Ebola’s Impact on the Health Care Industry
Now that a second nurse at Texas Presbyterian Hospital in Dallas has been infected with the Ebola virus, the risk to U.S. health care workers has been thrown into the limelight.
“Health care workers are at more risk than any other worker,” said Ron Leopold, M.D., health outcomes practice leader for Willis North America. “But I think there is an overwhelming tendency for all of us and the national media to overblow the risk.”
The virus is highly contagious, but only through direct contact with an infected person. “That’s a very small number of health care workers in this country,” he said. “Being alerted to what’s going on but not alarmed is critical.”
“Being alerted to what’s going on but not alarmed is critical.” — Dr. Ron Leopold, health outcomes practice leader, Willis North America
However, as more doctors, nurses and other clinical staff are exposed to the virus, the potential spread of Ebola on U.S. soil could pose a considerable workers’ comp risk for the health care industry.
“What if doctors treating patients in the U.S. are exposed? For every doctor, you have multiple staff working beneath them. That could have a quick and dramatic effect on personnel at the hospital and the financial consequence would be large,” said Pete Reilly, health care practice leader at retail broker William Gallagher Associates.
In the case of nurses Nina Pham and Amber Joy Vinson, who both cared for Liberian Ebola patient Thomas Duncan at Texas Health Presbyterian Hospital in Dallas and subsequently contracted the disease, illness clearly arose out of the course and scope of employment.
Arguments could be made that breaches in safety protocol led to their exposure, placing fault on the nurses and precluding coverage. But given the CDC’s admission of mishandling its approach to Ebola safety training and not offering enough assistance to the hospital, that rationale may not stand up.
At a hearing of the House Subcommittee on Oversight and Investigations, CDC director Thomas Frieden even said, “While we do not yet know exactly how these transmissions occurred, they demonstrate the need to strengthen the procedures for infection-control protocols which allowed for exposure to the virus.”
Several of the nurses’ co-workers also said that they followed CDC guidelines and wore full hazmat gear while caring for Duncan.
“There are details about every case that would come to bear, but it all depends on the carrier, the policy and other things we can’t address until a scenario is presented,” said Eric Justin, M.D., chief medical officer at Lockton Cos.
Workers’ comp carrier and large health systems, which are typically self-insured, simply don’t have enough information to determine coverage at this point.
It’s tough to understand what all the risks are at this point.”– Dr. Eric Justin, chief medical officer, Lockton Cos.
“It’s a small numbers problem. It’s tough to understand what all the risks are at this point,” Justin said.
Even if few health care workers become infected, the impact on workers’ comp could be significant for any individual hospital because of the high costs associated with caring for a patient in isolation.
“You may not have to close or quarantine your emergency room, but certainly you’ve had to quadruple your order for some type of vaccine or other medications,” Reilly said. Additional expenses may be incurred for hazmat suits, the proper disposal of those suits, additional steps needed for disinfection of hospital rooms and equipment, and even public relations messaging that may be necessary to reassure the public that a facility is safe.
“Normal business services may be 50 percent more expense in this type of situation because you have to go through additional steps to comply with CDC protocol,” Reilly said.
It’s up to hospital risk managers to plan for the admission of Ebola patient, however unlikely, to ensure staff is up to date on safety protocols.
The transmission of the disease on U.S. soil has sparked renewed vigor from the CDC, including clearer and more rigorous guidelines for the proper wear and removal of protective gear, and a plan to send larger, more experienced teams of experts to any hospital caring for an Ebola patient.
Initially, the CDC indicated that any hospital in the U.S. should have the essentials to treat Ebola on their own. The experiences of Emory Hospital in Atlanta and then Texas Presbyterian prove that assumption to be naïve and unsafe.
“In a very short time, mostly due to the situation in Dallas, we’re learning [about the virus] rather rapidly, and one sign of that learning is that the CDC announced that they will start to be much more assertive about providing not just teams to go wherever an Ebola case is confirmed, but larger teams that are experienced not just with working with Ebola but also training others to work with the isolation gear and decontamination procedures,” Justin said.
Most doctors and nurses are aware of the guidelines issued by the CDC and OSHA regarding protective gear, but many have likely not practiced them since early days of job training.
“Even people with experience are finding, ‘This isn’t so easy,’” Justin said. “They’re becoming aware of the need to actually practice them.”
Current CDC protocol also calls for any worker to be observed while removing protective gowns, masks and gloves to ensure that everything is done correctly.
Justin called this “buddy system approach” a necessary methodological step, which allows observers to both step in in a critical moment to correct a problem, and also record information to suggest process changes in the future.
The CDC has also backtracked on earlier assertions that any hospital can handle an isolation patient.
Future cases will most likely end up in one of the four larger, specialized centers that house their own biocontainment units, including Nebraska Medical Center in Omaha, the National Institutes of Health in Bethseda, Md., and St. Patrick Hospital in Missoula, Mont., along with Emory Hospital.
Health care risk managers should make sure to keep third party service providers informed about Ebola response plans and safety procedures.
The experience at Emory, the first U.S hospital to receive an Ebola patient, revealed shortcomings in the U.S.’s plan to manage the virus.
Several third-party vendors working with the hospital balked at the idea of dealing with any potentially infected materials.
Their waste removal company, for example, refused to haul away the high volume of waste generated by someone afflicted by the disease. A transport company would not take blood samples a few blocks away to be tested.
“People on the waste management side are a step or two removed from the clinical setting, so I can see why they’d be concerned,” Justin said. “The best thing to do to allay those anxieties is to have discussions between infection control and those companies, and also let them know of the procedures available.”
Having these third-party vendors on board not only help care for an infectious patient run more smoothly, but also mitigates the risk of a contracted worker making claims of negligence against a hospital.
“As part of your disaster recovery plan, you should be checking with those vendors and making sure they are going to respond,” said Deana Allen, SVP at Willis North America’s national health care practice. “These are the critical services we’ll need.”
Workplace Safety Requires Consensus
Each of us brings a personal perception of reality to our definitions of how safe our workplaces are.
Here’s the challenge we all face in making workplaces safe across the country. Place a group of folks in a room and ask them to put together a plan and protocols to make it safe. Ask them to reach consensus on locking down their workplace.
For those of us who have tried to walk our contemporaries through the process, it can be mind-numbing, especially when working in the public sector.
According to the latest Bureau of Labor Statistics, workers in local government have a higher incidence rate of nonfatal occupational injuries and illnesses (6.1 cases per 100 workers) than any other type of industry sector.
Public workspaces are designed for the community, the employees who provide the services and the folks who come to be served.
The balance between “by the people and for the people” can be treacherous.
These folks come in all shapes and sizes and temperaments. Their issues might be as mundane as a dog license and as complex as a child custody court case. The mix of service on any given day varies according to the weather, the deadline, the season and the crime.
Limiting access to public spaces requires a balance between the safety of the employee and the need for the public to feel there are no barriers to the services they seek.
Safety planning requires common sense and a sense of purpose. Both the public and the employee need to be satisfied that any approach to workplace safety is well-intentioned and does not restrict access to our unalienable right to good government.
Safety — one little word that carries a big message. Placing a barrier between the public and its government often creates suspicion and a cry of limitation or obstruction. Folks want to come face to face with the people whose taxes pay their government salaries.
The balance between “by the people and for the people” can be treacherous.
How safe is your workplace? Look around and measure the complacency of your co-workers.
Listen to the chatter — cameras that record your environment and monitor your safekeeping are construed as Big Brother watching. Gates, window service and counters that prohibit access are obstruction devices. Opponents of metal detectors and bag screenings argue they violate personal freedom and are unnecessarily invasive.
Employees within public spaces, however, will certainly testify that workplace safety measures are needed based upon statistical data, downright scary situations, questionable behavior and outright concern.
The process for establishing safety protocols is a journey best taken with an open mind and a sense of community.
Employees in all types of workplaces have to agree to participate in the protocols established for the good of the whole. If consensus cannot be reached, the results may be fatal.
Be tenacious and push for cooperation in agreeing that safety can be achieved without the perception of violation of privacy.
At the end of the day, each of us as risk managers have one goal — to get our employees home safe and sound to families awaiting their returns.
Read all of Marilyn Rivers’ Risk Insider contributions.
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.