Archives by: boverson

Maybe Some Green Shoots?

As the slow economy continues to drag on there may be signs of life out there!

We recently had meetings of the Boards that run our two self insurance groups and they represent about 275 New Hampshire companies. Many of the Board members noted that they have hired in the last 60 days, one company increasing their staff by over 10%. Several of the companies noted that the fourth quarter of 2009 was better than forecast and a few even noted that their 4th quarter was better than normal. One Board member reported they have been doing a lot of recent training for the sales reps that sell their product at retail and have been swamped by the number of new requests for quotes that have come in just in the last three weeks and he said his office staff can barely keep up.

One company we visited just before the New Year said their business had dropped by over 50% in October of 2008 and another 50% in November of 2009 causing significant downsizing. At the time of our visit, they were just about back to full employment.

Perhaps the best news comes from an Employment Agency we work with who employed 50 in November of 2009, now has 150 and is working seven days a week to keep up! They are seeing that increase across the board.

We are actually starting to hear more good than bad on the employment front and that will hopefully continue into 2010.

Consider Your Bottom Line: Mock OSHA Inspections

An article by Human Resource Executive addresses a subject near and dear to our hearts. With a democratic administration increasing DOL spending, the promise of a larger, revitalized OSHA is starting to become a reality. The article sites the record fine levied against BP last October ($87M), the increased staffing across all divisions, and some new regulatory priorities. But what is perhaps most important about this story is the new found reluctance of OSHA to negotiate with those they cite. The article indicates that OSHA has gone on record stating that the number of “unclassified” violations will be granted much less frequently.

It has really always been “too late” to avoid a compliance issue once OSHA knocks on your door and issues a citation. Now, the downside to an OSHA citation is more severe, and less likely to be negotiated the other way. We’ve always been advocates of “mock” OSHA inspections/audits, and this article clearly describes their use and subsequent benefit in the currently climate. What the article doesn’t so much mention however is the bottom line cost impact of performing a mock inspection to avoid a citation. It’s simple: Mock inspections are cheap; OSHA inspections are expensive, and regardless of which one you perform, you’ve got to fix whatever problems are found anyway.

In today’s economy, I’d rather incur the costs I can control, in order to avoid the ones that I can’t…

How to Pick a TPA

Although I could easily answer this by saying: “Simple: just pick us”, I would imagine those of you listening to me might want a bit of justification. Mark Noonan has started a three part column (part 1) over at Risk & Insurance that will (hopefully) reinforce what I’d tell you about what we do, and why we’re the natural choice.

Mark makes mention of the “60% of costs these days are medical” issue, which represents a nationwide shift from almost the exact opposite (indemnity near 60% of total cost) a few decades ago. Wrapped up in this statistic somewhere is the actual cost differential from state to state. For instance, NH averages about 73% of claims costs in the medical category, while the average for the rest of New England is only around 49 (Data: NCCI NH State Advisory Forum 2009)

What this disparity means is that what TPAs may be used to in other parts of the country, or even right in our back yard isn’t what they would see here in NH. Mark does allude to the need for your TPA of choice to be familiar with the climate. I don’t think you can overemphasize this point enough when selecting a TPA here in NH.

Trouble on the Horizon

So, I haven’t been in this industry for long enough to know what things looked like the last time the P/C Industry was faced with market changing factors. However, I’d like to think that based on what we’re looking at now, that there’s no choice but for the market to change. At this year’s National Workers’ Compensation and Disability Expo, in the Keynote, Robert Hartwig of the Insurance Information Institute (III) shared a lot of information that brought a few things into focus for me. Especially for small businesses, that don’t have the horsepower to run their own Risk Management operations, and rely heavily on the service delivered to them by carriers in the voluntary market.

The story goes something like this: There’s three major factors that Robert sees as looming over the P/C marketplace (specifically comp). He refers to them as Megatrends, and trust me when I tell you, he’s got the data to back these claims:

•The Obesity Epidemic
•The Aging Workforce
•Distracted Driving/Equipment Operation
So, if you’re even with me at this point, you’re likely familiar with the first two factors, and perhaps not so much with the third. Nonetheless, they all point to increased utilization of a Medical Care System that is seeing costs rise at an alarming rate. Of course it varies by State, but here in NH (the WORST CPI state in the country), you should be very concerned about this. Especially if you’re a P/C carrier, and you’ve seen your profits disappear by over 96% over the past two years.

What other kinds of pressures will carriers in the market be faced with (I’ve already referred to increased medical utilization):

•Cost Shifting from Health Insurance to WC
•Reduced Investment Income
•Reduced Revenue (premiums are tied to payroll remember…)
And then there’s this piece: if you’re an employer, you may not even be aware that change is a-comin’. In general, you may not even be aware of the impact of the actions you take (or don’t take) on your WC Carrier. It’s interesting perhaps then, that there is a general lack of concern for how injuries are paid for, especially where premiums keep going down and down and down, and then down some more. This “Third Party Payer Syndrome” only amplifies the medical utilization problem mentioned earlier.

It’s no surprise that large organizations with a well defined corporate culture are doing whatever they can to take control of “the situation”, before it takes control of them. But for the rest of us (the vast majority of us), what will be a shock is when many of the carriers in the voluntary market can’t bear the burden of all of the factors that are looming for them. We’ll be looking at each other in the blast zone, and wondering where things went wrong. Sound familiar?

Employee Flu Shot Programs

Why Should We Provide Flu Shots to Our Employees?

•114,000 people are hospitalized every year in the U.S. due to complications of the flu
•36,000 people die each year in the U.S. due to complications of the flu
•Vaccination results in 32-45% decrease in absenteeism
•Average sick day costs $200 in lost productivity per employee
•Non-immunized workers have a rate of absenteeism that is 36% higher than immunized workers
•Vaccination is the most effective way to prevent flu and the spread of infection
Is an Annual Flu Shot Needed?

A new vaccine is developed each year, specific to the three virus strands identified by the Centers for Disease Control (CDC) as most prevalent. These strands will account for 70-90% of influenza that year. Since the strands of virus change yearly, you must be vaccinated every year.

Worried About Side Effects?

Vaccine is created from an inactive form of the virus; you cannot get the flu from a flu shot!!! Common side effects include: soreness, swelling and redness at the injection site, low-grade fever, and aches. Severe reactions are extremely rare. Flu shots are one of the safest, most effective vaccines.

The importance of how supervisors deal with injury and medical claims

Supervisors play an important role at the time of injury and when an injured employee returns to work. Generally, they are first to be notified of an injury. How they react can set the tone for the entire injury claim process. They also deal directly with the injured employee when they return to work.

When a supervisor receives an injury report, he/she should always respond positively and follow company reporting procedures. If possible, they should assist the injured employee to medical treatment. Their role at this time is to solve the problem and not to assign blame.

During the recovery process, the supervisor should maintain communication with the injured employee and keep informed about the employee’s progress. It is always important to separate personnel problems from the worker’s compensation incident. A supervisor should reassure the employee about their recovery and return to work and make sure to refer any employee questions about benefits to the company worker’s compensation liaison.

When the injured employee is released with a partial work capacity, the supervisor should be fully informed of the employee’s restrictions. Modified duties should be fully explained to the employee, with an emphasis on progression to full duty and hours. The supervisor can help the employee develop a commitment to this process. It is important to make sure the employee complies with medical restrictions and notifies the personnel manager of any change in duties. Supervisors should welcome injured employees back to work.

With the help of well-trained supervisors, return to work will be a positive situation and this will help to develop a culture of timely return to modified and full duty work. In this way supervisors can help reduce job loss due to injury.