Archive for May, 2005

Drug Prescription Hit Parade: Ka-Ching go the Strings…

Monday, May 16th, 2005

Lately we’ve been thinking a lot about drugs. According to a study released by NCCI last year, prescriptions are taking an increasing portion of medical care in workers compensation: rising from about 6.7% of total costs in 1997 to 12.1% in 2002. The precentage today is probably higher than that.
So what? Is this really news? The LynchRyan focus is not so much on rising costs as on which costs are rising: in other words, which drugs are being prescribed under the workers compensation system and why.

Generic versus Brand Name
In the battle between generics and brand name drugs, brand names are winning out big time in workers comp. The NCCI study (going only through 2002) reveals that generics are prescribed 79% of the time. This sounds good — where generic equivalents are available, they are prescribed a majority of the time. But let’s look a little deeper. The study reveals that 56% of the time, there are no generic equivalents. In other words, over half the time doctors are prescribing brand name drugs, which are always more expensive. As a result, generic drugs comprise only 35% of written prescriptions. Beyond that, doctors are making some interesting choices in which drugs they prescribe. Take a look at NCCI’s top 10 drugs by total paid:

First in line, Celebrex, an anti-inflammatory with no generic equivalent. It’s advertised as an arthritis drug.
Second, Oxycontin, a painkiller originally developed for terminal cancer patients. (Some studies show still show Oxycontin as the #1 drug under workers comp.) Oxycontin’s addictive potential and readily abusable state are well documented.
Third, Vioxx, another anti-inflammatory (recently removed from the market).
Fourth, Hydrocodone, another painkiller, and the first generic to make the list.
Fifth, Neurontin, prescribed for pain. This drug is specified for certain seizure disorders and for the pain of shingles. Why is it so popular for workers comp pain?
The top 10 list is rounded out by Ultram (a painkiller with a generic available); Carisprodol, a generic muscle relaxer; Cyclobenzaprine, another generic muscle relaxant; Soma, a brand name muscle relaxant; and Ambien, a brand name sedative.
I am tempted to ask, what’s the problem with Soma’s sales force? Why is their brand lagging behind the generic equivalents?

In general, pain killers comprise 55% of workers comp prescriptions. No surprise, given that pain is a major component in injuries. But why are doctors relying on brand names, when there are very powerful generic drugs available for pain? Why prescribe Oxycontin? Why is Neurontin so popular?

Is this what consumers want?

There is one major difference between prescriptions written for workers comp and those written under conventional health plans. When you fill a prescription under your health plan, you almost always are asked for a co-payment. The co-pay tends to be much higher for brand name drugs, which is an incentive for the consumer to choose a generic equivalent. But in workers comp, there is never a co-pay. Thus there is no incentive for the consumer to make do with a generic equivalent. Does this mean that consumers — injured workers — are driving up the costs of prescriptions by requesting brand name medications? It might be a factor, but I doubt that it’s a major factor. The answers lie in the highly trained minds of the doctors. Just what are they thinking? What leads a doctor to prescribe a powerful and addictive drug, when a safer generic is readily available? What is the specific decision making process for a doctor when he or she takes out the little prescription pad?

This is a workers comp blog. We don’t presume to have the answers to these compelling questions. We do try, however, to identify the key issues and this is indeed a big one. Prescription choices and costs are an important dimension of the workers comp world. The continuing popularity of the widely abused Oxycontin, the off-label use of branded drugs such as Neurontin, and the heavy reliance on branded anti-inflammatory drugs add up to big profits for the drug companies. But are they medically necessary? Are these drugs really what injured workers need to get better? Are doctors making the right choices for the right reasons? Only time — and better data — will tell. We will surely revisit this issue in future blogs.

Ohio’s Great Workers Comp Coin Caper?

Friday, May 13th, 2005

I used to think I worked in a fairly pedestrian little industry. At cocktail parties, the words “insurance” and “workers comp” were always good for a few yawns and glazed eyes. There wasn’t much in the way of excitement – a little premium fraud here, a little claimant fraud there, and an occasional doctor mill busted…nothing too eye opening.
But today, I suddenly find myself in the thick of one of the most scandal-ridden industries going… first there was the Spitzer probe and the ignominious fall of the financial giants; and now, in a surprising follow-up, courtesy of Ohio, we have the great Comp Coin Caper of 2005.
Now if the linkage between 119 rare coins and workers comp isn’t immediately apparent to you, you can be forgiven. It’s a pretty twisted tale – I’ll rely on the Toledo Blade

Intoxicated employee = Employer liability?

Thursday, May 12th, 2005

We have been tracking a tragic accident in Michigan that illustrates a very open-ended liability for employers. According to an article in the Detroit Free Press, Thomas Wellinger was a well-regarded employee of Unigraphic Solutions, a high tech company in Michigan. After his marriage failed last year, he apparently developed a drinking problem. On May 3, a little after 3 pm, he left work and drove his SUV at 70 miles per hour into a car driven by Judith Weinstein. The 49 year old mother and her two sons, Alexander, 12, and Samuel, 9, were killed instantly. Wellinger had a truly amazing blood alcohol level of 0.43 — a clear indication that he routinely maintains a high level of alcohol in his system (his blood alcohol level would kill most of us outright). As is so often the case, Wellinger survived the crash, suffering a broken neck. He has been charged with vehicular homicide.
Here’s the issue for his employer: how long have they known about Wellinger’s drinking problem? What have they done about it? While Wellinger may not have the deep pockets to cover the inevitable liability for his negligence, his employer does have liability insurance. The burden of proof shifts now to the employer: they have to prove that their actions in controlling Wellinger were prudent and reasonable. It’s worth noting that the employer intends to cooperate with the investigation, but their counsel has recommend that they repond only to a subpoena.
What did you know and when did you know it?
It appears that Wellinger may have spent a late night drinking at a local casino (note to attorneys: additional deep pockets here…) He showed up for work, then left the office early. Here’s the crux of the Unigraphic’s potential liability: Wellinger returned briefly to the office around 3 pm. Was anyone aware of his drunken state? (Even for a steady drinker like Wellinger, the 0.43 blood alcohol level must have been visibly evident.) And if the employer was aware of his acute intoxication, what if anything did they do about it?
The Free Press article quotes Bill Judge, a Chicago-area attorney who works with corporations to develop drug-prevention programs and policies dealing with substance-abusing workers. Judge states that although there is no Michigan law mandating that employers stop drunken employees from driving, they can face serious civil liability.
“You have to understand that once a worker shows up drunk, the employer must act … he becomes the employer’s responsibility.You put him in a cab, or you call the emergency contact person on his application and say come get him. If he decides he’s going to drive anyway, you call the police.”
While attorneys often obfuscate matters, Judge has nailed this one perfectly. If the employer is aware of the danger to the employee and others, action must be taken. You are not obligated to restrain someone (that’s a police function), but you do need to ameliorate the risk. If the employee insists on driving away, call the police and give them a description of the vehicle.
Written Policies Are not Enough
The American Management Association estimates that over half of American companies have pre-employment drug and alcohol testing, but only 38 percent have post-hire testing programs. In any event, written policies are pretty useless if you don’t walk the talk. When a volatile situation occurs — when an employee shows up intoxicated — the employer must take immediate action. Supervisors need training in what to do and how to do it. If you let an impaired employee drive off, you are endangering innocent people like the Weinsteins. If it can be proven that the employer was aware of the danger, our legal system will hold that employer accountable, even though the employee is no longer in the “course and scope” of employment.

Recognizing and preventing occupational disease

Wednesday, May 11th, 2005

The Canadian Centre for Occupational Health and Safety (CCOHS) recently held a national forum on Recognizing and Preventing Occupational Disease. and as a part of that forum, delegates participated in workshops where they developed new strategies for dealing with occupational disease. The preliminary results of these forums are posted as survey recommendations under the following categories:

  • Infectious Diseases
  • Occupational Cancer
  • Respiratory Diseases
  • Stress
  • Workplace Musculoskeletal Disorders (WMSDs/RSI)
  • General Occupational Diseases

Through Friday, May 13, site visitors can take the survey, although Canadian data only will be used in final results. In addition to offering recommendations from the survey, the site affords access to many of the presentations on occupational disease that were made at the forum, either in PowerPoint or PDF formats. The CCOHS is an extensive resource that may be less familiar to U.S. readers. It offers many excellent health and safety resources in English, French, and Spanish. Although the Canadian comp system and regulatory matters are different in Canada than in the U.S., worker health and safety issues are universal.

Qualified interpreters can save lives

Monday, May 9th, 2005

We’ve blogged before about language in the workplace, the impact that language has on safety, and the increased risk of death that non-English speaking immigrants face at work. We’ve also talked about the need for cultural competence in health care in the face of changing worker demographics.
In a post entitled People are dying because of their language, Jordan Barab at Confined Space carries a speech that Elisabeth Milos, an interpreter for injured workers, gave at a Workers Memorial Day rally at the state Capitol in Sacramento, California. It’s well worth reading. The points that Milos makes are further bolstered by a recent New York Times article by Nina Bernstein entitled Language Barrier Called Health Hazard in E.R.
Both Milos and Bernstein point out the many problems with leaving translation up to family members or untrained persons. It is important to have a qualified interpreter when serious matter about health or safety must be conveyed. In What does an interpreter do?, the author discusses the role an interpreter can play and distinguishes interpretation from translation.
Employer Resources
How can an employer cope with the challenges that a diverse and multilingual work force poses? I once worked for a progressive manufacturer that offered English-as-a-second-language courses on site, and that regularly brought community interpreters in to acclimate new immigrant employees, such as Vietnamese and Hmong workers. Many immigrant groups have local cultural support centers, and they can be a good source for interpretation or translation.
One other alternative is for telephonic translation services via a three-way conference call. An advantage of such services is that they can be available on short notice, 24 hours a day, 7 days a week. We can’t vouch for the quality of any of these services, but here are a few you might explore:
Certified Languages International
LLE Languge Services
Our legal system faces the need for interpreters on a daily basis, so their experience might be instructive. See the Court Interpretation Resource Guide (PDF), or the state links for court interpretation (PDF) which might provide a cookie trail to certified local resources.
If any of our readers have resources to suggest, I would welcome them. This is a topic of growing urgency.

What’s your Mom worth?

Sunday, May 8th, 2005

Did you ever stop to think what a hard-working stay-at-home Mom should be earning if she were paid for her labors? did, and they tallied the regular pay and overtime to come up with a figure of $131,471. To arrive at that number, they looked at the various roles a Mom plays and the cost of those tasks if they were purchased on the open market. They took an average of seven job responsbibilites, from day-care teacher and cook to CEO and nurse, to arrive at a 40-hour base-pay of $43,461. Add another $88,009 for 60-hours of overtime and voila. But this doesn’t factor in the 24-hour-a-day on-call nature of the work, either.
The market value of a stay-at-home Mom? $132,000, or thereabouts. The real value of a woman who raises seven kids with no pay? Priceless – thanks, Mom!

FedEx Drivers Head to Federal Courts: A Declaration of Dependence?

Saturday, May 7th, 2005

We have been focusing on the issue of independent contractors for some time now. As recently as April 27, we blogged that the FedEx strategy of hiring their drivers as “independent contractors” was not likely to prevail in Massachusetts, where the standards for establishing independence are very high indeed. Now Diane Lewis of the Boston Globe (registration required) reports that a handful of current and former FedEx drivers have gone one step further: they have filed a class action suit in Boston federal court on behalf of all 17,000 FedEx drivers across the country.
Lewis’s article clarifies one of the mysteries of this arrangement: how do these “independent contractors” come up with the money for FedEx box trucks with company logos? The answer is that they lease them, presumably from a company that is “independent” of FedEx itself. The suit alleges that in addition to leasing the trucks, the independent contractors have to buy gas, uniforms, and equipment, thus netting much less than what they expected to make and less than what salaried drivers at rival UPS are paid. (In my April 27 blog, it appeared that FedEx drivers made more than UPS drivers.)
Federal Court versus State
I am a little disappointed that the case is bypassing the state courts. It’s a slam dunk that FedEx would lose here in Massachusetts, but it would have been a great show. The fate of this case in federal court is perhaps less certain. By bringing the action in federal court, the plaintiffs have set their sites on a nation-wide action that challenges FedEx’s core strategy across the country. This case is likely to end up at the US Supreme Court.
While I am all for innovation in management, I have a problem with the FedEx business strategy. By calling their drivers independent contractors, they break the natural bond between employer and employee. Independence is wonderful, but it must be true independence. FedEx drivers are caught in a nether world: they lack the job security and benefits of employees and also lack the true independence of entrepreneurs. By taking the company to court in Boston, the drivers are issuing a declaration of dependence in one of the home cities of American independence. It’s the American way.

Course and Scope: A Case of Flag Waving

Thursday, May 5th, 2005

We stumbled upon a workers comp case in South Dakota illustrating one of the more interesting technicalities of workers comp: coverage begins when you are “working” — but when are you working? There are times when injuries suffered while travelling to the job site are covered and situations when they are not. Because the vast majority of American workers do not have their own disability insurance, the determination of eligibility for comp is crucial. If you are “in the course and scope” of employment, your medical bills are paid and you receive a percentage of your average weekly wage during recovery. If you are not “working,” you have to pay medical bills yourself, you owe co-pays on your prescription medications and you have no income during your disability.
Heading off to Work
The South Dakota case, outlined in the Rapid City Journal, involves a woman whose job involved flagging motorists on an interstate construction project. She reported to a quarry in Rapid City, where employees of Hills Materials traditionally assembled for the workday, and then drove 125 miles to a distant site where she was to flag motorists at the roadway construction site. She never made it to the site: she fell asleep while driving and crashed the car. The company, and its insurer, are fighting the claim all the way to the South Dakota Supreme Court. They argue that she was heading to work — she was not yet at work — when the accident occurred. They also brought up the issue of misconduct, as the employee may have been speeding, she fell asleep at the wheel and she was not wearing a seat belt. (Because workers comp is “no fault,” the alleged misconduct is not relevant, unless it reaches the level of “willful intent.”)
I was intrigued with the company’s argument that allowing this claim would open the door to even more frivolous claims. Their lawyer queried: “If she fell in the shower, could she claim workers compensation for that? Or if she fell out of bed the night before when she was resting up for work? Where do you draw the line?”
I personally draw the line at sound legal reasoning, which appears to have been crossed, at least in this brief quote from the defense. In most states, the beginning of the workday would be the quarry. But even if the employee had headed off to the distant jobsite directly from home, the long journey would likely be part of her work day. The 125 miles is hardly a regular, well-established commute. The lower court judge has raised the right issues and to my mind reached the right conclusions. I suspect that the South Dakota Supreme Court will do the same.
Taking Care of Your Employees
In my semi-official grandstanding position as a workers comp blogger, I think it is unfortunate that the employer chose to fight this case. Their opposition sends the wrong message to all of their employees. They should have accepted the case, supported the employee during her recovery and welcomed her back as soon as possible. Given her job as a flag waver, they could probably accommodate her restrictions and bring her back on light duty. That would be far better strategy than dragging what appears to be a losing case through the courts.

Giving employees what they want

Wednesday, May 4th, 2005

Many large companies that would do anything possible to outperform competitors may be overlooking a surefire path to success: having motivated, enthusiastic employees who are committed partners in achieving the company’s goals. If you are a business owner or a manager, take the time to read this excellent interview with David Sirota, co-author of the book The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want – I’m pretty sure you’ll be glad you did. The article is from the current edition of Knowledge@Wharton, an online resource from The Wharton School, University of Pennsylvania. (This is a great resource – free registration may be required.)
Sirota and his co-authors, Louis A. Mischkind and Michael Irwin Meltzer, have conducted more than 2.5 million employee surveys since 1994. Their research demonstrates that companies with high employee morale outperform companies with low employee morale. In a group of 28 companies employing 920,000 workers, the share price for the high morale companies increased by an average of 16%, versus about 3% for low-morale companies.
The authors reject the “get-tough” managerial tactics that were adopted widely in the last decade in an effort to increase share price and satisfy stakeholders. Rather, they favor a managerial approach that aligns company goals with the goals of its workers. Sirota describes the three basic goals of workers as:

  • Equity, or being treated fairly – fair pay, fair benefits, and security.
  • A sense of achievement – being proud of what you do and the company you do it for.
  • Camraderie – being part of a team effort, working well together.

Every tool a hammer
Sirota states that about 16% of the companies he deals with have a hostile work force. Often, this is the result of a reactive managerial style that we frequently encounter in companies that are suffering from high workers compensation losses. Sirota states:
About 5% of every workforce is allergic to work. These employees are shirkers. But managers in many companies, especially where there are large numbers of blue-collar workers or back-office operations such as call centers, treat the entire workforce as if it is the 5%. They set up rules and punitive measures for taking too long a rest break, etc. There is close supervision, so people who come in wanting to work, and hoping to take pride in their work, find themselves treated as if they are children or criminals.
Such a punitive style of management – treating everyone like the worst performing few – is a common reactive approach to the high costs of workers comp. We see this frequently. In frustration to one or several high-cost claims, some employers react by treating every comp claim as fraud, and treating all claimants in an adversarial manner. This serves to worsen any problems, creating a corrosive air of mistrust between managers and employees. It often becomes a type of self-fulfilling prophecy, even in instances when high comp costs are actually more the result of outside market forces or a fundamental lack of basic preventive of managerial measures.
A better way: employees as partners
Sirota discusses various managerial styles that have been in vogue over the last few decades, and presents an alternative that we ascribe to:
“First there is paternalism, where workers are treated as children. Then there is adversarial where workers are the enemy. Then there is transactional, where workers are like ciphers. Management does not know what they are like as individuals. The attitude is, ‘We paid you, now we are even. We don’t owe you anything.’ That’s where most companies have gone today. Loyalty is dead.
The fourth is what we have been talking about, which is the partnership organization. It does not mean that because I paid you, we are now even. You don’t treat partners that way because you might need them to help you out sometime, and they might need you. It’s more like a relationship between mature adults — not like children or enemies, but allies.”

We endorse this latter approach fully, and have seen it work well in those companies that embrace it as a model. The breakdown in employer-employee loyalty has been pervasive in recent years, resulting from massive and repeated layoffs, outsourcing, and other organizational measures that convey the underlying message that employees are a commodity. It may take years for employers to bridge the chasm that has been created and recreate a loyal work force, but the benefits are many for those few high-performing organizations that make the effort.

Risk Factor: new industry publication

Tuesday, May 3rd, 2005

Risk Factor is a monthly newsletter that made its debut at RIMS. Lori Widmer is a principal behind this new monthly publication – she’s a savvy and experienced risk management editor, having worked wih and been published by some of the premier risk, workers comp, and HR industry publications. Learn more at the Risk Factor website, and read Lori’s commentary on last month’s RIMS conference. For a complimentary sample copy of Risk Factor, drop a note to