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Director, Technical Services
The Redwoods Group
Morrisville, N.C.

The managing general underwriter for nearly half the nation's YMCAs reviews data and finds new opportunities for safety and risk reduction.

Lifeguards at YMCAs insured through The Redwood Group are much better equipped to prevent drowning tragedies thanks to the extensive safety program Doug Page and Peter Kvale developed. This training goes well beyond CPR.

Instead, the augmented pool safety program focuses on where the lifeguards are positioned around the pool, assessing how often they rotate their positions and how many breaks they take, among other factors. No radios are allowed on the pool deck.

"One of the first things we did was to get rid of flexible plastic chairs because they're not at the elevation to adequately scan the bottom of the pool," said Page, senior vice president and program director at The Redwoods Group in Morrisville, N.C. Page and Kvale, the director of technical services, also scattered manikins and silhouettes on the bottom of the pool to simulate drowning victims and timed how long it took lifeguards to notice.

Page said, ideally, lifeguards should react in about 10 seconds, but lifeguards at the YMCAs took about a minute or so to jump into action.

So, does that training work? You bet. According to their own data, the training and influence of The Redwoods Group staff has improved operating behaviors to the point that in 2007, there were zero drowning deaths in guarded YMCA pools insured by Redwoods.

That's typical of how The Redwoods Group operates--it creates a culture of safety (its company motto is "serve others") through its risk management programs, by identifying a YMCA's exposures, and instituting a loss-control program to prevent serious injuries and keep the kids, parents and staff safe. The heart of the operation is its quantitative approach to risk management.

Their data-gathering is so all-encompassing and continuous that it allows Page to keep his finger pressed tightly on the pulse of the YMCA exposures by carefully examining all the data from their customers and other data-collecting organizations, such as the Centers for Disease Control and Prevention and National Transportation Safety Board. The system requires every customer to submit an incident report, no matter how large or small, from broken bones to death.

"We receive over 50,000 incident reports each year," Page said. His staff analyzes all these reports, looking for trends and where they're happening. "It's very quantitative and backs up our hunches." Even after Redwoods has identified and solved a problem, they reanalyze the data. "I think it's unique for a managing general underwriter to use that (quantitative approach)," said Page.

Thanks to that approach, the rollover dangers of driving 12- to 15-passenger vans popped up on Redwoods' radar screen in 2004. With 80 percent of the insured YMCAs using these vans, Redwoods saw the opportunity to avoid future liabilities.

"We were the first to tell them to get out of them," said Page. Today fewer than 5 percent of YMCAs still use the vans, and the remaining Ys have plans to phase them out.

The edict included a warning that Redwoods would not insure the Ys that didn't comply. Page said they only lost two clients.

As a MGU, Redwoods serves a niche market--about half of the 1,000 YMCA organizations across the country and, more recently, 25 Jewish Community Centers, which have similar risks.

"Doug knows the business extremely well," said Joel Porten, a safety professional and assistant vice president at Global Loss Prevention, previously known as AIG Consultants. Lexington Insurance is the carrier on the YMCA program.

"He has communicated a variety of different things to his customers on a regular basis," Porten said.

Porten admitted that "it was a huge leap of faith on our part" to take on the loss-control coordination for Redwoods due to the nature of the clients. But during the five or so years that Porten's firm has done business with Redwoods, he's had no complaints. He said losses have been kept to a minimum and "we pay their claims."

Indeed, from January 2001 to January 2008, Redwoods' 13 paid losses ranged from $2,802 to $932,115. Following a $500,000 sauna fire loss at a North Carolina YMCA in 2007, where there were no automatic sprinklers, Page researched trends in YMCA fires and discovered that most fires at Ys started in saunas and caused more than $1.7 million in losses from April 2000 to April 2007.

So Page developed a pretty simple, and cheap, remedy. Redwoods recommended that Ys install one high temperature sprinkler head tied to the water line above each sauna. That solution cost Ys less than $300, versus the much higher cost of a fully automatic sprinkler system.

Since launching the sauna safety program in January 2008, total losses due to sauna fires are at an all-time company low--one sauna fire loss over an 18-month period.

Over the same time period, there's been a 32 percent increase in the number of YMCAs installing sprinklers in their saunas.

--By Julie Liedman

The Redwood Group sums up its corporate values in two words: "serve others." Doug Page and Peter Kvale take that mission seriously, especially with their clients. Redwood took the unusual step to incur a financial loss last year because of the recession, rather than layoff employees and reduce services to clients--that is, to "serve others."

Both men advocate a culture of safety among their fellow employees and clients. It's this commitment to service and the service culture that distinguishes them as Responsibility Leaders. Customers and fellow employees are key constituencies who are part of a commitment to responsibility.

Doug and Peter's unusual solution to the YMCA sauna fire problem, as well, helped to change the culture toward safety at YMCAs. And these two Responsibility Leaders won't stand on the sidelines if their clients don't commit to key risk management issues. For example, they refused to insure 15-passenger vans. Because of that policy, two clients left. All these efforts stem back to that corporate philosophy to "serve others."

CEO
Amerind Risk Management Corp.
Santa Ana, N.M.

Amerind CEO Kent Paul opens the property/casualty world to American-Indians. The question is not one of risk transfer so much as it is one of trust.

Sovereignty is the boon and the bane of all First Nations, but risk management brings those contradictions into focus. Kent Paul has won recognition from his constituents, as well as from the mainstream insurance sector, for finding resourceful and effective solutions.

Amerind Risk Management is a multitribal, multijurisdictional IRS, Section 17 federal corporation, owned by a vast majority of federally recognized tribes and based a few miles north of Albuquerque.

One initiative this year, initiated by CEO Paul, offers a good example of Amerind's unique challenges. The project assigns GPS coordinates to all of the structures that Amerind covers, which is important because with a hugely diverse and overwhelmingly rural base, few of the properties Amerind covers even have addresses.

As every property-casualty underwriter knows, a physical address is the point of departure for P/C coverage in the non-native world.

"We have a very diffuse base," Paul said. "We cover more than 55,000 structures worth more than $7.5 billion across 32 states, but most of that is so rural that they have Post Office boxes. Our risks include tornadoes and wildfires to hurricanes and floods. Hurricane Katrina and the wildfires in California had particularly traumatic impacts on Indian Country. We were among the first responders to get money to our policyholders in those cases."

The GPS initiative is "a massive undertaking," in the words of one insurance industry executive, noting that the project will take years to complete. Even so, the project's already yielded results. "The data that we got for this year's renewal was night-and-day different from the data we got when the policy was first issued," the executive said.

The enthusiastic response to the GPS program emboldened Paul to launch another program to help make tribal policyholders more visible: giving Amerind policyholders, many of whom are poor, live in rural areas and don't have checking accounts, access to debit cards. Paul is preparing to start a debit-card program later this year.

"People are issued the card when they get the policy," said Paul, "but it has no value at the time. If there is a claim, we can load it up easily. That is much better for getting money into people's hands than checks or wire transfers."

Those developments get Paul kudos from the community, but the major innovation that grabbed the interest of the mainstream insurance sector was the formation in January of an independent commission of national industry experts to advise and support the all-Indian board of directors at Amerind.

"We created our own regulations," said Paul. "We are unencumbered by many standard industry regulations, so we can be more responsive, but that also means that outside underwriters have not been comfortable doing business with us. We had also to be innovative to respond to the naysayers."

Once the advisory commission was in place and mainstream carriers and reinsurers took note, Paul helped create a captive reinsurance company and four segmented cells. "We needed something between the risk pool and people like Munich Re or Lloyd's," he said.

Mainstream insurers are most impressed by the fact that Paul lead the charge to create the first segregated-cell portfolio structure operating inside Indian Country, using the segregated-cell captive model. Each cell contains a homogenous group of similar type risks protecting tribes from a variety of exposures.

Prior to this time, the Indian tribes were primarily familiar with only the traditional insurance "risk transfer" model. By introducing this alternative risk financing mechanism, Paul is credited with expanding their knowledge of innovative risk management practices and providing them with an alternative risk solution.

Paul's other major accomplishment, as seen from outside Indian Country, was his ability to create a common cause among the proudly individualistic native community.

"For all of the history of the tribal nations, fortunately or unfortunately, they have found it tough to trust each other," said a carrier executive who has worked with Paul for several years. "Kent has been able to get 500 of the 560 or so federally recognized tribes to solve common problems and to enable each other to solve individual problems."

"Kent lives by his words and expectations," said one Amerind staff member. "He does not expect any more from us than he would from himself. He never wants the spotlight; instead, he shines the light on others. he makes us feel important and proud to be who we are. Kent shows sensitivity and respect to the native American Indian culture," while bringing to that culture the best practices in risk management.

--By Gregory DL Morris

Now here's a challenge: develop a comprehensive risk management program for more than 500 independent Indian tribes spread over 32 states involving sophisticated alternative risk options for a variety of different risks along with the challenge of insuring more than 55,000 structures from a range of potential catastrophic losses.

The solutions, though innovative and imaginative, were not the crux of the issues. It was the trust of the tribal communities in Kent Paul that made it all come together. For good reasons, over the decades, trust has been a tough issue to overcome when working with Native American tribes.

Because of his understanding of the cultural background of his Indian clients, Paul has been able to bring risk management techniques to the fore. "He shines the light on others," said one of his colleagues. "He makes us feel important and proud to be who we are."

Director, Loss Control
St. Joseph Health System
Orange, Calif.

Taking the guesswork out of what an injured employee can and cannot do makes returning to work safer for employees and less risky for employers.

In a way, understanding the exact physical demands of every job in an organization seems so logical, so common-sensible. Figuring them out, however, seems complicated and downright tedious.

And so it was. For Judie Tsanopoulos, director of loss control at St. Joseph Health System, the 3,600 bed, not-for-profit Catholic healthcare system sponsored by The Sisters of St. Joseph of Orange, headquartered in Orange, California, developing the program was kind of a mission.

Tsanopoulos developed and implemented the Job Function Matching Program, a system that objectively measures the physical demands of each of the system's 24,000 employee's jobs and provides testing to measure the ability of injured employees who are returning to work to perform them. Now, physicians can make precise and medically sound recommendations regarding return-to-work assignments based on specific work restrictions.

"She challenged the normal way of approaching the return-to-work process," said Leif Guerrero, manager of disability and employee health at Mission Hospital, part of the St. Joseph system. "She put so much into it. Most of us would have thrown in the towel, but not her. She would not give up."

The program has significantly reduced modified workdays at a test hospital, St. Joseph Hospital in Orange, from 3,642 in the first year to 672 in the third year, and is now being implemented in the 14 other St. Joseph Health System hospitals in California, Texas and New Mexico.

In Guerrero's hospital alone, he said, the program has saved more than a million dollars in workers' compensation costs in the first year of operation.

The Job Function Matching Program was developed in response to what Tsanopoulos felt were vague and ambiguous work restrictions that physicians placed on injured employees returning to work. The restrictions often were based on subjective judgments that reflected anxiety about misdiagnosis and uncertainty about the nature of the tasks an individual could safely perform.

So Tsanopoulos asked: How do we know what an employee can or cannot safely do in relation to his or her physical work demands and how do we communicate that information effectively to medical providers?

To answer those questions, Tsanopoulos assembled a team of physical therapists, supervisors and employees to identify such physical metrics as force demands, physical movement demands and specific requirements of the essential job functions. To validate the process, activities were created for each job task that simulated forces, movements, positions and specific requirements. During this process, more than 3,000 job descriptions were narrowed down to 350 physical demand descriptions, all catalogued according to the physical demands of both essential and nonessential tasks.

The process that was developed covers how post-injury evaluations are provided to the employee's treating physician, physical therapist and nurse case manager to determine the employee's course of treatment and return to work. During the recovery period, the employee takes a weekly Job Function Test, which enables the employee and physician to see the improvement. As the injured worker's abilities increase, so do the job demands, acting as an internal work-hardening program.

The result is that employees now can be measured against the physical demands of possible jobs with an objective barometer.

"She took away the subjective approach and brought measurable, clinically driven outcomes to the process," said Guerrero. "As a result, we're seeing employees coming back to work much sooner now--three months versus 16 months, for example--which decreases workers' comp costs."

The process also had some other, unexpected, results. For one, the comprehensive assessment of the whole work environment allowed the team to identify several re-engineering opportunities to make jobs safer and reduce risk. For example, microfiber mops were introduced, eliminating the need to lift heavy buckets.

In addition, Guerrero said, employee morale has noticeably improved. Negative language describing a patient's status has been replaced with more positive language. The idea of "work restrictions" has been eliminated and now the idea "physical abilities" is emphasized.

"The whole process fosters positive reinforcement, provides a safe, controlled environment that protects the individual from the fear of re-injury and preserves the patient's dignity during recovery," said Guerrero. "And the cost benefit of reduced workers' comp claims and less litigation makes employers very happy too."

--By Julie Liedman

If there is one thing that characterizes our Risk Innovators as Responsibility Leaders, it's persistence. Judie Tsanopoulos at St. Joseph Health System refused to give up on her efforts to match appropriate medical treatment to specific work restrictions to ensure that workers can return to work.

To accomplish that task, she had to persist in changing the culture along with the treatment. Her program to change the culture of work at St. Joseph revolved around an effort to preserve the dignity of every injured worker or patient. It even meant changing the medical language to avoid negative repercussions.

And in the process, the changes improved employee morale and helped workers lose fears of reinjury during recovery and return-to-work. The result, besides employees returning to work more quickly, is fewer lawsuits and lower workers' compensation costs. And healthy employees too.