Report of Roundtable Discussions at the ASSE Symposium
“Using Risk Principles for Safety and Health Decisions ”
March 23-24, 2005 - San Diego, CA
The facilitated roundtable discussions at the ASSE Risk Symposium were an important part of this event as it brought attendees together to share information on issues related to their involvement in Risk. Attendees at this symposium selected one of 18 roundtable topics (in the format of a question) and participated by sharing their experiences to answer the question assigned to their table. This report contains thee responses from these roundtable discussions.
What are some of the most effective return-to-work programs?
Responses: Participants in this discussion suggest the following activities:
- Return-to-Work (RTW) team with a coordinator – this team, consisting of the Safety Professional and representatives from Human Resources, Medical and Operations Management, meets weekly, reviews new and existing cases, establishes a RTW plan which matches restrictions to jobs that accommodate restrictions, establishes timelines, and evaluates progress.
- Network of contracted physicians/medical providers that can be situated on-site. Employees are sent to the clinics of the contracted physicians. These medical providers meet with partially disabled workers assessing progress, observe the transition to work, and discuss the status with the worker and RTW team or coordinator.
- If the employee is sent to the organization's contracted off-site clinic, the medical providers work with the organization's on-site coordinator and/or nurse.
- Physicians evaluate tasks for physical requirements to determine essential job functions.
- Value-added functions or tasks are pre-determined based on physical requirements. The goal is to facilitate recovery, keep injured employees at work, and reduce recovery time.
- Establish a wellness or rehabilitation center on-site. This will allow for close monitoring of injured workers, assures that the rehabilitation takes place and is managed, and lowers cost by reducing worker travel time. The center can be managed by the RTW coordinator, company RN, or an Occupational Therapist depending upon availability.
- Pre-employment screening to match physical requirements of the job with the individual's physical ability. It includes the use of competency-based job descriptions, physical testing, psychological testing and a background check.
- Communication and training to be certain that employees are aware of the RTW system and understand how it benefits them and the employer. It is important to communicate to employees that “we value you” and “it's the right thing to do.” Through training, supervisors are taught their role in this process and how to be supportive of the injured worker. The supervisor's positive attitude toward the RTW system and the injured worker is critical for success.
- Create a RTW “pool” for injured workers who need to be assigned, but no alternate work that meets the restrictions exists. Various departments in the organization can draw from this pool. Workers' Compensation is paid from a corporate fund and the department is not penalized if the “pool” worker experiences a re-injury.
- Communicate with medical providers to be certain that all clinics know your desire to return injured workers. Have medical providers tour your facility and observe the transitional jobs or tasks. Also, have them establish a line of communication with the RTW coordinator.
Claims data benefits the Safety process. So, how do we access this information and play a bigger role in claims management?
Responses
- Safety does not always have access to claims data, but it is important to obtain this information.
- One organization wanted to determine the cost drivers of Safety operations. However, the liability claims staff members were not sharing claims data. Need to start by moving toward integrating Safety and Risk Management. Sharing of information from Risk Management would enable Safety to develop a more complete cost-benefit analysis. In this give and take exchange, Safety can contribute their knowledge of operational risk.
- Third-party administrators for claims (TPAs) do not always provide the data needed by Safety. Safety needs to put control mechanisms in place to manage the loss data it receives from its TPA.
- Safety needs to approach the Claims Department in the organization and ask for claims data. This information will demonstrate trending of losses that will more clearly identify where the organization's exposures can be found.
- Safety can mitigate claims. For individual claims, Safety can investigate the claim and use the facts of the case to develop lessons learned. This information can be used to prevent similar events from occurring.
What is Safety's role in your organization's insurance allocation model? Does it work?
Responses:
- The Safety Professional needs to measure effectiveness. One approach is to use metrics to motivate management support for Safety. Safety needs to move its focus from using the OSHA Bureau of Labor Statistics incident rates and look at how much money is being spent on Safety and Health loss in the organization.
- The data needed to communicate the impact of Safety and Health loss comes from claims data.
- Units of the organization do not take an interest in the costs associated with Safety and Health losses because it does not allocate back to their budget.
- One participant described a process for allocating the cost of Workers' Compensation back to the units of an organization To conduct this process, you determine a weighted average for losses and charge the premium back to each business unit based on: 50% of the allocated cost based on percentage of payroll (size of the group) and the other 50% based on the business unit's WC losses (the exposure). These two values determine the degree of allocation.
- It's all about chargeback. Another method is to chargeback by average cost. If the business unit exceeds that amount, they absorb the cost.
Can risk management data be used to help drive safety performance?
Responses:
- Yes. One way is to tie the costs of losses to traditional lagging measures such as “days-away-from-work cases or OSHA recordable cases. This helps to demonstrate to managers the cost component of accidents.
- Another practice is using Workers' Compensation case information to assist in assessing OSHA recordkeeping practices.
- Some participants reported success in tying Workers' Compensation costs to other measures that are used by the organization, i.e., Workers' Compensation cost per hour worked and Workers' Compensation cost per unit of production.
- Another practice is using property and business interruption values in prioritizing the allocation of capital for property protection controls (i.e., sprinkler protection, upgrading electrical systems, dust controls, etc.)
- A participant reported using risk assessment data to communicate to senior management the five biggest risks in the organization.
How do we produce an economically “safe” product?
Responses:
- Early influence in the concept phase saves time, money and emotional distress and reduces the potential for compromising safety in the final product.
- Early involvement of risk management in the design and concept phase insures that insurance costs are included in the product cost estimate.
- In the product selection process, you need to consider the cost of not building a safe product – recalls, brand image, and loss-producing incident cost.
- Establish the optimum level of safety to best balance product costs and potential liability.
Do some companies engage in at-risk behavior because they carry insurance?
Responses:
- Business owners or managers will engage in at-risk behavior or make risky decisions based on the fact they have paid for insurance and they want to take advantage of the coverage.
- Companies might assume or do exceptionally hazardous operations or new lines of business because they have insurance and are covered, i.e., asbestos or lead abatement.
- In a wrap-up project with the owner at risk, contractors and subcontractors might not understand the impact of losses on their own experience.
- If a small company does not have many injuries on a long-term basis, they may want to use the insurance.
Are there risk assessment approaches that can protect against business interruption?
Responses:
- Yes, there are such approaches. You first need to scope the needs and determine the hazards to address.
- The next step is to determine the probability and analyze the frequency. Develop a matrix with terminology/prioritization. You then analyze the business cost/benefit, track and follow-up.
- The approaches are: probable maximum loss, integrated risk assessment, and critical outcome assessment.
The recent California WC statute reform: How's it working?
Responses:
- Reform has not been in effect long enough to understand fully the long-term benefit. It may take until the third quarter of 2005 or later to see the impact and understand the issues.
- The reform offers great potential for improvement in California WC. Key opportunities for improvement include: apportionment; direction of medical care; limitation of subjective injuries; and reduction of time frame for employer reporting from 5 days to 24 hours.
- An additional benefit to the reform could be greater awareness and understanding across employers, employees, insurance companies/TPAs and medical providers.
- Litigation may increase as claimant attorneys seek ways to deal with the reform. And, it may be more difficult to succeed with litigation given new guidelines and controls.
How do we motivate management to use the concept of return to work in a restricted duty capacity?
Responses:
- Develop Worker' Compensation cost allocation model and sell implementation to management. WC dollars would then come directly out of the departments/areas, providing a built-in incentive for management participation in efforts to bring employees back to work.
- Educate management about the consequences to their experience modifiers (insurance costs) when employees are not brought back in restricted capacities. Currently a misperception exists that there are no real cost consequences to losing less-skilled people.
- Translate lost productivity (in the form of absent employees) into dollars that contribute to the bottom line.
- Build a culture where returning to work is part of employee ethics by first getting the CEO to champion the effort. This will include initiatives that make employees feel valued, such as supervisors sending get-well cards to employees, calling to check on progress, etc.
- Implement a system that discourages fraud including surveillance, job descriptions shared with health care providers, company doctors that follow up on the employee's personal physician's decision, use line workers to help set up job banks, etc.
What challenges do you face in working with your risk management group? How can these challenges be overcome?
Responses:
- Lack of communication between Safety and Risk Management. Need to find a method of facilitating discussions; whether formal or informal, the two groups do not need to report to the same area.
- Lack of sharing data – this relates back to communication challenges. Safety needs to understand what data is available and how to interpret the financials; Risk Management needs to ensure that appropriate data is shared.
- Different priorities for Risk Management and Safety – both groups need to understand the priorities and concerns of each other and this needs to be discussed/reviewed regularly.
- Risk Management does not always have a presence at the plant level. Risk Management needs to get out to the field.
What is the impact of European Standards and how do you address that impact on Safety and Health in your organization?
Responses:
- Some companies desiring to move "beyond OSHA" and who are looking for "leading edge" requirements are investigating EU standards as the new benchmark in areas such as machine guarding and chemical safety.
- Other companies have decided to replace certain of their current OSHA-based global standards with new global standards based on EU requirements.
- US companies are facing difficulties when transferring production equipment from the US to Europe because the US equipment often is non-compliant with European requirements and must be retrofitted before it can be operated in European plants.
- EU Directives and European national legislation produce regulations requiring the implementation of safety systems based on "risk assessment" techniques. This is a very different approach from the "OSHA compliance" approach required by regulations in the US. Companies who have not adopted the "risk assessment" approach on a global basis find themselves implementing two different systems: OSHA compliance-based systems in the US and "risk assessment"-based systems in Europe.
- Some companies have abandoned global incident metrics based on "Days Away From Work" ("Lost Workday Case Rate") because European social systems are so much more generous than US-OSHA regarding verification of "work-related" “Days Away From Work” cases. Instead, these companies tend to measure global metrics on a "recordable" or "all cases" basis.
What contract language, insurance requirements, and other information should you examine for the outside contractors hired by your company?
Responses:
- To be examined: Contract or Purchase Order, executed and signed, Hold Harmless Agreements, indemnification, financial assets, Certificates of Insurance with additional insured endorsement, separate Hold Harmless Agreements and additional names insured endorsement.
- In the contractor purchase order, we need to examine: statement of work, standards of performance, deliverable dates, does it comply with laws and regulations. Review requirements by line of business and activity (i.e., pollution, blasting, etc.)
- Review Professional Liability for design.
- Spell out the phase of work to control operations and hazards.
- You may want to ask certain contractors to submit their Health and Safety program for your review.
- Conduct pre-qualification of contractors with insurance requirements in place including credit reports, broad contracts in place for emergencies, liens, and information on criminal actions.
- Examine the Workers' Compensation modifier of a General Contractor and subcontractors.
What services should your insurance broker be providing to you?
Responses:
- Your broker should be an advocate to the carriers by presenting the company to the market and facilitating relationships with carrier personnel including: Underwriting; Claims and Loss Prevention.
- Brokers should provide claims and claims advocacy service including:
- Positioning catastrophic claims for proper reporting – ensure that claim is reported under the appropriate line of coverage. • Establishing claims service expectations with carrier. • Handling reporting of claims under all lines of coverage except Worker's Compensation. • Monitoring large losses and conduct claims review meeting with carrier and client.
- The largest brokers are perceived as the only option for large international organizations. The feeling that they have the market “sewn up” may lead to a feeling of complacency resulting in lack of service.
- Companies want to be treated like a “big fish in a small pond”
- Brokers need to provide proactive loss control services that supplement what the carrier provides. Many carriers provide underwriting support and no service perceived as a value to customer – the broker should then be positioned to provide the service as a resource for Risk Management and Safety Staff and by going beyond inspections
- Give carriers adequate notice to respond to underwriting requests.
How can you assist in the development of contracts for vendors?
Responses:
- Narrow the scope of risk. If your company is working with small vendors, develop a question and answer form for them to evaluate their safety operations. This tool should motivate them to take this action.
- Focusing just on cost and turnaround time is not enough. Safety must be included. One approach is to obtain the contractor's record.
- Another approach is to gather best practices (some organizations are gathering this information as they work with their clients and employees worldwide). These best practices can then be distributed companywide as best practice Safety guidelines.
- You can work with the unions on identifying their workers' Safety and Health programs and help them develop and implement effective safety programs for their union contractors, often used by companies.
- When a project is put out for bid, we need to be certain that worker Safety and Health costs are included in the bidding process.
Do “safety-leveling” behaviors (an individual's propensity to take greater risks when safety controls lessen the perception of risk) occur and if so, how do we control them?
Responses:
- Does training lead to this outcome? Training vs. Education. What vs. Why. It is important to inform employees of the ramifications of at-risk behavior.
- Supervisors are more prone to practice at-risk behavior. They understand the risk and humanitarian desire to avoid injury to others.
- The culture is: police, machismo mission critical and rewards for “bravery,” and safe work vs. another person ready to take my job.
What are the b est practices for contingency planning for business interruption your company could face? (You just lost your flag ship plant, what are you going to do?) Responses: The best practices are:
- Involve all of your organization's departments in the risk assessment process. What are the hazards that could cause business interruption that would be catastrophic? Plan for the worst-case scenario – lesser events will then be covered.
- Prioritize organization operations in terms of how long your organization can be without this operation – this may be based on revenues, contract requirements or other.
- Don't ignore the area of influence – i.e., nearby operation that could impact your facility being accessible and also critical suppliers. Consider the full spectrum of solutions.
- Train those involved with the final plan. Have tabletop drills and actual drills to test and refine the plan. Review the plan on a regular basis to update vender information contacts.
- For key products, operations develop redundancies (equipment, locations) inventory control plans, mutual aid agreements with similar organizations. Maintain the equipment needed to reduce the interruption. Refer to NFPA 1600.
Can all risk be removed?
Responses:
- No. Different perceptions of risk create different risk tolerance levels.
- You can mitigate risks through audits, inspections, culture change, and incentives.
- Risk-contributing factors are you, the environment and other people.
- Risk control drivers are cost-competitiveness and adding value to the organization.
- Best metrics are: comparing yourself/your business to past performance.
How do you determine acceptable risk for a team, facility, company, or global enterprise?
Responses:
- Often by experience, observation, outcomes, processes, a little bit of reason and by default such as looking at how work is done and reaction to unacceptable risk situations.
- By defining the converse – what is unacceptable risk (which is easier to define) and staying below that level.
- Using a risk matrix as the cells in the matrix define acceptable levels. Rigor of the analysis in arriving at the risk matrix cell is important as risk reduction efforts are often based on the cell.
- The answer is company and industry specific. The maturity of both plays a role in the determination of acceptable risk. Culture also plays a major role.
- Use external requirements or benchmarks including regulations, research data, standards, and other sources and using best information available.
- Identifying what can be done to reduce specific risk and if unable to take much action to reduce risk, then risk may be acceptable.
- Mechanisms used to identify unacceptable risk such as a “time out card” in fieldwork and in meetings. Also, implementation of “close call” programs that prompt investigations to find systemic problems.
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