Risk Insider: Frank Russo

Hire for Integrity

By: | May 26, 2016 • 3 min read
Frank is the Senior Vice President of Risk and Legal Affairs and Privacy Officer for Silverado Senior Living, a nationally recognized provider of memory care assisted living, home care and hospice services. He can be reached at [email protected]

As risk managers we are all too familiar with being awakened by calls in the dead of night involving major incidents, accidents, injuries or events. The root cause of many of these misfortunes is often our employees and — unfortunately — their bad habits.

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In more cases than we’d like to see, the bad outcome may have been caused by a negligent, careless, hostile, disgruntled or even criminal employee.

Yes, we all have (or should have) strong safety protocols and policies and procedures in place to prevent these accidents from occurring. In addition, we all provide (or should provide) risk management and safety training to our employees, especially after these serious events occur.

But all the training in the world won’t offset a bad hire. So what if we had a risk management time machine? What if we could go back in time and prevent that disastrous event from happening by not hiring the employee who was responsible? What would that be worth to you and your organization?

What if we could go back in time and prevent that disastrous event from happening by not hiring the employee who was responsible? What would that be worth to you and your organization?

At Silverado, we assessed our hiring process to determine if we could mitigate and reduce risk based on how we hire. Our conclusion? Yes, we absolutely could.

We looked at traits common to what we would consider “bad hires,” and the shared traits of employees who were terminated for cause and/or caused or contributed to an avoidable accident.

Several years after making the decision to include risk management in our hiring practices, our claims data and new safety culture has validated our initial belief.

The Importance of Integrity

Warren Buffet said, “In looking for people to hire, you look for three qualities; 1. Integrity, 2. Intelligence, 3. Energy.” At Silverado, we incorporated an integrity screen for ALL new hires companywide a couple years back. To work for Silverado, you must pass this test.

I understand we all need to be profitable to survive. So adding an extra step and upfront expense may seem unnecessary or even impractical, especially for something that isn’t a state or federal requirement.

But we concluded early on that it was the right thing to do in order to employ the safest and highest integrity employees possible.

In our case, these employees are providing care to thousands of vulnerable memory-impaired individuals whom we are entrusted with every single day. Knowing care is being provided by high integrity people is extremely important to us.

We also know that any cost or time associated with it will be paid back tenfold by a reduction in claims (and related hard and soft costs). And we have the data to prove it.

Two years after making integrity screens part of the Silverado culture, we wanted to look at the effect on our risk data.

The University of Arizona ran an in-depth two-year independent study on our employees who took the integrity test and those who didn’t. This study specifically addressed workplace injuries (workers’ compensation claims) and focused on frequency and severity. The results showed even greater impact that we anticipated.

  • Incidence of any claim being filed is nearly 3 times as strong among non-test takers.
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  • Incidence of a claim exceeding $5K is nearly 4 times as strong among those who never took the test.
  • Incidence of a claim exceeding $20K is nearly 12 times as strong among those who never took the test.
  • Internally we also found that hiring for Integrity positively affected our turnover rate as well as our professional liability frequency.

At Silverado we have found that higher integrity equals lower risk. By hiring for integrity we have successfully been able to mitigate risk from the initial hiring process and prevent many injuries (and associated costs) before they ever occur.

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Safety Culture

Craft Incentive Programs With Care

While most safety incentive programs are well intended, employers must ensure that they don't backfire and discourage reporting.
By: | May 11, 2016 • 6 min read
The Bait

What kinds of safety incentives lessen injuries and illnesses, and what kinds inadvertently discourage workers from reporting?

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Safety professionals say it’s all in how an incentive program is structured, and perhaps even more importantly, how the importance of maintaining a safe work environment – especially for workers and their families — is communicated.

In 2012, the U.S. Occupational Safety and Health Administration issued a memorandum calling for employers not to provide incentives that effectively discourage employees from reporting their injuries.

Disincentives include awarding paid time off to a unit that has the greatest reduction in incidence rates or maintaining an injury-and illness-free worksite for a period of time.

“If employees do not feel free to report injuries or illnesses, the employer’s entire workforce is put at risk,” OSHA wrote.

“Employers do not learn of and correct dangerous conditions that have resulted in injuries, and injured employees may not receive the proper medical attention, or the workers’ compensation benefits to which they are entitled.

“Ensuring that employees can report injuries or illnesses without fear of retaliation is therefore crucial to protecting worker safety and health.”

The agency last year issued an updated memorandum that detailed the differences between a positive incentive program and one that discourages reporting.

“A positive incentive program,” wrote the agency, “encourages or rewards workers for reporting injuries, illnesses, near-misses, or hazards; and/or recognizes, rewards, and thereby encourages worker involvement in the safety and health management system.”

The memorandum included examples of positive incentives such as “providing tee shirts to workers serving on safety and health committees; offering modest rewards for suggesting ways to strengthen safety and health; or throwing a recognition party at the successful completion of company-wide safety and health training.”

The agency warned that incentive programs that focus on injury and illness numbers often have the effect of discouraging workers from reporting an injury or illness.

Disincentives to reporting, it said, “may range from awarding paid time off to a unit that has the greatest reduction in incidence rates to rewarding workers with a celebration for achieving an injury/rate reduction goal or maintaining an injury-and illness-free worksite for a period of time.”

“There are also programs that actually defeat the purpose, by telling people that they can get paid if they don’t have accidents. But that sends the wrong message.” — Brent Jones, safety officer, Red River Army Depot

But these are just memorandums, and since there are no hard and fast rules about such programs, many employers are confused about what is now acceptable to OSHA, said Don Enke, director of risk control services at Safety National.

Enke recently spoke about OSHA’s view of incentive programs in a webinar, “Out Front Ideas with Kimberly George and Mark Walls,” sponsored by Safety National and Sedgwick.

“I think what OSHA is looking for is, does your program have characteristics that would compromise safety, discourage reporting a claim, or even delay reporting a claim?’” Enke said.

“They definitely don’t want anything delaying reporting. And they don’t want anybody retaliated against if they report a claim.”

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Traditional safety incentive programs often reward employees for having a certain number of days without any injuries. However, that could discourage employees or their supervisors from reporting an injury, a key concern of OSHA’s.

“What I’m seeing in the workplace with various clients is more of a progressive program of leading indicators vs. lagging indicators,” Enke said.

“It’s recognizing employees for various proactive safety behaviors. That is where I’m seeing more progressive programs or employers moving in that direction, where it’s part of their safety culture.

“They’re getting employee buy-in and ownership, and they’re making employees part of the program where they are involved with hazard indications, reporting near misses, reporting unsafe conditions, even involved with audits, training programs — even taking online training courses.”

Tamara Ulufanua-Ciraulo, director of insurance, Stater Bros. Markets

Tamara Ulufanua-Ciraulo, director of insurance, Stater Bros. Markets

Tamara Ulufanua-Ciraulo, director of insurance at Stater Bros. Supermarkets in San Bernardino, Calif., said that safety professionals need to review their incentive program to make sure the organization is not pushing people to not report.

For example, at Stater Bros., no single store carries the sole burden of its own claim costs, Ulufanua-Ciraulo said.

Costs are now spread out across all stores, and each store has a pro rata share of the cost based on man-hours and how injuries are reported.

“That way, no one injury can hurt a store’s profit and loss statement, which minimizes a manager’s desire to not report,” she said.

For its employees, Stater Bros. rewards them for engaging in safe practices that minimize injuries. The grocer holds annual recognition parties, with raffle prizes of gift cards, gas cards and apparel, and catered breakfasts for certain years of no reported injuries.

But Ulufanua-Ciraulo believes incentives like these don’t result in employees not reporting, because the company has also changed the culture about safety, with bulletins saying that what’s most important is the employee — not the organization.

“We recognize employees’ good intentions by giving them positive recognition for staying safe,” she said. That has helped dispel any misunderstanding about reducing injury costs being the company’s top priority, which leads workers to not report.

Brent Jones, safety officer at Red River Army Depot in Texarkana, Texas, said it comes down to how safety incentives are structured and then communicated to employees: “The right tools in the wrong hands can always be detrimental to the organization.”

“We do offer safety incentives, but we don’t tie them to injury rates or anything like that,” Jones said. “Instead, we reward for good behavior in trying to reduce injuries.”

The depot has an “on-the-spot” incentive program, in which supervisors can recognize employees for going above and beyond the standards.

For example, supervisors wouldn’t recognize an employee for wearing personal protection equipment, “because that’s what they’re supposed to do.”

But if an employee reports potential safety hazards, that goes above and beyond, so their supervisor can hand them a ticket that can be redeemed at the safety office for a gift, such as glasses, coffee mugs, backpacks, coolers, chairs, umbrellas.

These all have the depot’s safety logo on them, which also helps the safety team’s communication efforts by publicizing the depot’s commitment to safety when employees use these items outside of the workplace.

The program only works if there is good communication, Jones said.

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“A lot of programs are poorly communicated and, in my opinion, don’t work,” he said. “There are also programs that actually defeat the purpose, by telling people that they can get paid if they don’t have accidents. But that sends the wrong message.”

If leadership of an organization thinks incentive programs are only there to encourage fewer accidents, then that’s likely going to give OSHA cause to view their incentive program merely as a way to discourage injury reporting, Jones said.

“The message to employees is that they should keep themselves safe so they can go home to their families without injury,” he said.

“That brings it home a little bit with a whole new outlook. How that message is delivered probably means the most, even with an incentive program.”

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected]
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Sponsored Content by IPS

Compounding: Is it Coming of Age?

Prescription drug compounding is beginning to turn a corner in managing chronic pain.
By: | April 28, 2016 • 5 min read
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The WC managed care market has generally viewed the treatment method of Rx compounding through the lens of its negative impact to cost for treating chronic pain without examining fully the opportunity to utilize “best practice” prescription compounds to help combat the opioid epidemic this nation faces. IPS stands on the front lines of this opioid battle every day making a difference for its clients.  

After a shaky start cost-wise, prescription drug compounding is turning the corner in managing chronic pain without the risk of opioid addiction. A push from forward-thinking states and workers’ compensation PBMs who have the networks and resources to manage it is helping, too.

Prescription drug compounding has been around for more than a decade, but after a rocky start (primarily in terms of cost), compounding is finally coming into its own as an effective chronic pain management strategy – and a worthy alternative for costly and dangerous opioids – in workers’ compensation.

According to Greg Todd, CEO and founder of Integrated Prescription Solutions Inc. (IPS), a Costa Mesa, Calif.-based pharmacy benefit manager (PBM) for the workers’ compensation and disability market, one reason compounding is beginning to hit its stride is because some states have enacted laws to manage it more effectively. Another is PBMs like IPS have stepped up and are now managing compound drugs in a much more proactive manner from an oversight perspective.

By definition, compounding is a practice through which a licensed pharmacist or physician (or, in the case of an outsourcing facility, a person under the supervision of a licensed pharmacist) combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.

During that decade, Todd explains, opioids have filled the chronic pain management needs gap, bringing with them an enormous amount of problems as the ensuing addiction epidemic sweeping the nation resulted in the proliferation and over-consumption of opioids – at a staggering cost to both the bottom line and society at large.

As an alternative, compounded topical cream formulations also offer strong chronic pain management but have limited side effects and require much reduced dosage amounts to achieve effective tissue level penetration. In fact, they have a very low systemic absorption rate.

Bottom line, compounding provides prescribers with an excellent alternative treatment modality for chronic pain patients, both early and late stage, Todd says.

Time for Compounding Consideration

IPS_SponsoredContentThat scenario sets up the perfect argument for compounding, because for one thing, doctors are seeking a new solution, with all the pressure and scrutiny they’re receiving when trying to solve people’s chronic pain problems using opioids.

Todd explains the best news about neuropathic pain treatment using compounded topical analgesic creams is the results are outstanding, both in terms of patient satisfaction in VAS pain reduction but also in reduction potentially dangerous side effects of opioids.

The main issue with some of the early topical creams created via compounding was their high costs. In the early years, compounding, which does not require FDA approval, had little oversight or controls in place. But in the past few years, the workers compensation industry began to take notice of the solid science. At the same time, medical providers also were seeing the same science and began writing more prescriptions for compounding – which also offers them a revenue stream.

This is where oversight and rigor on the part of a PBM can make a difference, Todd says.

“You don’t let that compounded drug get dispensed when you’re going to pay for it without having a chance to approve it,” Todd says.

Education is Critical

IPS_SponsoredContentAt the same time, there is the growing, and genuine, need to start educating the doctors, helping them understand how they can really deliver quality pain management to a patient without gouging the system. A good compounding specialty pharmacy network offering tight, strict rules is fundamental, Todd says. And that means one that really reaches out to work with the doctors that are writing the prescriptions. The idea is to ensure that the active ingredients being chosen aren’t the most expensive sub-components because that unnecessarily will drive the cost of overall compound “through the ceiling.”

IPS has been able to mitigate costs in the last couple years just by having good common sense approach and a lot of physician outreach. Working with DermaTran Health Solutions and its national network of compounding pharmacies, IPS has been successfully impacting the cost while not reducing the effectiveness of a compounded prescription.

In Colorado, which has cracked down on compounding profiteering, Legislative change demanded no compound could be more than $350.00 period. What is notable, in an 18-month window for one client in Colorado, IPS had 38 compound prescriptions come through the door and each had between 4 and 7 active ingredients. Through its physician education efforts, IPS brought all 38 prescriptions down 3 active ingredients or less. IPS also helped patients achieve therapeutic success (and with medical community acceptance). In that case, the cost of compound prescriptions was down to an average of $350, versus the industry average of $788. Nationwide IPS has reduced the average cost of a compound prescription to $478.00.

Todd says. “We’ve still got a way to go, but we’ve made amazing progress in just the past couple of years on the cost and effective use of compound prescriptions.”

For more information on how you can better manage your costs for compound prescriptions, please call IPS at 866-846-9279.

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




Integrated Prescription Solutions (IPS) is a Pharmacy Benefit Management (PBM) and Ancillary Services partner to W/C and Auto (PIP) Insurance carriers, Self Insured Employers, and Third Party Administrators who specialize in Workers Compensation benefits management.
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