The CEO of a large insurance company once confided to me that the toughest innovation challenge he faced was that, “Every time we try to innovate, the agents turn around and kick us in the nuts.” The dance between Uber and Google around drone taxis reminds me of that conversation. Google invested in Uber in 2013 but has recently distanced itself from Uber amid indications that it is considering offering its own ride-hailing service using driverless cars. While such a service might make sense for Google and might be the way of the future, imagine how Uber’s drivers will react if Uber attempts the transition to driverless cars. Both the insurance CEO and his agents knew that the most innovative thing his company could do was to eliminate the agents as middlemen between him and his customers. This insurer was paying about 15% of its premiums to agents in commissions and bonuses. Eliminating agents would have translated into lower expenses for the insurer and lower premiums for customers. GEICO, for example, pays no agent commissions. It takes advantage of its structural cost advantage to out-market and out-price its agent-based competitors. The problem was that this insurer depended on its agents. Going from agent-mediated sales to no agents was fraught with danger. Sometime in the future, whether five, 10 or 15 years from now, Uber will confront a similar predicament as it confronts the adoption of drone taxis. Fully autonomous cars will enable Uber-quality service at much lower prices -- and at a fraction of the cost of car ownership. The only difference is that there will be no human drivers. Drone taxis are an opportunity that Uber has long foreseen. It was likely a part of the calculation for accepting Google’s $258 million investment in 2013. Travis Kalanick, Uber’s CEO, was clear about the opportunity when he told a technology conference in 2014 that: "The Uber experience is expensive because it’s not just the car but the other dude in the car. When there’s no other dude in the car, the cost [of taking an Uber] gets cheaper than owning a vehicle." And, as I discussed I a recent column, Uber just put a lot of money behind that vision. So, by the time driverless cars become viable, Uber will have had a hand in its development for a long time. But here’s the rub. By that time, Uber will no longer be a feisty startup with nothing to protect. It will most likely be a highly profitable and richly valued public company. It will be servicing millions of customers in thousands of cities across hundreds of countries all around the world. And its success will depend on the allegiance of hundreds of thousands of independent human drivers. As with insurance agents’ power over the aforementioned CEO, drivers will have tremendous leverage over Uber. Will Uber drivers accept a drone option on the Uber app? No. It is easy to imagine work stoppages and mass defections to competitors that promise not to offer drones. It is also easy to imagine intense campaigns by drivers and third parties to save drivers’ jobs and livelihoods. Uber will find itself at the very uncomfortable heart of the technology vs. jobs debate. Will Uber management have the audacity to risk changing Uber’s business model? Could Uber weather the bad publicity and potential disruption to its revenue and profits? Would its board and investors allow management to put the company at risk? Uber will be in much the same position that Kodak found itself with digital photography. Kodak had the foresight to invest in research that yielded many of the core inventions enabling digital photography. Yet it struggled for decades to capitalize on those inventions -- even as digital photography inexorably replaced film-based photography. Kodak failed even though it had immense resources, technical expertise and management talent. It failed because it could never negotiate the business model transition to digital photography. If you had a very profitable and dominant film, chemical and paper business, when would you choose to accelerate its demise? Kodak management stuck with film until the company's early advantages in digital photography no longer mattered. The iconic “Kodak moment” used to conjure up images of heart-warming pictures. It now symbolizes companies grappling with complete and utter technology disruption. Uber will no doubt have all the prerequisite resources, technical expertise and management talent to fully comprehend the strategic implications of driverless cars. Like Kodak, it will have a very long time to prepare. Do you think it will survive its Kodak moment?

Recent workplace and school shooting incidents underscore the importance of having comprehensive prevention and response policies and plans in place. We are finally coming to grips with the reality that workplaces are veritable lightning rods for violence. In an article titled, "Business Continuity for Small Businesses," Dr. Robert F. Hester said, "Safety, security and preparedness aren’t routinely a focus in our lives. Being on guard is not something Americans are used to or like doing. Still. . . the threat never goes away; only fades in memory.” Workplace violence reflects employee perceptions of their workplaces and their personal issues. Workplaces are veritable lightning rods for violence. Our job is to minimize the risk through strategies and preparation. Minimizing risks requires a critical assessment of your workplace security; prevention and response procedures; physical security measures; and administrative and operational policies. Workplaces must appreciate that unhappy employees don’t wake up one morning consumed with getting even. They don’t! The escalation toward homicidal retaliation probably started months earlier, if not years, and the clues were missed or misunderstood. Supervisors need to examine work sites for autocratic supervision, toxic employees and criminal elements. Sometimes, workplace policies create misunderstandings, when the workforce is taken for granted, and that can lead to conflict. Supervisors and managers need to intervene swiftly by monitoring and then communicating. They can show sensitivity to changes in family, medical, personal, financial and workplace relationships that are often exacerbated by workplace relationships. Workplace violence prevention really requires a comprehensive view of workplaces and how best to integrate resources, collaborate on strategies and coordinate efforts. (Developing Your Comprehensive Workplace Violence Prevention Policy/Plan). Workplaces must review their policies and plans annually and design the right atmosphere. Workplaces must be critical of their capabilities and limitations by asking tough questions. We must not allow convenience to dictate management’s decisions and attitudes. Employees (supervisors and managers alike) must be held accountable for inappropriate conduct as part of building credibility in violence prevention. We must ask the following questions:

• Do we understand the risks?
• Are we responding properly?
• Do we monitor and track incidents, situations and people?
• How could an incident happen?
• What did we miss that could have prevented the outcome through care, consideration and attentiveness?
• What did we take for granted and why?
• How do we interact or fail to intervene?

I ask that senior leaders begin a process today to assess their workplace settings to uncover hazards and resolve security gaps. Why wait to answer such questions tomorrow when posed by the media, OSHA or a jury? Research shows that people delay because of:

1. Denial about whether they have a problem;
2. The resources required;
3. A belief that they can simply terminate troubled employees;
4. An inability to act quickly;
5. Lack of staff and support;
6. The cost of training;
7. The expense of hiring a consultant.

But there is a need to be prepared for the when it happens rather than if it happens. The threat can come from a: current employee, former employee, disgruntled customer, client, patient or student, criminal or a domestic/intimate partner. I will not scare readers with immaterial statistics not specific to your respective workplaces at this point, but I will implore you to take immediate action to improve your workplace security.

It’s a brand new year. I hope last year’s numbers were where you wanted them to be: solid growth, increased revenue and expenses under control. But for those agencies that didn’t add to their book, there’s always an excuse or six. It’s easy to rationalize why things didn’t go your way. Of course, sometimes, it really isn’t your fault; maybe you lost a major account for reasons beyond your control. This column highlights a half-dozen common excuses and suggests ways to slap them down. No time to sell. No producer ever has enough time to sell; yet it’s their most valuable commodity. There are innumerable ways to gain more selling time, including: wiser time management; more selective prospecting and quoting; using instant digital communications; shifting small, no-growth accounts to a skilled in-house agent or a less busy outside producer. Enact these approaches, and others, to extend the clock in your favor. Not enough commercial prospects. Be preemptive. Work mainly with new business leads that align with your personal interests, plus pricing and underwriting strengths. Count the approximate number of prospects within each niche you want to target, and broadly pre-qualify them, before doing any actual solicitation. If you don’t, your sales results may not be adequate to offset your time and marketing expenses. Our personal lines rates are too high. Competing head-to-head with direct marketing carriers isn’t entirely about price. Professional advice, a local presence, smart proposals, regular communications/reviews, plus a competitive premium, all generate appealing value. Besides, rates are fluid; they go up and down, relative to the competition. Focus on the elements that are within your agency’s control instead of lamenting about what is not. No one has heard of our companies. If you tout your leading carrier as your agency’s brand, you are making your job harder than necessary. You are not your carrier. Besides, agency carriers never advertise as much as direct and captive-agent companies. Instead, concentrate on building your own brand through social media and traditional means. Adequately market and sell your agency, and people will buy from you — not the underwriting carrier. Inadequate sales training. You can’t expect serious sales from unskilled salespeople. So, provide continuous sales training to every producer and front office staffer. To help, there are state association-sponsored programs such as the American Insurance Marketing and Sales (AIMS) Society’s CPIA designation for producers, plus a variety of sales training sources for in-house client reps. There are also independent vendors with worthwhile training tools (including my own Agency Ideas resources). Too many rivals. Endless rivals, on all levels, challenge today’s independent agencies. Retailers, banks, captive and direct marketers, traditional competitors and more are all shooting for your business. Plus, the digital universe reduces the barriers of entry to anyone with an insurance license, a website/app and a willing policy writer. It can seem like you against the world. Don’t use this as an excuse. Instead, think of it as a clarion call to stop being a generic office and start being different — in terms of both marketing and sales. Are excuses that important?  As Jeff Goldblum’s character Michael famously said in The Big Chill, “I don’t know anyone who could get through the day without two or three juicy rationalizations. They’re more important than sex. . . . Ever gone a week without a rationalization?” Excuses are normal, everyday occurrences. It’s common to imagine them. Just don’t let them interfere with the growth of your agency. Let your endless competitors get lost in the rationalization maze instead. This article first appeared in Insurance Journal. 

The second-most read article from Health Affairs in 2014 was a fantastic piece by the employee benefits professionals from Pepsi and researchers from the RAND Corp.

The Pepsi team and the RAND researchers evaluated PepsiCo’s wellness program over a seven-year period and found the following:

• The disease management component of the overall wellness program lowered healthcare costs by $136 per member per month (PMPM) and decreased hospital admissions by 29%
• Lifestyle management/wellness showed a return on investment (ROI) of .48 to 1 (in other words, it LOST money)
• Disease management's ROI was 3.78 to 1
• Combined ROI for wellness and disease management was 1.46 to 1
• Findings were consistent with RAND's workplace wellness programs study, which found that lifestyle management did not lower healthcare costs
• Lifestyle management program's cost was $144 per participant per year

The article concludes that "blanket statements like ‘wellness saves money’ are not warranted."

As employers evaluate their healthcare strategies, it is important to keep these findings in mind.

Building an effective risk culture is much more than changing your organizational culture in line with your vision, mission, corporate values and risk appetite -- you must factor in the interests of competing national cultures, sub-cultures, Maslow’s theory on individual self-actualization and the informal groups in the company. The interactions among all of these are not predictable, and variables cannot accurately be isolated. An effective risk culture is not a matter of risk assessment or level of compliance; it is a matter of “conviction” -- a corporate state of mind where human beings can take well-informed risk decisions because they want to, not because they have to. ERM policies, systems and reporting dashboards are all part of the foundation for good risk management. Once you have all of these in place, you can start building an effective risk culture. Remember also that there is too much complexity and subjectivity in culture to assume that individual reactions and responses can be aggregated to reflect or give an accurate picture of the whole organization’s  risk culture. You cannot “pop” an effective risk culture in the microwave; it takes a lot of preparation, dedication and time to get it to perfection. You can have the best staff retention rates in the industry or the most awards for long service -- both of these can also indicate a high risk of employee fraud. According to ACFE research:  53% of fraudsters have more than five years of  service and the median loss for fraudsters with six to 10 years of service is $200 000. 52% of fraudsters are between 31 and 45 years old, and older fraudsters tend to cause larger losses. Scanning the horizon might just be the most important thing to do. You cannot control or stop what is coming; you have to prepare to respond to it. So many organizations spend large amounts of money to focus and report only on what is happening inside the organization, where they actually have control. Your biggest risks are outside of the organization, where you have no control. Key elements for the future of your risk strategy should include internal networking; you have to talk to the informal groups and their informal leaders just as much as you do talk to the executives and managers, maybe even more. The real business does not always get done in the formal “boxes and lines” structure. Just as important are the aspects of desk research and external networking. To have a good risk management strategy and action plan, you have to know everything about your industry, markets, competitors, supply chain, alternative supply chain, global risks in a connected world and many more. Failure to adapt your business model to the ever-changing internal and external risk environments will lead straight to the corporate graveyard. The future of risk management is just: “risk management through people.” You can have the best systems, great models and scenario analysis with elaborate dashboards; at the end of the day a person will take a decision. Are your employees aiming at more than one target, or do you have a clearly defined risk for reward strategy and risk appetite statement to guide them? Business strategy and risk culture are parts of an interdependent system. Start working on your success by training every employee with some basic risk management skills. As my Moody's colleague Sarah Tennyson wrote last year: “Enterprise-wide risk management requires a shift in the behavior and mindset of employees across an organization. To realize the full benefits of improved systems, tools and analytical skills, people need to learn new ways of perceiving situations, interpreting data, making decisions, influencing and negotiating.” This was originally published at Zawya.

As we get rolling in 2015, enterprises continue to approach a technology tipping point. According to our Digital IQ survey, 35% to 50% of technology spending is outside of the CIO’s budget. This data raises the question: Is it possible for CIOs to continue to influence how the enterprise is leveraging technology? The short answer is yes, but CIOs need to transform their approach to leadership. The New Year calls for a new CIO. The top-down days of technology leadership are over. Budgets, standards, procurement and governance…these concepts of control have been central to the CIO’s playbook, but they are increasingly ineffective as CIOs lose the ability to dictate how technology dollars are spent. Rather than instituting rules, CIOs must inspire executives across the enterprise to follow their lead. The measure of a successful CIO is shifting from how well the IT department functions to whether the entire enterprise has the ability to both drive and deflect digital disruption. If CIOs are the Pied Piper, the music is the “art of the possible.” Through a bold vision combined with deep listening, CIOs must guide the organization in maximizing technology’s full potential. The old C-I-O stood for Control, Infrastructure and Organization. The new C-I-O stands for Catalyst, Integration and Outside-in. Let me explain. From Control to Catalyst or Consultant or Communicator The CIO has no choice but to shift from one who controls technology spending to a catalyst who sparks action. The best way to persuade the enterprise to push the boundaries of technology is to build relationships and introduce big ideas through demos, prototypes and market intelligence. CIOs need to use demos to show the enterprise how business goals can be accomplished through the hands-on exploration of emerging technology. From Infrastructure to Integration Shadow IT has led to siloed systems such as SaaS and cloud applications that have to be integrated so businesses can get the most value out of them. Gluing together best-of-breed solutions isn’t new for CIOs. Integration was a critical skill set as we used middleware to stitch together customer relationship management (CRM) and enterprise resource planning (ERP) systems with legacy platforms. But integrating legacy systems with digital is different, given new vendors, technologies and sourcing models. CIOs need to take a hard look at their team’s integration skills and partnerships to make sure they are up to speed. From Organization to Outside-in In the past, we haven’t looked very far for inspiration to innovate. Most corporations have a history of learning about new technologies by tapping a few trusted vendors, attending a conference or two and reading a handful of trade publications. For the most part, organizations have turned their gazes inward toward their own organizations for innovation ideas. In the age of digital, where new technologies are plentiful, CIOs need to lead the charge of outside-in innovation, looking outside to communities such as makers, universities, open source, contests, crowd funding sites and global innovation hubs for inspiration. The role of the CIO is undergoing a seismic shift, and it’s creating a great deal of uncertainty and angst. Change is difficult, but it’s also exciting as it leads us to discover strengths and interests that we didn’t even know we had. It’s incredible what we can achieve when the future is on the line, as it is now. For CIOs to come out on the other side of this haze, they need to make themselves “tomorrow ready” by reshaping their roles today.

Of all the states, who would have guessed that New Mexico would be the hotbed of medical marijuana court decisions?  Between the Vialpando v. Ben’s Automotive in May and the Maez v. Riley Industrial case, handed down earlier this month, New Mexico’s court of appeals appears to be one of the most pro-marijuana courts in the nation. Back in May, when I first wrote about this issue, I wondered why the reasonableness of the marijuana treatment was not questioned, and our corporate counsel told me that surely there be additional case law. Sure enough, the court in Maez decided to take on the issue. Maez suffered from an industrial accident and was treated by Dr. Reeve.  Dr. Reeve prescribed a variety of medications, including several opioids. As required for patients on long-term opioid therapy, he performed regular urine drug tests. Maez tested positive for marijuana. Typically, recreational marijuana use, or the use of any illicit substance, raises red flags with the prescriber. But not with Dr. Reeve! Dr. Reeve informed Maez that, if he was going to use marijuana, he needed to have a medical marijuana license. Luckily for Maez, Dr. Reeve was happy to provide him with one. According to Dr. Reeve, “Patients are going to use cannabis either one way or the other. . . . If a patient requests that I sign [a license], I will sign it . . . but I’m not recommending . . . or in any way advocating for the use of medical cannabis.” Dr. Reeve also considers the use of medical marijuana to be the patient’s decision, “as it’s private and voluntary, and it’s not overseen by a physician.” So the guy ended up on a medical marijuana regimen because of a failed drug test. That should be sufficient for the court to find in favor of the payer, right? Nope.  And it gets worse. The court went on to rationalize Dr. Reeve’s actions as reasonable, stating that “[Dr. Reeve] adopted a treatment plan based on medical marijuana. He would not have done so if it were an unreasonable treatment.” Imagine if that logic was applied to all workers' comp medical treatment. The doc says it’s reasonable. . . so it is. State statutes and regulations have been evolving for more than a decade to specifically counter this argument. But not in New Mexico. And it gets even worse. To take this determination one step further, because the physician said it is Maez's choice whether to use medical marijuana, the court, by default, has determined that the self-directed use of marijuana by this injured worker is reasonable because the physician signed off on it. This is patient-directed care at its absolute worst. To recap what led to this decision: illicit drug use, perpetrated by the injured worker, condoned by the doctor and supported by a court of law. I wish I could tell you that marijuana should be the least of your concerns, but if this is the specious logic to which we’re beholden. . . we’ll need better guidelines, better tools and better lawyers.

Timely response and clear communication are critical for handling workers' compensation claims. However, when it comes to gathering information, “timing” might be just as important as “timely.” A story out of Ft. Worth, TX highlights that the process needs to be a well-choreographed dance, or significant problems can arise. Fort Worth Mayor Betsy Price publicly admonished CorVel Enterprise Comp for asking "inflammatory questions" of a police officer the morning after he was shot and seriously wounded in the line of duty. The officer, a 19-year veteran of the Fort Worth Police Department, was shot in the abdomen while he and another officer responded to a mother’s 911 call asking for help with her son. The son, who was barricaded in a bedroom, opened the door and shot the officer. Both officers returned fire, killing him. The officer underwent surgery at Texas Health Harris Methodist Hospital. Mayor Price, in a letter to CorVel, said the company’s workers’ compensation representative showed up at the hospital the morning after the shooting and proceeded to ask questions of the family, officers and hospital staff. The letter calls the questions “inflammatory” and criticizes the timing “as one of our police officers rests in a hospital bed recovering from gunshot wounds received last night.” The mayor is requesting CorVel CEO Gordon Clemons and his staff meet with her to “determine the facts and get to the bottom of this matter.” The company did not respond for the initial newspaper article and, as of this writing, still does not appear to have responded publicly. I must state unequivocally that we do not know what questions were asked, or in what tone they were delivered. Clearly, however, people were upset by what they perceived to be an entirely inappropriate line of questioning, and people’s perceptions will be their reality. The questions might have been of a simple, by-the-book initial claims investigation nature. Given the emotionally charged atmosphere, however, I would suggest the timing was likely poor. Perhaps the best question that could be asked in that highly volatile 24-hour period should have been, “How can we help?” [Editor's Note: It now appears that this question was, in fact, the point of the visit, but communication was poor. Here is a link to a followup column by the author. ] This highlights such a critical issue for our industry. If there are two things workers’ comp is routinely criticized for, it is lack of timeliness and of communication. After all, we are the industry that invented the concept of “hurry up and wait.” Under normal circumstances, having a workers’ comp representative present and involved within 24 hours would be a great thing – assuming, of course, that the representative did not make it a confrontational affair. Yet, somehow, an employee in this case has produced the opposite effect, angering an injured worker's family, his associates and employer – the client responsible for paying the bills. Perceptions can have lasting and damaging effects. Unfortunately for the workers’ compensation industry, perception is not something we spend a great deal of time worrying about. We are a statutorily driven industry, going through the regulated processes day after day after day. It is sometimes easy to forget that there is a human being attached on the other side of that claim, and that our actions are continually creating perceptions about us and our trade. That lack of awareness on our part can lead to costly errors, and that may be exactly what has occurred in this case. We do not have the full details; this is a one-sided story to date. What we do know is that something riled the mayor enough to write that letter and take the entire matter public. In one way, her actions accent a positive point of the story, as they show an employer actively engaged in the welfare of an employee, as well as the management of his recovery. It is something we need to see far more of across the nation. As for the CorVel employee involved, we do not know if the person was a competent employee just trying to perform the processes required of the job -- or is living proof that a company is only as good as the biggest idiot on its payroll. It really doesn’t matter, as the perceptions of the one side are the only ones that are of concern at a public level. Those perceptions tell us that proper timing may be more important than proper timeliness, and that showing compassion is essential. Sometimes, we can show compassion just through proper timing.

I grew up watching Knight Rider and seeing KITT, where Michael would continuously talk into his watch, and KITT would drive to his rescue (through a garage door or two) or safely transport him through the night while Michael had a catch-up on his sleep -- only to be woken up by the local police freaked out at the thought of him asleep at the wheel, only to be foiled by his pretending to have a "crook neck"! Move forward 15-plus years, and we now talk to our watches, and cars are driving themselves. This futuristic TV show and its "connected car" is today's reality and only becoming more and more real. We are allowed driverless cars from January 2015. The connected car is a super exciting area that many folks already talk about in great detail. In fact, Capgemini's Car's Online study  presents a compelling case. Here is a quick summary from me of benefits:

• Safety -- by default, car capability increases beyond recognition. Humans no longer control of the car (especially as the car will react quicker than we ever would). In 2015, all cars in Europe must be equipped with eCall, a system that automatically contacts emergency services and directs them to the vehicle location in the event of a serious crash.
• Fleet knowledge and efficiency -- knowing when to roll vans/cars/trucks across what roads.
• Intelligent GPS -- bye bye theft, traffic jams and other inconveniences.
• Location-based services -- working out the best things for you along the way, including charging points for you and your car!
• Infotainment and more -- never be out of touch; everything is connected to your biometric-enabled smart phone. Your fingerprint not only unlocks the phone but tells the car who is driving and sets your profile and other preferences.

Of course, there is far more to it than this. The key here for me -- it's an unprecedented volume of data for us to derive insights from. There is a good summary from Direct Line in the UK here. A 12-month pilot, for example, gathered more than 11 million miles of data. It's nothing new! One of my frustrations is that everyone talks about telematics as a new shiny thing. Like GPS, telematics has been around for more years than I care to recall -- however, it has only just found its feet in mainstream marketing and the minds of consumers, primarily because of plummeting technology costs for the telematics "black box," smartphones that can do the same (or similar) things and, most importantly, a problem to solve: the increasingly high cost of insurance. I use the word "mainstream" carefully; telematics is talked about a lot, with adoption in some key demographics (young drivers). While it has applicability across a great many other demographics, the number of actual policies is still relatively low compared with the total number of policies in force for any one insurer. I do, however, believe this will change, not because of the desire to reduce the cost but more because of the way we move to buy everything as a true utility or service. This was debated at a recent roundtable discussion by Post magazine, which I participated in. However, to drive significant adoption, it may need a more fundamental change. Perhaps a change in law from opt-in to opt-out? It would certainly give governments the opportunity to truly consider road charging properly! Let's be blunt! The connected car brings so much more and is yet another blunt instrument providing oodles of data back to organizations that allow you to use it. As in most of these cases, there is always a pioneer, and in the world of motoring it's usually Formula 1, followed quickly by Mercedes in the consumer markets, before it filters down to other manufacturers. As an aside, there are some great videos here on data in F1 here and here - the difference being, soon this will be available to all of us, on our phones. F1 is a world where hundreds or thousands of changes are made to the car during a race to increase performance and the team's chances of winning. It's all data-driven. Imagine now if that same logic could apply to your everyday commute. Extend the life of your car, avoid accidents and congested roads and get cheaper gasoline. The list goes on -- these, in fairness, are all here today and almost all through your smartphone. It's simply quicker and easier to update than the cars' in-built systems. Just look at the long list of features on the Ford Fiesta driving experience page. Today's reasonably priced car is a hive of sensors, features and functions. Advertising of them has moved from mpg, performance and power steering, to how it connects to the rest of your digital life, from Foursquare check-ins with Mini, to connecting to your phone in every car. (A change in law helped that specifically here in the UK, to ban the use of phones while driving.) In fact, infotainment is now seen as more important in most cases than the actual driving experience itself. From an insurance perspective, the connected car offers a great insight into not just where and when you drive, but how you drive, too -- therefore what risk you present to insure. We already have the ability to do some great things way beyond UBI (usage-based insurance); organizations like MyDrive compare your driving style to that of advanced motorists -- the key here being you can drive fast (among others) safely. In fact, go a step further: Allianz has found in the Australian market that if you are a meat eater you are a better driver than your vegetarian counterpart. Data is starting to tell us much more than ever before. What does the future hold? Jump forward five, 10, 15 years. We will live in world of autonomous vehicles. Car safety will have excelled beyond recognition. Motor accidents will be a thing of the past. It is a familiar story now. What or who do we insure then? The personal market with have dissolved. The fleet and commercial market will have evolved. From a personal perspective, I still question even the basics of car ownership. Going back to where I started this post, I remember growing up as a kid, and my first ambition at 17 was to get driving lessons, pass my test and buy a car. Ask a 17-year-old today in the UK where car ownership is on his list of priorities, and I would be surprised to see it in the top 10. This in itself brings a new challenge. We will no longer insure the driver and vehicle; you will simply rent your journey with a Zip Car or similar, which will include a near-new car, Sat Nav, insurance, gasoline and much more. These new schemes, or fractional ownership, could destroy the need (in urban areas, at least) or the desire to own a car and its associated financial burden. For insurance companies, we need to decide on what or where the market will be - who we establish new partnerships with outside the vehicles - to drive new revenue streams and make the most of the vast volumes of data available about each and every journey. Of course, with this brings more questions, the most important being: If all this data is so valuable, who owns it? Home, James! Personally, while I love driving, 99 times out of 100, we could probably be doing something else far more valuable when the one thing we haven't solved yet is creating more time. I wait for my autonomous car to chauffeur me around in the future!

Here is a wellness needs analysis to help you choose the best approach for your company. It is based on wording, definitions, regulations and related government proposals from the Employee Benefits Security Administration, Department of Health and Human Services and other ACA-related government writings easily found via Google. This serves to set a high-level framework -- certainly not “legal advice,” yet respecting that, when it comes to government, today’s suggestions are tomorrow’s compliance issues. More importantly, this perspective takes out the profit-driven vendor’s depiction of what might be best for your company. The essence is pleasantly simple. Wellness is defined by government in two forms: 1) Participatory Wellness: Provides health-related opportunities equally to all workers, such as reimbursed gym membership, classes on weight loss, smoking cessation and other health/lifestyle issues. Participants can be offered low-level rewards like gift cards. 2) Health-Contingent Wellness: Programs that seek to identify individual health factors and set individual requirements for risk conditions. The incentive/penalty aspects can be as much as 30% of the premium costs for the individual. Basically, smokers and employees with high cholesterol or body mass indices pay more unless they follow a “reasonable” regime with “reasonable” results to address these problems -- "reasonable,” as a government term, being clear like mud. I would wager most readers gravitate toward participatory programs, correctly assuming that they are less expensive, less intrusive and, frankly, more respectful of employees' desires. Participatory programs generate goodwill, in the spirit of wellness, and help individuals who are determined to help themselves. Optimally applied, they offer a gentle positive push via passive awareness efforts, essentially “farming” for participants as opposed to actively “hunting” for candidates via the health screenings required in health-contingent programs. Participatory programs seem like a no-brainer and therefore raise the question: Is there any logical place for health-contingent programs? After all, they cost a ton (averaging more than $600 per employee annually) and have not been shown to improve health or return dollar savings. In some sense, they are totally illogical in presuming that today’s employees are tomorrow’s health risk for the employer. Consider that when any employee leaves, the employer has wasted the health-contingent wellness dollars spent on him. Further, few employers today offer retirement health plans and therefore do not “own” the highest-risk period of most employees' lives. Let me simplify further. When selling a house, you cancel and pro-rate your homeowners insurance on the day of closing. I submit that health-contingent wellness is as silly as allowing the next homeowner to use the remainder of the policy you already bought. So, back to the question: Is there a logical place for health-contingent programs? Surprise! Absolutely! And the impact would be strong and immediate. Health-contingent wellness makes sense in workplace environments with “presumptive benefit” requirements for workers' compensation. Police, firemen and first responders in most jurisdictions are granted “presumptive” WC benefits for heart, hypertension, lung and related issues arguably connected to the stress of the job. Movements are in play to widen these benefits to include mental health disorders and cancers and to include other classes of public employees. Most public workforces have low turnover and retirement health plans. Therefore, investing in tomorrow’s health today is a justifiable hedge against long-term risk. Also, and more importantly, presumptive benefits involve issues that can be mitigated by condition-specific wellness programs. Controlling cholesterol, high blood pressure, weight, anxiety, smoking, alcohol, etc. is effective and constitutes money well spent. Health-contingent wellness would identify those with health risks and set them on a personal improvement plan with expected milestones. Targeted employees would have as much as 30% of premium contribution at risk for noncompliance. The workforce, as well as the public, would be better served. Editorial comment: I realize that engaging some public unions in health-contingent wellness presents a difficult collective bargaining issue. However, I submit that these employees must consider public interest. They should not be able to have it both ways. One can’t argue that the nature of the job is clinically connected to health conditions yet avoid known methods to mitigate those health risks. One can’t enjoy a luxury of expanded WC benefits without personal responsibility for health. Besides, the ACA says it should be so! Quick Tip – Consider the Spectrum in Choosing Your Wellness Approach For many employers, participatory wellness makes more sense. But don’t assume too quickly before making a critical assessment of your workforce. Start from the extreme example of public employees with presumptive WC benefits and work backward to find your risk level. Questions to ask include: Do you have low turnover? Do you have an aging workforce? Do you have retirement health obligations? Are there specific issues that you can identify affecting today’s workers’ comp costs such as obesity, diabetes or other co-morbidities? What are today’s health costs telling you about your workforce? Can you make a near-term, dollar-savings case for addressing individual employees head-on in a health-contingent wellness program? If you answered any with “yes,” then you may choose the route of health-contingent wellness. Approach this with precision. Manage health issues with proven programs and specific improvement expectations. My personal suggestion for vendor contracting is to install some mid-program “escape clause” if interim expectations and milestones are not met. Common sense can prevail when it comes to wellness. Good luck!