The financial consequences can be significant. In the case of the San Bernardino shootings, for example, at least two claims were made against the county that employed the shooter seeking $58 million and $200 million.

Although all business owners have a workplace violence exposure, 70 percent of organizations have no plans in place to avoid or mitigate workplace violence incidents and no insurance coverage, according to the National Institute for Occupational Safety & Health.

“Most companies are vastly underprepared,” Spunberg said. “They don’t know what to do about it.”

Small- to medium-sized organizations in particular lack the resources to develop risk mitigation plans.

“They typically lack a risk management department or a security department,” Spunberg said. “They don’t have the internal structure that dictates who supervisors should report a problem to.”

With its workplace violence insurance solution, Hiscox aims to educate companies about the risk and provide a solution to help bridge the gap.

“The goal of this insurance product is not so much to make the organization whole again after an incident — which is the usual function of insurance — but to prevent the incident in the first place,” Spunberg said.

Hiscox’s partnership with Control Risks – a global leader in security risk management – provides clients with a 24/7 resource. The consultants can provide advice, come on-site to do their own assessment, and assist in defusing a situation before it escalates. Spunberg said that any carrier providing a workplace violence policy should be able to help mitigate the risk, not just provide coverage in response to the resultant damage.

“We urge our clients to call them at any time to report anything that seems out of ordinary, no matter how small. If they don’t know how to handle a situation, expertise is only a phone call away,” Spunberg said.

The Hiscox Workplace Violence coverage pays for the services of Control Risks and includes some indemnity for bodily injury as well as some supplemental coverage for business interruption, medical assistance and counseling.  Subvention funds are also available to assist organizations in the proactive management of their workplace violence prevention program.

“Coverage matters, but more importantly we need employees and supervisors to act,” Spunberg said. “The consequences of doing nothing are too severe.”

To learn more about Hiscox’s coverage for small-to-medium sized businesses, visit http://www.hiscoxbroker.com/.

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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 Hiscox USA. The editorial staff of Risk & Insurance had no role in its preparation.




Hiscox is a leading specialist insurer with roots dating back to 1901. Our diverse portfolio includes admitted and surplus products for professional liability, management liability, property, and specialty products like terrorism and kidnap and ransom.
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