Archive for May, 2014

Risk Roundup and Work Comp News of Note

Friday, May 30th, 2014

Claire Wilkinson hosts the most recent risk roundup at Terms + Conditions blog: Cavalcade of Risk #209 – check it out. And if you aren’t familiar with Claire’s blog, she writes for the Insurance Information Institute and her blog has been one of the pillars in the insurance community since 2006
In other news …
FatalitiesCompany ‘willfully ignored’ safety standards in worker’s death – Megan Woolhouse of the Boston Globe and Michael Grabell of ProPublica cover the 2011 death of Daniel Collazo while working on a machine at the Tribe hummus plant in Taunton, MA. Although Tribe paid a $540,000 fine to OSHA for 18 serious violations – one of the biggest fines in New England in at least a decade – the article discusses the limitations of OSHA penalties, which are often less costly than taking preventative measures. Prior to Collazo’s death, Tribe had been cited previously for failure to enact the lockout-tagout procedure that would have prevented this death.
Tribe is not some small, local food plant struggling to keep up with safety regulations – it is part of a large multinational food conglomerate, the owner being Israeli-based Tivall 1993 Ltd. The article notes: “Tivall 1993 Ltd. is a subsidiary of OSEM Investments Ltd., one of the largest food companies in Israel. Last year, it made $109 million in profit on $1.2 billion in revenue. The majority owner of OSEM Investments is the Swiss food products conglomerate Nestle SA, which earned about $10 billion in profit last year on sales of more than $100 billion.”
Related: Worker Fatalities Show Importance of Safety Training
The pot chronicles =Reimbursement for medical marijuana authorized under New Mexico workers’ comp law = Kathleen Kapusta, J.D. at Wolters K;uwer discusses the case: “Agreeing with a workers’ compensation judge (WCJ) that New Mexico’s Workers’ Compensation Act and its attendant regulations authorize reimbursement for medical marijuana, a state appeals court affirmed the judge’s order requiring an employer to reimburse an injured employee for medical marijuana used under the Lynn and Erin Compassionate Use Act. Rejecting the argument that the judge’s order was contrary to federal public policy, the court noted that the Department of Justice has recently offered “equivocal statements” about state laws allowing marijuana use for medical and even recreational purposes, and has even informed the governors of two states that voted to legalize possession of the drug and regulate its production and distribution that it would defer its right to challenge those laws.
Related: Joe Paduda at Managed Care Matters: Medical marijuana in work comp – take a deep breath, folks… and Michael Gavin at Evidence Based: Medical Marijuana: The Decision that Never Should Have Happened
What’s going on? Bob Wilson of had been following the strange termination of John Plotkin, let go from his job as CEO of SAIF after just a few months – and under vague circumstances. See his recent post: Governor Kitzhaber, Is Oregon the New North Dakota?
Mining – At Coal Tattoo, Ken Ward reports that MSHA pushes proximity detection rule back again. The rule would require coal-mine operators to install life-saving proximity detection systems in underground mines.
ACAI.R.S. Bars Employers From Dumping Workers Into Health Exchanges: Robert Pear reports in the New York Times: “Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling. Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day — or $36,500 a year — for each employee who goes into the individual marketplace. / The ruling this month, by the Internal Revenue Service, blocks any wholesale move by employers to dump employees into the exchanges.”
Fraud12 year sentence for $400,000, multi-state workers’ comp fraud: “According to evidence presented at the sentencing and guilty plea hearings, between January 2011 and February 2014, Perry developed a scheme in which he defrauded six different insurance companies of workers’ compensation benefits using false business and fictitious employees.”
News Briefs

Health & Safety
Annual summer campaign to prevent heat-related illnesses launched by US Labor Department
Be Smart with Sharps
NIOSH: Safe Handling of Hazardous Drugs
Laundry Risk Factors and Best Practices part 1, part 2, part 3

What Are They Breeding In Snohomish, Washington?

Wednesday, May 28th, 2014

Yesterday was a dank, dour, dreary, drizzling day, so, rather than diving deep into work, I spent a good part of the day devouring dumb and dumber insurance stories from the internet.
I came away asking, “What are they breeding in Snohomish, Washington?”
But before I tell you about Danny Calhon, a 19 year old from Snohomish who has achieved his 15 minutes of fame in a way you could never in your entire lifetime conceive, permit me a small digression and a bit of a rant.
I grew up in Massachusetts in the idyllic Leave It To Beaver and Dobie Gillis era. Maynard G. Krebs was the closest thing to a weird kid as one could encounter, and he was tame fiction. True, we had our share of “Whoops, Billy and Betsy have to get married” moments, but that was about as far as anyone my friends and I knew strayed from the beaten path, and that wasn’t often. Just often enough to make you sincerely grateful you weren’t Billy.
In those days, the closest one came to technology was the party line rotary dial phone sitting on the bench near the kitchen and the black and white, 15-inch television resting in the living room, gathered around which, every night at 6:30, the entire family would take in NBC’s Huntley-Brinkley Report. Fifteen minutes of all the news in the world. “Good night, David. Good night, Chet.” There was no internet. There weren’t even area codes. Calculators were “adding machines,” and they were hand-cranked. People hand-wrote letters. The postal service was a marvel of efficiency. Mail a letter then and within three days it would be delivered by hand through a mail slot in your front door by your own, personal, smiling, friendly (except when there were dogs around – no leash laws then) mailman. Sorry, no women. Feminism and women’s rights hadn’t hit the post office yet, or anywhere else for that matter, which is a real pity. Gloria Steinem had yet to go undercover for 11 days as a Playboy Bunny in Hugh Heffner’s New York Playboy Club. That wouldn’t happen until 1963.
That world blew up, and this may surprise you, in 1967 with the appearance of Texas Instrument’s hand-held calculator, which added, subtracted, multiplied and divided. That was it. In the early 1970s, I bought one for our office. It cost $479. After that, there was no stopping the communications bullet train (which didn’t exist back then, either). Pretty soon, Al Gore invented the internet and Steve Jobs and Bill Gates and, eventually, Mark Zuckerberg dragged everyone kicking and screaming into the galaxy we now inhabit. Facebook, Twitter, Instagram, you name it. Everyone’s a reporter and everything gets reported. If a Bumble Bee farts in Pasadena, we know it in Boston within five minutes.
One of the fun games my friends and I used to play when we were 11 or 12 was to take a deep breath and hold it while blowing really hard on our thumb, which we had stuck in our mouth. We’d then pass out for a second or two, and a friend would catch us before we hit the ground. Seems a little childish now, but, well, we were children.
Which brings me back to Danny Calhon. Remember him? Danny – he’s going to put Snohomish on the map – Calhon made it into the local newspaper, and now all over the country, maybe the world, for – get ready now – causing a three-car crash after fainting due to intentionally holding his breath while driving through the 772 foot long Dennis L. Edwards Sunset Tunnel near Manning, Oregon.
You can be forgiven right about now for asking yourself if you read that last bit correctly. Trust me. You did.
There’s good news and bad news here. The bad news (my wife always wants the bad news first – seems counterintuitive, but there you are) is that after he fainted, Danny’s 1990 Toyota Camry, which was carrying him and his friend, 19-year-old Bradley Meyring, drifted across the center line and crashed, head-on, into a Ford Explorer being driven without a care in the world just before the roof caved in – literally – by 67-year-old Thomas Hatch. His wife Candace, 61, was in the front passenger seat. The good news is that there are no life-threatening injuries.
Young Mister Calhon faces a laundry list of charges. At this time, we don’t know why in the world he was holding his breath enough to faint while driving through the tunnel. Neither does Lt. Gregg Hastings, with the Oregon State Police, who drew the short straw to investigate. Maybe Danny doesn’t even know, himself.
Back in Leave It To Beaver country, we would never have known about this. Think of all we were missing.

Health Wonk Review: Beach Edition at InsureBlog

Friday, May 23rd, 2014

Hank Stern has posted Health Wonk Review: Life’s a Beach Edition at InsureBlog. HWR is the biweekly digest of the best of the blogosphere’s opinions from the health policy wonks – a must read! Many thanks to Hank, long-time HWR participant and all-round internet nice guy for a great hosting job!
And as we enter the holiday weekend, just a little reminder …Hire-Vets

Another Day, Another Battle in the War on Over-Prescribing Opiates

Friday, May 23rd, 2014

Fresh off Massachusetts Governor Deval Patrick’s donnybrook with Zogenix, maker of Zohydro ER, District Attorneys from Orange and Santa Clara Counties in California have filed a consumer protection lawsuit against five opioid manufacturers, charging they conducted a more than decade-long massive and deceptive marketing campaign to mislead doctors about the risks of long-term use of the drugs and to encourage their use for minor aches and pain.
The suit, filed in Superior Court by Orange County DA Tony Rackauckas and Santa Clara Counsel Orry P. Korb, names as defendants:

  • Purdue Pharma;
  • Teva Pharmaceutical Industries’ Cephalon, Inc. (Teva purchased Cephalon in a hostile takeover in 2011);
  • Janssen Pharmaceuticals (owned by Johnson & Johnson since 1961);
  • Endo Health Solutions; and,
  • Actavis
  • The 100-page suit paints an ugly picture of a huge conspiracy to co-opt “chronic pain advocacy and research groups” and charges that the five firms “directly and through their front organizations made and caused their misrepresentations to be made and broadly disseminated.” It names the American Pain Foundation, the American Academy of Pain Medicine and the American Geriatric Society as co-opt targets.
    The suit also names Key Opinion Leaders, KOLs, who the Defendants “rely on … to promote the use of opioids for the treatment of chronic pain.” These are doctors who are considered thought leaders in the management of pain and hold lofty positions at important medical institutions. The suit alleges that some of them have been promoting widespread use of opioids since the mid-1990s,
    I found fascinating one particular footnote, located on page 37 of the lawsuit. It reads:

    “Opioid makers were not the first to mask their deceptive marketing efforts in purported science. The tobacco industry also used key opinion leaders in its effort to persuade the public and regulators that tobacco use was not addictive or dangerous. For example, the tobacco companies funded a research program at Harvard and chose as its chief researcher a doctor who had expressed views in line with industry views. He was dropped when he criticized low-tar cigarettes as potentially more dangerous, and later described himself as a pawn in the industry’s campaign.”

    Hmmmm. Linking what the Counties allege is a more than decade-long opioid over-prescribing conspiracy to a proven decades long tobacco conspiracy. Now that’s brilliant.
    This could get very interesting.
    Note: Thanks to WorkCompCentral for alerting us to the lawsuit.

New York Workers Comp: Once More Unto The Breach

Thursday, May 22nd, 2014

Public Citizen, a national non-profit representing consumer interests on a broad range of issues, has just published a report entitled, Aim Higher: New York Should Reform Its Workers’ Compensation Laws To Reduce Injuries. The report focuses on New York’s Service Industry Sector, which, according to the U.S. Bureau of Labor Statistics (BLS), represents 91% of New York’s non-farm working jobs and 83% of all occupational injuries and illnesses.
Public Citizen suggests that OSHA is woefully under-serving New York’s Service Industry, given that sector’s over-representation in both population and occupational injuries and illnesses.
Public Citizen looked at New York for a number of reasons, one of which was its 2012 position in the Oregon Department of Business Insurance’s bi-annual rankings of the states – New York came in as the fifth most costly, even after all of the Spitzer reforms had settled in. We’ve written often about New York’s myriad problems and the efforts of the Workers’ Compensation Board to address them. And we’d be remiss if we didn’t mention that the recent revamping of New York’s Trust Fund Assessments, by far the largest in the country, will lower costs. However, it will take some time to make a significant dent there.
But the Public Citizen Report’s primary recommendation is that New York modify Labor Code Part 59: Workplace Safety Loss Prevention Program.
Part 59 requires that an employer with payroll greater than $800,000 and an Experience Modification Factor greater than 1.2 institute a formal safety program, the requirements of which are listed in Part 59. Public Citizen’s recommendation is that:

“New York state’s legislature should remove the threshold(s) for requiring a workplace safety plan to capture all employers in New York state.”

In otherwords, New York should mandate that all of its employers comply with the requirements of Part 59, which, in case it has slipped under your professional radar, is a safety inspection and remediation program. Its 19 pages of bureaucrat mumbo jumbo require that state-approved consultants inspect employers who exceed the threshold. Part 59 lists the requirements for employers, the duties of the consultants, their required qualifications and the costs the state imposes on them for certification ($1,000 per consultant if you’re a one or two person shop).
There. Now you don’t have to read it. You can thank me later.
Public Citizen’s Report is well-intentioned, but it misses the mark and is rather impractical. For example, in 2012 there were 592,148 workplaces in New York. Using OSHA inspection rates as a model, inspecting all of them in one year would require more than 12,000 consultant inspectors. Moreover, Public Citizen’s recommendation lacks any loss cost or injury reduction performance requirements.
Nonetheless, right about now you may be asking about New York employer compliance with Part 59 as it currently exists. Me, too. However, a call to the New York Department of Labor was not returned.
In November, 2012, we wrote about Part 59’s sister regulation, Part 60:, the New York Workplace Safety and Loss Prevention Incentive Program. If Part 59 is mumbo-jumbo, Part 60 is mumbo-jumbo written in Pig Latin. Like Part 59, it is totally process-driven. No performance requirements; no performance measurement. Just build a certified program, and good things will happen. As we wrote then, “The New York DOL doesn’t seem to care if the program reduces loss costs. All the DOL wants to know is: Have employers built their programs the way we told them to build them?”
Well, we said it then, and we’ll say it now: the most successful workers comp incentive program in history is the Massachusetts Qualified Loss Management Program (QLMP), instituted at the height of the worst workers compensation crisis ever – 1990 to 1993.
To describe how it works, here’s what we wrote in 2012:

Premium credits accrue to Loss Management Consulting Firms whose Massachusetts customers the WCRIB certifies have reduced their loss costs in the year following engaging a firm. The greater the loss cost reduction, the greater the credit, up to 15%, which is then passed on to the Loss Management Consulting Firm’s customers in the succeeding year. Lower loss costs mean lower premiums for employers. The Loss Management Consulting Firms have to requalify every year. So, if a Firm’s results slip, it will see its credit, and probably customer portfolio, reduced. In the QLMP, all of the incentives are lined up so that everyone is motivated towards reducing costs, while providing safe workplaces and high quality care for injured workers.

In the first year following QLMP approval, loss costs dropped more than 20% throughout the entire Massachusetts Residual Market. Our Lynch Ryan clients saw reductions of 49.6%.
After Massachusetts, we tested the QLMP in Missouri’s $145 million Assigned Risk Pool. Fifteen percent of the pool entered what we called the Missouri Injury Management Program (MIMP), while the remaining 85% of the Pool received normal Pool service.
After one year, the MIMP accounts had incurred loss ratios of 48% and paid loss ratios of 15%, while the non-Mimp group had incurred loss ratios of 90% and paid loss ratios of 25%.
Employer premiums go down, insurer residual market loads decline and consultants flourish – but only if the loss cost results of their employer clients remain stellar.
One would think that Chambers of Commerce and Business Councils everywhere would be clamoring for this type of program for their members, but such has not been the case. Perhaps we happy few who were present at the creation never publicized results well enough. You live and learn.
Regardless, if New York, or any other state, wants to really incentivize employers to reduce injuries and loss costs, it should consider adopting a version of the Massachusetts QLMP. The good people at the Massachusetts Workers Compensation Rating & Inspection Bureau would be happy to help, and so would I.
Note: Thanks to friend and colleague Peter Rousmaniere for sharing the Public Citizen report with us.

Oh God, for one more breath

Wednesday, May 21st, 2014

The excellent site Letters of Note publishes a fascinating collection of historical letters, postcards, telegrams and memos — a great site for browsing. On a recent visit, we came upon a heartfelt letter from miner Jacob Vowell, his last communication before suffocating in the Fraterville Coal Mine in Tennessee. The letter was to Sarah Ellen, his beloved wife and mother to their 6 children, one of whom, 14-year-old Elbert, was by his side in the mine. The 1902 disaster killed most of the 216 miners who were working when an explosion occurred. (Source of the photo and more about the Fraterville disaster).
This letter seems particularly poignant in light of the recent terrible mining tragedy in Soma, Turkey that has claimed more than 300 lives.
Ken Ward Jr. of Coal Tattoo points us to a four-year old report that warned of the life-threatening risks in the Soma mines. Accounts from survivors also give testimony to a lax safety record and climate of fear. And as if the tragedy weren’t terrible enough, Prime Minister Erdogan’s handling of the event and the governmental response to grieving families seems like something out of a Dickensian novel. More recently, several arrests have been made.
In the “people who live in glass houses” department, Ken Ward asks why we can’t do better right here in the U.S. in his post, Why is it OK for mine operators to break the law? Last week, Eric Legg and Gary Hensley were killed at Patriot Coal’s Brody Mine No. 1. NPR investigations revealed that this mine consistently violated federal mine safety laws, but federal regulators say they were powerless to shut it down.

Despite the threat to miners, federal regulators say they do not have the authority to simply close the mine.

“MSHA failed to use an even tougher tool at the Brody mine. The agency has the authority to seek a federal court injunction that would place a mine under the supervision of a federal judge. The judge could then order the closure of the mine if its owner failed to fix chronic safety problems.

But in the 40 years it has had this authority, MSHA has used it only once — in 2010 against Massey Energy’s Freedom Mine No. 1 in Kentucky. Massey then closed the mine.”

On this topic, it’s also worth reading Alan Neuhauser’s article In US News & World Report, Experts: Coal Mining Deaths Preventable. Here’s a key excerpt:

“We have not come up with any new ways to kill coal miners,” says Celeste Monforton, a mine safety researcher and advocate who worked at the Mine Safety and Health Administration. “These are things that we’ve known for a long time and we know how to prevent them.”

Instead, for the fifth straight year, the coal mining industry is once again well on its way to recording more than 20 workers’ deaths this year.

“Very few accidents are act of God,” says Mary Poulton, head of the Department of Mining and Geological Engineering at the University of Arizona. “Almost all of them are something we should have been monitoring or controlling or dealing with. When these things happen, it’s a tragedy because our systems failed.”

Health Wonk Review & other noteworthy news

Thursday, May 8th, 2014

Health Wonk Review – Jason Shafrin hosts a not-to-be-missed HWR fit for a King at his blog, Healthcare Economist. Find out what’s on LeBron James’ mind, among other things! Lots of good links to the best of the health wonk blogosphere in this edition.
Challenges – In this week’s Insurance Journal, Andrea Wells has an excellent article on 10 Challenges Ahead for Workers’ Compensation. It’s a must-read overview of key issues: Industry experts weigh in on technology, opioids, ACA, terorism, safety & more. We are pleased that our own Tom Lynch is featured discussing how the work comp industry is lagging in technology and his vision for what could be.
Case Law to Watch – At Risk & Insurance, Roberto Ceniceros talks about a case involving a drug-related death that is scheduled to be heard by the California Supreme Court in his post Drug and Death Connection. He says, “the court will determine whether a commercial insurer should be financially responsible for the death of a worker who died from an accidental overdose a year after being injured on the job.”
AccountabilityRousmaniere: Who Protects Workers from Injury? – “This messy mix of private and public sector parties engaged in work injury risk is similar, a risk consultant told me, to how risks are dealt with in other areas of the economy. Too bad the parties don’t talk with each other that much.”
TravestyCrisis of veterans’ suicides is too often ignored – “The Veterans Administration says 22 veterans kill themselves every day. Think about it. In March, not a single American service member was killed in action in Afghanistan or Iraq. But during that month, almost 700 veterans committed suicide.”
The Future WorkplaceEmerging tech is transforming the workplace – “While smart mobile devices, SaaS, and social software ushered in a wave of major change in the workplace, that’s nothing compared to what’s coming.”
Language – At the WorkCompEdge Blog, Kory Wells asks Are You Using These Five Words When You Talk About Workers’ Comp? She cites a study of the 5 most persuasive words in the English language and looks at how this language relates to the world of work comp.
TrustIf I Could Teach The World to Sing – Dave DePaolo talks about trust and gratitude in the world of workers’ comp. His thoughts remind us that despite our focus on the process, we need to remember that at the very heart of things, workers comp is about a human event: a person got injured at work.
Safety AdvancesCollision Avoidance Systems Can Decrease Accidents 44% – no small prospect given that vehicular injuries / fatalities consistently rank right up there in terms of work exposures.
More News of Note

It’s North American Occupational Safety and Health (NAOSH) Week

Wednesday, May 7th, 2014

May 4 through 10 is North American Occupational Safety and Health (NAOSH) Week, a commemoration that has occurred since 1997 through an agreement between safety organizations in Canada, the United States and Mexico. The goal is to focus the attention of employers, employees, the general public, and all partners in occupational safety and health on the importance of preventing injury and illness in the workplace, at home and in the community. The slogan is Safety and Health: A Commitment for Life , and this year’s theme is How Safe Are You!
Here are participating partners / sponsors, where more information can be obtained:
American Society of Safety Engineers (ASSE)
Canadian Society of Safety Engineering (CSSE)
Canadian Centre for Occupational Health & Safety (CCOHS)
Labour Program of Human Resources and Social Development Canada (HRSDC)
Threads of life

Cavalcade of Risk #207

Thursday, May 1st, 2014

Your biweekly risk roundup is posted and ready for your review: Cavalcade of Risk #207 is hosted by Rebecca Shafer at the AMAXX blog – there’s a smorgasbord of topics, including Wounded Warriors and venture capitalists, Aristotle and ERM.