Archive for June, 2005

Toil and Trouble: Older Workers and Workers Comp

Wednesday, June 15th, 2005

A couple of new studies reinforce a number of concerns that we continue to raise concerning the aging of the American workforce. NCCI has released a study (PDFs) that specifically addresses the potential impact of an older workforce on workers compensation costs. Not surprisingly, they find that older workers get injured less often than younger ones, but when they do get hurt, their recovery times are slower and the cost of the claims is higher. The NCCI study focuses on the specific injuries that generate the most dollar losses among older workers: rotator cuff strains, lumbar disc problems and carpal tunnel syndrome. (We alerted readers in a prior blog that workers over 50 should be very careful when performing jobs above the shoulder level.)
The specific risks associated with older workers need to be examined in the context of changes in the overall workforce. The Workers Compensation Research Institute (WCRI) has published an interesting study on Return-to-Work Outcomes in four key states: California, Massachusetts, Pennsylvania, and Texas. WCRI found that workers over the age of 55 who are injured are 12 to 35 percent less likely to return to work when compared to workers between the ages of 25 and 39. In addition, these older workers are out of work 62 to 276 percent longer. (I would like to quote from the study at length, but the information is proprietary and protected by copyright, so I am limited to quoting from their press release.)
One Side of the Story
WCRI

Laptop ergonomic woes: The price for mobility

Tuesday, June 14th, 2005

I remember an ad from some years ago showing a guy using a laptop at the beach. At the time, this was designed to paint some futuristic fantasy of ubiquitous computing. I clearly remember how the ad alternately intrigued and horrified me. As a bit of a web geek, I loved the idea of mobility. On the other hand, the luddite in me balked. I’m not always keen on the blurring of the line between work and personal space. Nice to work at home now and again, yes. Not always quite so nice to have work follow you when you are enjoying a Margarita on the beach.
Today, mobile computers are the fastest growing segment of all computing devices. About one in every four computers purchased last year was a notebook. That’s a whopping total of more than 45 million new laptops. More and more workers are mobile today. People are working from the road, working from home, and yes, they are probably working from the beach. Mobile computing affords both employer and employee freedom from the constraints of geography.
But as Newton told us, for every action there is an equal and opposite reaction. The downside to this mobile nirvana is an upsurge in laptop-related ergonomic maladies. In a recent article, Is Your Laptop a Pain in the Neck?, Alorie Gilbert of CNET News discusses this phenomena.
Essentially, laptops were never designed to be permanent workstations. Good workstation ergonomics dictate that the optimal place for the computer screen is just under eye level, and that the best place for a keyboard is at wrist level. With a laptop, you can have one but not both. They violate just about every aspect of the CDC’s ergonomics guidelines, and then some.
Strains, sprains, and

Workers’ Comp in Iraq

Monday, June 13th, 2005

A fascinating article by staff writer T. Christian Miller in today’s Los Angeles Times (registration required) focuses on the cost of providing workers comp insurance to non-military employees in Iraq. Under a WW II era program called the Defense Base Act, private insurers charge the government for comp premiums. These private carriers are at risk only for the non-combat related injuries, illnesses and deaths. The government reimburses the carriers for all combat-related incidents, plus a 15% admin fee. Overall, costs for comp in Iraq are somewhere around $ 1 billion, but no one seems to know for sure.
Currently, two carriers dominate the market: AIG and ACE. The Pentagon is talking about awarding all the business to a single carrier, in order to contain the escalating costs. The counter argument seeks a continuation of the “free market approach.” I’m not sure how “free” the current market is and as for the rates, they appear to be headed in the wrong direction.
Comp in Iraq
There are about 30,000 Americans and third-country nationals and more than 40,000 Iraqis working on U.S. contracts in Iraq. To date, about 300 contractors have been killed and 2,700 injured. When the program began, insurance rates ran between $4 and $8 per hundred dollars of payroll. Now they are up to $20 per hundred — a pretty hefty rate by most measures.
Salaries in Iraq, as you would expect, are much higher than those in the states. It’s not unusual for workers to pull down $100,000. (The pay is good, but you would have to characterize the working conditions as marginal.) Comp premiums at the $20 rate would average about $20,000 per employee — a very high rate indeed. Because of the high salaries, death claims are averaging between $1.2 and $1.8 million — significantly higher than death claims for workers in the states.
How do rates for insurance in Iraq compare to other locations in the world? Here’s one striking example cited by Christian: In Colombia, a contractor flying helicopters in support of State Department drug interdiction programs is charged at $3.87 per $100 of payroll — less than a truck driver in the states. In Iraq, however, a contractor flying helicopters runs $90 per $100, with comp payments almost the equal of payroll (only iron workers above the 6th floor reach anywhere near comparable rates in the states). Keep in mind that if the helicopter pilot dies in a combat-related incident, the carrier is not on for the loss. The carriers respond by saying they have to establish these high rates, because even if they are eventually reimbursed for a combat-related incident, it could take several years to actually get the money and there is no guarantee that the government will accept the liability.
Conventional Cost Control, Unconventional Conditions
Employers in the states have learned the hard way that the best way to control comp costs is to contain losses. Cost containment means committing to good safety programs and setting up a system for immediately responding to injuries. You need to establish a relationship with an occupational medical provider and set up a comprehensive return-to-work program that uses temporary modified duty to speed recovery. That’s all well and good stateside, but I have to wonder how well that kind of a system will work in Iraq. Is anyone motivated to implement modified duty? Do employees really want to go back to work, or would they prefer to collect 2/3 of their (inflated) average weekly wage at a safe distance from the turmoil? If you were an Iraqi national, would you risk your life going back to work on temporary modified duty? With U.S. taxpayers ultimately footing the bill, does anyone over there really care if an injured employee goes back to work? When you think about it this way, you wonder why carriers would want any of the risk.
Where’s OSHA?
I wonder what OSHA would say about the working conditions in Iraq. (Given the reduced number of inspectors, they probably haven’t gotten there yet.) Under the General Duty Clause, employers must provide a workplace free from the risk of injury and illness. How does Iraq stack up? As a spokesman for one of the carriers stated, in response to questions about the high rates, “it’s 130 degrees. There is a lot of dust. There is a lack of hospitals.” Not to mention the fact that strangers are constantly trying to kidnap or kill you. Stress claim, anyone?
Ubiquitous AIG
It is indeed interesting to find AIG in the middle of this high-risk mess. Just as they were challenged by New York Attorney General Elliot Spitzer for “risk transfer” transactions that apparently involved no risk at all, it appears that here in Iraq they are collecting possibly inflated premiums where, once again, a substantial portion of the risk lies with others (you and me, to be exact).
Ultimately, my sympathies here are with the workers. I can hardly imagine a more difficult place to work. Here in America it’s rare to dress for work with a prayer that you will survive another day (rare but certainly not unheard of). In Iraq, every breath in that hot, dusty place is accompanied by just such a prayer. Here’s wishing a safe return to our civilians and a lasting peace for the Iraqi people themselves.

We’re Number 1…in Mental Illness?!

Friday, June 10th, 2005

The National Institute of Mental Health recently issued the findings of its $20 million study of mental health in the United States. Parallel studies are taking place in 27 other countries, but even though these studies have not yet been completed, the National Institute of Mental Health is ready to declare us the winners. “We lead the world in a lot of good things, but we’re also leaders in this one particular domain that we’d rather not be,” said Ronald Kessler, the Harvard professor of health care policy who led the effort, called the National Comorbidity Survey Replication (PDFs here).
News Coverage
I am as fascinated by the way the study is being presented in the media as by the study itself. Just take a look at some of the headlines gleaned from newspapers and the internet:
“U.S. Leads in Mental Illness” (Washington Post)
“U.S. Mental Health Holding Steady”(Science Now)
“U.S. Mental Survey Depresses Experts” (Nature.com)
“Mental Disorders Strike Nearly Half of All Americans”
“Little Change in Suicidal Thoughts or plans in U.S. ” (Medical News Today)
And the winner is:
“Survey Says Person Next to You is Nuts” (Web Pro News)
Comorbidities
The study involved face to face interviews with over 9,000 individuals. The surveyers were carefully trained. The questionnaires were detailed and comprehensive. I am not sure how you can extrapolate the mental health condition of 296 million people by surveying .00003 percent of them, but I’m neither a mathematician nor a mental health expert, which is probably just as well.
The study found that less than half of those in need of mental health services get treated. Those who seek treatment typically do so after a decade or more of delays, during which time they are likely to develop additional problems. And the treatment they receive is usually inadequate. The study projects that almost half of Americans (about 145 million people) meet the criteria for illness at some point in their lives, but acknowledges that most cases are mild and do not require formal treatment. Every year about 6 percent of adults are so seriously affected that they cannot perform even routine activities for periods averaging three months.
The report speculates that this lack of appropriate intervention results from a number of causes, including the failure to recognize early warning signs, inadequate health insurance (I would add, routine exclusion of mental health services by health insurers) and the lingering stigma that surrounds mental illness. Indeed, once people are perceived as having a mental problem, they may not be able to escape being seen in that light.
Thomas Insel, chief of the National Institute of Mental Health, said the nation needs to recognize that mental illness is a chronic condition that requires expert medical attention just as heart disease, Alzheimer’s and diabetes do. Intel was disappointed to learn from the survey that despite the availability of effective treatments for many mental illnesses, about a third of people in need rely solely on nonprofessional sources such as Internet support groups and spiritual advisers.
“You wouldn’t rely on your priest for treatment if you had breast cancer,” Insel said. “Why would you go to your priest for a major depressive disorder? These are real medical and brain disorders, and they need to be treated that way.” [Disclaimer: reading the Insider will do nothing for depression and may on certain days actually increase anxiety.]
Implications for the Workplace
The study does not attempt to project the number of American workers trying to perform their jobs while suffering from mental disorders. But if nearly half the population has a problem at some point in their lives, then the workplace must be pretty well saturated with potential issues. We have a long way to go in recognizing how mental health impacts job performance and in developing meaningful interventions. When you’re Number One, it’s lonely — and sometimes even dangerous — at the top.

Work bullies & bad bosses

Thursday, June 9th, 2005

Most of us can remember some grade school nightmare involving a bully. My nemesis was a seemingly innocuous and almost cherubic looking boy who had the soul of Attila. There wasn’t a single kid in the school or pet in the neighborhood that didn’t feel the toe of his boot, either literally or figuratively. It really wouldn’t surprise me in the least if I were to learn he had orchestrated all the shameful doings at Abu Ghraib. Or perhaps you might know him – maybe he’s your boss.
Diane Lewis of the Boston Globe recently wrote a lengthy piece on the topic of bullying bosses using the controversy about John Bolton as her lead. As a parade of former colleagues and subordinates line up to protest his appointment as an ambassador to the U.N. on the basis of his temperament, I wonder if he wishes he had spent a bit more time honing his people skills?
The Bolton nomination seems to be enjoying some popularity as a springboard for a discussion about abusive bosses. See Amy Joyce’s recent article, Big Bad Boss Tales, in the Washington Post for a rogues gallery – a badness hall of fame, so to speak.
Lewis cites a study by Wayne State University that indicates that one out of every six workers are bullied by bosses in any given year. A study by Workplace Bullying and Trauma Institute found that 71 percent of workplace bullies outranked their victims.
Bosses aren’t the only bullies
The National Institute for Occupational Safety and Health (NIOSH) released a recent study on workplace bullying that has a somewhat different take on the matter. Their findings showed that bullying was more likely to be peer to peer than manager to worker. Of the 516 respondents, 24.5 percent reported that some degree of bullying had occurred at their workplace during the preceding year; 39.2 percent named an employee as the aggressor, 24.5 percent said the bullying involved an outside customer/nonemployee, and 14.7 percent involved a supervisor.
Whether the source of the bullying is a supervisor, a coworker, a customer, or the head honcho in the corner office, it can have a serious and pernicious effect on the work culture, eroding trust and goodwill. It can also be expensive. Not only will angry, sullen workers be less than productive, they may find a sympathetic hearing in court for harassment or for being victims of a hostile workplace. And if a work injury occurs, egregious behavior or misconduct on the part of a supervisor might pierce the shield that generally holds workers comp as the exclusive remedy. While “no fault” is the operating rule, when serious misconduct can be established, all bets are off. And it should be particularly noted that most states take a decidedly dim view of any retaliatory actions for claims that have been or might be filed.
Rooting out a bully culture
Employers need to take a hard look at their company culture and root out any bullying behavior. We like to think most employers want do the right thing. We believe that most people aspire to excellence, but sometimes just have trouble getting there – the devil is in those pesky details.
Presidents, business owners, and CEOs must take a leadership role by setting the tone and establishing and enforcing “zero tolerance” policies. Supervisors should be trained in conflict resolution, anger management, and preventing harassment. A system for reporting, investigating, and resolving complaints should be established. Employees should be informed of how to report a complaint, and be assured that they will not be retaliated against for doing so. While HR should play a key role in this process, it might be beneficial to have an Employee Assistance Program (EAP) on board, too, so that employees have recourse to an external source if they are too intimidated to pursue a complaint internally.
More reading on the topic of bullying:
Beware: Bullies at work
Are you working for a bully?
Bullies at work
Rough, raunchy or rude: Workplace bullying increases health care costs, lowers productivity
Workplace Bullying & Trauma Institute

AIG’s Pure Poetry

Wednesday, June 8th, 2005

Insurance giant AIG is reeling from revelations of improper accounting practices. Maurice Greenberg, the legendary and autocratic driver behind the company’s success (#106 on the Forbes list of wealthiest people), was abruptly removed from his post. In the midst of this classic and prolonged “public relations nightmare,” the company is trying to rebuild public trust. One step is a turn toward the arts.
The current issue of the New Yorker contains a full page add for the company, along with a small booklet of poetry entitled “Well Versed: poems for the road ahead.” You don’t often find major corporations looking to poetry for sustenance and growth. So it’s only fair that we take this effort seriously. In fact, I find myself reading these poems in the context of AIG’s recent turmoil.
Robert Frost’s “The Road Not Taken”
We’ve all read of the “two roads diverging in the yellow wood” and the choice confronting the narrator. Which road to take — the well traveled or the less well traveled? “I took the road less traveled by,/and that has made all the difference.” Ah, but which road did AIG take and what difference did that make?
Rudyard Kipling’s “If”
You probably remember the opening lines: “If you can keep your head when all about you/Are losing theirs and blaming it on you…” Sage advice, from a presumed father to his son. I wonder if the new leadership at AIG has taken these lines to heart: “If you can meet with Triumph and Disaster/And treat those two imposters just the same/…Or watch the things you gave your life to, broken,/And stoop and build ’em up with worn-out tools;/..If you can talk with crowds and keep your virtue,/Or walk with kings-nor lose the common touch…” For all its success over the past decade, no one ever accused AIG’s leadership of having a “common touch.” Perhaps the new leadership will set this as a goal.
Edna St. Vincent Millay’s “First Fig”
“My candle burns at both ends;/It will not last the night;/But ah, my foes, and oh, my friends-/It gives a lovely light.” I am tempted to connect this unsafe candle burning practice with accounting procedures at AIG, but I won’t.
The collection includes a number of frequently anthologized poems, along with a nice selection from contemporary poets such as Philip Booth and Lucille Clifton. Most of the poems seem to offer some form of advice or faith in facing an uncertain future. Poetry is good at that: helping us look ahead without telling us exactly what to expect. Reminding us to center not on greed or duplicity, but on the values that really matter.
I’d like to think that in the midst of AIG’s crisis, someone actually read these few poems at AIG’s board meeting, but I’m not that naive. I suspect that board members have no awareness whatsoever of this particular PR project to recapture the public trust. Too bad. A little time for poetry in the board room might help companies avoid the type of mess that AIG finds itself in. Good luck to them, and good luck to the rest of us, too.

News roundup from industry publications

Tuesday, June 7th, 2005

Have you checked out our resource sidebar lately? Besides our “blogroll” of weblogs we find interesting or related, we have also compiled a lengthy list of publications and resources that offer one-stop-shopping for all your industry news. Here are a few recent news items we’ve noted:
If you haven’t done so, check out the site redesign at Business Insurance. It’s a much cleaner, brighter look, and the site seems easier to navigate. The center column is updated with daily news items, and has a blog-like format. The top story today is Judy Greenwald reporting on a Gen Re executive’s guilty plea to a conspiracy charge in connection with a reinsurance deal 4 years ago on behalf of AIG.
Peter Rousmaniere examines the ways that information technology changes how we manage work injury risk in this month’s issue of Risk and Insurance. Four words: easier, faster, better, cheaper.
The editors of Behavioral Healthcare Tomorrow have issued 2005 Almanac for Mental Health & Addiction Professionals. It provides an annual roundup of statistical trends in mental health and addiction. One section of the report examines social costs and expenditures associated with adult mental illness and substance use disorders, as well as at treatment trends and outcomes in adult care.
Workforce Week is a great HR publication that’s always worth a look-see – we’ve been remiss in not adding it to our resource sidebar but will now do so. The current online issue has an article on the Temp-to-Hire trend that is becoming a full-time practice at many firms.
The recent issue of Risk Factor features an article on obesity in the workplace by Lori Widmer.
Mike Moody has a good article on captives in this month’s issue of Rough Notes. And while at the site, check out the new digital issue format that is being introduced. Rough Notes has long been a pioneer in putting so much substantive content online – you can access back issues as early as 1997!

Starbucks vs. IWW: 21st Century Java meets Turn of the Century Union

Monday, June 6th, 2005

When I read that the IWW (Industrial Workers of the World) was trying to organize workers at a Manhattan Starbucks, I thought for a moment that I was stuck in a time machine. The IWW still exists? Indeed, the “wobblies” are still with us. They have a website, resplendent in red and full of interesting information. This year marks the union’s 100th anniversary, which, I think it is safe to say, is a little past its peak in terms of interest and participation. They still have articles from two of their most famous supporters, writers Jack London and Helen Keller. A quick review of the archives shows that the truly famous drop off sometime around 1920, but the mission over the next 80 years does not change: the IWW will be satisfied with nothing less than an end to capitalism.
The IWW press release raises some classic issues of poor working conditions, some of which will ring true with those who study the ergonomics of fast food. Starbuck workers serve an enormous volume of beverages, many of them extremely hot. The union claims that in order to save money, management refuses to schedule enough workers to do the required work safely. Instead, workers are forced to perform their duties at unsafe speeds with an undue level of physical exertion.
“A Starbucks coffee shop is an ergonomic minefield. The stores are supposed to mimic an Italian cafe without considering the uncomfortable bending and reaching we have to do, ” explained Barista Anthony Polanco. “This is not your mom and pop coffee shop. We are talking McDonalds busy every day. Starbucks talks about “Creating Warmth” but the only warmth I feel is the heat pad at the end of the day.”
Coffee, Coffee Everywhere
Starbucks is a $15 billion company with over 7,500 locations around the world. According to the union, in New York City Starbucks workers start at $7.75 an hour and eventually receive paltry raises. The union accuses Starbucks of developing a scheme whereby all Baristas work on a part-time basis and are not guaranteed a set number of hours per week, thus making it exceedingly difficult for workers to budget for necessities like rent, utilities, and food.
The union doesn’t address the issue of benefits directly, but it appears that half time (20 hours per week) workers qualify for a fairly robust benefits package, including health, dental and retirement. These benefits certainly have the potential to separate Starbucks employees from those in other fast food industries. However, there may be an issue with scheduling — a few disgruntled employees claimed that managers deliberately scheduled them for just shy of the required 20 hour average, so they were unable to participate in the benefits plan.
Walmart and Starbucks
There may well be some important similarities in all companies seeking to carve out humongous market shares across the globe. Rapid growth is fueled by aggressive pricing (well, I would not say that Starbucks sells a discounted product!), anticipation of consumer demand and, I’m sorry to say, ferociously contained labor costs. One Starbuck employee wonders why it has become fashionable to boycott Walmart for its labor practices, all the while stopping by the local Starbucks for the stimulant of choice. Interesting question, one which cuts into the very heart of the culture wars. Perhaps the privileged classes can survive without Walmart, but not without their Java.
Still, I like to imagine a couple of wobblies huddled for several hours in overstuffed armchairs at their neighborhood Starbucks, nursing a frappachino latte whatever and plotting the end of capitalism. That is still and ever will be the American way.

So you want to be an actuary…

Sunday, June 5th, 2005

Actuary.net points to an amusing survey on Actuarial Outpost about career choices: Machinist or Actuary? Perhaps I should qualify that to say that it’s amusing if you work in insurance ;-) It brought to mind an actuarial jokes website that I chanced on some years ago when there was precious little in the way of insurance posted on the web. It’s fun to see that not only is this “pioneer” site still up, but that Jerry Tuttle has been nurturing it along since at least 1998 and the site now boasts more than 150 jokes. For a light bit of weekend reading, here’s a sample:

  • An actuary, an underwriter, and an insurance salesperson are riding in a car. The salesperson has his foot on the gas, the underwriter has his foot on the brake, and the actuary is looking out the back window telling them where to go.
  • What is the difference between an introverted actuary and an extroverted actuary? An introverted actuary stares at his own feet during a conversation, while an extroverted one stares at the other person’s feet.
  • An underwriter takes his two actuaries into a restaurant. The waiter asks the underwriter what he would like to eat, and the underwriter says, “I’ll have the steak.” Then the waiter asks the underwriter, “And for your vegetables?” The underwriter replies, “They’ll have the steak too.”

Now it’s all well and good to take potshots at the actuaries among us (no doubt they have amusing stories about marketers), but in workers comp, we depend on them for ratemaking, reserve adequacy, and providing models to predict the impact of any legislative changes. For those who would actually like to learn more about the role that an actuary plays and what the job entails, visit the actuarial entry on Wikipedia or the Bureau of Labor Statistics page on actuaries. Also, a few professional associations jointly sponsor the site Be An Actuary, which offers quite a bit in the way of career advice.

CDC Backtracks on Obesity: Fat is Bad Again

Friday, June 3rd, 2005

Back on April 22 we blogged the new food pyramid model and a surprise finding from the AMA Journal that a little obesity might actually help you live longer. That particular study found that skinny people were at higher risk for death than those who were somewhat overweight. So it was time to break out the Twinkies and have a party, right?
Not so fast. It turns out that a little obesity is still a bad thing. On June 2 the Centers for Disease Control held a briefing that essentially retracted the findings of that earlier study. Dr. Julie Gerberding, head of the CDC, is quoted as saying: “we want to be very clear–obesity and overweight–and I’m sorry to say overweight because I know a lot of people were hoping that CDC was going to come out and say it was okay to be overweight but we’re not saying that. It is not okay to be overweight.”
Got that? Overweight was, is and will be a bad thing. Gerberding goes further, asserting that “people need to be fit ,they need to have a healthy diet, and they need to exercise and overweight is a very important health issue in and of itself, but also overweight is a major predictor of future obesity.” In other words, don’t let that gym membership lapse any time soon.
Good Data Gone Bad
Naturally, the question that interests the Insider most is how did this unfortunate endorsement of obesity come about? This isn’t exactly Enron — so cooking the books doesn’t raise the value of anyone’s stock. (Then again, did anyone track the value of fast food stocks when the initial report came out?) Where exactly did the data crunchers go wrong? It turns out that in studying morbidity, the research data brought in a large number of people who died of from chronic conditions, for example, people who had end-stage cancer or an immunodeficiency. These terminally ill and finally deceased people very often are, by the time they die, significantly underweight. As a result, the deaths involving the chronically diseased skewed the data in favor of moderate obesity, which creates health problems but does not generally kill people outright.
So when you just compare death rates of “skinny people” to people who are slightly overweight, you can get a paradoxical finding. It’s literally true, but it really has nothing to do with the root causes of mortality. (Kind of like saying that every accident is the result of “carelessness.”) The Insider is somewhat shocked that the earlier study was released without further scrutiny. Fortunately, we did not adjust our dietary intake to accommodate the counter-intuitive findings. So we’ll continue to pass on the General Gau’s Chicken (sigh) and stick with the steamed vegetables. Bon appetit!