Question: How many pieces are involved in a workers' compensation settlement? Answer: Probably more than you think. The more issues there are in a negotiation, the greater the opportunity for give and take. This adds flexibility for parties to shape a settlement acceptable to all. Trading across issues in negotiation is called "logrolling." Every case has its own unique issues. Here is a partial list, some obvious, some I have seen people miss. Income issues Disability percentage, including whether the disability is caused by an industrial injury Apportionment Applicable date of injury Past payments: When were permanent disability payments supposed to start? Was the right rate used? Were past payments properly characterized as permanent disability (PD), or should they have been temporary disability (TD)? Is there a TD overpayment? If life pension payments will be due, when should they start? Average weekly wage: Have you taken into account overtime and the value of non-cash compensation? Ability to perform future work Return-to-work issues: Will the employer provide modified work? What about training? Check California law about computer purchases. Liens Penalties Medical issues What are the accepted body parts? What expenses are reasonable and necessary? This can include issues about support services. What is the appropriate medical specialty? Is the treatment the applicant wants compensable? Is the applicant's overall medical condition likely to shorten life expectancy?

I was thinking recently about humor in insurance, oddly enough coinciding with the recent final performance by the Monty Python team in London. Insurance was on the Python’s radar, even offered as a safer alternative to being a lumberjack. There was one notable sketch about motor insurance. I must confess I’m almost nervous about reminding everyone of the content, but it went like this: ….Oh! And the next item is a sketch about insurance called 'Insurance Sketch'.... (Cut to Mr Devious's insurance office. Devious and a man are sitting there.) Devious: What do you want? Man : Well I've come about your special fully comprehensive motor insurance policy offer. Devious: What was that? Man: Fully comprehensive motor insurance for one-and-eightpence.  [Author's note: about two dimes in real money] Devious: Oh, oh, yes, yeah, well, unfortunately, guv, that offer's no longer valid. You see, it turned out not to be economically viable, so we now have a totally new offer. Man: What's that? Devious: A nude lady. Man: A nude lady? Devious: Yes. You get a nude lady with a fully comprehensive motor insurance. If you just want third party, she has to keep her bra on, and if it's just theft.... You’ll find the full text of that script here. There was humor in commercials well before geckos. Consider this video of a little dog called Lucky. Another InsuranceThoughtLeadership contributor, Shefi Ben Hutta, this month launched a new site that I unashamedly am willing to promote, called theSkinnie, which merges insurance with entertainment. It’s a smart idea -- the equivalent of reading the cartoons in the newspaper before you get to the real stuff. I must confess that when I first saw this, it felt like going to the dentist -- lots of nerves were touched. But it made me think more about my industry and shook me out of any complacency. So, is there any way that insurance can be funny? It’s an industry that constantly lives with disaster, illness and misfortune. Most of its practitioners inevitably create personal defense mechanisms, often through humor, so as not to take our jobs home with us. But there are lighter moments. Oddly enough, all the contributors to this site, and all its readers, are connected by a golden thread, a thread of responsibility coupled with objectiveness. At the end of the working day, most of us breathe a slight sign of relief that, whatever it was, it happened to someone else and not to us. Or as Monty Python would have said, "Always look on the bright side of life."

There is a saying:  “In wellness, you don’t have to challenge the data to invalidate it. You simply have to read the data. It will invalidate itself.” Nowhere is this truer than in the University of Pittsburgh Medical Center’s (UPMC) wellness program, results of which were just released in the October issue of the American Journal of Preventive Medicine, a journal that functions largely as the wellness industry’s house organ. All you need to do is read UPMC’s own words to learn that nothing happened in its wellness program. According to the article, over the course of the five-year study: “The proportion of low-risk members increased by 2%.” Two whole percentage points! After penalizing employees thousands of dollars ($2000 in 2011 alone for employees on the family plan) to compel them to submit to blood draws and other screens and answer very personal questions on health risk assessments, 2% was all they had to show for it? I hear a few people saying: “Wait a second, Al, you said nothing happened. They did get a 2% increase in low-risk members. While trivial, that is not literally nothing.” Well, first, it wasn’t really 2%. UPMC has 55,000 employees. But by the time they culled out everyone who didn’t meet the various requirements of participation, they were down to 13,627 people. Hence this entire conclusion was based on roughly 272 people reducing a risk factor. UPMC is the largest private-sector employer in Pennsylvania, a healthcare company that presumably knows a thing or two about health, and a major proponent of wellness programs. Yet all UPMC could manage after five years and millions of dollars was to reduce risk for 272 people.   Some Punchlines This self-admitted trivial risk reduction performance is not even the punchline. Usually there are three punchlines in these situations. The first punchline is usually that even though the results were uninspiring they were also overstated because the perpetrator left out both non-participants and dropouts from the analysis, which of course UPMC did. Because dropouts and non-participants typically have worse risk factor performance than participants (which is often why they drop out or decline to participate), it’s likely that the risk factor deterioration of the 41,000 employees left out could easily have more than offset the aforementioned improvement by the 272 people. The second punchline is that UPMC “matched” participants against a passive reference group of non-participants, a study design sleight-of-hand that is an excellent way of locking in savings. The reason that methodology is loading the dice is that a passive reference group (people who are matched “on paper” because their claims files happened to be available) are never given the chance to decline to participate, or to participate and then drop out. Hence the control group is not comparable. That would seem like common sense, and it is, but no need to rely on common sense. Another wellness vendor, Health Fitness Corporation (HFC), admitted the problem. As you can see on the slide below, HFC’s would-be participants improved vs. the reference group in 2005 by 9%, even though the program didn’t start until 2006. The third punchline is that UPMC didn’t “plausibility-test” its results by seeing if wellness-sensitive medical events – like heart attacks -- declined for the population over the period. Most companies that don’t do this analysis, like Pepsico, say that they didn’t track wellness-sensitive medical events because they didn’t have access to the event rate data. But obviously UPMC had plenty of access to this event information – it is self-insured by a health plan that it itself owns. All three of those mistakes are inexcusable in light of the fact that, by this point, everybody knows that you need to address them all to show valid results. Savings:  Also About Nothing Of course, UPMC also claimed to show substantial savings – who doesn’t? But the savings – according to UPMC's own article – could not have been because of the wellness program. The only three preventive care services that the participants consumed more of than non-participants were checkups, colon cancer screens and breast cancer screens. Checkups have no clinical value,  cost money and on balance may be slightly more likely to do harm than good. The intervals and start points for both colon and breast cancer screens have both been relaxed since this UPMC study was performed (2008 to 2011), because doing fewer was deemed by the U.S. Preventive Services Task Force to be a healthier idea than doing more, because of lack of efficacy and overdiagnosis/overtreatment potential and (in the case of colonoscopies) a risk of complications. In any event, whatever money screens save would be years off, as the idea is to find tumors early and spend the money now rather than later. So, screening people does not generate short-term savings and in fact costs money in the short term. Bottom line: This study did nothing – there is no credible source to attribute savings to, no appreciable risk reduction and lots of liberties taken in study design, and the most important analysis (for plausibility) was conveniently overlooked. Why did UMC even publish this, knowing that it was meaningless? Simple -- UPMC sells this stuff…and it is hoping your western Pennsylvania counterparts will sell it for them, using code language to make sure brokers know that sales come with commissions. Like every other wellness vendor, UPMC is hoping to entice you with those commissions. Like every other vendor, UPMC gives you a talking point, in this case a conclusion helpfully summarized on the first page, that “wellness programs are a useful tool in managing health and costs.” Yes, these programs carry commissions, and, no, they are not subject to the same commission disclosure requirements that you must make when selling health plan services. But if you’ve read this far into this posting it’s because you want to do what’s best for your clients, even if it means forgoing short-term commissions. In the long run, you are doing your clients much more good – and, not coincidentally, increasing your chances of keeping those clients – by selling them only the products that are best for them, a list of products that does not include workplace wellness overscreening programs like this one.

No one really knows the true value of dentistry. The reason is the widely used practice of submitting claims to insurers with fees based on their reimbursement schedules, rather than on normal practice fees. This practice, which is designed to avoid write-offs, artificially lowers the amounts used in the insurer’s analysis and determination when updating the reimbursement fee schedules and makes it virtually impossible to accurately determine the true "value" of dentistry. Many dentists say the reimbursement fee schedules are unreasonably low -- they say they stay with insurers only to retain patients. While a few insurers annually request that their participating dentists file, or register, their current practice fees, very few dentists participate. Given the lack of availability of actual practice fees, insurers either use  information from the claims they've received or purchase information. The companies offering the information typically advertise that it is from claims submitted. Because neither practice fee schedules nor services provided to the uninsured at the full fee rate are submitted to or captured by the companies analyzing fee information, that information is not included in the calculations. Insurers sort charges into percentiles for each, specific CDT code, and dental practices can use the figures to help understand what their cost structure must be to ensure a reasonable profit. But what insurers show as the 70th percentile could very well be the 50th percentile of the actual practice fees for dentists in an area. Will submitting normal practice fees affect reimbursement levels? The result may be an increase in reimbursement levels – or not. The insurer could maintain the same reimbursement fee schedule, even as submitted claims rise, and claim higher cost containment. An insurer uses cost containment reports as a competitive tool to show how it saves money for its clients. Basically, the lower the premium and the higher the cost containment, the more competitive the insurer can be. Still, with the ability to easily post or to utilize auto-posting capabilities in most practice management systems, and with the Jan. 1, 2014, mandate that requires insurers to be able to provide electronic payment files (remittance advice), the practice of submitting fees based on reimbursement schedules to avoid write-offs seems counterintuitive given that the practice could lower future reimbursement schedules.

In Part I, I laid out the shortcomings of using a quantitative business case to decide whether to proceed with big insurance modernization projects. Recently, I’ve been fortunate to partner with several clients who’ve taken a different approach to funding initiatives and measuring value on a continuing basis, and I'll describe those approaches here.  Deciding whether to fund an initiative Example one: One alternative approach when deciding whether to fund an initiative is the “critical thinking” model. Leadership groups may, rather than insist on the quantitative business case, instead request “arguments” and answers to questions. Why? Why not? What are the risks? What is the order of magnitude of investments -- instead of precise estimates? What will happen if the initiative is not undertaken? Is it a "table stakes" initiative that everyone in the industry must undertake, or might there be competitive advantage? Armed with honest answers to these questions and order-of-magnitude estimates, leaders then discuss, debate and engage in critical thinking to reach consensus on whether or not to pursue the initiative. The emphasis is on the discussion rather than a simple processing of contrived numbers. Example two: The “continuous funding based on results” model. I have seen a few clients allocate an initial investment based on a joint case made by business and IT together -- “together” being the operative word. Every 12 months, business and IT together go up to an executive oversight group, show what they have done with the “pot of money” and, based on this, get additional “grants” together. Because business and IT agree, and tangible value is demonstrated, additional funding is granted until business and IT feel that major items are achieved and only diminishing returns are left. It may be argued that, for complex transformations, continuous funding is not possible, especially if commercial software is involved. I am not convinced. First, even with very large enterprise initiatives, I have seen the model work; second, even with commercial software purchases, the costs of such software often is a very small fraction of the overall outlay, perhaps no more than 10% to 20%. Example three: A third model is akin to thinking about your health. If you know that your health is important in the long run, then, rather than try to quantify the benefits of investing in keeping yourself healthy, you might simply set aside a steady stream of “investments” toward the intended objective. This steady stream could be for healthy food, exercise and fresh air, periodic visits to the doctor, etc. Perhaps insurance initiatives, especially those of the “modernization” and “transformation” kind that only yield benefits over a long period, ought to be treated as you might treat your personal health. Without regular investments in health, the organization will get sick. There are variations of those three examples of new models described that include qualitative arguments on the benefits side, with “best effort” cost estimates, fixed funding for a fixed number of years with expectations for periodic “report cards,”  etc.  But none of them are the traditional ROI approach. How do you spend the funding for a given initiative? How is money spent and resulting value measured along the way? All too often, regardless of how funding is appropriated, this pot of money is then handed off. “We’ve given you the money; now get us everything you promised,” is the dynamic that gets set up between those who are responsible for obtaining the money (usually the business) and those who are supposed to deliver a “set of scope” for the money (usually IT). In reality, countless variables and problems arise that can trip initiatives up. In the worst case, you can be a dead duck before you’ve barely started. Besides disappointment and frustration, you sometimes get finger-pointing and colorful name-calling! Here again, a different approach may be needed. Perhaps the pot of money is not handed off. Rather, joint ownership is established. A series of “micro” decisions are jointly made about what to spend the money on. Estimates of effort for smaller-scope items come from the execution side of the team. Those who will benefit from the fulfillment of that scope decide whether it is worth spending the money. I have seen a healthy dynamic ensue from this approach. Sometimes, what was originally deemed beneficial is given up; sometimes, new benefits are identified and added. Often, when the pot of money does run out, I have seen business and IT jointly make the case for additional funding to deliver additional returns. And, more often than not, they do get the additional funding because executives who allocate capital can see the good that came from the original allocation. A few years back, I undertook a “small scope” remodeling project at home. An architect/designer drew up the concepts and plans. A general contractor agreed to execute the plans, having provided some rough estimates. Like insurance transformation initiatives, it was “defined scope” only briefly! As the project unfolded, many changes occurred – some necessary and others as discretionary or choice items. While the architect and general contractor collaborated and provided options, my wife and I (responsible for the pot of money) had to make a series of “micro decisions” about the “return” that we might experience and the costs required. Like most IT projects, the project took longer and cost more than originally envisioned, but we were certainly happy with the results. Reflecting on this experience, I realize that those successful teams that I have described above essentially were taking the same approach. While a home remodeling exercise is rather trivial compared to an insurance modernization or transformation initiative, to me. at least, the underlying principles seem similar.   While the theory of the quantitative business case may be ingrained and appealing, I have seen it offer very little practical value. A (non-quantitative) case can perhaps be made to let go of the theory and embrace more pragmatic approaches to fund, monitor and measure the returns of insurance initiatives.

Here are tips on how public companies can better protect themselves against securities claims -- practical steps companies can take to help them avoid suits, mitigate the risk if they are sued and defend themselves more effectively and efficiently. Avoiding suits Companies can avoid many suits with what I’ll call “better-feeling” disclosures. Nearly all public companies devote significant resources to accounting that conforms with GAAP, and non-accounting disclosures that comply with the labyrinth of disclosure rules. Despite tremendous efforts in these areas, events sometimes surprise officers and directors -- and the market -- and make a company’s previous accounting or non-accounting disclosures appear to have been inaccurate. But plaintiffs’ lawyers decide to sue only a subset of such companies -- a smaller percentage than most people would assume. What makes them sue Company A, but not Company B, when both have suffered a stock price drop because of a development that relates to their earlier disclosures?  There are a number of factors, but I believe the driver is whether a company’s disclosures “feel” fair and honest. Without the benefit of discovery, plaintiffs’ lawyers have to draw inferences about whether litigation will reveal fraud or a sufficient degree of recklessness -- or show that the discrepancies between the earlier disclosures and later revelations was due to mistake or an unanticipated development. What can companies do to make their disclosures “feel “more honest? An easy way is to improve the quality of their Safe Harbor warnings. Although the Reform Act’s Safe Harbor was designed to protect companies from lawsuits over forward-looking statements, there are still an awful lot of such actions filed. The best way to avoid them is by crafting risk warnings that are current and candid. A plaintiffs’ lawyer who reads two years’ worth of risk factors can tell whether the risk factors are boilerplate or an honest attempt to describe the company’s risks. The latter deters suits. The former invites them.Another way for companies to improve their disclosures is through more precision and a greater feel of candor in the comments they make during investor conference calls. Companies sweat over every detail in their written disclosures but then send their CEO and CFO out to field questions on the very same subjects and improvise their responses. What executives say, and how they say it, often determines whether plaintiffs’ lawyers sue -- and, if they do, how difficult the case will be to defend. A majority of the most difficult statements to defend in a securities class action are from investor calls, and plaintiffs’ lawyers listen to these calls and form impressions about officers’ fairness and honesty. Companies looking to minimize the risks of litigation should also take steps to prevent their officers and directors from making suspicious-looking stock sales -- for obvious reasons, plaintiffs’ lawyers like to file suits that include stock sales. If a company’s officers and directors don’t have 10b5-1 plans, companies should establish and follow an insider trading policy and, when in doubt, seek guidance from outside counsel on issues such as trading windows and the propriety of individual stock sales, both as to the legal ability to sell, and how the sales will appear to plaintiffs’ lawyers. Even if officers and directors have 10b5-1 plans, companies aren’t immune to scrutiny of their stock sales -- plaintiffs’ lawyers usually aren’t deterred by 10b5-1 plans, contrary to conventional wisdom. So companies should consult with their counsel about establishing and maintaining the plans, to avoid traps for the unwary. Defending suits Whether a securities class action is a difficult experience or a fairly routine corporate legal matter usually turns on the company’s decisions about directors’ and officers’ indemnification and insurance, choice of defense counsel and management of the defense of the litigation. Deciding on the right director and officer protections and defense counsel require an understanding of the seriousness of securities class actions. Although they are a public company’s primary D&O litigation exposure, most companies don’t understand the degree of risk they pose. Some companies seem to take securities class actions too seriously, while others might not take them seriously enough. The right level of concern is almost always in the middle. A securities class action is a significant lawsuit. It alleges large theoretical damages and wrongdoing by senior management and often the board. But the risk presented by a securities action is usually very manageable, if the company hires experienced, non-conflicted and efficient counsel and devotes sufficient time and energy to the litigation. Cases can be settled for a predictable amount, and it is exceedingly rare for directors and officers to write a personal check to defend or settle the case. On the other hand, it can be a costly mistake for a company to take a securities class action too lightly; even meritless cases can go wrong. The right approach involves several practical steps that are within every company’s control. Companies should hire the right D&O insurance broker and treat the broker as a trusted adviser. There is a talented and highly specialized community of D&O insurance brokers. Companies should evaluate which is the right broker for them -- they should conduct an interview process to decide on the right broker and seek guidance from knowledgeable sources, including securities litigation defense counsel. Companies should heavily utilize the broker in deciding on the right structure for their D&O insurance program and in selecting the right insurers. And, because D&O insurance is ultimately about protecting officers and directors, companies should have the broker speak directly to the board about the D&O insurance program. Boards should learn more about their D&O insurers. Boards should know their D&O insurers’ financial strength and other objective characteristics. But boards should also consider speaking with the primary insurer’s underwriting executives from time to time, especially if the relationship with the carrier is, or may be, long-term. The quality of any insurance turns on the insurer’s response to a claim. D&O insurance is a relationship business. Insurers want to cover D&O claims, and it is important to them to have a good reputation for doing so. The more the insurer knows the company, the more comfortable the insurer will be about covering even a difficult claim. And the more a board knows the insurer, the more comfortable the board will be that the insurer will cover even a difficult claim. Boards should oversee the defense-counsel selection process, and make sure the company conducts an interview process and chooses counsel based on value. The most important step for a company to take in defending a securities class action is to conduct an audition process through which the company selects conflict-free defense counsel who can provide a quality defense -- at a cost that leaves the company enough room to defend and resolve the litigation within policy limits. Put differently, the biggest threats to an effective defense of a securities class action are the use of either a conflicted defense counsel, defense counsel who will charge an irrational fee for the litigation or counsel who will cut corners to make the economics appear reasonable. Errors in counsel-selection most often occur when a company fails to conduct an interview process, or fails to consult with its D&O insurers and brokers, who are “repeat players” in D&O litigation and thus have good insights on the best counsel for a particular case. Although the Reform Act’s 90-day lead plaintiff selection process gives companies plenty of time to evaluate, interview, and select the right defense counsel for the case, many companies quickly hire their corporate counsel’s litigation colleagues, without consulting with brokers and insurers or interviewing other firms. The right counsel may end up being the company’s normal corporate firm, but a quick hiring decision rarely makes sense under a cost-benefit analysis. The cost of hiring the wrong firm can substantial -- the harm includes millions of dollars of unnecessary fees; hundreds of hours of wasted time by the board, officers and employees; an outcome that is unnecessarily uncertain; and an unnecessarily high settlement -- and there’s very little or no upside to the company. On the other hand, it costs very little to interview several firms for an hour or two each, and the benefit can be substantial – free and specialized strategic advice by several of the handful of lawyers who defend securities litigation full time, and potentially substantial price and other concessions from the firm that is ultimately chosen.  The auditioning lawyers can also provide guidance to the company on whether its corporate counsel faces conflicts and, if so, the potential harm to the company and the officers and directors from hiring corporate counsel anyway.

The Affordable Care Act, or the ACA, (aka Obamacare) is a catalyst for accelerating change brought about by the crushing cost of healthcare.  We have reached the tipping point where all the players in a $3 trillion industry are desperate to find new footing, while their usual way of doing business is crumbling underneath them. Don’t get caught up in the rhetoric of politics. Obamacare is just a symptom of the problem; it’s not the cause! Everything in healthcare is undergoing change. Companies must also change -- they must change the strategy, tactics and people involved in their decision-making process. The C-suite understands this better than anyone. They know that in today’s economy taking measured risk is essential for profitable growth. Yet many of them have assigned the responsibility of healthcare business strategy to managers who keep their feet on the brakes, repeating why change is risky every year. That’s why today, in a post-Affordable Care Act world, the strongest C-suites are advocating change for better healthcare strategies, not just safe ones. Taking Your Foot Off the Brake One way to do this is to get the C-suite more involved in setting the business strategy direction for corporate healthcare. They need to evaluate the risks associated with the many healthcare opportunities they are facing. One of the first steps in doing so is distinguishing between healthcare risks that can be managed and risks that should be avoided. Avoiding unnecessary costs – like healthcare claims – is where value is created. Here’s why: The new law under the ACA started as a 2,800-page question mark and now exceeds 28,000 pages. The administration is literally creating and adapting the law as it goes forward. The revisions and updates have been numerous, and they will continue. That’s because the medical treatment industrial complex, also known as the healthcare industry, is one of the largest components in our economy -- with a system built on illness and sickness as the revenue model. But we know beyond a shadow of a doubt that our sickness care model is totally unsustainable. Yet shifting hospitals and physicians practices away from a fee-for-service model, where they receive payments based on the volume of care delivered, will take years to become the norm. The incentives in our current system are so perverse that hospitals and physicians receive even greater compensation when preventable infections and injuries are allowed to take place. Lest you think this is a harsh criticism, these facts are validated by government studies that indicate medical errors rank as one of the top five leading causes of death in America. Yet we rarely hear anything about these facts. Healthcare exists on a continuum. On one end, we have buyers who want health insurance only so that a third party will pay their claims when they want or need treatment -- like a buffet. On the other end, are people who are looking for an emergency backstop in the event of an unforeseen illness or accident. It should be obvious; there is no one-size-fits-all solution! Businesses need to take steps to reduce, control and eliminate claims from their healthcare budgets. It all starts with corporate culture and the realization that employers must change the parent-child healthcare dynamic. The parent-child relationship exists where businesses still decide on what benefits, designs and choices there will be for the next 12 months and then tell all employees that this is what the company has selected for them. It’s time to consider a benefits partnership where the company facilitates the framework for the offering, but the employees choose what fits best for them. The communication resembles something more like "we are partners in healthcare, and each of us will be rewarded for the good health of our team members." Contrast that against the usual legacy approach where employees are told "here is the new insurance coverage, go and consume because a third party pays the bill and good luck if you get sick -- hope you catch it early!’ Three Ways for Organizations to Use the Affordable Care Act 1.  Challenge the status quo legacy thinking of your benefit managers. The easiest way is to put a question mark at the end of their statements. Ask them to explain the what, why and how of the latest rate increase. Be honest, benefits is not their only job responsibility, and you can’t afford the learning curve after Obamacare. Top line revenue challenges, increasing operational expenses, shrinking margins and profits are the norm today. Reacting every 12 months to the supply chain’s rate increase is not how to manage healthcare after the ACA. Pop quiz: Do you think the benefits manager hires a broker/consultant that challenges her fear of change, or supports the status quo? Ask managers to explain why you have prepaid premiums versus a pay-as-you-go strategy. Ask them to explain the  carrier’s rationale for another rate increase. Ask them how the broker/consultant proposed to reduce claims by 20% to 40% in the renewal meeting. 2. How are you identifying, measuring and managing the modifiable risk factors in your employee population You can’t manage what you can’t measure. The ACA allows employers to create plan differentials where employees can qualify for different levels of benefits based on the outcomes of their biometric screen. For example, smokers who have high glucose, HBP and high cholesterol may pay higher out-of-pocket costs compared with the employee whose measurements qualify for a higher level of benefits. Think of it as finally being able to receive better health insurance because you receive the equivalent of a “good driver discount.” Additionally, health promotion and preventive care is emphasized under Obamacare, whereby employees can become eligible for incentives based on their participation, activities or outcomes in specified programs. The ACA provides incentives for promoting health -- and not insurance! 3. Define for yourself why you invest in health insurance. Are you only concerned with managing a budget and trying to keep a lid on costs? Is health insurance just a financing cost so employees can access care and a third party will pay most of the bills for them? Or, do you invest in health insurance so employees will have quality healthcare at a fair price where they can become good healthcare consumers armed with cost and quality resources. Employees can accumulate their own prefunded healthcare accounts through HSAs instead of paying health dividends to insurance companies. For too many employers, insurance companies profit off the  good health of the employees and then charge the company another rate increase every year. The business of healthcare will never be the same after Obamacare. There is no way to avoid change; you’re either moving forward or going backward. Companies must look for new directions with new eyes and a new map because the old map was so 28,000 pages ago. The new law provides many tools for controlling healthcare costs by promoting prevention, transferring risk where appropriate and avoiding risk entirely by eliminating adverse selection. Focus the conversation on how to reduce the demand for healthcare claims because that represents 85%-90% of the money invested in healthcare.

The American Association of Suicidology said it best when it created this logo for the association: “Suicide prevention is everyone’s business.” By everyone, the association includes employers and work organizations. Considering that the workplace is where the majority of working-age adults spend a significant portion of their day, and sometimes night, it only makes sense that employers and coworkers join the national fight against suicide. Over the past 10 years, work organizations have begun to realize that they can help identify and treat working adults suffering from depression -- a leading risk factor for suicide and also the leading cause of lost work productivity. Despite the knowledge that depression is highly correlated with suicide risk, workplaces have been slow to embrace their potentially critical role in preventing suicide through workplace-based programs. Many of the programs already being offered by employers address depression and can be easily and often freely expanded to also include elements of suicide prevention. The connection between depression and suicide is clear, and employers, large and small, have an important role to take in addressing the public health problem of suicide in our country. Detecting and treating depression among employees is one way employers can play a significant role. In fact, many employers are already making inroads in minimizing the negative effects of depression and related mental health issues through employer-sponsored benefits such as employee assistance programs (EAPs), workplace wellness programs and occupational health services. Some of the more commonly offered employer-sponsored interventions at the workplace to identify and respond to depression include workplace-based public awareness campaigns that involve posting suicide warning signs, referral resources and general anti-stigma messages, workplace-based depression screening, such as the program offered through Screening for Mental Health and other early interventions that can be cost-effectively offered through EAP counseling, wellness programs and related occupational health programs. Improving the detection and treatment of depression and therefore preventing suicide will have a positive impact on the employee and, in the process, the business success of the company. By expanding existing workplace-based wellness programs that often focus heavily on identification and treatment of depression among employees, employers are able to increase the number of employees seeking and obtaining treatment -- depression often has low rates of treatment because it is not accurately identified. In fact, prior research shows that, at any given time, depression affects between one-tenth and one-fifth of U.S. employees (Kessler et al., 2008). For employers, this means that for every 100 employees, depression costs employers about $62,000 annually. The majority of this cost does not come from treatment (treatment only accounts for about $9,000), but, rather, costs related to lost work time resulting from sick day absence, work disability (short term and long term disability days) and "presenteeism" (underperformance at the workplace because of illness). In addition, depression and suicide contribute to hidden costs to employers such as lowered morale, increased stress and lower employee engagement and loyalty. The effect of a suicide on coworkers can also be devastating. In addition to treatment of depression, employers who work with their EAPs and other wellness programs to identify and respond to depression will improve other chronic health conditions. This is because employees who suffer from depression also suffer from an average of 5.1 other chronic health conditions that can complicate treatment and increase costs to the workplace. For example, some of the most serious comorbid conditions in terms of lost productivity with depression include anxiety (48% of employees with depression also have anxiety); chronic fatigue (46%), obesity (29%), chronic sleeping problems (26%) and chronic back and neck pain (32%). (The statistics are from data collected by Integrated Benefits Institute, a leading research organization in health and productivity. See www.ibiweb.org for more information.) Research suggests that medication and psychotherapy are effective in 70% to 80% of depression cases (RAND, 2008). Employers can require their EAPs and other workplace wellness programs to screen all employees for depression using free and simple validated tools such as the 9-item Patient Health Questionnaire (PHQ-9), where the ninth question asks specifically about suicide risk. Employers can also provide comprehensive depression care management programs for employees screened or otherwise identified to have serious depressive symptoms or for those at increased risk, such as employees who recently went out of the workplace on short-term disability (Desiron, de Rijk, Van Hoof, & Donceel, 2011; Lerner, Rodday, Cohen, & Rogers, 2013; Lo Sasso, Rost, & Beck, 2006). EAPs are one way through which workplaces have historically and effectively provided help to employees with depression and other mental health and personal problems. EAPs have been shown to be effective in reducing depressive symptoms among employees, including thoughts about suicide (University of Michigan Depression Center). EAPs can provide identification and screening services, such as on-site employee depression screening; however, EAP services go well beyond simple screening and identification. Depending on the services purchased by the employer, EAPs can provide comprehensive assessment, short-term counseling and referral and case management services for longer-term help in the community. Additionally, well-positioned EAPs, those with more on-site access and easy access to consultation with workplace managers and leaders, help to ensure that EAPs are even more effective at recognizing and responding quickly to employee problems such as suicide risk. Additionally, strategically positioned programs can offer responses that are integrated and in line with the culture of the broader work organization to better serve employees while also supporting workplace productivity. Highly visible and management-supported EAPs can help to reduce stigma toward mental health problems, which in turn will encourage employees to seek help at an earlier stage of their problems and be more responsive to early intervention. It is important that all employees in the workplace take suicide risk seriously. They should be trained to identify depression and suicide risk among coworkers, not be afraid to ask questions about the well-being of coworkers and refer them to EAPs or other resources when needed. Some examples of companies working to train employees (a designated employee, group of employees or all employees) and raise awareness of suicide and mental health in general are: Chesapeake Energy, DuPont and Johnson & Johnson (see Partnership for Workplace Mental Health for these and other examples). EAPs can work with employers to develop appropriate training material to help reduce the stigma of mental health problems, not limited to just depression and suicide, so that everyone is able to play a role in contributing to the well-being of the workplace. Just as employees understand and can identify physical safety risks such as falling hazards and safe lifting practices, employees should also understand what to look for when employees may be at risk for a mental health problem. Even employers who are not able to provide comprehensive services such as EAPs and workplace wellness programs can take small steps that can have a huge impact on saving lives. One simple first step employers can take to increase awareness of depression and suicide at the workplace is to promote the phone number for the National Suicide Prevention Lifeline (1-800-273-8255) at different locations throughout the workplace where employees will readily see signs, posters and online messages. The Lifeline is a free hotline that can be utilized by anyone who might want to talk with a professional about mental health issues and well-being. Promoting the Lifeline is free to the employer and can be a good way to demonstrate the employer’s interest in the mental wellness of employees. Utilizing free hotline services such as Lifeline is especially important for employees who don’t have access to EAP or other workplace wellness programs. Overall, we know that workplaces that offer more control to their employees with regard to working conditions that can lower workplace stress, do better with regard to workplace productivity and depression. Therefore, it is critical that employers step up the plate and review and revise workplace policies and programs that are designed to support employees who may be suffering from depression and therefore have increased risk for suicide. By expanding existing programs to include assessment and treatment for depression, employers are working to improve productivity while also preventing suicide at the same time. It is a win-win for employers, employees and society as a whole. This article was written by Dr. Jacobson Frey; Kimberly Jinnett, PhD; and Jungyai Ko, MSSA.

The Santa Cruz Board Walk includes an old-fashioned rollercoaster ride named the Big Dipper. Establishing appropriate insurance requirements for transportation network companies (TNCs) such as Uber, Lyft, SideCar and Ride Share has been like a ride on the Big Dipper.

The California Public Utilities Commission (CPUC) has jurisdiction over TNCs as “charter party carriers” -- carriers for hire that, unlike taxis, must prearrange their rides. The Big Dipper ride began when the Consumer Protection and Safety Division of the CPUC sent cease-and-desist letters to some TNCs in 2010 and again in 2012. After studying insurance issues related to TNCs, in September 2013 the CPUC required TNCs to carry insurance providing as much as $1 million of coverage per incident while “providing TNC services.” This phrase proved to be troublesome.

There are three “periods” for TNC driving. Period One is when the driver turns on the TNC app (“log-on”) but does not yet have a match with a passenger. Period Two is when there is a match. Period Three is when a passenger is in the car. Although there is evidence in the record that the CPUC intended “providing TNC services” to cover all three periods, including Period One, it was not clearly stated in the rule. In addition, TNCs were uncomfortable extending $1 million in coverage to drivers merely because they were driving around while logged on.

Then came New Year’s Eve, 2013. An Uber driver killed a small child and injured the child’s mother and brother while driving during Period One. Because there was neither a passenger nor a match with a fare, it was possible that the driver was not “providing TNC services” and, therefore, was not covered by Uber’s insurance policy. It was likewise possible that the driver’s personal insurance would not apply.

Because the driver was logged on, the accident fell within the policy’s exclusion for commercial or livery use (although in this case the personal auto insurer provided coverage up to the policy’s limits). If neither Uber’s policy nor the personal policy covered the accident, the driver would have been uninsured -- an unacceptable outcome for the driver, the injured parties and public safety.

At least one TNC carried a “contingent” policy of $50,000 for an individual injury during Period One. The policy was triggered, however, only if the driver’s personal carrier declined coverage. This could lead to some odd results. If the driver had only $15,000 in coverage, and the driver’s carrier accepted responsibility, the injured pedestrian could look only to $15,000 in coverage. If the driver’s insurer declined to cover the accident, the pedestrian could look to the $50,000 coverage of the TNC policy.

In any event, there was no legal requirement that the TNC have coverage for Period One, and either $15,000 or $50,000 did not approach the $1 million the CPUC thought it had required. Following the New Year’s Eve accident, both the CPUC and the California legislature rushed to fill this possible “gap.”

The president of the CPUC proposed requiring a minimum of coverage of $100,000 for one injured person, $300,000 for more than one person and $50,000 for property damage (a 100/300/50 policy) of “excess” insurance for Period One, but the legislature arrived first. Although several bills were introduced, AB 2293 (Bonilla) is the only bill that made it to the finish line.

Initially, the bill sought only to build a “firewall” between personal insurance and TNC driving. The bill exempted personal auto insurance from covering driving while a TNC driver was logged on. Personal auto insurers argued that this driving is often more dangerous than ordinary personal driving, so, if personal auto insurers were responsible for the risk during Period One, the additional costs would be passed on to other auto owners. This might raise rates and would be a subsidy to commercial TNC enterprises.

The TNCs asked that their insurance limit during Period One be limited to 50/100/30, perhaps concerned that the CPUC wanted to require more coverage (recall that the CPUC was initially of the opinion that its $1 million requirement extended to Period One), To bolster their argument, the TNCs pointed to the limits adopted in a similar Colorado statute.

The bill in California was amended to include the 50/100/30 limit for Period One. Stakeholders pointed out that these limits were woefully inadequate to cover the injuries from the New Year’s Eve accident. The limits would also be inadequate to cover many other accidents.

The Bill was amended. Now, coverage for Period One would be $750,000 per incident (a 750/750/750 policy). This is the minimum coverage the CPUC has applied to limousines for 20 years or more. In addition, for losses exceeding $750,000 the TNC was to “assume all liability of the participating driver.” Liability, in effect, was limitless.

Now we are at the top of the ride. Hang on.

The TNCs were very unhappy with this turn of events. There was also concern whether such policies were available and, if so, affordable. TNCs are very popular with consumers, and few people wanted to appear to stifle this area of transportation innovation (with the exception, of course, of taxi drivers). The bill was amended again.

Period One coverage would now be 100/300/50, with $1 million of excess coverage. In addition, the drafters deleted the requirement that the TNC assume all of the driver’s liability. More lobbying, more horse trading and more diplomacy resulted in yet another amendment. The new limits were lowered to 50/100/30 (remember the limits in the Colorado law?), but with an excess policy of $500,000. It was unclear, however, whether the excess policy covered the driver or only the TNC.

With these lower limits, drivers might have found that their personal auto insurance would not cover them, yet their TNC coverage would be inadequate. This would put their personal assets at risk.

It occurred to the drafters that there was little point in adopting a bill unless the governor, who had not yet taken a position, would sign it. After consultation with the governor’s office, the bill was amended for the final time.

Period One maintained the minimum TNC coverage of 50/100/30, but the additional, excess policy was lowered from $500,000 to $200,000. The amendment also provided that the $200,000 excess policy must specifically cover the driver in addition to the TNC. The bill carried forward earlier requirements for Periods Two and Three. The bill requires $1 million in liability coverage for Periods Two and Three and requires $1 million in uninsured/underinsured motorist coverage for Period Three.

The bill directs the Department of Insurance to collaborate on a data-based study and report back to the legislature. To allow insurers time to create policies or endorsements to cover all of these requirements, the new limits are to take effect on July 1, 2015. If one is to be injured by a TNC driver during Period One, it may be best to consider postponing the injury until then.

The final bill also did something else. During final amendments, two words were added -- “at least.” Period One coverage, including the $200,000 excess coverage, must be “at least” those limits set out above. Because AB 2293 specifically permits the CPUC to continue exercising its rulemaking authority “in a manner consistent with” AB 2293, if the CPUC were to adopt higher limits (for instance, the $750,000 limit it applies to limousines), these limits would be “consistent” with limits “at least” those outlined above.

So we complete our first Big Dipper ride where we began -- with the CPUC. Two words -- “at least” -- are the CPUC’s ticket to reboard the Big Dipper. When the time is right, perhaps there will be yet another dizzying ride.

Please lower the bar snugly across your lap and keep your hands and feet inside.

Over the past several years, the epidemic of prescription drug abuse under the guise of “pain management” has generated headlines all across the country. The improper use of Schedule II medications in the workers’ compensation system is a part of this public health crisis. Publications by the Workers’ Compensation Research Institute (WCRI), the California Workers’ Compensation Institute (CWCI) and the National Council on Compensation Insurance (NCCI) have underscored not only the costs of such abuse but the tragic consequences to those who, through no fault of their own, have been consigned to a life of addiction and disability. Those tragedies are unnecessary and avoidable. When it comes to workers’ compensation, the payer community has been at war with the provider community for generations. In some respects, the debate can be reduced to a clash of two business models  -- the claims payer wants to reduce workers’ compensation costs while providing mandated medical care, while the care provider must build a business model around a dazzling array of payment (and paperwork) systems to maintain profitability. It is, in part, the economics of healthcare that so confounds payers and so stymies providers who are honest and ethical but who nevertheless still have to keep their offices open and a roof over their heads. But consigning the issue of opioid abuse to this paradigm is too easy an exercise. Equally significant, regrettably, are the problems associated with the insular world of workers’ compensation and how regulatory decisions are made within this highly regulated, if not suffocating, environment. Some states get the process right. Oregon and Washington have transparent and inclusive processes to engage claims payers, worker representatives, providers and regulators on important issues of occupational medicine. The Oregon Medical Advisory Committee has as its charge: “…to advise the director, with a diversity of perspectives, on matters relating to the provision of medical care to injured workers. The ‘director’ is the director of the Department of Consumer and Business Services or the administrator of the Workers’ Compensation Division (WCD).” That’s a lot larger charge than adopting treatment guidelines in a rule-making process. In Ohio, Gov. Kasich’s Opiate Action Team developed prescribing guidelines in a process that involved all key public and private stakeholders: “The clinical guidelines are intended to supplement -- not replace -- the prescriber's clinical judgment. They have been endorsed by numerous organizations, including: Ohio State Medical Association, Ohio Osteopathic Association, Ohio Academy of Family Physicians, Ohio Chapter of the American College of Emergency Physicians, Ohio Pharmacists Association, State Medical Board of Ohio, Ohio Board of Nursing, Ohio State Dental Board, Ohio State Board of Pharmacy, Ohio Hospital Association, Ohio Association of Health Plans and the Ohio Bureau of Workers' Compensation.” Like Washington, Ohio maintains a monopolistic state fund to provide workers’ compensation benefits. Ohio’s Bureau of Workers’ Compensation uses the same guidelines as every other provider of medical services. And, of course, there is the large body of work being done by the Agency Medical Directors Group in Washington. That entity coordinates medical treatment among all state agencies providing medical care, including their state-run workers’ compensation program at the Department of Labor and Industries. Professional licensing boards and medical associations are also an integral part of that process. Why aren’t these collaborative initiatives the template for further prescription drug reforms in states like Arizona or California? The much-lauded Texas closed formulary wasn’t created in a vacuum, and policymakers in that state recognized that open (“legacy”) claims required special treatment. As reported in TexasMedicine, the publication of the Texas Medical Association, “The regulations require physicians and carriers to formally discuss the pharmacological management of these patients. Ideally, the two parties would agree before Sept. 1 (2013) on how to proceed. That agreement could include a weaning schedule, a plan to continue the patient on the N drug or other alternatives.” California didn’t do that when making the transition from a judicial medical dispute resolution process to independent medical review, and Arizona has on the table a review/dispute process that will be equally jarring for open claims It would be remarkably naïve to suggest that a more transparent approach to the development and application of treatment guidelines and having processes in place that encourage a peer-to-peer dialogue between requesting and reviewing physicians would result in an immediate drop in prescription drug abuse. But it would also be remarkably cynical to proclaim that the approach won’t have an effect. The current workers’ compensation monologues over Schedule II drugs needs to be replaced with a dialogue that has as its goal not only the delivery of appropriate care to those who will be injured at work in the future but that also addresses the sad legacy of the abuses of past decades and offers help to those who so desperately need it now.