By DAN REYNOLDS, senior editor of Risk & InsuranceŽ
When it comes to managing workers' compensation risk, there may be nothing quite like a hospital to provide a challenge for a risk manager.
In the United States, a stressed and aging physician and nursing workforce is charged with caring for an aging population that for much of the past couple decades has gotten fatter and more difficult to handle.
Picture a 130-pound, 50-year-old woman trying to lift a weak, possibly injured 300-pound male patient out of a hospital bed and you get the picture.
Consider the back and other musculoskeletal injuries these nurses are suffering trying to lift these heavier patients, along with the other risks that workers face in a hospital: A needle that with one glancing prick can infect a healthcare worker with HIV, the exposure to the bodily fluids of patients who may harbor other infections and diseases, the slips and falls that bedevil any large institution where workers are hurrying from one tiled and soap-slicked workplace to the next.
That's the world that Carl Gattuso, the chief corporate officer for the Richmond-based Virginia Commonwealth University Health System Authority, was looking at in 2000.
Gattuso is charged with overseeing the authority's workers' comp, professional liability and employee disability programs, and what he was seeing in 2000 was worrying him. For one thing, the health system was looking at an increase in its workers' comp premiums that year of more than 30 percent.
At the time, the system had a third-party administrator managing its claims. When Gattuso took a closer look at that relationship, he didn't like what he saw.
"TPAs are good things but people don't take the time to look under the covers to see how good a job they are doing," Gattuso said. "I don't know that they take an interest in the well-being of the employee as we do."
When key stakeholders at the health service authority decided they needed to make some changes, they considered a number of options, but finally decided on self-insurance for workers' comp. The incumbent TPA was shown the door and a smaller, less expensive TPA was retained to pay claims.
The health system also brought on Michael Paladino, who at the time was working as a consultant in Tennessee.
In his new role as director of claims and insurance, Paladino, with Gattuso's blessing and cooperation, set about making the changes that resulted in the Virginia Commonwealth University Health System Authority winning the 2010 Theodore Roosevelt Workers' Compensation and Disability Management Award in the nonprofit category.
The award is presented every year at the Annual National Workers' Compensation and Disability ConferenceŽ & Expo to institutions in the public and private sectors to honor innovative workers' comp and disability management programs. The conference is scheduled to take place at the Las Vegas Convention Center Nov. 10-12.
Paladino and Gattuso had crossed paths many times before and Gattuso had come to rely on Paladino's advice. It was in the system's return-to-work program that the two really felt some progress needed to be made. Paladino made building a better program a priority.
"What I found was that we had to restructure a few things," Paladino said.
What Paladino and others ended up creating was a job bank that gave workers with diminished capacity an opportunity to work in other departments. A nurse who had gotten injured lifting a heavy patient, for example, could find work as a technical advisor to the information systems staff who were installing a new clinical program.
The employee's original department would still be charged with paying the employee's salary, a measure installed to cut down on the practice of managers using an employee's injury as a pretext to sever a less-than-satisfactory relationship with the employee.
"I've got nurses who were injured but were perfectly capable of auditing medical files," Paladino said.
"What we did do is said you are going to be responsible for paying for these people and I'm going to give the rest of the organization an offer of free help," he said.
Once the program got rolling, more departments started taking advantage of the job bank. There are now between 25 and 50 requests in from various departments for workers who are at less than 100 percent physical function.
And so, what's happened to the health system's incurred costs per claim as a result of the job bank and other measures? You guessed it. Costs have tumbled by an order of magnitude.
In 2006, the system's incurred cost per claim, including medical and indemnity, stood at $2,792. In 2009, that figure had dropped to $555 per claim.
Lost days per claim at the authority have plummeted. In 2006, the system was seeing an average of 69.62 days lost per claim. In 2009, that barometer stood at an average of 16.41 lost days per claim.
But the health system's return-to-work program wasn't the only place the system was having problems.
The Virginia Commonwealth University Health System Authority operates the Virginia Treatment Center for Children, a facility that treats behavior disorders and other impairments suffered by abused children.
The facility treats children as old as 17, an age when a child that is inclined to act out can be big enough to hurt someone. "When they hit or act out and hurt our staff they can do a lot of damage," Paladino said.
The staff in the facility has to walk a fine line. They are charged with restraining sometimes-violent patients, but have to handle them in a respectful manner within the boundaries of the law. The children's center was seeing claims as high as between 70 and 100 per year when Paladino got his start at the health system.
Paladino, who had worked extensively in insurance before coming to VCU, used his contacts to find Monica Cooke, the Edgewater, Md.-based founder of Quality-Plus Solutions. Cooke has a specialty in consulting with organizations that do what the children's center does.
"I was called out specifically to look at injuries and rates of injuries and concerns about how they can lower those rates," Cooke said.
Training for the staff was improved, for example, in the area of managing the physical environment in the children's center. The consultant conducted a top-to-bottom analysis of rooms to evaluate how safe they truly were.
A patient looking to hurt someone will look for implements to do that and making the work environment safer from that perspective was a priority. "Sometimes it's how various rooms are organized and how great observation levels are," Cooke said.
Paladino estimates that from that range of 70 to 100 claims per year the children's center is now seeing less than half a dozen claims per year.
"She brought things to the table like having us do a detailed review of every injury; we call it a root cause analysis," Paladino said.
Cooke, he also said, wanted management to see the cost of an injury plain and simple, and managed to produce tangible results through simple solutions.
And speaking of management, both Paladino and Gattuso point to the system's claims council as another linchpin of the successful workers' comp program.
Gattuso goes to claims council meetings every week to go over any claim that resulted in lost time, regardless of whether the claim is compensable or not.
Members of the council include Gattuso and Paladino as well as Maria Curran, the system's vice president of human resources and Dr. Frank Tortorella, the system's director of employee health services and its medical director.
The nine-member council reviews the medical, social and legal pieces of a claim and develops an action plan for managing the claim. That consistent buy-in from so many stakeholders is one key to the program's successes, according to Gattuso. His involvement and sponsorship is another.
"You have got to have a guy like myself who is the one backing it who is really going to be held responsible by senior management," Gattuso said.
But in doing what he did, Gattuso knew he was taking a risk; a risk, as it turned out, that paid off.
"I was the prime executive who was backing this because the other executives were very afraid of workers' compensation because of the liability," Gattuso said. "I am convinced that this program is successful because you do have a person at the top who is supportive of it, and you have the expertise to manage it, and you have the physician who can control it."
"You wrap that together with a good safety program, and you wrap that together with a good return-to-work program, and I think the result is a really successful program," he said.
November 1, 2010
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