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Cyber Threat: Transportation

Disabled Autos

Hyperconnectivity and driverless cars raise new cyber risks for automakers and their suppliers.
By: | April 7, 2014 • 7 min read
042014_03c_cars

Hacking into cars is not a future concern. It is possible now, and the potential danger will increase as carmakers continue to enhance connectivity features in automobiles.

But even that threat pales against the potential damage cyber attacks could wreak when driverless cars take to the roads for real.

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One common perceived threat here and now comes from the ease of access that manufacturers have built in for drivers. If a driver can unlock a car door and start the engine using a cell phone, an unauthorized person can turn off that engine and lock the doors from a cell phone.

Taking a drive into the near future, could someone arrange for all of the cars on a Los Angeles freeway to have their engines turned off at the exact same time?

Even now, the ability to hack into and remotely control a car is a clear and present danger.

 Video: Behind the wheel of a car, you may be able to text, watch a movie or even sleep — if it’s a computer-controlled, driverless car. The WSJ’s Michael Kofsky heads to the test track to show how it works and safety questions it raises.

A pair of security engineers — doing their research with an $80,000 grant from the Pentagon — were able to hack into the systems of Toyota and Ford cars, and override a driver’s braking attempts, according to an account of the scenario in Forbes.

The pair was able to “demonstrate a range of nasty surprises: everything from annoyances like uncontrollably blasting the horn to serious hazards like slamming on the Prius’ brakes at high speeds. They sent commands from their laptops that killed power steering, spoofed the GPS and made pathological liars out of speedometers and odometers,” according to Forbes.

Expanding such abilities simultaneously to a fleet of cars is a feat yet to be accomplished.

“It could be possible to hack into one or another vehicle, but there is nothing that can stop the whole fleet at the same time,” said Mark Brooks, senior research engineer at the Southwest Research Institute (SwRI) in San Antonio. “Current levels of connectivity are not seen as major threats because they are not continuous.”

No One at the Wheel

“Even when a driver is using a navigation system, that is just a single download. The industry is much more concerned about continuous streaming back and forth, as with driverless cars,” he said.

Driverless cars rely on a number of sensors to operate, and are definitely vulnerable to attack, according to one of the hackers at the Def Con Hacking Conference in August.

“I’m a huge fan of unmanned vehicles,” said a hacker who goes by the name of Zoz to Venture Beat, a blog that focuses on technology. “I love robots. I think they’re the future. But, like everything else humans ever made, it’s going to get hacked.”

Google’s driverless car’s primary system is a “laser range finder mounted on the roof of the car,” which generates a 3D map of the area, according to IEEE, a technology professional organization.

R4-14p34-36_03Cars_ER.indd“The vehicle also carries other sensors, which include: four radars, mounted on the front and rear bumpers, that allow the car to ‘see’ far enough to be able to deal with fast traffic on freeways; a camera, positioned near the rear-view mirror, that detects traffic lights; and a GPS, inertial measurement unit, and wheel encoder, that determine the vehicle’s location and keep track of its movements.”

Zoz told Venture Beat that it would not require sophistication to attack and derail those sensors, and he pointed out that engineers in Iran were able to hack and capture a U.S. drone by “spoofing” the GPS and feeding it incorrect location information.

Death and destruction are always a worry when hackers can subvert an operating system, but apportioning liability is also a major concern, SwRI’s Brooks said.

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“If there were any problems, whose fault would it be? The carmaker? The navigation OEM? The software company? The driver? These are the discussions everyone is starting to have.”

Those initial conversations can be difficult, said Dave Wasson, professional and cyber liability practice leader at brokerage Hays Cos. in Chicago.

“The issues are known. People are aware of the risks. But at the moment there is kind of a paralysis because it is unclear how to quantify these risks, and also because even if we could quantify them, there are very limited options yet in how to deal with them.”

A Flawed System

Wasson added that a reordering of the current liability structure is both necessary and inevitable. “Right now, you have a pull market, with small OEMs seeking coverage because the first-tier OEMs and carmakers demand that they be indemnified. But that is not sustainable. A client might demand a $15 million cover from a small supplier, but that cover could cost the supplier $50,000 when he only grosses $100,000 on the contract.”

It is a situation where bigger companies are offloading their risk management onto smaller ones, and that, Wasson said, is flawed.

“Even when the suppliers comply, often the package does not work the way either the supplier or the OEM client thinks it will,” he said.

“Eventually the large firms will realize that they need to take this as primary,” Wasson said. “They have the assets, the skills, the risk managers, and the brokerage relationships to get it done properly.

“Besides, they are the ones who are going to get sued. They can turn to their indemnification contracts, but if the small supplier with few assets goes bankrupt, then what? It’s the company with the badge on the car that people are going to go after.”

As those issues percolate, commercial vehicle operators have other challenges as well.

“One really big cyber issue for a logistics company or express delivery service would be to have the GPS signals for their vehicles scrambled, or the electronic shipment documents tampered with,” said Steve Surber, area vice president for Arthur J. Gallagher in Irvine, Calif.

A cyber attack could be used to divert a shipment, cover theft, tamper with cargo, or even just to delay a shipment that is time sensitive. And the theft could be of the truck or trailer itself, some of which are worth up to $60,000, he said.

On another level, hacking can be used to disrupt the loss control systems of trucking lines, many of which use GPS and electronic reporting to track their fleet performance, Surber said.

Cyber alterations of such reporting could hide potential liability issues such as speeding, sleeping, unauthorized stops, fuel diversion, or many other misdeeds by shippers, loaders, drivers or consignees.

“Companies already rely heavily on computer systems and networks to help with loss control,” he said.

Among insurers, coverage is still evolving, he added. “There is some coverage from cyber policies, but mostly we are still seeing claims handled through general liability.”

Wasson, at Hays Cos., said that while the cyber risk and liability markets are pull markets at present, with owners seeking to transfer risk, the business is not without push.

“We are energetic about working with our carriers,” he said. “There is coverage and there is capacity.”

Cyber Security Efforts

In April, an automotive consortium started revving up its efforts to enhance cyber security.

The Automobile Consortium for Embedded Security — a part of SwRI — includes automakers, original equipment manufacturers, other suppliers, and cyber security experts.

The program aims to provide “pre-competitive and non-competitive research in automotive embedded systems security to protect the safety, reliability, brand image, trade secrets and privacy of client members’ future products,” according to the organization.

Mark Brooks, senior research engineer, Southwest Research Institute

Mark Brooks, senior research engineer, Southwest Research Institute

“As soon as they start claiming their vehicles are secure, they would paint a target on themselves. It’s not like safety or fuel economy. With security, there are bad guys and you don’t want to attract their attention.”

The consortium, Brooks said, “is looking at emerging research both in new technologies and new protections for embedded security for the automotive world.”

“There are lots of theoretical threats,” he said, “but we want to be sure we are focusing our efforts on the most relevant ones.”

The unique challenge is that automakers want to enhance the protections in their vehicles, but ironically, it is not something they want to advertise.

“As soon as they start claiming their vehicles are secure, they would paint a target on themselves.

“It’s not like safety or fuel economy. With security, there are bad guys and you don’t want to attract their attention.”

He said that automakers also are hesitant to unilaterally invest in cyber security efforts.

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“As we started talking to automakers, we found them eager to be part of developing security, but it’s tough for them to take the lead or commit a lot of money to something that will not help them sell cars,” Brooks said.

“They also don’t want to reinvent the wheel,” he said. “They are very interested in solving common problems with peer-reviewed research and applications.”

                                                                                                               

Complete coverage on the inevitable cyber threat:

Risk managers are waking up to the reality that the cyber risk landscape has changed.

Cyber: The New CAT. It’s not a matter of if, but when. Cyber risk is a foundation-level exposure that must be viewed with the same gravity as a company’s property, liability or workers’ comp risks.

042014_02c_hospital_thumbnailCritical Condition. The proliferation of medical devices creates a host of scary risks for the beleaguered health care industry.

Alaska Plane CrashUnmanned Risk. The dark side of remote-controlled drones, which have already been hacked — by students.

dv738024An Electrifying Threat. There is a very real possibility hackers could devastate the nation’s power grids — for a potentially extended period of time.

Gregory DL Morris is an independent business journalist based in New York with 25 years’ experience in industry, energy, finance and transportation. He can be reached at riskletters@lrp.com.
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Risk Insider: Bob Morrell

Risk Technology: Risk Managers Lead from Within

By: | April 22, 2014 • 2 min read
Bob Morrell is CEO and Co-Founder of Riskonnect. He oversees the strategic vision and strategy of Riskonnect, a provider of risk management technology. Bob hones his competitive skills practicing mixed martial arts, along with his family. Bob can be reached at bob.morrell@riskonnect.com.

This year marks my twentieth in the risk management field.  Now I would never call myself a risk manager.  Far from it: I’m a computer geek, and proud of it.  Today we refer to the Internet, Cloud, Mobile and Big Data, but I’ve been working with technology my entire life.  So much has changed in those twenty years.  Networking computers together was rudimentary and extremely limited when I started.  Now everything, and everyone, is interconnected, and that has changed everything.

That interconnectivity has allowed organizations to move away from the isolated, siloed processes of the past, and produced dramatic changes in the way we conduct our business and our lives. I’ve watched risk management evolve from a department called upon primarily when things go wrong, to a pervasive philosophy for running a successful business.  Fewer and fewer risk managers I speak to work in isolation, reacting to claims as they come in.  Rather they are a collaborative lynchpin to manage risk.  They don’t wait for bad things to happen.  They proactively put safety programs in place, analyze loss data and make their organizations more risk-aware.  They know an enormous amount about the inner workings of their organization, its suppliers, distributors, vendors and team members.  This is a fundamental transition from a middle management, administrative function, to an executive level function that is key to the organization’s success.

But risk managers are increasingly finding that email and spreadsheets are clumsy, inefficient, and ultimately create obstacles to managing risk throughout their company.  With the speed and global reach of business, when even ‘local’ businesses rely on a far-flung supply chain, yesterday’s technology introduces risk, inefficiencies and increased levels of error. Today’s business demands technology that facilitates decisions for tomorrow’s business challenges. Organizations need a platform – a platform that provides secure, efficient and consistent methods of communicating risk-related events and data.  Fortunately this need comes at a time when we have a convergence of technologies that can make this vision a reality.

 This is a fundamental transition from a middle management, administrative function, to an executive level function that is key to the organization’s success.

Just imagine running your business on technology of twenty years ago.  Sending paper memos (when CC referred to a literal ‘carbon copy’), using a phone tethered to your desk, taking delivery of policy documents in hard copy – oh wait, they still do that.  Would that put your business at a competitive disadvantage?  Of course it would – and risk management would suffer too.

Risk management no longer has to take a back seat to other parts of the organization. Quite the opposite. By leveraging commercial cloud platforms, the pervasiveness of the Internet and the interconnectivity of everyone and everything, the risk management team can be the most modern, forward-looking part of the company. Risk management has become the bellwether of change – actually bearing the standard for technology-enabled collaboration and productivity across the organization. Imagine that.

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Sponsored Content by Helios

Medication Monitoring Achieves Better Outcomes

Having the right patient medication monitoring tools is increasingly beneficial.
By: | September 2, 2014 • 5 min read
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There are approximately three million workplace injuries in any given year. Many, if not the majority, involve the use of prescription medications and a significant portion of these medications is for pain. In fact, prescription medications are so prevalent in workers’ compensation that they account for 70% of total medical spend, with roughly one third being Schedule II opioids (Helios; NCCI; WCRI; et al.). According to the U.S. Drug Enforcement Administration (DEA), between the years of 1997 and 2007, the daily milligram per person use of prescription opioids in the United States rose 402%, increasing from an average of 74 mg to 369 mg. The Centers for Disease Control and Prevention (CDC) reports that, in 2012, health care providers wrote 259 million prescriptions—enough for every American adult to have a bottle of pills—and 46 people die every day from an overdose of prescription painkillers in the US. Suffice to say, the appropriate use of opioid analgesics continues to be a serious issue in the United States.

Stakeholders throughout the workers’ compensation industry are seeking solutions to bend the curve away from misuse and abuse and these concerning statistics. Change is happening: The American College of Occupational and Environmental Medicine (ACOEM) and the Work Loss Data Institute have published updated guidelines to promote more clinically appropriate use of opioids in the treatment of occupational injuries. State legislatures are implementing and enhancing prescription drug monitoring programs (PDMPs). The Food and Drug Association (FDA) is rescheduling medications. Pharmaceutical manufacturers are creating abuse-deterrent formulations. Meanwhile payers, generally in concert with their pharmacy benefit manager (PBM), are expending considerable effort to build global medication management programs that emphasize proactive utilization management to ensure injured workers are receiving the right medication at the right time.

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A variety of factors can still influence the outcome of a workers’ compensation claim. Some are long-recognized for their affect on a claim; for example, body part, nature of injury, state of jurisdiction, and regulatory policy. In contrast, prescribing practices and physician demographics are perhaps a bit unexpected given the more contemporary data analysis showing their influence on outcomes. Such is the case for medication monitoring. Medication monitoring tools promote patient safety, confirm adherence, and identify potential high-risk, high-cost claims. Three of the more common medication monitoring tools include:

  • Urine Drug Testing (UDT) is an analysis of the injured worker’s urine that detects the presence or absence of a specified drug. Although it is not a diagnosis, UDT results are generally a reliable indicator of what is present (and what is not) in the injured body worker’s system. The knowledge gained through the testing helps to minimize risks for undesired consequences including misuse, abuse, and diversion of opioids. With this information in hand, adjustments to the medication therapy regimen or other intervention activities can occur. UDT can also be an agent of positive change, as monitoring often leads to behavior modification, whether in direct response to an unexpected testing result or from the sentinel effect of knowing that medication use is being monitored.
  • Medication Agreements or “Pain Contracts” signed by the injured worker and their prescribing doctor serve as a detailed and well-documented informed consent describing the risks and benefits associated with the use of prescription pain medications. Medication agreements help the prescribing doctor set expectations regarding the patient’s adherence to the prescribed medication therapy regimen. They serve as a means to facilitate care and provide for a way to document mutual understanding by clearly delineating the roles, responsibilities, and expectations of each party. Research also suggests that medication agreements promote safety and education as injured workers learn more about their therapy regimen, its risks, and benefits.
  • Pill Counts quantify adherence by comparing the number of doses remaining in a pill bottle with the number of doses that should remain based on prescription instructions. Most often, physicians request pill counts at random intervals or the physician may ask the injured worker to bring their medication to all appointments. As a monitoring tool, pill counts can be useful in confirming proper use, or conversely, diversion activities.

On a stand-alone basis, these tools rank high on individual merit. When used together as part of a consolidated medication management approach, their impact escalates quite favorably. The collective use of UDT, Medication Agreements, and pill counts enhance decision-making, eliminating gaps in understanding. Their use raises awareness of potential high-risk, high-cost situations. Moreover, when used in concert with a collaborative effort on the part of the payer, PBM, physician, and injured worker, they can improve communication and align objectives to mitigate misuse or abuse situations throughout the life of a claim.

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Medication monitoring can achieve better outcomes

The vast majority of injured workers use medications as directed. Unfortunately, situations of misuse and abuse are far too common. Studies show a growing trend of discrepancies between the medication prescription and actual medication-regimen adherence when it comes to claimants on opioid therapy (Health Trends: Prescription Drug Monitoring Report, 2012). In response, payers, working alongside with their PBM and other stakeholders, are deploying medication monitoring tools with greater frequency to verify the injured worker is appropriately using their medications, particularly opioid analgesics. The good news is these efforts are working. Forty-five percent of patients with previously demonstrated aberrant drug-related behaviors were able to adhere to their medication regimens after management with drug testing or in combination with signed treatment agreements and multispecialty care (Laffer Associates and Millennium Research Institute, October 2011).

In our own studies, we have similarly found that clinical interventions performed in conjunction with medication monitoring tools such as UDT reduces utilization of high-risk medications in injured workers on chronic opioid therapy. Results showed there was a decrease in all measures of utilization, driven primarily by opioids (32% decrease) and benzodiazepines (51% decrease), as well as a 26% reduction in total utilization of all medications, regardless of drug class. This is proof positive that medication monitoring can be useful in achieving better outcomes.

This article was produced by Helios and not the Risk & Insurance® editorial team.


Helios, the new name for the powerful combination of Progressive Medical and PMSI, is bringing the focus of workers’ compensation and auto-no fault pharmacy benefit management, ancillary services, and settlement solutions back to where it belongs—the injured party.
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