The Case for Exoskeletons
I hope more workers’ compensation insurers seriously evaluate paying for exoskeletons that allow patients with certain spinal cord injuries to rise from their wheelchairs and walk.
Exoskeletons are assistive devices often described as “wearable robots” or “Segways with legs.” Since 2014, the Food and Drug Administration has approved two models for personal use, including one earlier this year.
Some workers’ comp insurers have already approved a few claims for the motorized devices and the cost of training. Other underwriters have declined to fund them.
The battery-powered devices cost at least $80,000 plus additional training. Safety questions remain and some doctors who agree on the medical benefits they provide are still wary of certifying them as “medically necessary.”
But the products are among technological advancements in patient care — like increasingly sophisticated prosthesis — that payers should learn about to adequately weigh the exoskeleton’s price tag against potential medical care and medication expense reductions resulting from their benefits.
“Psychological benefits also result from standing, walking and looking others eye to eye. Well-being impacts claims expense.” – Clare Hartigan, physical therapist, exoskeleton clinical trail leader at Shepherd Center
Attendees at the National Workers’ Compensation and Disability Conference® & Expo in New Orleans can watch an injured worker’s exoskeleton demonstration during a session titled “The Bionic Claimant: Emerging Medical Technology’s Impact on Care and Cost.”
Clare Hartigan, a physical therapist who will speak during the session, has led clinical trials on exoskeletons at the Shepherd Center, a rehab hospital in Atlanta. She will be joined by Mark Sidney, VP of claims at Midwest Employers Casualty Co.
Exoskeletons’ well-documented medical benefits for spinal injury patients include improved bowel and bladder function, weight loss and better glucose test results, Hartigan said.
“Psychological benefits also result from standing, walking and looking others eye to eye,” Hartigan said. “Well-being impacts claims expense.”
Apart from clinical uses and workers’ comp, other exoskeleton applications are emerging. The military is testing robotic-like suits that could help soldiers carry more weight and reach the battleground less fatigued.
The National Institute for Occupational Safety and Health expects rapid growth in industrial wearable exoskeleton suits that can help workers lift greater loads or hold up heavier tools for longer periods.
But it would also be great to see more workers who have lost their mobility in workplace accidents benefit from the health and quality-of-life improvements exoskeletons offer. Perhaps that will come as more insurers learn about exoskeletons and begin evaluating their unit costs against their impact on medical expenses.
We can also hope for decreases in exoskeletons’ cost as commonly occurs with most technology products. But the companies offering them will need to recoup their R&D expenses. &
Quality Care Outside the ER
A recent trip to the hospital provided a clearer understanding of why I am seeing more employers offer services that prevent minor workplace injuries from leading to unnecessary emergency room visits.
It was 6 a.m. the morning after my wife underwent an outpatient hospital procedure to remove fluid accumulating around a lung. She was experiencing shortness of breath and pain, but we didn’t know whether the symptoms were expected or needed attention.
Better hospital discharge instructions the prior day would have prevented our dilemma at an hour when the emergency room was our only source for medical answers.
We debated the necessity of the ER as we drove to the hospital and even as we walked in the door. We just needed someone to put our minds at rest.
Employees were shocked when they heard the real cost of emergency room care. The exercise gained their cooperation in reducing ER visits.
But walking into an emergency room claiming shortness of breath lands a patient in a bed followed by an intravenous fluid line insertion, a chest X-ray, an MRI and an EKG before the doctor feels safe offering a simple assurance that the problem is only residual symptoms from the earlier procedure.
Our visit illuminated why more employers are turning to triage nurses to determine whether a hospital emergency room visit is necessary or if simple first aid will suffice.
I help select winners of the Risk & Insurance® Teddy Award, given to employers with outstanding safety and workers’ comp programs. Among the 2016 Teddy Award applicants, I see more employers working to eliminate unnecessary emergency room visits.
One creative employer asked workers to submit guesses for the cost of receiving a few stitches during an ER visit. The closest guess to the actual cost received a gift card.
The employees were shocked when they heard the real cost. The exercise gained their cooperation in reducing emergency department visits.
Of course, employers must be wise about deploying strategies that reduce hospital visits. No one wants to risk exacerbating an injured colleague’s condition by discouraging necessary acute care.
Nor do employers want to run afoul of regulators.
Yet, more can be done to reduce unnecessary emergency room use, according to a 2013 RAND Corp. study. Better access to non-emergent care could help.
Interestingly, however, RAND found that while emergency rooms are often “targeted as the most expensive place to get medical care,” they actually play a part in slowing health care cost growth by preventing avoidable hospital admissions.
Emergency departments are playing a larger role in overall U.S. health care treatment as their complex diagnostic evaluation capabilities are increasingly used to support primary care doctors.
Though in our case, better discharge instructions would have helped us avoid the ER. &
Why Marine Underwriters Should Master Modeling
Better understanding risk requires better exposure data and rigorous application of science and engineering. In addition, catastrophe models have grown in sophistication and become widely utilized by property insurers to assess the potential losses after a major event. Location level modeling also plays a role in helping both underwriters and buyers gain a better understanding of their exposure and sense of preparedness for the worst-case scenario. Yet, many underwriters in the marine sector don’t employ effective models.
“To improve underwriting and better serve customers, we have to ask ourselves if the knowledge around location level modeling is where it needs to be in the marine market space. We as an industry have progress to make,” said John Evans, Head of U.S. Marine, Berkshire Hathaway Specialty Insurance.
CAT Modeling Limitations
The primary reason marine underwriters forgo location level models is because marine risk often fluctuates, making it difficult to develop models that most accurately reflect a project or a location’s true exposure.
Take for example builder’s risk, an inland marine static risk whose value changes throughout the life of the project. The value of a building will increase as it nears completion, so its risk profile will evolve as work progresses. In property underwriting, sophisticated models are developed more easily because the values are fixed.
“If you know your building is worth $10 million today, you have a firm baseline to work with,” Evans said. The best way to effectively model builder’s risk, on the other hand, may be to take the worst-case scenario — or when the project is about 99 percent complete and at peak value (although this can overstate the catastrophe exposure early in the project’s lifecycle).
Warehouse storage also poses modeling challenges for similar reasons. For example, the value of stored goods can fluctuate substantially depending on the time of year. Toys and electronics shipped into the U.S. during August and September in preparation for the holiday season, for example, will decrease drastically in value come February and March. So do you model based on the average value or peak value?
“In order to produce useful models of these risks, underwriters need to ask additional questions and gather as much detail about the insured’s location and operations as possible,” Evans said. “That is necessary to determine when exposure is greatest and how large the impact of a catastrophe could be. Improved exposure data is critical.”
To assess warehouse legal liability exposure, this means finding out not only the fluctuations in the values, but what type of goods are being stored, how they’re being stored, whether the warehouse is built to local standards for wind, earthquake and flood, and whether or not the warehouse owner has implemented any other risk mitigation measures, such as alarm or sprinkler systems.
“Since most models treat all warehouses equally, even if a location doesn’t model well initially, specific measures taken to protect stored goods from damage could yield a substantially different expected loss, which then translates into a very different premium,” Evans said.
That extra information gathering requires additional time but the effort is worth it in the long run.
“Better understanding of an exposure is key to strong underwriting — and strong underwriting is key to longevity and stability in the marketplace,” Evans said.
“If a risk is not properly understood and priced, a customer can find themselves non-renewed after a catastrophe results in major losses — or be paying two or three times their original premium,” he said. Brokers have the job of educating clients about the long-term viability of their relationship with their carrier, and the value of thorough underwriting assessment.
The Model to Follow
So the question becomes: How can insurers begin to elevate location level modeling in the marine space? By taking a cue from their property counterparts and better understanding the exposure using better data, science and engineering.
For stored goods coverage, the process starts with an overview of each site’s risk based on location, the construction of the warehouse, and the type of contents stored. After analyzing a location, underwriters ascertain its average values and maximum values, which can be used to create a preliminary model. That model’s output may indicate where additional location specific information could fill in the blanks and produce a more site-specific model.
“We look at factors like the existence of a catastrophe plan, and the damage-ability of both the warehouse and the contents stored inside it,” Evans said. “This is where the expertise of our engineering team comes into play. They can get a much clearer idea of how certain structures and products will stand up to different forces.”
From there, engineers may develop a proprietary model that fits those specific details. The results may determine the exposure to be lower than originally believed — or buyers could potentially end up with higher pricing if the new model shows their risk to be greater. On the other hand, it may also alert the insured that higher limits may be required to better suit their true exposure to catastrophe losses.
Then when the worst does happen, insureds can rest assured that their carrier not only has the capacity to cover the loss, but the ability to both manage the volatility caused by the event and be in a position to offer reasonable terms when renewal rolls around.
For more information about Berkshire Hathaway Specialty Insurance’s Marine services, visit https://bhspecialty.com/us-products/us-marine/.
Berkshire Hathaway Specialty Insurance (www.bhspecialty.com) provides commercial property, casualty, healthcare professional liability, executive and professional lines, surety, travel, programs, medical stop loss and homeowners insurance. The actual and final terms of coverage for all product lines may vary. It underwrites on the paper of Berkshire Hathaway’s National Indemnity group of insurance companies, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. Based in Boston, Berkshire Hathaway Specialty Insurance has offices in Atlanta, Boston, Chicago, Houston, Los Angeles, New York, San Francisco, San Ramon, Stevens Point, Auckland, Brisbane, Hong Kong, Melbourne, Singapore, Sydney and Toronto. For more information, contact [email protected].
The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Berkshire Hathaway Specialty Insurance. The editorial staff of Risk & Insurance had no role in its preparation.