Scientists Look to Protect Workers From Climate Change
“Climate change may result in not only the increasing prevalence and severity of known occupational hazards and exposures, but also the emergence of new ones,” states a blog post. “Workers are often the first to be exposed to the effects of climate change and may be affected for longer durations and at greater intensities. Recently, workers were referred to as ‘the canaries in the coal mine of climate change impacts.”’
But the article on the National Institute for Occupational Safety and Health’s website also notes that while there has been much research and planning on public health from the environmental aspects of climate change, little has been done on the effects on workers.
Those particularly at risk include outdoor workers, emergency responders, commercial fishermen, health care workers, farmers, certain indoor workers, and transportation and utility workers. “For worker populations such as migrant workers and day laborers who may have inadequate housing or other social and economic constraints, the health effects of climate change may be additive from exposures both at work and at home,” according to the post.
The potential effects of climate change on workers include:
Direct effects such as increased ambient temperatures, air pollution, ultraviolet radiation, extreme weather, vector-borne diseases, and expanded vector ranges.
Indirect effects, such as hazards from new and emerging industries such as renewable energy, carbon sequestration, and “green industries,” and changes in how structures and communities are built and maintained.
“There is strong evidence that climate change is and will continue presenting risks of job-related injury, illness, and death …” — National Institute for Occupational Safety and Health
“Climate change can contribute to decreasing the ozone layer and affect UV radiation levels at the surface of the earth. Outdoor workers will have more frequent, intense, and longer exposure to UV radiation, resulting in increased risk of adverse eye effects, skin cancer, and possibly immune dysfunction,” the article states. “Extreme weather events or natural disasters, such as floods, landslides, storms, lightning, droughts, and wildfires, are becoming more frequent and intense. Weather disasters may cause deaths, injuries, diseases, and mental stress.”
The post notes that an executive order signed by President Obama last year made a commitment to prepare the nation for the potential impacts of climate change. “The challenge is to characterize how these climate events may influence worker health and safety and to establish plans for mitigating, responding, and adapting to the current and anticipated impacts.”
NIOSH has created a team of scientists to investigate the implications of climate change for worker health and safety and to develop an action plan. Called the NIOSH Climate Change Occupational Safety and Health Work Group, the team is charged with determining relevant issues, identifying gaps in worker protection, and making recommendations for worker safety and health improvements.
“There is strong evidence that climate change is and will continue presenting risks of job-related injury, illness, and death, so numerous critical research questions need to be resolved regarding specific hazards, sentinel events, risk assessment, and preventive actions,” the post says. “Additional research needs include susceptible populations, surveillance, and indicators relevant to climate change and workers. A strategic research plan will provide the roadmap for a broad approach to meeting these needs. As a result, the health consequences of climate change and how to lessen them will be widely understood.”
Speakers Put Finishing Touches on Presentations
This year’s conference kicks off Wednesday, Nov. 19 at 8:30 a.m. with the keynote address. Dr. L. Casey Chosewood, senior medical officer and director of the Office for Total Worker Health Coordination and Research for the National Institute for Occupational Safety and Health, will discuss Integrating Employees’ Health and Well-Being to Improve the Bottom Line. His keynote address will be followed by two-and-a-half days of more than 30 breakout sessions. They are categorized within five tracks: Claims Management, Medical Management, Program Management, Disability Management, and Legal/Regulatory Issues.
Below is an in-depth look at several of the sessions.
The Productivity Challenge: Engaging Injured, Absent and Disconnected Workers
Wednesday, Nov. 19; 11 a.m.-12:15 p.m.
The personal touch is key to getting a company wellness program to translate to reduced workers’ comp costs, said Kevin Confetti. As director of employment practices and workers’ compensation for the University of California, he said placing coordinators at individual facilities has made the difference in getting workers involved in the various health promotion activities available.
“The biggest plus is actually having someone sit down and talk to these employees about how these programs can benefit them,” Confetti said. “We get so much junk mail at home — written literature falls on deaf ears. If someone can talk to them, they are more apt to give it a try.”
Confetti will be joined in the session by Dr. Teresa Bartlett, senior vice president of medical quality at Sedgwick. They will discuss ways to engage employees in wellness programs in order to reduce absences and ultimately improve productivity.
“Successful companies understand the importance of employee engagement and creating a culture of wellness,” Bartlett explained. “When employers embrace these concepts and focus on a quality health care experience, the results are demonstrated by having a positive impact on productivity and safety.”
Despite the robust wellness programs the University of California has implemented at its individual campuses and medical center, getting workers to participate has been challenging. Nearly three years ago, the company developed work-strong, an occupational wellness program.
“The reason we went into it as a prevention effort is that our employees like to stay with us. … They tend to be long term. What we were finding was it was not uncommon for them to have two to four workers’ comp claims in their tenure. If we can improve the health and wellness of our employees, it will help prevent them from being injured,” Confetti said. “We have definitely seen that. The rate of repeat injuries has definitely declined. That’s the number one benefit.”
Confetti said he’s also heard impressive stories from the employees as a result of the company’s wellness activities. For example, some have been able to control their diabetes through diet and exercise rather than medications.
“They’ve committed to making these changes,” he said. “We have people saying it’s changed their lives.”
Companies of all sizes can gain valuable insight from the session. The organization is something of a microcosm of the employment world.
“The best way to look at the university is they are really small cities; each with a police force, our dorms are like hotels, the dining commons are restaurants. You name it, we have it — teachers, researchers, construction workers, pipe fitters, plumbers, custodians,” Confetti said. “Really what we do can translate to any business. Other than manufacturing we have close to every type of industry on our campuses.”
Approaches to Managing Nontraditional Claims: Including Unions, Legacy Claims and Co-Morbidities
Thursday, Nov. 20; 1:30-2:45 p.m.
While workers’ comp practitioners typically seek to close claims as soon as possible, that’s not always the best approach. An injured worker who’s been on a long-term medical pharmaceutical program, for example, should be weaned off inappropriate medications before a settlement is discussed, especially if a Medicare set-aside is involved.
“That would be a claim where it looks like you could settle it, you think you should settle it, there is no jurisdictional impediment to settling, and there might be interest for the claimant and his attorney to settle,” said Julie Fortune, senior vice president and chief claims officer for Arrowpoint Capital. “But when you do the calculations based on current medical spend, the Medicare set-aside might be reviewed and returned by CMS at an amount that would exceed your expectations. So you don’t want to settle until you get the medical appropriately managed pursuant to the guidelines of the jurisdiction.”
That’s just one instance where it might be in the best interests of all parties to spend more time addressing some of the issues in the claim rather than trying to resolve it quickly. Fortune will join Patti Colwell, manager of national workers’ compensation program for Southwest Airlines and Tron Emptage, chief claims officer for Helios to look at nontraditional claims and out-of-the-box thinking to achieve optimal outcomes.
“Since 2004 Arrowpoint Capital has settled more than 40,000 workers’ comp claims,” Fortune said. “Our approach is fine-tuned, and we are pretty aware of what claims we can and cannot resolve or when we should or should not resolve them.”
Some states dictate the procedures for handling claims. Texas, for example, doesn’t allow claims with a date of injury after 1991 to settle future medicals on them. “That doesn’t mean we don’t aggressively use every tool and technique permitted by Texas regulations to manage the medical treatment,” Fortune said.
Among the biggest factors prolonging claims and preventing recovery are comorbidities. While comorbidities may not have been present when the worker was injured, they may develop as the person ages. In some cases there might be multiple comorbidities such as obesity and diabetes.
“The loss of function can be profound and their ability to do anything is extremely limited. They haven’t worked for 10 or 15 years, they are now obese, some morbidly obese. They can barely get around the house let alone exercise or attempt to seek other work,” Fortune said. “Complicating this further is the fact that many of the workers wind up on Social Security disability or Medicare, which now requires all parties to take into account Medicare’s interest as a secondary payer.”
Comorbidities can acutely impact workers’ comp settlements in terms of life expectancy. Fortune says through the use of data management and predictive modeling, the industry is just beginning to get a better handle on predicting life expectancy of injured workers with comorbidities to accurately calculate workers’ comp settlements.
“Part of what we are doing is carefully tracking body mass index because there are some recent studies showing that morbid obesity can reduce your life expectancy dramatically,” she said. “If you’re attempting to figure your total cost with a normal claimant with a back strain without surgery, it’s fairly easy to calculate. But if you have a person with multiple surgeries and lots of comorbidities, you need to determine how such factors are going to impact their normal life expectancy. That’s part of what needs to go into the calculation of these claims. It’s really challenging right now. There is no easy-to-use tool.”
Modeling Managed Care for Program Impact
Thursday, Nov. 20; 10:45 a.m. to noon
To bundle or not to bundle. That’s one of the questions employers are asking these days, i.e., whether it is more cost effective to put all managed care services into the hands of a single vendor.
“We reject that thought. We don’t want to put all our eggs in one basket,” said John Riggs, manager of workers’ compensation for the Disneyland Resort. “In my opinion you lose the expertise in that niche product if you go into bundle.”
The idea of bundling — bill review, utilization review, nurse case management, and other managed care services — is among the topics to be discussed by Riggs, along with John Smolk, principal manager of workers’ compensation for Southern California Edison, and Barry Bloom, principal of The bdb Group. Where he and Smolk are opposed to bundling services, “Barry will talk about his clients who have gone both routes,” Riggs said.
Employers need to be aware of the many managed care services available and how they function “so there’s an understanding of what the terms and programs are,” Riggs said. “The number of insured employers and those handled by third-party administrators is much greater than those self-insured or self-administered. They may have an agreement with the TPA that includes services. The employer needs to understand what the programs are all about and how the costs can become intermingled — and it becomes a cash cow for the provider.”
The evolution of managed care has been driven largely by the state of California. Workers’ comp payors there have been required to obtain authorization for most medical procedures.
“It’s like a big machine,” Riggs said. “It’s become more complicated, more expensive, and the outcomes are suspect and always subject to challenge … so unless your program is operating on all cylinders 24-hours a day, you can find yourself in a world of hurt.”
Riggs said the panel will offer in-depth insights into the various managed care services available, discuss how to pick the most appropriate ones depending on a company’s needs, and demonstrate how to evaluate them.
Workers’ Compensation and Its Secondary Payers: Medicare and Medicaid
Thursday, Nov. 20; 8:30-9:45 a.m.
As if the Medicare Secondary Payer Act didn’t create enough headaches for workers’ comp stakeholders, there’s a new law threatening to cause more consternation.
The Bipartisan Budget Act signed by President Obama last year strengthens Medicaid’s third-party reimbursement rights in terms of ensuring it does not pay for medical care when there is a primary payer such as workers’ comp. That, combined with another law on the books, could open the floodgates for reimbursement efforts.
“Traditionally, we haven’t see a lot of Medicaid recipients [in the workers’ comp system] because once you are gainfully employed you are generally disqualified,” said Jennifer Jordan, general counsel of MEDVAL, LLC. “Under the expansion of the Affordable Care Act, that will change.”
The Medicaid program will be open to more than just those making minimum wage. As Jordan explained, the head of household for a family of four could have an income of approximately $35,000 and still be eligible.
“We’re going to see a lot more people in the workforce who qualify for Medicaid and if also receiving Social Security Disability Insurance, could be dually eligible for Medicare as well,” she said. The real challenge will be “identifying your red flags with regard to who else is out there and knowing to check with them.”
The goal of the law is to enforce Medicaid’s position as the secondary payer, so it, like Medicare, would be the provider of last resort. However, unlike Medicare, Medicaid is administered on a state rather than federal level.
“The programs are very different. You can’t go to the Centers for Medicare and Medicaid Services with questions because they are state programs,” Jordan said. “It’s going to be a new layer of bureaucracy at the settlement level because now you have to go to someone else and ask them too if they want money.” Add to that the possibility of the injured worker moving to another state during the course of the claim, and there is yet another government agency with which to deal.
Jordan, and fellow speakers Vernon Sumwalt, a partner at the Sumwalt Law Firm, and Tim Nay, founding principal of the Law Offices of Nay & Friedenberg, will discuss the ins and outs of Medicaid and what the law change might mean for workers’ comp practitioners.
Additionally, regulations continue to be developed for the Strengthening Medicare and Repaying Taxpayer, or SMART Act, which reformed some of the Medicare Secondary Payer rules. The speakers will discuss that as well.
“None [of the regulations] have been finalized; they are a work in progress,” Jordan said. “We will cover where they are with regard to changes.”
Policy and practice changes at CMS will also be addressed, along with practical strategies to comply with the Medicare Secondary Payer itself, whether participating in the voluntary CMS approval program or not.
Holding Your Insurer/TPA Accountable With Customer Service Instructions
Thursday Nov. 20; 3:45-5 p.m.
High-quality service is a must these days, and there is no reason employers can’t work with vendors who offer the most advantages for their companies. That’s the message two veteran claims and risk management professionals hope to get across.
“I had an instance recently where we were using a vendor and couldn’t get copies of X-rays. … It caused delays for the employee who couldn’t get return to work. It can be a big problem,” said Darin Hampton, a workers’ compensation regional coordinator for International Paper. “That’s why we say you have a right to tailor [your program] to who you want to use.”
The particular vendor partners an employer uses do not have to be dictated by an insurer, third-party administrator, or attorney. A mainstream vendor that many companies use for a particular service might not always be the right one for the organization.
“You have these national programs,” Hampton said, “One that might be great in Florida but not in Texas. So you must tailor what you do.”
Where there can be snags is convincing claims adjusters to get on board. They may not realize they don’t have to use an inferior vendor.
“We had a diagnostic vendor [for radiological services]. There are only so many radiological facilities in the U.S. so what they have to sell is service,” said Jodie L. Massingill, senior manager of casualty claims for Sysco Corp. “But the adjuster said, ‘I have to use them; nobody is going to listen to me.’”
Building solid relationships is key. “It’s all about managing that relationship and about income streams,” Massingill said. “I tell my adjusters, ‘if you don’t want to use [XYZ] company call me and tell me who you want to use.’”
Effective partnerships with claims adjusters can go a long way — not only for more effective claims handling but for keeping adjusters happy and in their jobs. “I have adjusters that stay with us because they like my claims team,” Massingill said. “We help them. They feel like they are part of this and not a piece of meat just handling a claim.”
As Hampton describes it, claims examiners should be an extension of the company. “A big thing for me is ‘Don’t call me and say the attorney wants me to do blah, blah, blah,’” he said. “I tell them, ‘It’s your claim. You tell me what you want to be done.’ I don’t want them to feel that the attorney has the upper hand.”
Adjusters who are empowered in their jobs to use the vendors they deem the most appropriate tend to stay with an organization for the long term. The two say avoiding turnover among adjusters can save a company headaches and money.
“At the end of the day, a claim is a claim is a claim. It’s handled basically the same way. So how is your adjuster going to make it better for them and for you?” Massingill said. “It’s the partnership.”
Medical Case Management: How to Position Your Program for Best Outcomes
Thursday, Nov. 20; 8:30-9:45 a.m.
Managing the medical aspect of a workers’ comp claim involves doing the right thing at the right time. It requires all hands on deck. There is no silver bullet, just hard work. But employing a companywide commitment that focuses on all aspects of the claim cycle leads to best outcomes — for everyone.
“It’s a collaborative effort among all appropriate parties to make an effective outcome,” said Kim Weaver, director of professional services for M Hayes.
“It’s a coordination of benefits — integrating all the moving parts of a claim and identifying a basic operating philosophy so the decision making is consistent,” added Anita Weir, director of medical and disability management, Corporate Risk Department at Safeway Inc. “That means you’re always talking about taking care of your employees, timely quality care and you set your programs up with that in mind.”
The two industry veterans will share strategies to design and implement the best case management program for each organization. They say while the strategies work for larger employers, many of the same tools can also be used by midsized and small companies.
“They may not be into the total integration of long-term disability and short-term disability, but even just integrating the workers’ comp pieces — more companies are doing that,” Weir said. “I’m talking about making sure we have vendors who practice the same philosophy and have the same goals. That more of us are looking at quality care issues than cost mentality. There are a lot of employers who are doing that. … People in workers’ comp now are beginning to realize that the best cost savings is good quality care.”
While employers seek to contain costs, they are also demanding value-added services from vendor partners. It’s about more than just the bottom line.
“People are willing now to develop programs and willing to put out a little money because they are seeing that medical is a high cost driver and it’s not getting any better without that value-added service from all parties,” Weaver said. “So they are looking at that as well.”
So what are some of the elements that make for a successful case management program? “Accountability and authority,” Weir said.
“Again, addressing the right things at the right time with the right resources,” Weaver concurred. “Making sure that is happening and evaluating the process — not just going with the status quo.”
Employers must be willing to really look at their case management programs to see what is working and what is not, then take steps to improve it.
“We’re in an unprecedented time. A lot of things are changing,” Weaver said. “People are either going to look at their programs and improve them, or they are not going to survive.”
A Renaissance In U.S. Energy
America’s energy resurgence is one of the biggest economic game-changers in modern global history. Current technologies are extracting more oil and gas from shale, oil sands and beneath the ocean floor.
Domestic manufacturers once clamoring for more affordable fuels now have them. Breaking from its past role as a hungry energy importer, the U.S. is moving toward potentially becoming a major energy exporter.
“As the surge in domestic energy production becomes a game-changer, it’s time to change the game when it comes to both midstream and downstream energy risk management and risk transfer,” said Rob Rokicki, a New York-based senior vice president with Liberty International Underwriters (LIU) with 25 years of experience underwriting energy property risks around the globe.
Given the domino effect, whereby critical issues impact each other, today’s businesses and insurers can no longer look at challenges in isolation one issue at a time. A holistic, collaborative and integrated approach to minimizing risk and improving outcomes is called for instead.
Aging Infrastructure, Aging Personnel
The irony of the domestic energy surge is that just as the industry is poised to capitalize on the bonanza, its infrastructure is in serious need of improvement. Ten years ago, the domestic refining industry was declining, with much of the industry moving overseas. That decline was exacerbated by the Great Recession, meaning even less investment went into the domestic energy infrastructure, which is now facing a sudden upsurge in the volume of gas and oil it’s being called on to handle and process.
“We are in a renaissance for energy’s midstream and downstream business leading us to a critical point that no one predicted,” Rokicki said. “Plants that were once stranded assets have become diamonds based on their location. Plus, there was not a lot of new talent coming into the industry during that fallow period.”
In fact, according to a 2014 Manpower Inc. study, an aging workforce along with a lack of new talent and skills coming in is one of the largest threats facing the energy sector today. Other estimates show that during the next decade, approximately 50 percent of those working in the energy industry will be retiring. “So risk managers can now add concerns about an aging workforce to concerns about the aging infrastructure,” he said.
Increasing Frequency of Severity
Current financial factors have also contributed to a marked increase in frequency of severity losses in both the midstream and downstream energy sector. The costs associated with upgrades, debottlenecking and replacement of equipment, have increased significantly,” Rokicki said. For example, a small loss 10 years ago in the $1 million to $5 million ranges, is now increasing rapidly and could readily develop into a $20 million to $30 million loss.
Man-made disasters, such as fires and explosions that are linked to aging infrastructure and the decrease in experienced staff due to the aging workforce, play a big part. The location of energy midstream and downstream facilities has added to the underwriting risk.
“When you look at energy plants, they tend to be located around rivers, near ports, or near a harbor. These assets are susceptible to flood and storm surge exposure from a natural catastrophe standpoint. We are seeing greater concentrations of assets located in areas that are highly exposed to natural catastrophe perils,” Rokicki explained.
“A hurricane thirty years ago would affect fewer installations then a storm does today. This increases aggregation and the magnitude for potential loss.”
On its own, the domestic energy bonanza presents complex risk management challenges.
However, gradual changes to insurance coverage for both midstream and downstream energy have complicated the situation further. Broadening coverage over the decades by downstream energy carriers has led to greater uncertainty in adjusting claims.
A combination of the downturn in domestic energy production, the recession and soft insurance market cycles meant greatly increased competition from carriers and resulted in the writing of untested policy language.
In effect, the industry went from an environment of tested policy language and structure to vague and ambiguous policy language.
Keep in mind that no one carrier has the capacity to underwrite a $3 billion oil refinery. Each insurance program has many carriers that subscribe and share the risk, with each carrier potentially participating on differential terms.
“Achieving clarity in the policy language is getting very complicated and potentially detrimental,” Rokicki said.
Back to Basics
Has the time come for a reset?
Rokicki proposes getting back to basics with both midstream and downstream energy risk management and risk transfer.
He recommends that the insured, the broker, and the carrier’s underwriter, engineer and claims executive sit down and make sure they are all on the same page about coverage terms and conditions.
It’s something the industry used to do and got away from, but needs to get back to.
“Having a claims person involved with policy wording before a loss is of the utmost importance,” Rokicki said, “because that claims executive can best explain to the insured what they can expect from policy coverage prior to any loss, eliminating the frustration of interpreting today’s policy wording.”
As well, having an engineer and underwriter working on the team with dual accountability and responsibility can be invaluable, often leading to innovative coverage solutions for clients as a result of close collaboration.
According to Rokicki, the best time to have this collaborative discussion is at the mid-point in a policy year. For a property policy that runs from July 1 through June 30, for example, the meeting should happen in December or January. If underwriters try to discuss policy-wording concerns during the renewal period on their own, the process tends to get overshadowed by the negotiations centered around premiums.
After a loss occurs is not the best time to find out everyone was thinking differently about the coverage,” he said.
Changes in both the energy and insurance markets require a new approach to minimizing risk. A more holistic, less siloed approach is called for in today’s climate. Carriers need to conduct more complex analysis across multiple measures and have in-depth conversations with brokers and insureds to create a better understanding and collectively develop the best solutions. LIU’s integrated business approach utilizing underwriters, engineers and claims executives provides a solid platform for realizing success in this new and ever-changing energy environment.
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.