Archive for February, 2008

ADA Restoration Act: The Fix Needs Fixing

Tuesday, February 12th, 2008

The Americans with Disabilities Act of 1990 attempted, among other things, to eliminate workplace discrimination against people with disabilities. No one can argue with the goal. Over the years, problems have emerged in determining who meets the ADA definition of disabled. Nearly sixteen years after full implementation of the law, this remains a murky area in need of clarification.
Under the ADA’s original definition, a disability was something that limited “one or more major life activities” such as standing, walking and breathing. In the view of the U. S. Supreme Court, a person who can successfully use a mitigating device (hearing aid, corrective lenses, medication, etc.) is by definition no longer disabled. And because the person is not disabled, they are no longer protected by the ADA. Your basic “Catch 22.”
By stripping away protection from at least some people who might be considered disabled, the Supreme Court appears to go against the original intent of the Act. So Congress wants to fix it. They have drafted the ADA Restoration Act, through which they intend to make the intent of the law so clear, even a Supreme Court Justice will understand it:

Sec 7. Rule of Construction
Broad Construction.-In order to ensure that this Act achieves its purpose of providing a comprehensive prohibition of discrimination on the basis of disability, the provisions of this Act shall be broadly construed to advance their remedial purpose.

In other words, when in doubt, assume a person is disabled and act accordingly.
Clarity or Confusion?
Under the Restoration Act, the definition of disability becomes much broader and all-encompassing. The “substantially limits” criterion has been dropped. Transient injuries or temporary adjustment problems appear to be covered. (The proposed bill could easily merge workers comp claims with the ADA, thereby creating a litigator’s paradise.) The draft law includes impairments that are “episodic, in remission or latent.” It includes “emotional illness” and “specific learning disabilities.” The new definition is so broad, many of us would be eligible at one time or another.
The generous definition of disability could well have an unintended consequence: by expanding eligibility, the new law would lose its focus on the people who need protection the most – those who face persistent and profound obstacles in their effort to secure or maintain employment. Another consequence would harm employers, already burdened by the exacting procedural standards governing their behavior under the ADA. More inclusive eligibility would open the door to potentially frivolous claims.
Ironically, in the years since its implementation, the ADA may have had a negative impact on employment of the disabled: it appears that overall levels of employment for the disabled actually declined after ADA implementation in 1992. Employers avoided the problem with a “when in doubt, leave them out” approach. Rather than risk running afoul of the new law, many employers apparently turned their collective backs on all disabled applicants (and in doing so, violated the ADA!).
In the draft law’s current form, “restoration” is a misnomer. The act would significantly expand the umbrella of protection to millions of people not currently covered. In solving one very real problem (a narrowing interpretation of eligibility), another has been created: blurred eligibility lines that are too inclusive for practical purposes. The reform legislation needs some reforming. Congress should keep its focus where it is needed most: on Americans with legitimate, long-term, life-altering disabilities, people whose access to productive work has been hindered by artificial barriers. The original ADA was a good beginning. The Restoration Act in its current form is a giant step in the wrong direction.

Safety blog coverage of the sugar refinery explosion: frustration with OSHA

Monday, February 11th, 2008

We sorely miss Jordan Barab‘s participation in the safety blogosphere – he was a tireless crusader for workplace safety. Whenever a work tragedy occurred, such as last week’s Imperial Sugar Refinery explosion that claimed the lives of 6 workers, we could always count on Jordan to offer details and expertise on the matter that couldn’t be found elsewhere. So we have been pleased to note the emergence of a few new blogs that have stepped up to the plate.
OSHA Underground provides both knowledge of OSHA and technical expertise about a variety of work safety issues. It’s quite obviously the blog of a frustrated insider, KANE, who is vocal about diminishing OSHA resources and lack of agency leadership at the top. On Friday, KANE blogged the refinery explosion, noting that the Chemical Board had previously identified explosive dust hazards as a safety issue that needed to be addressed by OSHA. KANE also posted a list of OSHA’s comprehensive refinery inspections since March 2007, and a letter from Congressman Miller to Elaine Chao calling OSHA to task for not having enacted a standard to prevent combustible dust explosions, as recommended by the Chemical Safety Board (CSB) in November 2006. Miller notes that the CSB report identified 281 combustible dust incidents between 1980 and 2005 that killed 119 workers and injured 718.
The Pump Handle, another blog that is addressing work safety issues, also weighs in on the Imperial Refinery explosion, noting that this is the second catastrophic industrial explosion involving multiple fatalities in two months. In his post, Francis Hamilton Rammazzocchi runs through the frustrating history of the Chemical Board’s recommendations to OSHA that might have prevented such tragedies: The [Chemical] Board found that “Reactive incidents are a significant chemical safety problem,” but that OSHA’s Process Safety Management standard “has significant gaps in coverage of reactive hazards.” The Board therefore unanimously recommended that OSHA “Amend the Process Safety Management (PSM) Standard, 29 CFR 1910.119, to achieve more comprehensive control of reactive hazards that could have catastrophic consequences.”
And the response since this prescient recommendation?

More than five years after the CSB’s recommendation was issued, OSHA has refused to act. In typical Bush Administration fashion, instead of revising the PSM regulation, OSHA established an “Alliance” of chemical industry associations and published a reactive chemical webpage. The Alliance involved setting up booths at chemical industry conferences, occasional presentations about Alliance activities, and two actual training workshops that trained a total of 36 students. In 2004, the CSB evaluated OSHA’s response and judged it “unacceptable,” and the Alliance was terminated in March 2007. Rammazzocchi also faults the media for its pallid coverage and their lack of any call for accountability. He notes that despite being “hip deep in an election year,” candidates haven’t been questioned in any public forums about their stance on the regulatory agencies such as OSHA and EPA and whether they will call for the agencies do the jobs that they were intended to do.
We’ve taken OSHA to task more than once for its recent hands-off attitude to safety regulations and enforcement. While no one likes bureaucracy, self regulation by industry insiders, or what some refer to as “the foxes guarding the hen-house” approach, clearly isn’t sufficient to ensure worker – and public – safety.

Asymmetry in Workers Comp

Friday, February 8th, 2008

In conventional medicine, breast implants come in pairs: in most circumstances, you install (or replace) both at the same time. There is a compelling aesthetic symmetry in the process. In the idiosyncratic world of comp, however, symmetry is trumped by the “work-related” standard.
Penny Rumple Richardson was injured in an on-the-job car accident. Her breast implants were damaged. The North Carolina Industrial Commission determined that the damage was work-related and approved replacement of both implants. The insurance company appealed. Ms. Richardson’s doctor, Greensboro plastic surgeon Dr. David Bowers, originally testified that the right implant had ruptured in the accident and the left implant showed signs of rippling, so he replaced both. But presumably when pressed by defense counsel, he conceded that the left implant most likely had rippling because it was under-filled. In other words, damage to one implant is clearly related to the accident, but damage to the other is not.
At the appeals court level, Judges Barbara Jackson and Sanford Steelman Jr. agreed that breast implants are covered in workers’ compensation claims, because they are a “prosthetic device that functions as part of the body.” However, they determined that only one implant was damaged as a result of the accident. They sided with the carrier in denying coverage for the “rippled” implant.
Judge James Wynn, Jr. dissented. He pointed out that Richardson needed both implants replaced to ensure that they were “symmetrical and evenly matched.” Judge Wynn sought to expand comp coverage to include the rather obvious aesthetic considerations, but he failed to convince his colleagues on the bench.
The Draconian remedy, of course, would be to remove the uncompensable implant. Fortunately, that won’t happen.
The case has been sent back to the workers comp commission for resolution. We hope Ms. Richardson has conventional health insurance and that it will cover half of Dr. Bowers’s fee. If that doesn’t work, Richardson herself will have to pay the price for maintaining essential symmetry.

Health Wonk Review and news roundup

Thursday, February 7th, 2008

Health Wonk Review – David Williams of Health Business Blog is the host of this week’s edition of Health Wonk Review – he includes a wide variety of posts and his concise briefs on each entry make it an easy issue to skim through. From here to the election, content should be rich as health care policy positions and debates take center stage.
Defense legal costs: a reader query – One of our readers asked if we had any reports on average costs for employer or insurer legal defense. We turned up this study: Defense Legal Costs of Oregon Workers’ Compensation Insurers, 2006 (PDF). (For comparison, see Oregon’s 2003 report PDF) If any of our readers can point to other reports or studies on this topic, we’d appreciate it.
Mine safety – Lawmakers are asking questions about why thousands of mine safety violations were never assessed fines. Questions were raised after an investigation by the U.S. Mine Safety and Health Administration showed that penalties had not been assessed for 4,000 citations issued by the agency between January 2000 and July 2006. And while on the topic of mining safety, documents have recently surfaced showing that owners of Crandall Canyon were aware of the mine’s structural problems before the disaster. This contradicts owner Robert Murray’s post-incident claim to press that, “It’s the first time I’ve heard of this” and insistence that there was no retreat mining in Crandall Canyon.
Lifting training doesn’t prevent injuries – A recent study reports that worker training in correct lifting practices doesn’t necessarily prevent back injuries. “The researchers say either advocated techniques do not actually reduce the risk of back injury, or workers do not significantly change their habits enough to make any difference. They conclude that a better understanding of the relationship between work-related back stress exposure and the subsequent development of back pain is needed in order to develop new, innovative ways to prevent back pain caused by lifting.”
OSHA poster scam – Jason Heilpern of Hazards Recognized alerts us to a phony OSHA poster scam. Some employers are getting mail, calls, and e-mail from scamsters warning them about the need to purchase compliance documentation. He points us to the right source for any posters, as well as contact information for reporting fraudulent solicitations.
New York rate setting change – Roberto Ceniceros of Business Insurance discusses the transition to a loss-cost system for determining New York’s workers compensation rates, a move that is expected to usher in greater competition in the state.
South Carolina medical standards – In September, Governor Mark Sanford issued an executive order requiring the state’s Workers’ Compensation Commission to use objective standards in an effort to control benefit awards which were reported to vary “wildly” averaging 81% higher than other states. The order has faced significant opposition and the dispute is expected to hit the courts this month.
Maryland domestic workers – Some lawmakers are calling for employment contracts for domestic workers who work 20+ hours to stem abuse and mistreatment. Many immigrants work long hours in some of the wealthiest homes in America without the benefit of basic employment protections, such as workers comp, health care, minimum wage, or overtime pay. While the proposed legislation does not seem feasible, it is likely a response to recent media coverage of domestic slavery and other reports of abuse of domestic workers.

West Virginia Transition: Changing Rules, Changing Lives

Wednesday, February 6th, 2008

We have been following the cosmic shift in the administration of workers’ comp in West Virginia, where a monopolistic state has morphed into a competitive market. The future looks rosy, but there is much pain in the transition. It’s one thing to tighten up eligibility requirements and build a new “return-to-work” culture; the problem comes when the new culture clashes with West Virginia’s long established “culture of disability.”
About a year ago we blogged the transition from state administration to Brickstreet. One of the key elements in the transition involves moving about 46,000 existing claims from state claims adjusters to third party administrators (TPAs). That’s a task that makes Hercules’s cleaning of the Augean stables look easy! Sedgewick now handles about 39,000 of the claims, with American Mining and Wells Fargo picking up about 4,000 each. Try to imagine all those (mostly paper) files moving out of state offices, followed by the task of picking up the narrative and developing revised strategies for each and every claim.
The state’s unfunded liability for these claims is about $3 billion – a big enough number for any state, let alone a small one. Over the years, the “culture of disability” resulted in one in seventy lost time claims turning into permanent and total disability (the next closest state comes in at a rate of one in 220).
It’s not hard to imagine the pain and confusion inherent in transitioning the claims from the public to the private sector. TPAs will apply new and presumably much more stringent standards in determining ongoing eligibility. There is no way they will allow one in seventy claims to drift into permanent total status.
The Pain in Change
Which brings us to the heart of the matter: the very painful price exacted in any cultural transition. In West Virginia, disability payments had become a way of life, a way of supporting workers with no other means of support. In the state’s perpetually depressed economy, indemnity for workplace injury paid the bills for thousands of families. This disability culture evolved over decades; it will not change in the Brickstreet blink of an eye. The three TPAs are sorting through 46,000 narratives of pain and loss. They are confronted with an embedded expectation that the benefits are an entitlement and should go on indefinitely. (One claim stems from an injury in 1929!)
The TPAs are trying to apply standard insurance criteria to long-established claims; they are breaking apart the old culture and paving the way for a new one. It will probably take 8 to 10 years to complete the process. Let’s not minimize the trauma: the transition in West Virginia is comparable to the collapse of the auto industry – with one important difference, of course: in Detroit the old culture built cars; in West Virginia, the old culture built disability narratives. No amount of retooling can (or should) preserve that inherently unproductive way of life.

Connecticut Privatization: Good Idea Gone Bad

Tuesday, February 5th, 2008

Workers comp in the public sector is like an iceberg: what is visible from year to year does not really tell you how big the problem is. With the budget funding cycle running fiscal year to fiscal year, there is no incentive to close out open claims. It’s actually cheaper – in the short run – to keep paying on a monthly basis, as opposed to writing one big check to make the claim go away. There is no incentive for a sitting official to settle old claims.
The problem with this approach, of course, is that governments never confront the real cost of comp. The claims “ball” just keeps getting bigger and bigger – a problem, in effect, that is constantly pushed ahead to the next elected official.
Back in 2001 officials with the Department of Administrative Services in Connecticut recognized the problem and tried to do something about it. They made a deal with ACE Financial Solutions, which agreed to assume up to $150 million in potential liability from 660 workers’ comp claims. By privatizing the handling of the claims, the state reduced the number of workers’ compensation cases it was handling and saved $13.5 million in both 2002 and 2003. The state used a bond to raise the funds for off-loading the claims. (A bond spreads the cost over many years, as opposed to making a big hit on the “current” fiscal year.)
In return for assuming the $150 million liability, ACE was paid $80 million. Sounds like a good deal for Connecticut, doesn’t it? Alas, the state failed to follow its own procurement standards and they apparently way overpaid for the privilege of handing off the claims.
Nothing in Reserve
With private insurance, it’s pretty easy to determine the value of claims. You simply take, in this case, the 726 claims, add up the reserves and come up with a number. You cannot really do this in the public sector. With a “pay as you go” mentality, there are no meaningful reserves. You can project how much a claim will cost in a given year, but no one really knows how long the payments will go on and what the ultimate cost of the claim will be.
MRM Consulting,a private firm, was hired to determine the ultimate value of the claims: that’s where the $150 million figure came from. Unfortunately, MRM hired untrained college students to make the estimates, at the attractive rate of $105 an hour. That’s great for the students, but bad for the state. CT Attorney General Richard Blumenthal has determined that the estimated total value of the claims was grossly overstated. Over 60 of the claims included in the estimate had already closed. As a result, the state overpaid ACE and wasted taxpayers’ money.
ACE has paid the state $40,000 to settle a lawsuit by the AG’s office that alleged the company paid an illegal $50,000 commission to brokerage giant Marsh & McLennan to get the workers’ compensation contract. A similar lawsuit by the state against Marsh & McLennan over the deal is pending.
The AG’s bottom line assessment is pretty harsh: “Privatization spawned inefficiency, incompetence and increased costs. We must reform conditions – lack of funding and procedures – that led to this bungled deal.”
The Right Way
Privatization is really a good idea. When it is done right, it can save state and local municipalities a lot of money. But you need good fundamentals in three key areas: a professional assessment of the value of the claims; an open and competitive procurement process; and strong management oversight from day one. Yes, you can privatize the handling of claims effectively, but the need for good management does not end with the awarding of the contract. Indeed, good management looks for accountability and performance every step of the way. Privatization is not an invitation to wash your hands of a problem, but to partner with a competent vendor to achieve mutual goals.

NY scaffolding: one miracle survivor saved by physics; others not so lucky

Monday, February 4th, 2008

When cables broke on a scaffold on the 47th floor of a New York high-rise residential building on a crisp December day, it took only about 6 seconds for the two window washers who had been on the platform to plummet 500 feet to the ground. Edgar Moreno was killed instantly but, astonishingly, his brother Alcides Moreno survived the fall.
The word “miracle” is often tossed about lightly, but in this case, Alcides Moreno’s survival was part miracle, part physics, and part good medicine. As Moreno fell, he clung to the scaffolding, riding it to the ground and the platform provided wind resistance that slowed his fall. While his brother Edgar struck the ground at a probable speed of about 100 miles per hour, experts say that Alcides’ descent probably slowed to about 45 miles per hour. Platform cables acting like the tail of a kite may have slowed him further.
Philip Barie, chief of critical care at New York- Presbyterian Hospital/Weill Cornell Medical Center, who has treated fall survivors before, talked about the odds:

“You get above six stories, it gets unusual,” he said. “You get above 10 stories, it’s rare. We’ve had two people survive 12, one person survive 14 and one person survive 19. Forty-seven stories is uncharted territory.”

Barie said he didn’t know if Moreno set a record. No, he did not, at least according to the Free Fall Research Page. The record was made by a Russian airman, who survived a 22,000 foot fall in 1942 after his bomber was attacked by German planes. (There are many other fascinating fall survival tales at this site, and Moreno’s story is on the front page.)
Of course, Moreno suffered grievous injuries – broken ribs, a broken arm, shattered legs and spine damage. He was in a coma for weeks and has undergone more than 16 operations. But within a few weeks, the prognosis looked good not only for his survivability, but likelihood that he would be able to walk again. In mid-January, he was dismissed from the hospital to a rehab facility.
Few miracles, many deaths
It is sadly ironic that Morena survived a 500 foot fall, but William Bracken was killed in a 19-foot fall in a scaffold collapse in Mooreville, PA about 10 days ago. And in the city of New York alone, there have been at least two more scaffolding deaths since Moreno’s fall. High winds were blamed for a scaffold collapse in Brooklyn that killed Jose Palacios in a 12-story fall last week. This followed on the heels of the death of Yuriy Vanchytskyy in a 42-story fall from the top of Trump SoHo, a condominium hotel under development.
Repeat safety violations
State records show that in the Moreno incident, the scaffolding had been cited for 10 violations in June, including four that were repeat violations. According to news reports, the brothers had complained about safety issues but were told the scaffolding was safe. Neither of the brothers were wearing safety harnesses when the accident occurred.
Repeat citations are not an uncommon story. A New York Times investigation into the collapse that killed Vanchytskyy found that his employer, DeFama Concrete, had a history of safety violations, had been fined tens of thousands of dollars in penalties, and had another worker death on record – the 2004 death of an employee who perished after falling 60 feet from the platform of a crane. In that accident, OSHA found a failure to provide sufficient safety devices. These fines and citations are apparently little more than a slap on the wrist because offending contractors are still hired to work on some of the city’s most prestigious new construction projects.
Worsening employment practices and the underground economy
City Limits looks at the matter of construction safety in New York, a problem that seems to be worsening:

“According to U.S. Bureau of Labor Statistics data on work fatalities, construction deaths in New York City more than doubled from 2005 to 2006, from 20 to 43. (Data for 2007 is not yet available.) Over that period, New York City also had a higher percentage of construction deaths than the U.S. overall, according to BLS: “the construction sector accounted for 43 percent of all fatalities; nationally, construction also led other sectors … accounting for 21 percent of all job-related fatal injuries.” The city’s Department of Buildings (DOB), however, reported that between Jan. 1, 2007 and Oct. 31, 2007, construction-related fatalities dropped 43 percent from the same period in 2006, from 14 to 8, and injuries stayed constant – but accidents on high-rise sites increased from 23 to 42.”

Part of the problem? City Limits links to and cites a recent report by the Fiscal Policy Institute (PDF) attributing much of the problem in New York construction to “worsening employment practices.” City Limits summarizes this part of the report:

” …the construction industry employs more than 200,000 workers in New York City, almost a quarter of whom work in the illegal “underground” construction industry. Not only does this lead to a half-billion-dollar annual financial loss because of unpaid payroll taxes and workers compensation premiums, according to the report, but it correlates with dangerous practices. Data from the federal Occupational Safety and Health Administration (OSHA) “indicate a strong correlation between construction fatalities and the characteristics of the underground economy: half of the deaths occurred among workers at very small construction companies, three-fourths of the workers involved worked for non-union companies, and failure to provide safety training was cited in over half of the cases.”

It’s a horrifying and daunting problem, but to their credit, city officials are taking action, and some improvements have occurred since 2006. A Suspended Scaffold Worker Safety Task Force was formed and several scaffolding-related laws were enacted to increase penalties. Many are also calling for an overhaul of the Department of Buildings, the regulatory body, which many fault for being slow and reactive.
Of course, all the deaths that we’ve discussed have occurred since these laws were enacted. The city needs to continue focusing on this issue because Alcides Moreno’s story notwithstanding, the miracle plan does not make for good safety policy.
(Thanks to rawblogXport for pointers to many of the links we’ve cited.)

Tom Brady and the Art of Hiring

Friday, February 1st, 2008

As the Super Bowl looms over the weekend, our thoughts turn toward the challenge of personnel management. Most of us are periodically involved in hiring decisions: for some, it’s a major responsibility, for others, an occasional task. Some applicants come across as a perfect match (and turn into a bust) while others are nervous and unimpressive, yet turn into the perfect employee. For all the psychological profiling, background checks and careful reading of the resume, it’s never an exact science.
Case and point: Tom Brady, the quarterback for the New England Patriots. He was chosen by the Patriots in the sixth round of the draft, the 199th player selected. The physical skills he demonstrated at the “combine” were modest, to say the least. Quite a few quarterbacks were chosen ahead of him. Yet he has risen to the pinnacle of his sport, mentioned in the same breath with the legendary Unitas, Montana and Bradshaw.
This raises some fundamental questions about hiring: how do you distinguish among applicants? How do you ferret out the intangibles that separate a good candidate from a great one? How can you eliminate the candidate who sounds good but lacks passion and identify the one who really wants the job?
In an article in the Boston Globe, John Powers dissects the qualities that made Brady special from the moment he showed up in training camp:
“Nobody expects anything of you,” Brady says. “You just show up and you’re trying to make the team. You’re trying to bring your playbook to the meetings and not forget it in the room. When you’re a first-round pick, everybody’s counting on you to come in and save the franchise.” No one had any notion that Brady was special; unlike Eli Manning, his New York Giant counterpart with an impeccable bloodline and the burden of a number one selection in the draft, Brady was able to develop outside of the limelight.
Early on coach Bill Belichick noticed Brady’s knack for command and control. “You could really see some of Tom’s leadership taking over at that point, even though it was with other rookies. You could see him handle the team, handle the call, getting people lined up and making sure everybody knew what to do.” Brady, the consummate team player, made everyone around him better.
Nobody in the locker room worked harder or studied more diligently, then or now, than Brady. He was driven, he later acknowledged, by the insecurity of the perennial backup, the kid who couldn’t play on a winless high school freshman team, who began Michigan as a seventh-stringer. “You don’t forget where you came from,” Brady once said. “The scars that you have from those days are deep scars.”
Good Managers are Hard to Find
As we watch the game this Sunday, it will be fascinating to see the two outstanding quarterbacks carry out their management roles. They represent the full hiring spectrum: the cannot miss, high profile number one versus the after-thought, the long-shot (who is no longer either). Regardless of the outcome, athletic scouts and personnel managers of businesses across the world will share a common thought: how do you find the real deals in leadership? How do you master the art of hiring?