Honoring Our Duty of Care
A recent discussion by a group of workers’ compensation professionals compelled me to tell them how proud I was of their compassion and empathy for injured workers.
I’m talking about the judges working to select Risk & Insurance®’s 2014 Teddy Award winners. The group met telephonically over the past few weeks to go over an impressive group of applications.
The judges included Patricia Hostine, manager, workers’ compensation at Cooper Standard Automotive; Bruce Jones, director of insurance & Texas plan administrator at Community Health Systems; Mark Noonan, managing principal at Integro Insurance Brokers; and Bryan Schwartz, risk manager at American Infrastructure.
The judges took great interest in outcome metrics and practices, and each applicant’s operational and cultural challenges.
In addition to program creativity and proven practices, the judges considered whether the applicants dealt with unions or implemented their programs across dispersed company locations.
But the judges also devoted a substantial amount of their time to discussing the amount of care and concern for injured workers the employer applicants showed.
The judges took great interest in outcome metrics and practices, and each applicant’s operational and cultural challenges.
They wanted to know more about how employees were communicated with while their lives were touched by the employers’ workers’ comp programs.
Were the employers’ processes monetarily driven or people-driven?
All agreed that by making the care of injured workers the top priority, dollar savings would follow.
But for the judges, it wasn’t just about corporate expenditure reductions. They were not just talking about the treatment of anonymous “claimants.”
Their conversation turned to the idea that workers’ comp should be about the treatment and care of injured workers and colleagues.
The vast majority of workers go to work each day doing their best to avoid accidents. When they are injured they want to get back to earning the paycheck their families count on.
There is clearly room in workers’ comp for the compassion and empathy that the judges discussed, and they are far from alone in understanding the importance of caring for a worker whose life has been disrupted by an unfortunate injury.
In workers’ comp, the discussion is often about managing difficult claims, outcomes measurements, vendor partnerships, frustrations with the system, etc.
But no doubt there are also countless daily examples of empathy and compassion in helping colleagues navigate a system they may fear.
There is a social responsibility in caring for injured workers and I was proud of the judges for making that a workplace priority.
Kudos to everyone who goes to work doing the same.
Cost pressures can drive one to forget that, ultimately, workers’ comp is about individuals’ lives.
The judges were reviewing award applications and looking for details that would tell them that their workers’ comp peers hadn’t forgotten injured workers’ humanity when they created their workers’ comp programs.
The Teddy Award winners selected by our panel of judges will be recognized at the 23rd Annual National Workers’ Compensation and Disability Conference® & Expo to be held Nov. 19-21 at Mandalay Bay in Las Vegas.
Vocal Rehabilitation Success
Growing a business, of course, is a good thing. But as Patricia Hostine, workers’ compensation manager at Cooper Standard Automotive, learned the hard way, it’s possible to have too much of a good thing — at least when it happens fast.
When one factory’s operations were relocated and absorbed into a Kentucky facility, that location’s staffing level tripled practically overnight, with many new employees lacking experience.
“If you’re launching a big program, it comes with a lot of confusion, a lot of overtime, a lot of new people coming in doing jobs they’ve never done before,” said Gerry King, former global vice president of health, safety and environment for the company.
“It’s a great recipe for workers’ comp issues.”
Claims costs skyrocketed. Within three years, that facility — one of the company’s 16 — was responsible for 50 percent of the company’s claims costs. Lost-time days there shot up by 46 percent.
Hostine said her company’s plight was keeping her awake at night … quite literally. During one of many sleepless nights, Hostine finally had a 4 a.m. epiphany: What are we waiting for? Why can’t we start vocational rehab on the front end?
“I’m a firm believer that if you have 12 weeks of lost time, you’ve already closed the window for vocational rehab,” said Hostine, who spent more than a decade as a vocational case manager before joining Cooper Standard.
“I think a lot of professionals miss that window and then don’t understand why vocational rehab doesn’t work.”
Hostine contracted with a part-time in-house case manager to work with injured employees and place them in appropriate positions. Job evaluations were conducted for every key position in the plant to ensure proper placement of recovering workers.
The company’s other key cost driver was that supervisors were being put in the position of making medical decisions. More often than not, nearly every minor injury wound up in the ER.
Hostine implemented a 24/7 telephonic nurse triage program. Nurses evaluated every injured worker and determined which issues could be handled in-house with first aid, and which required immediate attention or follow-up care.
Together, these programs have made a world of difference for Cooper Standard.
The company has seen a 50 percent decrease in the number of incidents that become claims. And lost time didn’t simply drop — it is now a mere 6 percent of the pre-expansion baseline for that facility. Workers’ comp wage loss payments have decreased 63 percent from 2010 to 2012. The 24/7 nurse triage program has now been implemented companywide.
Colleagues say that Hostine was unquestionably the right person to drive this level of change at Cooper Standard.
“[Patty] has an MBA. …. She is able to put workers’ comp in the context of the business and make people understand that you have to look at these as business decisions,” said King.
Patty is also being recognized as a 2014 Responsibility Leader.
Champion for Change
Workers’ Compensation Manager Patty Hostine created dramatic gains for Cooper Standard Automotive by championing a fundamental change in the way both management and employees perceived the company’s approach to injury treatment and recovery.
“When she came on board we had all kinds of new management — nobody was on board with our thought process,” said Gerry King, who hired Hostine to manage workers’ compensation at Cooper Standard.That kind of transformation is never an easy sell. But Hostine’s ability to clearly communicate the benefits of the change to people at every level of the organization is the hallmark of a Responsibility Leader®.
“So it was taking them and making them see the business side of workers’ compensation that a lot of people don’t look at,” King said.
Hostine is also committed the members of her team, and to making sure that everyone involved has the tools and knowledge they need to excel.
“Her ethics are above reproach,” said Mick Altherr, coordinator of health, safety and environment, and workers’ compensation at Cooper Standard Automotive, “and that drives her theme of being fair, firm and friendly. … She’s an amazing talent with her drive for knowledge. She shares her thought process to educate the people who work with her.”
Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and/or passion.
Responsibility Leaders overcome obstacles by doing the right thing over the easy thing to find practical solutions that benefit their co-workers and community.
Contractors Face Complex Insurance Scenario
With today’s expanding global marketplace, U.S.-based construction companies naturally seek growth opportunities in foreign countries. For instance, China has been on a decades-long building spree. Middle Eastern nations continue to invest in massive developments. Cross-border construction activity among developed countries, particularly in Europe and Japan, remains robust.
That’s the good news for U.S. contractors considering or already involved in global projects. On the flip side, it’s critical to realize that international opportunities present different challenges than domestic projects.
Construction services represent a significant portion of global trade. World exports of construction rose 2% (to $115 billion) in 2012, the World Trade Organization estimates. The European Union and Asia represent the major share of that trade. Yet, while international trade in construction is on the rise, every country retains its own laws regarding insurance, so building a multinational insurance program represents a significant challenge.
ACE’s recently published whitepaper, “Global Construction: International Opportunities, Local Risks” focuses on educating risk managers about the complexities of going global.
Key issues for contractors to consider include:
Legally speaking, compliance for U.S. contractors operating outside the U.S. is much more complex than for their domestic operations. For example, by operating in different countries, multinational contractors must adhere to a myriad of local national laws and regulations regarding the “duty of care” they owe to the general public and other third parties. While most of the developed world has established employer duty-of-care legislation, the majority of the countries where many of these new global projects are available have not. A contractor’s insurance program should be flexible enough to handle claims in several different jurisdictions and provide adequate coverage for awards granted in emerging, as well as developed, legal jurisdictions.
Continuity of coverage across borders
For projects in foreign countries, a proactive risk management strategy should not only address the wide range of exposures typical in a given construction project, but also the impact that the differing local laws and regulations may have on the insurance coverage. For example, a contractor may have to obtain local insurance policies for various lines of business to cover the risks associated with its operations and to be compliant with local insurance requirements.
Building multinational solutions
A multinational program using “non-admitted” coverage can be a cost-effective alternative to local coverage. Such non- admitted coverage is usually arranged in the parent company’s home country to insure exposures in other countries. Some countries, however, don’t allow non-admitted coverage, while others may allow it subject to conditions such as prior approval. In the past the threshold question was whether non-admitted insurance could be used, but today companies should also consider potential changes in enforcement practices as well as evolving regulations.
Local services can be crucial
Besides compliance issues, companies should address issues such as how local claims will be handled and paid, and which other local services they may need in the event of a claim or incident. For example, companies building projects in the European Union may want to purchase environmental coverage that responds to the demands of the European Environmental Liability Directive in order to provide proper insurance protection for potential liability associated with damage to the environment or natural resources. On a broader level, catastrophe planning should be part of a global risk management strategy.
Public/private partnerships may bring new risks
Another consideration for contractors revolves around project structure. Typically in the U.S., construction projects have been driven either by the owners or the contractors and the insurance coverage reflected that through an owner- or contractor-controlled insurance program (OCIP/CCIP). Today, while more U.S. projects are being structured as public-private partnerships, because the structure is more common in Europe, U.S. contractors considering projects abroad may encounter it for the first time. Public-private partnerships raise questions about how risks and liabilities are apportioned among the parties, so contractors may find themselves sharing responsibility for risks that are not typically part of a standard project, or have increased exposures for professional liability.
M&As can impact insurance programs
With the growth of the global construction economy, and the rising need for the development or improvement of infrastructure in emerging economies, an increasingly multinational approach has led to consolidation and merger-and-acquisition activity in the construction marketplace. As this trend continues, companies also need to consolidate their insurance programs to achieve better efficiency by individual lines of business and to meet insurance requirements in different countries.
The takeaway: local risks, global solution
For contractors working in more than one country, maintaining consistent insurance coverage across borders while controlling costs clearly presents a number of challenges. By using a controlled master policy and admitted insurance from local carriers, contractors potentially gain greater insight into their claims trends and an increased ability to identify locations experiencing significant losses. With this information, contractors also will be in a better position to take corrective action and reduce losses.
Finally, while varying insurance regulations and markets must be addressed, contractors should evaluate the insurance carrier, its experience and presence in foreign markets and its relationships with local insurers around the world. When it comes to international construction projects, the right insurance coverage will play a crucial role in long-term success.
To learn more about how to manage global contracting risks, read the ACE whitepaper: “Global Construction: International Opportunities, Local Risks.”
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with ACE Group. The editorial staff of Risk & Insurance had no role in its preparation.