Untold millions of people provide personal and private information on the Internet every day to pay their bills, to purchase a product, to post a picture and so on, even though data breaches have become practically a daily occurrence. The problem has focused attention on the lack of security by the companies that use the data, but consumers also need to take some responsibility. The hacking of Target at the end of 2013 is the best-known of recent data breaches, but hackers know no bounds. Virtually every individual who uses the Internet—no matter who he is or what she does professionally—is at risk for a data breach. For instance: In May 2014, three desktop computers were stolen from the California office of Bay Area Pain Medical Associates. About 2,780 patients were notified that their personal information was in a spreadsheet that could have been accessed by the thieves. In March 2014, about 1,700 people in the employee wellness program for Virginia-based Dominion Resources had their personal records accessed by a hacker who gained entry to the systems of a subcontractor, Onsite Health Diagnostics. The personal information of their spouses and domestic partners was also hacked, if they had scheduled a health-screening appointment online. In Encinitas, a California Public Employees' Retirement System (CalPERS) payment document containing 615 current and former employees’ personal information—including Social Security numbers—was inadvertently made public on the city’s website from May 18, 2014, to July 3, 2014, and was accessed by 16 unauthorized individuals before the data breach was discovered. In July 2014, Orangeburg-Calhoun Technical College in South Carolina had to notify 20,000 current and former students and faculty that their personal information—including Social Security numbers—was on a laptop that was stolen on July 7, 2014, from a staffer's office. In Texas, from Dec. 28, 2013, until June 20, 2014, the Houstonian Hotel Club & Spa’s payment processing systems were compromised when they were infected with malware. More than 10,000 customers had their payment card data exposed. In April 2014, Park Hill School District in Missouri learned that before leaving the district an employee downloaded 10,210 current and former staffers’ and students’ personnel and student files that contained their personal information. The former employee made the files accessible to untold numbers on the Internet. The Department of Managed Health Care (DMHC) discovered on May 16, 2014, that Blue Shield of California inadvertently made public the names, business addresses, business telephone numbers, medical groups, practice areas and Social Security numbers of about 18,000 doctors. The list could go on and on, but you get the message. Data breaches can occur on any computer system, anywhere and any time. So, who is ultimately responsible for data breaches? The company holding the data, because of its system’s vulnerability? Or the user/consumer, because we are responsible, through our passwords and PINs, for the security of all data we post? (If you read the privacy policies of the sites you use, the user is responsible.) The answer is not an easy one. If your information was hacked through an entity’s online systems, your answer most likely would be the entity, and you might participate in a class action. at least two dozen federal class actions have been filed against Target, alleging it did not adequately protect customer privacy. A class action has been filed against P.F. Chang’s China Bistro for a security breach that involved, according to the complaint, 7 million customers’ credit and debit card payment data stolen from its restaurants’ systems between March and May 2014. (It has been reported that the breach came to light only when a batch of card data was alleged to be up for sale at Rescator, an underground store best-known for selling customer data stolen in the Target breach.) But is it that simple, that the sole responsibility lies with the entity that was hacked? What about us, the consumers? Do we need to be part of the answer by accepting that we willingly create those passwords and PIN numbers and that we provide our personal and private information so we can shop on eBay (which just notified 145 million of us that a cyber attack may have compromised customers’ login information and other personal and private information) or pay bills online? Should it be our responsibility to understand that online systems, or the strips on the back of our credit and debit cards, that store the data we provide are moving targets (no pun intended) for theft? Saying “yes” would be the first step in the right direction. Everyone, user and organizations alike, is vulnerable, so the responsibility to protect our information lies with us all. The second step is for each of us to do whatever we can to manage our vulnerability. Such as:

• Making sure our anti-virus software is current, to prevent scammers from installing viruses on our computers that allow hackers to steal our personal and financial information. When the popular online ticket marketplace Stub Hub suffered a data breach, the hackers did not break directly into Stub Hub’s system; instead, they stole account information directly from the customer by downloading viruses onto each customer’s personal computer, or by collecting the information from data breaches of other websites.

• Monitoring our bank and credit card accounts every day. If you see charges or withdrawals you did not authorize, contact the bank or credit card company immediately. (The liability is still yours until you report that your information has been compromised.)

• Make sure your homeowner’s or renter’s insurance policy covers losses because of fraud, because, even if a class action is settled, there may be strings attached to how you can collect your share. For example: Vendini, another company that offers ticketing services to theaters and event venues, settled a class action in 2014 about compromised data. The settlement requires Vendini to pay as much as $3,000 a customer for identify theft losses. But here is the catch—you have to prove that the information used to make you a victim of identity theft actually came from Vendini’s systems.

Here is the bottom line: The landscape on cybersecurity is shifting rapidly as data breaches are spiking. Congress, regulators and state attorneys general are taking a hard look at how companies, universities and governmental agencies are protecting consumer information from unauthorized access. Hearings have been held and new laws pushed. As a result, organizations are facing critical questions about what their responsibilities are to ensure consumers’ private and personal information is secure and in compliance with old as well as new laws. But it is also imperative that you, the consumer, understand that you cannot depend on organizations to protect the information you provide to them. Rather, you need to take matters into your own hands and pose critical questions to yourself about how you use your own information online. You need to decide what information you are willing to turn over to be able to pay bills, make purchases or register for social media online. It is after all, your information and your life. Think about it. The information contained in this article is provided only as general information and may or may not reflect the most current developments legal or otherwise pertaining to the subject matter thereof. Accordingly, this information is not promised or guaranteed to be correct or complete and is not intended to create or constitute formation of an attorney-client relationship. The author expressly disclaims all liability in law or otherwise with respect to actions taken or not taken based on any or all of the content of this article.

In the last decade, pilots and trials of telematics have eked out only single-digit adoption rates for usage-based insurance (UBI) among drivers, but the opportunity is now here for a breakthrough. All that is required is a smartphone. To date, buying insurance based on actual, verified miles driven has involved installing expensive and privacy-invading tracking systems, mated to a vehicle port with a “dongle thingy,” or ghosting a cell phone’s reception turn for turn. These systems are complete overkill for verifying odometer readings. Instead, consumers who want to get low rates because they drive few miles can verify their actual readings on a timely basis by simply periodically taking pictures of their odometers with their smartphones. An app could verify the date and ensure that the photo is of the car that is being insured. Using a smartphone app for UBI would require insurers to leave behind their traditional approach and be much more responsive to drivers. At the moment, those insurers that offer low-mileage programs tend to just have one cutoff – for those who drive less than 7,500 miles a year – and offer them only something approaching a 10% discount off the rates for those who drive the average distance of roughly 12,000 miles a year. Yet someone who drives 5,000 miles a year should, based on industry data, get a discount of 30%. Given the sophistication of smartphone apps, drivers would expect rates to be set for actual miles driven, not just based on whether they stayed below that 7,500 cutoff. Someone who drives 3,473 miles in a year could pay just for that number. An app could also be used to win business. The interface will help the consumer not only remember to take the picture of the odometer but could alert them when carriers in their state offer better rates for those customers who drive less. (In many states, miles are not now used in rating.) Consumers who drive less are set to benefit hugely from telematics. All they need is the right app – and the savings on insurance could even pay the phone bill for some. Usage-based insurance for the mass market is here.

While there is considerable talk about fraud in workers’ compensation, the discussion usually refers to fraud by claimants or employers. Unfortunately, fraud and abuse also occurs in medical management. Poorly performing medical doctors produce high costs and poor claim outcomes. When they are also corrupt, the damage can be exponential. We know poorly performing and corrupt doctors are out there. More importantly, we also know how to find them! Disciplining providers by not paying them when they knowingly overtreat is one solution, but even better is avoiding them altogether. Identify the bad doctors and carve them out of networks.  Most agree with this philosophy, yet few medical networks in workers’ compensation have seriously addressed the issue. Efforts to solve the problem should focus on identifying the perpetrators by means of a well-designed analytic strategy. The data, when analyzed appropriately, will point out medical doctors who perform badly. There is a trail of abuse in the data. Bill review data, claims payer data, and pharmacy data, when integrated at the claim level including both historic and concurrent data, present a clear picture of undesirable practices. Outliers float to the surface. Fraudulent providers treat more frequently and longer than their counterparts. They also use the most costly treatment procedures, selected as first option. The timing of treatment can produce evidence of corruption, such as when more aggressive treatments like surgery are selected early in the claim process. Some of the more subtle forms of medical fraud involve manipulating the way bills are submitted. Corrupt practices attempt to trick standard computerized systems. They consistently overbill, knowing the bill review system will automatically adjust the bills downward. Systems can miss subtle combinations of diagnoses and procedures and allow payment. Likewise, some practitioners bill under multiple tax identifiers and from different locations. Unless these behaviors are being monitored, computer systems simply create different records for different tax ID’s and locations, making the records appear as different doctors. When attempting to evaluate performance, the results are skewed. Provider records must be merged and then re-evaluated to arrive at more realistic performance scores.

There is absolutely nothing good about a failed water system for the insurer, the customer or the community. One of the most unfortunate things is that many failures are predictable and avoidable -- but not by the plumbers, developers or contractors; the technical assurance of complex systems is the exclusive domain of the engineering discipline. This article demonstrates how a combination of many contributing factors may conspire to compromise an entire system. The insurer should be aware of common pitfalls and mitigate them before accepting the risk. When a failure occurs, the insurer should investigate if the cause of failure has been removed, and where the liability falls. For this investigation, we brought together a hydronic operations engineer, an analytical test engineer and a chemist to reconstruct a more-likely-than-not conclusion for a particular case: a six-year-old CPVC (chlorinated polyvinyl chloride) hydronic system that suffered extensive leaking and catastrophic failures, incurring substantial insurance claims and other economic loads. (A hydronic system uses water to heat and cool a building.) Failure records When leading an investigation, the first thing is to collect the maintenance records, if they exist (an insurer should mandate maintenance plans). These records can then be overlaid on a diagram of the building to see when, where and how severe the problems have been. In this case, there is no clear pattern, which suggests a system-wide failure.     Several significant problems were observed during a cursory review of building documentation, installation and operation. There was no single cause of failure; rather, there were multiple conditions. 1. CPVC was not the specified material. In fact, no specifications for hydronic piping material were called out, nor was any statement deferring the material selection to another party apparent. 2. There was no compensation for CPVC thermal expansion. 3. There was a general failure to meet the manufacturer's installation requirements. 4. Oxygen was allowed into a “closed” system. As a result, the air separator and pump impeller became corroded. 5. An unknown hydrocarbon contaminant was introduced that attacked the CPVC. Analysis The first set of photographs suggests a case where the threaded brass connections throughout the installation were improper for this application. NPT tapered threads (National Pipe Thread Standard) are designed to create interference fit between similar materials as a means of creating both a high-strength union and a positive fluid seal. Where one material is substantially stronger (brass) than its counterpart (CPVC), the strength of the union and the integrity of the seal may be compromised. Stress would be introduced that would accelerate the cracking and, ultimately, cause the failure of the CPVC. Figure 1: Sample 3, CPVC thread vs brass nut tightened to .080 gap. Figure 2: CPVC Thread effectively “bottomed out” on all samples. Note obvious leak path. In a proper application of CPVC threads, the manufacturer installation recommendation is to hand tighten for no more than one to two turns beyond finger tight, using a strap wrench. It is clear that these unions were tool-tightened to the point of CPVC material deformation, as the brass nut bottomed out on the CPVC male connector. This introduced mechanical stresses in the material. These stresses opened leak paths, while making the material more vulnerable to chemical contamination and degradation. Figure 3: Severe galling of threads observed on all CPVC vs. brass samples Figure 4: Evidence of leakage and corrosion of brass observed on all samples. Note tooling marks on CPVC connector. Figure 5: Dark staining on threads and thread root is typical of contaminant absorption under material stress conditions. Figure 6: Rust deposits, brass corrosion, evidence of leakage and Teflon tape remnants are consistent across all samples Classic environmental stress fracturing was found at the inside wall of the threaded area of the pipe. This is a precursor to failure because of excess mechanical forces applied to threads and the propensity for CPVC to absorb contaminants at such stress zones -- a textbook case. Figure 7; Classic ESC. Brown stains are rust deposits remaining after gentle cleaning of the sample. This cross-threaded sample was found in the demolition pile for the concurrent re-pipe. This sample provides a particularly egregious demonstration of combined deficiencies observed in this CPVC installation. A catastrophic failure at this union was imminent. Figure 8: Catastrophic failure was imminent CPVC is proven to be a robust piping material throughout the world, but when many adverse conditions are concurrent -- in this case, we had poor workmanship, multiple mechanical stresses, contamination and chemical attack -- no material is resilient enough to resist such abuse. Figure 9: The anatomy of a failure Figure 10: Radial and longitudinal ESC failures were present in the cross-threaded sample Figure 11: Two complete cracks form inside the threaded section of sample 5. Note micro-cracking surface patterns. Figure 12: “Dry desert” cracking pattern is typical of ESC. Figure 13: This ECS failure attributed to poor workmanship as excess cement was allowed to pool inside the pipe. An additional sample provided by the heating contractor demonstrates a condition where insufficient cement was applied, allowing the CPVC tube to fall out of the connector. This is notable because the failed sample is not the original installation; rather, it appears to be a later repair. This would suggest that there might have been many hands contributing to the failure record of this facility. Figure 14: An additional failure sample that was provided by the heating contractor does not appear to be an original installation. This suggests that even continued repairs would not necessarily guarantee a reliable system. Conclusion The architectural building specifications did not make it clear to engineering what material would be used for the piping of the hydronic system. The engineers designed a hydronic system without providing readily obvious identification of material. It appears from the drawings that a metal system was intended (given the omission of thermal expansion loops). In the absence of this specification, the builder or sub-contractor took it upon himself or herself to use an otherwise reliable industry standard such as CPVC piping product. Features such as thermal expansion loops and brass-inlaid connectors were not specified, so the contractor may not have known to include them. However, strict adherence to CPVC manufacturers installation requirements would have alerted the installer to seek additional information, if not to attend to industry practices. Further, the building was completed and operated without adequate regard for the make-up water pressure or constant venting for a closed system. A closed hydronic system would not hold enough oxygen to cause the iron corrosion that was observed. Only oxygen in the water would corrode the pump impeller. When the oxygen was inadvertently allowed to enter the system, that may have been when an incompatible corrosion inhibitor, cleaning agent or MIC inhibitor was also introduced. The incompatible chemical was likely absorbed in high-stress areas of the system such as the brass fittings and anywhere that unchecked thermal expansion would introduce stress. The system began to weaken. As repairs were made, they could not be attributed to any one cause because each occurred opportunistically at a microscopic level corresponding to invisible stress levels. Some failures were minor and some catastrophic. What is certain is that they would have continued until all components were replaced individually. Even then, those replaced components would have still been vulnerable to failure. A decision was made to replace a major part of the CPVC system with polypropylene. It was our recommendation to replace the entire CPVC system with an “engineered system” that is specified from beginning to end to perform the function of a modern and reliable hydronic heating and cooling system. Further, operating procedures and maintenance planning should be specified and overseen by a competent engineering firm that understands the vulnerabilities of all hydronic system components. Finally, if the owners want to determine exactly what chemical(s) was responsible for compromising the relative integrity of this CPVC system, further laboratory tests may be performed to extract the identity of the offending hydrocarbon. However, these are fairly expensive tests whose ultimate value ought to be weighed against the value of pursuing additional action. *** Dr. Duane Priddy, CEO of Plastics Failure Lab, whose assistance on this project is greatly appreciated, provided the following chart:

The goal in mediation is to define issues and resolve them. You can get a head start by alerting your mediator to the issues and suggesting why those issues tilt in your favor. Lack of a brief unnecessarily lengthens the mediation, and your mediator is probably being paid according to how much time is spent in mediation. Effective resource management dictates you don’t want the mediator to have to spend the first hour—or two or three—digging out the issues. Mediation can be an exhausting process. People get cantankerous, which makes negotiation more difficult. Short-cutting the mediation by defining issues in advance can keep participants at their best. The brief need not be formal. A letter may be adequate. If you are in doubt about how formal your brief must be, contact the mediator and ask. A party who does not brief the issues may be allowing the other side to define the discourse. What if your opponent briefs different issues than you do? No problem. Mediation is the place to get all the issues on the table. Preparing a brief helps you hone your arguments. The brief is a guide to make sure no issue is overlooked. Send your brief to the mediator far enough ahead of the mediation so the mediator has adequate time to review it. Did you know the mediation brief you send the mediator is confidential? You decide whether to share it with the opposing party. Information disclosed to the mediator during mediation is not discoverable. The mediator cannot be subpoenaed. This allows you to control when to reveal your “smoking gun”—maybe not until trial. Some parties prepare two briefs: one for the opposing party and a confidential one for the mediator.  More commonly, a party prepares just one, but may decide to waive confidentiality of the brief during mediation.

The workers’ compensation insurer is for many the centerpiece of a mature industry. Injury frequency almost constantly declines. Insurers earn modest but fairly steady returns on equity, with little risk of insolvency. Market shares generally do not change much. Careers are largely very predictable. Within this industry, however, specialized services as an extension of claims management grew since 1990 from about $4 billion in total costs to about $18 billion today. This service universe expanded dramatically and changed repeatedly in products, organization and leadership. Let’s review this evolution and ask if two decades-plus of growth is coming toward an end. Medical bill review, case management, subrogation services, transportation, investigation, pharmacy management – the list of services is long. With annual growth of all specialized services at the 15%-plus level, successful entrepreneurs have been highly rewarded. Like matryoshka dolls, spending on a direct benefit (such as surgeries) requires bill review; inside that, a more specialized review for implants; and then more specialized responses to new state regulation and court decisions. Claims payers account for these services as “loss adjustment expenses,” which divide into “unallocated” and “allocated” categories. Rick Sabetta, a managing principal with Risk Navigation, a claims consultancy, says that as specialized services grew, insurers and third-party administrators began to reposition some costs as “allocated.” As a result, they, but more likely vendors, could charge the services to the claims file. Sabetta told me that some insurers sought to improve the bottom line by reducing or completely removing the unallocated factor, even to the point of insurers' outsourcing their entire claims operation to TPAs. He said, “It is far less expensive to farm the claims out to the TPA than it is to attract, hire, train and manage a claim staff.” To an investment banker, the outsourcing universe is an engagingly complex version of a supply chain management exercise given to MBA students. The entrepreneurs compete through superior information technology, superior management talent and guiding more volume through a scalable structure. Since the 1980s, the supply chain challenge always has reinvented itself into something larger. That’s why the bankers come back often, confident of liquidating their investments in a few years at a profit by selling them to other bankers. The 1980s saw the rise of case management, and national expansion by vendors such as Intracorp, CRA, Genex and Corvel. The 1990s saw the introduction of bill review firms, with their complicated coding systems. State-mandated closed networks started to emerge. So did utilization review. Major state reforms, in Florida in the 1990s and Texas and California in 2004-2005, effectively educated the payer community that it could – and legally had to – commit to using specialized services. In the 2000s, pharmacy benefit management arrived. Regulators rarely demand transparency in the outsourcing universe. For example,  physical therapy is today heavily influenced by proprietary physical rehab networks, but these networks do not share their experience publicly. Pharmacy benefit managers publish about their experience, but only voluntarily. This universe of firms that arrange on behalf of claims payers for physical therapy, dental care, translation, Social Security disability awards, etc., arose from a choice claims payers made to outsource. But would Walmart or Home Depot have outsourced management of their supply chain to vendors to anywhere near this extent? Prospects of double-digit growth in the outsourcing universe may be declining. Frequency of claims continues to decrease. There may not be a new major class of claims operations for payers to outsource. Some large states could lay down mandates that create demand, such as new utilization review or preferred provider organization rules, but the bigger states have mostly done that already. I think we are going to see more of a Walmart culture in how the supply chain is controlled. This article was first published in workcompcentral.

Suicide continues to be among the most stigmatized topics of all human experiences. It is, therefore, characterized by fear, shame and misunderstanding.  Myths include:

• “If we talk about suicide, it’s more likely to occur.” The truth is just the opposite.
• “It will never happen in my circle of friends, family and co-workers.” The truth is: Given the staggering statistics of how many Americans seriously contemplate, plan for and attempt suicide, chances are you know someone who is at serious risk right now.

Fortunately, many progressive and courageous business leaders are beginning to bring this terribly misunderstood topic out of the shadows and into meaningful discussion. This is important not only because the suicide death of an employee has a devastating impact on the workforce and productivity but, more importantly, because leaders are recognizing that the workplace is uniquely positioned to help prevent suicide. As a critical incident response consultant for more than 20 years, and now the clinical director for Crisis Care Network, which responds to more than 1,100 workplace critical incidents a month, with as many as 40 to 50 a month being the suicide of an employee, I have been involved in thousands of employee suicide death responses over the years. I can attest to the shock, sorrow and disruption most employees and organizations feel. I can also attest to the fact that, in most cases, at least one other employee will step forward and say to the consultant on site that, in addition to all the other complex feelings in response to the co-worker’s death, he or she is also frightened by the fact he or she is likewise giving serious consideration to suicide. I was at a workplace response recently where a young female employee, about the same age as the employee who had committed suicide, approached me after a group session to say that she was very scared at how frequently she herself thinks about suicide. She had never told anyone. She knew she probably needed to talk with a professional counselor but always felt ashamed and intimidated by the notion. Fortunately, her employer cared enough to have a comprehensive employee assistance program (EAP) in place that brought in critical incident response services. EAPs, by design, try to remove as many barriers as possible that would prevent employees from receiving effective services. Access is typically 24/7, confidential, at no cost to the employee and available immediately as a telephonic consultation, or as a face-to-face appointment at a convenient location within 72 hours. After further discussion with this employee to determine her level of risk or urgency, we sat together and called the EAP to make an appointment. All employers should be planning now for how they would handle a suicide, so they can be sure to use the opportunity not only to care for employees but to take a proven series of steps that will make future suicides less likely. For the guidebook on what is known as “postvention,” click here.

Over the years, I’ve had safety directors or claims managers tell me that workers’ compensation claims move slower than a one-legged dog on tranquilizers. I would say the resolution speed of comp claims more closely resembles that of a three-legged dog on mild muscle relaxants - - but I won’t quibble over how far to take the metaphor. Bottom line: Oftentimes, comp claims do move very slowly. Without dwelling on the obvious, let me suggest three legitimate reasons why comp claims aren’t yet as fast as text-messaging teenagers. 1. Litigation takes time If you have pro se claims (where the claimant does not have an attorney), you’ve undoubtedly noticed that these claims are usually resolved very quickly. Why? You can insert you own joke, but you might consider the old one about how attorneys make good speed bumps. Having fewer attorneys involved removes obstacles and speeds the process. The absence of attorneys also means that there are likely no real issues to resolve. Everyone agrees on everything, so there is nothing to argue about. In disputed claims, though, investigation takes time. Discovery takes time. Getting opinions from expert physicians takes time. Courts take time. Years ago, I had a client tell me: “Brad, I don’t want you to settle any of our comp claims. Take them all to trial.” I did that. . . for a while. After two years of this (and after seeing the defense costs associated with taking every case to trial), the VP of claims called me and said: “Brad, can you start letting me know which claims can be resolved without trial?” It doesn’t take a high level of skill to take every case to trial. It does, however, require skill to know which claims should be settled and which claims should be disputed. 2.  Movement takes willpower Apart from falling down, movement takes willpower and initiative. A new client contacted me in June about taking over the defense of a claim that has been litigated since 2002. I entered my appearance, reviewed the medical records, called the claimant’s attorney and worked out a tentative framework for settlement with three or four phone calls. I am certain that I am not any smarter than the defense attorney I replaced. Some would say he is far smarter - - he was paid to work a file for 12 years, and I was the dope who resolved it with a few phone calls! Self-serving attitudes aside, I had a fresh perspective and wasn’t afraid to throw out ideas to resolve the claim instead of simply throwing out ideas for continued litigation. In an area of the law where the work is often very repetitive, coming up with a new approach is often difficult. 3.  Common sense is mistaken Common sense would seem to indicate that if the claimant’s attorney knows little about workers’ comp law, this places me (as the defense attorney) in a better position to achieve a favorable result for my client. In this instance, common sense is completely wrong. I have always found that claimant’s attorneys who actually know what benefits are payable under the workers' comp law and how to prosecute a workers’ comp claim are far better to work with than the attorneys who handle three comp claims a year and try to handle the claim like a jury trial in circuit court. Knowledge and experience can bring efficiency to a system that rarely seems efficient.

Violent crime, a major and growing problem in this country, is exacerbated by the fact that many crimes go unreported. But there’s a simple fix to the lack of reporting: Make it easier for people to tip off authorities anonymously. Developments in communications technology and in social media can play a decisive role in increasing reporting, especially among young people. Once authorities have more information, they can not only track down more criminals but can develop a fuller picture of where and under what conditions violent crimes occur, and can develop better prevention programs. In California, the Visalia campus of the College of the Sequoias has a program  allowing individuals to report suspicious behavior on campus to local police anonymously via text, voice mail or email. “Our best resource, by far, is the students and faculty right here on campus,” Chief of the Police department Bob Masterson told the student newspaper . “Even if you’re not the victim, you could be a great witness.” Many students said the program, TipNow, keeps them safer; they also consider it a good idea for all campuses. At U.S. hospitals, the violent crime rate per 100 hospital beds rose 25%, from 2.0 incidents in 2012 to 2.5 incidents last year, according to research released by the IHSS Foundation at the International Association for Healthcare Security and Safety (IAHSS). The rate of disorderly conduct incidents experienced the biggest jump, from 28 per 100 hospital beds in 2012 to 39.2 last year (a rise of 40%). A separate IHSS Foundation study found that 89% of the hospitals surveyed had at least one event of workplace violence in the previous 12 months. The federal Bureau of Justice Statistics’ National Crime Victimization Survey reported the following statistics for workplace violence between 1993 and 1999:

• While working or on duty, U.S. residents experienced 1.7 million violent victimizations annually, including 1.3 million simple assaults, 325,000 aggravated assaults, 36,500 rapes and sexual assaults, 70,000 robberies and 900 homicides.
• Workplace violence accounted for 18% of all violent crime.

From  1997 through 2009, 335 murders occurred on college campuses, according to data from the U.S. Department of Education (2010).  Three-fifths of campus attacks in a 108-year span occurred in the past two decades. Yet many crimes go unreported to campus authorities. A 1997 study about campus violence by Sloan, Fisher and Cullen found that only 35% of violent crimes on college campuses were reported to authorities. There are various reasons for not reporting crimes. For example, many may regard a crime as too minor a matter to report or may consider it a private matter. Many studies have shown a reluctance to report crimes or other suspicious activities out of fear of the authorities or of criminal retribution. For instance, in February 2009 in San Gabriel, Calif., two gunmen opened fire inside a coffee shop, killing one and wounding six others, but police had trouble finding witnesses to what appeared to be a gang-related attack even though the shop was crowded with at least 40 people. Sheriff's spokesman Steve Whitmore was quoted as saying,  "We know people saw something, and we need them to come forward and help us solve this crime."

Workers’ compensation is widely recognized as one of the most challenging lines of business, suffering years of poor results. Insurance companies are under increasing pressure to achieve profitability by focusing on their operations, such as underwriting and claims. Insurers can no longer count on cycles, where a soft market follows a hard one. The traditional length of a hard or soft market is evolving in a global economy where capital moves faster than ever and competitors are using increasingly sophisticated growth, segmentation and pricing strategies. Insurance executives also cite regulatory and legislative pressures, such as healthcare and tax reform, as inhibitors of growth. Furthermore, medical costs continue to rise, making it particularly difficult to price for risk exposure. The long tail of a workers’ compensation claim means that the cost to treat someone continues to increase as time elapses and becomes a compounding problem. Despite recent improvements in combined ratios, there are still many challenges within workers’ compensation that have to be reconciled. The savviest insurers are evaluating the availability of technologies, advanced data and analytics to more accurately price risk – and ultimately ensure profitability. The ‘Unknown’ in Workers’ Compensation Information asymmetry has made it difficult for insurers to accurately determine who is a high-risk customer and who is low-risk. At the point of new business, a workers’ compensation insurer is likely to have the least amount of information about those they are insuring, and it’s easy to understand why. The insured knows exactly who is on the payroll and what types of duties employees have. Some of that information is relayed to an agent, and then finally to the carrier, but, as in any game of telephone, the final message becomes distorted from the original. This imbalance of information is one reason why fraud is rampant, and why insurers ultimately pay the price. Payroll misclassification – or “premium fraud” – occurs when businesses pay salaries off the books, misrepresent the type of work an employee does or purposely misclassify employees as independent contractors. Some misclassifications are not nefarious. But whatever the cause, they create significant revenue and expense challenges for carriers that rely on self-reporting. The ‘Silent’ Killer Without the right insight or analytical tools, insurance companies have a hard time discerning between their policyholders and making consistent and fair decisions on how much premium to charge on each policy. When an insurer begins to use predictive analytics, competitors that are still catching up run the risk of falling victim to adverse selection. When we hear executives say things like, “The competition has crazy pricing,” it raises a red flag. We immediately begin looking for warning signs of adverse selection, such as losing profitable business and an increasing loss ratio. The problem is that it takes time to recognize that a more sophisticated competitor is stealing your good business by lowering prices while also sending you the worst-performing business. By the time you recognize adverse selection is occurring, you’re falling behind and have to respond quickly. The Power of Actionable Data Fortunately, there are technologies available for insurers of all sizes to make more informed, evidence-based decisions. But when it comes to data, there is still some confusion: Is more data always better? And how can carriers turn data into actionable results? It’s not always about the volume of data that an insurer has; it’s about the business value you can derive from it. If an insurer is just beginning to store, govern and structure its data, it is likely not receiving actionable insights from historic data assets. Accessing a more holistic data set with multiple variables (from states/geography, premium size, hazard groups, class codes, etc.) through a third party or partner can help to avoid selection bias, while encouraging rigorous testing and cataloging of data variables. Having access to a variety of information is key when it comes to making data-driven decisions. The conundrum insurers face when delivering actionable intelligence that underwriters can use is that they only know the business they write. They know very little about business they quote and nothing about business they don’t even see. What complicates this picture is that an insurer’s data is skewed by its specific risk appetite and growth strategies. It’s up to the insurer to fill in the blind spots in its own data set to ensure accurate pricing and risk assessment. As we know, what an insurance company doesn’t know can hurt it. As insurers increasingly turn to advanced data and analytics, the next question that keeps insurers up at night is, “When everything looks good, how do I know what isn’t really good?” One way that Valen Analytics is helping insurers answer that question is by providing companies with a “Risk Score,” a standard measure of risk quality. By tapping into Valen’s contributory database, workers’ compensation underwriters can have better insight into all the policies they write – even historically loss-free policies. In fact, the Risk Score accurately identifies a 30% loss ratio difference between the best- and worst-performing loss-free policies. This is one example of how the power of data can push the industry forward. Despite its many challenges, the workers’ compensation industry is becoming more analytically driven and improving its profitability. A comprehensive data strategy drives pricing accuracy and business growth while allowing insurers to achieve efficiencies in underwriting decision-making. By keeping up with technological advances, insurers can use data and analytics to grow into new markets and areas of business, while also protecting their profitable market share. While NCCI’s annual “State of the Line” report labeled workers’ compensation as “balanced” this year, we may soon see the integration of data and analytics push the industry to be recognized as “innovative.”