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By DAN REYNOLDS, senior editor

It can happen at any point, really, in any organized human educational endeavor. You could be sitting in an audience, perhaps it's a university lecture hall, perhaps it's the antiseptic and uninspiring space of the meeting room of a professional trade show.

In this case, the words that were uttered went like this:

"It is a gift to have a challenge that inspires the imagination."

The words, when they were uttered, came across like the words of a prophet. "I am someone worth paying attention to," the speaker's inflection seemed to say.

Indeed, the speaker turned out to be someone worth paying attention to. The words in this case, said at a session on third-party administration management during the annual conference of the Risk and Insurance Management Society Inc. in San Diego, were punctuated by an index finger passionately impaling the air, and were spoken by Gisele Posey, the corporate senior director of workers' compensation and loss prevention for Kindred Healthcare, based in Louisville, Ky.

THAT NEVER HAPPENS

The story of how Posey came to be at Kindred and lecturing in San Diego this past April might be just as interesting as the results she has been able to produce at Kindred.

After 17 years with the trucking company Yellow Freight, where she had worked her way through the ranks to the position of corporate director of workers' comp, Posey took a buyout in 2004 to be with her newborn daughter Sydney. But six months into the stay-at-home life, she started to get itchy.

Unable to sleep, she was surfing the Web one night and saw a posting for a corporate senior director of workers' compensation and loss from Kindred Healthcare. "It was one of those rare occasions when you read a job description and say, 'This is me,' " Posey recalls.

Two weeks later she was in the door at Kindred's headquarters and talking to Kim Martin, Kindred's senior vice president of risk management and compliance. "She was the first resume that we looked at, and that never happens," Martin recalls.

Posey was also able to convince Martin that she could translate her experience in lowering workers' comp costs for her former employer into the healthcare field. While at Yellow Freight, she shrunk costs from $75 million to $43 million by implementing several on site programs, including physical therapy review, medical bill review, orthopedic and physiatrists review, and telephonic medical case management.

Posey also developed and implemented an Injury Counselor Program for field operations designed to enhance employee communication, strengthen aggressive claims management and reduce employee litigation.

Posey told Martin she could lower costs at Kindred, but she was going to need some resources.

"She just blew us out of the water with her ability to say, 'This is exactly how I would approach it,' " Martin says.

Something else happened when Martin and other Kindred executives interviewed Posey that day. She was hired on the spot.

"That is probably the first time in my career that I have offered anyone the job before they have left the building, seriously," says Martin.

Right from the start, Kindred's top brass thought they had something special.

"This is the young lady that is going to save the company $10 million," Posey remembers Kindred CEO Paul Diaz saying when Diaz introduced her to a group of associates when she joined the company more than two years ago.

Posey has done much better than that. She was hired in February 2005 and, through June 2008, has saved her employer, a company of 55,000 employees with hospitals, long-term care facilities and rehabilitation centers operating in 50 states, the equivalent of an estimated $34 million. Last year the company generated more than $4 billion in revenue.

So, how has she done it?

For starters, she took a hard look at the TPA that was managing Kindred's claims and decided they had to go.

"When I started doing the claims reviews, I noticed that there were significant lapses in time between when an examiner indicated that they were going to do something and then when they actually executed the plans, if ever," Posey says. "Also, examiners were assigning files over to an attorney when there were issues that they should have been handling, which were increasing the costs of the claims."

"I was able to tell very quickly that the claims were not being handled as they should be," Posey recalls. "The previous TPA was nickel-and-diming us to death."

She conducted an RFP process and settled on Sedgwick CMS. That relationship began in January 2006 and, according to both sides, has flourished.

David North, Sedgwick's president and CEO, says there are three areas in which Posey stands out. "The first is she is very knowledgeable," North says.

Secondly, North says Posey is in almost constant motion. "She must be viewed at Kindred as one of those people that represents the saying, 'If you want to get something done, find a busy person.' I think Gisele is one of the busiest people I know."

Her third key feature, according to North, is her attention to data. "She uses analytics in our program to monitor where the program is at any given time and where she is going to focus her time to bring some improvements to the program, and that creates a very good partnership," North says.

"I thought one of the first things I needed to do was to partner with a TPA that was capable of extracting information that would be beneficial to our field managers, and that was really one of the things that stood out in my mind about Sedgwick," says Posey. "They were able to cut and dice all kinds of information, and we were able to pass that on to our operators."

Posey also took over a workers' comp management operation that had only one workers' compensation manager. "All she was able to do was put out fires," Posey recalls.

Right in the door, she got the commitment from Martin to hire two more managers and has since hired a third.

"I know that some companies think that having an internal management process that manages your TPA is redundant," Martin says. "But the fact of the matter is it has been a huge return on investment (having the in-house managers tracking the TPA) simply because TPAs are very busy. They have a lot of clients, and when you have got someone who is staying on top of it and making sure that everything is being done and responding to that, that has been really remarkable."

Here is how Posey saw it.

"As I indicated, we had had only one person who was responsible for workers' comp," says Posey. "So, as a result, the loss prevention folks were handling claims-related issues that normally your loss prevention folks would never get involved in. What I felt was important for the loss prevention folks to do was to reduce frequency and severity, and ironically that had never been the focus."

Posey also set about strengthening Kindred's transitional return-to-work program.

"We instituted a policy requiring the Sedgwick examiner to contact the Kindred work comp manager in any instance where our facility refused to put an employee in transitional work," Posey says. "If management continued to refuse, the issue was brought to my attention to resolve."

"To my staff's credit, only two or three claims have ever hit my desk in the last three-and-a-half years," says Posey.

Posey has also cut down Kindred's legal costs.

"We do not want a firm to use Kindred files to train a new associate," says Posey. "Our special account instructions indicate that we do not want to pay attorneys for doing adjuster work. Also, we monitor hourly rates annually and renegotiate if we feel necessary. I have also used flat-fee programs in the past. This approach can result in significant savings of up to 35 percent."

Bill Thomas, the president and managing partner of Delaware, Ohio-based Thomas & Co. LPA now does a lot of workers' comp legal work in Ohio for Kindred. But when he and Posey met, they were just young guns, trying to pull some decent recoveries out of the Yellow Freight claims files.

"We had a really big case together where we made a really nice recovery, and then I started to do some more work for Yellow Freight," Thomas recalls.

Posey didn't forget about Thomas, and when she needed some help righting the workers' comp claims ship at Kindred, she brought Thomas' company along to handle Kindred's cases in Ohio.

There are some schools of thought in handling claims that you work law firms against one another, giving the work to the firms that close the cases the quickest for the least amount of money. Thomas, with his 18 years in the business, thinks that's the wrong way to go about things. "That is just flat wrong," Thomas says of the "sharks in the water" approach.

In contrast, Thomas' company works for Kindred in Ohio for a flat fee. He says Posey's approach to business, maintaining good relationships and open lines of communication, is what makes the arrangement work.

SLIPS AND FALLS

It may seem overly simplistic, but in the hospital, long-term care and rehabilitation businesses that Kindred is in, there are only two major categories of employee injuries. One is slips and falls; the other is injuries caused to employees trying to lift patients by themselves that are too heavy for them.

An additional initiative that Posey has implemented at Kindred is revamping its safety program. The traditional program involved rewards for good safety records and safety posters that Posey describes as "comic" and "hokey."

"In my experience, it doesn't make a whole lot of sense to pay people for working safely," says Posey.

Instead, what has worked for her at Kindred is a safety program that emphasizes family connections over cash incentives.

Using in-house communications staff, Posey and crew created a series of posters that emphasized the loss to family members if Kindred workers were to slip and fall or injure their back in an ill-advised effort to transport a patient on their own.

What Posey instead wanted to focus on were the human relationships that are affected by workplace injury.

"Most of us work hard every day to provide a good life for our families. We wanted to tap into that mindset as we laid out the framework of why it is important for our employees to work safely," Posey says.

It's that dual ability, possessing the analytical mind to break down programs and crunch numbers, and also having the communications skills and the ability to connect with people that makes Posey special.

"I think her people skills are so good that she is able to get the buy-in that she needs because she respects people, and I think they understand that," says Barbara Galluppi, an area senior vice president for Arthur J. Gallagher & Co., who has worked with Posey, as she put it, "banging down" reserve levels at Kindred.

Galluppi also says Posey has all the brains that a person could want, yet keeps her talent in check.

"She is just smart, but you know how some really smart people think they already know everything? She is very open to new ideas and very curious," the broker says. But Galluppi says Posey can put her hard shell on if need be. "She is tough when she needs to be tough, she doesn't suffer fools."

It was Virginia Sewing, recently retired from J.C. Penney Inc. and living in Overland Park, Kan., who was one of the first to spot Posey's talents when she was just a high school girl.

It was Sewing who also saw Posey behind the desk of a Doubletree Hotel working off her undergraduate debts and persuaded her to come to work for Travelers Inc. to train as a claims representative.

"She was very professional, and I was impressed by her professionalism and in her ability to learn quickly and to listen to people that had experiences and to learn from other people's experience," says Sewing.

Would Sewing call herself Posey's mentor?

"I am extremely proud and honored to be her mentor, and at the same time, she has very good capabilities on her own," says Sewing. "Whenever she was presented with anything that could have been a setback for a lot of people, she moved on beyond that, and I would say that is a trait of a resilient and brilliant person."

DAN REYNOLDS is senior editor of Risk & Insurance®.

October 1, 2008

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