There is an image from this past week that has troubled my sleep: a huge wave, some 20 feet high, barrels toward a coastline. People stand in the shallow waters of the shore, paralyzed by what they see coming. The tsunami roars across the beach and a way of life comes to an end.
Those of us involved in insurance-related businesses are well versed in the intricacies of risk transfer. Businesses purchase insurance because they have to and because they do not want to shoulder the entire burden of their losses. But nowhere in our schemes, in the careful calculations of our actuaries, is there room for the scale of the catastrophe that took place this past week. Over 100,000 people are gone and many more are at risk. Entire communities have disappeared into the murky waters. Nature’s awesome indifference has swept away everything, from indigenous populations to the tourists escaping the cold winds of North America and Europe. All have disappeared in a fierce rush of water that receded almost as quickly as it appeared.
I was scheduled to write about experience rating, the mechanism that aligns a company’s workers compensation losses with its costs. And I will do this, but at this point it can certainly wait until next year. For the moment, as we all pause to look back on the year that is ending and look forward to the one that is beginning, I want to express the hope that mankind will truly come together in a generous and non-partisan manner to ease the burdens of the survivors and begin a rebuilding project of unprecedented scale.
Best wishes to all our readers for a peaceful and prosperous New Year!
Archive for December, 2004
A Note at Year’s End
Friday, December 31st, 2004Snow shoveling: Heavy Lifting!
Tuesday, December 28th, 2004I was all set to do our second blog on experience rating, when a snow storm interrupted my plans. As I was shoveling to clear a path out of my driveway, I envisioned doing a brief blog on the hazards of shoveling: it can be heavy lifting, especially if the snow is wet or has been compacted by the action of large snow plows. Indeed, yesterday’s blog has a very useful link to the AARP website with lots of good information on shoveling.
I tried to be careful, bending my knees and minimizing the twisting. But shoveling involves the hazardous combination of lifting and twisting. In a hurry to get to the office, I worked too fast and I lifted too much. So guess what? I couldn’t finish the job. Something gave way in my lower back and I had to retreat to the house for Ibuprofen and a heat pack.
Later that morning, once I finally dragged myself ever-so-slowly into the office, I joked with a claims adjuster who works nearby that I planned to go into the copy room, lift a box and claim a work-related injury. She laughed and said, “Denied.”
Here are a couple of thoughts for employers who have to keep parking lots and sidewalks clear during the winter:
1. Ideally, hire professionals (with their own liability insurance) to do the work.
2. If snow continues to fall, be vigilant in keeping walkways clear (and make sure any melting snow inside is cleaned up immediately).
3. If you ask an employee to shovel, make sure he or she is in good shape and has a good shovel to work with. Watch them shovel: make sure they are using good lifting technique.
4. If your employees do physically demanding work, observe them carefully at the beginning of the shift, to make sure they have not been injured before they got to work (as I was).
In the next few months, there will be thousands of weather-related claims filed in the northern states for work-related injuries. Many will involve slips and falls on ice, auto accidents and lifting injuries from shoveling. I would advise everyone to slow down and stay alert. It would have worked for me, I’m sure.
Winterize your workplace for safety
Monday, December 27th, 2004After a harrowing drive home in a snowstorm last night, I was reminded about the importance of “winterizing” both at home and at work. For employers, snow and ice management require preplanning. Slips, falls and back strains are among some of the more common hazards; injuries from snow-removal equipment, falls from roofs, and hypothermia/frostbite are other common injuries that can befall your workers in the winter. Here are some general winter safety tips:
- Remove snow from all walkways in and around the building. Use salt and sand.
- Watch for thawing and refreezing conditions. Second and third applications of sand or salt may be needed on walkways.
- Put mats and rugs inside entryways – wet floors from snow tracked indoors can be a hazard.
- Train employees in the use of snow removal equipment. Ensure that safety policies strictly forbid any disablement of snowblower safety mechanisms.
- Make sure that snow removal from roofs and gutters is done safety.
- If you hire private contractors to remove snow or ice, check to ensure insurance coverages.
- Make sure staff who are working outside are dressed properly to withstand the cold.
- Encourage employees who drive to and from work to carry winter emergency kits in their cars, including blankets, gloves, socks, shovels, water, snacks, and a flashlight.
Here are some additonal resources.
Shovel snow safely
FEMA Winter preparedness safety tips
FEMA winter driving
Hypothermia: a cold weather hazard
CCOHS: Working in the cold
Safety during snow removal
WCB issues caution over removal of snow from roofs
Study reports black workers compensated less for back injuries
Friday, December 17th, 2004A Saint Louis University study that appears in the December issue of Pain reports that black Americans who suffer work-related back injuries are compensated less for their injuries than white people in similar situations.
“The implications of these differences are sobering. Even though patients have equal access to health care through the worker’s compensation system, there are substantial differences in the treatment costs that they incur,” principal investigator Raymond C. Tait, a professor of psychiatry, said in a prepared statement.
He and his colleagues studied 1,472 lower back injury worker’s compensation cases in Missouri. They found that money spent on medical care for blacks was about a third (an average of $4,000 less) of that spent on whites and that total disability settlements for blacks were about half ($3,000 lower) than the amounts given to whites.”
The study also cites prior research by the Institute of Medicine on racial and ethnic disparities in health care. Congress requested this study in 1999, and the final report which was issued in 2002 found that:
” … a consistent body of research demonstrates significant variation in the rates of medical procedures by race, even when insurance status, income, age, and severity of conditions are comparable. This research indicates that U.S. racial and ethnic minorities are less likely to receive even routine medical procedures and experience a lower quality of health services.
The report says a large body of research underscores the existence of disparities. For example, minorities are less likely to be given appropriate cardiac medications or to undergo bypass surgery, and are less likely to receive kidney dialysis or transplants. By contrast, they are more likely to receive certain less-desirable procedures, such as lower limb amputations for diabetes and other conditions.”
This is quite disturbing stuff indeed. The report suggest the need for more evidence-based medical guidelines to help providers and health plans make sound decisions and to ensure equity of care. It also points to the need for more minority providers.
Thanks to Jordan Barab at Confined Space for pointing us to the recent St. Louis study.
Top 10 backbreaking jobs
Thursday, December 16th, 2004According to the American Chiropractic Association (ACA), back pain is one the most common work-related injuries in the United States, accounting annually for approximately one-quarter of all lost or unproductive workdays. What do ACA members consider to be the most backbreaking jobs? Heavy truck and tractor-trailer drivers top the list, followed by construction workers, landscapers, police officers, farmers, shingle roofers, firefighters/EMTs, delivery drivers, nursing home workers, and auto mechanics.
Off the job activities can also exacerbate back pain. Spine-Health suggests that the holidays can add stress that can worsen chronic back pain. They offer some pointers to those suffering from back pain on how to get through the holiday season.
More information
MedlinePlus: back pain
Mayo Clinic: back pain
Preventing back pain at home and work
Lifting Guidelines and RTW
Study shows active recovery fosters return to work
KY SIG members owe $51 million
Tuesday, December 14th, 2004Members of a self-insurance group (SIG) in Kentucky are learning a harsh lesson in joint and several liability. More than 4,000 employers who are or were members of AIK Comp, a plan promoted by Associated Industries of Kentucky, face some $51 million in unfunded claims. Apparently, AIK reserves were insufficient to cover claims, and now all current members — and even some former members — are liable for the shortfall.
In workers comp, insurers often refer to the long tail. Essentially, this means that the costs of the claim extend well beyond the actual event or occurrence that the insurance covers. With most types of insurance, if a claim occurs, the payment is made within a short amount of time. With workers comp, payments cover medical costs and wage replacement (also called indemnity payments) over the life of the claim. Insurers estimate the ultimate cost of the claim and set aside reserves, the amount estimated as necessary to pay claims. In recent years, underreserving has been a factor in the demise of some very prominent insurers.
It’s too bad to see such a mismanaged pool because well-run SIGs can be viable and beneficial alternatives for small to mid-size employers that would not qualify for stand-alone self insurance. Recently, an A.M. Best report demonstrated that SIGs and captives often outperform traditional insurance programs:
“The combination of at-risk member capital, as well as joint and several liability, is a strong incentive to control losses, minimize frictional expenses, and detect and control fraud, according to the report. These factors benefit the results, with the five-year average loss and loss-adjustment-expense ratio for rated self-insurance pools at 60.6, vs. 89.3 for captives and 80.8 for A.M. Best’s commercial casualty insurance industry composite.”
Employers need to conduct rigorous due diligence before joining a SIG. As with any self-insurance program, they need to ensure their own house is in order and their loss experience is good – there are no shortcuts for good loss control; employers also need to ensure that the prospective SIG is very cautious in selecting its members, both in terms of member financial solvency and in terms of risk management and loss control requirements. If the entry threshold is low, that should be a serious sign for caution.
Three construction workers die every day in the U.S.
Thursday, December 9th, 2004The News Tribune of Tacoma, Washington recently featured an excellent – albeit unsettling – article entitled Construction workers
‘Tis the season – alcohol and holiday festivities
Tuesday, December 7th, 2004HealthLawProf Blog informs us that it is National Drunk and Drugged Driving Prevention Month. That’s a good cue to remind employers that they need to be mindful of their risk exposure when planning holiday parties. Off-premise and extra-curricular activities may pose either workers compensation or liability exposure when employees attend company-sponsored events. Employers should have worker health & safety a foremost consideration in any holiday party planning — not to mention the safety and well-being of fellow travelers on the road.
Many of our favorite blogs have been discussing this topic. For a cautionary and sobering tale, read Carole Matthews post at Inc. Magazine’s weblog about a real life tragedy that occurred at her Dad’s company party. Carole points us to Nine Tips for Office Celebrations from the DOL. Another good resource is the article Top Ten Ways To Hold A Company Party (Without Getting Sued) (pdf) written by attorneys at Fisher & Phillips. (Thanks to Michael at George’s Employment Blawg for the pointer.)
Other resources:
How to avoid disasters at office holiday parties
Keeping your company
