Tag Archives: 2020

20 Work Comp Issues to Watch in 2020

2020 kicks off our sixth year of Out Front Ideas with Kimberly and Mark, and we begin the year with our 20 Issues to Watch. You will notice that many of these issues reach beyond our usual focus on workers’ comp and healthcare. We also included issues relating to risk management, workforce management and employee benefits as each affects employers. 

1. 2020 Election Impact

The coming election will undoubtedly have an impact on our industry. With 11 state governors, 35 Senate seats, the entire House of Representatives and the president of the U.S. up for grabs, there could be significant change. The impact on businesses could include changes in healthcare, tax law, leave of absence regulations, independent contractor classifications and more. 

Democratic control could lead to an increased federal focus on state workers’ compensation laws, including federally mandated workers’ compensation coverage for farm workers. 

Virginia will likely have significant workers’ compensation reforms, with 17 bills already introduced. California also has many workers’ compensation-related bills, although recently few have become law. 

2. Healthcare Watch

As healthcare continues to be the hot button issue of the 2020 elections, with it comes uncertainty about what our future coverage model may look like. Regardless of uncertainties, we know coverage is complicated, and any system-wide changes will require years of effort before implementation. Healthcare.gov saw its first rise in new enrollment since 2016, up 1.8%, while renewing enrollees were down 2.9%.

Expect to see the continued rise of employer-led solutions in 2020, with healthcare programs like Walmart’s reducing cost, decreasing disability duration and promoting the best of care for common conditions. Community and local care is also emerging, with the continuation of new entrants into the market. New benefit solutions are also expanding, including apps and platforms, such as:

  • Calm, an Apple award-winning meditation app.
  • SleepScore, the leading firm monitoring sleep and offering actionable advice.
  • Grand Rounds, a personal health assistant firm driving quality, timely care.
  • Livongo, a digital health management firm for chronic conditions.
  • One Medical, a membership-based primary care platform.

3. Government Affairs and Compliance

Workers’ compensation is one of the most regulated lines of insurance, and this bureaucracy adds to the system costs. Industry engagement with regulators and legislators is increasingly important to ensure we have a voice at the table when change is contemplated. To make the system more efficient and effective, it is critical that third party administrators (TPAs), carriers and employers engage with regulators and legislators at industry events, like those held by the International Association of Industrial Accident Boards and Commissions (IAIABC), and the Southern Association of Workers’ Compensation Administrators (SAWCA).

4. Evolving Health Technology Models

Technology’s place in the evolution of health continues to expand, as seen at this year’s Digital Health Summit at the Consumer Electronics Show (CES). With tools that track health metrics and protect personal health information and with artificial intelligence, machine learning and blockchain all being major topics, the future seems to hold limitless possibilities. A few remarkable devices introduced at CES were:

  • Sana Health designed a headset that uses neurowave stimulation from light and sound to reduce pain.
  • Valencell launched a blood pressure sensor system that can be integrated into hearables or wearables.
  • Mateo’s Smart Bathroom Mat helps individuals monitor their weight and posture using “medical-grade pressure-sensing technology.”

5. Social Inflation

You hear much about this term in the risk management marketplace, referring to the phenomena of significantly increased liability costs due to societal changes. The impact has be associated with:

  • Jury behavior prediction becoming more difficult.
  • Litigation financing becoming big business.
  • Statutes of limitations being extended for a variety of claims, including workers’ compensation presumptions, malicious prosecutions and sexual assault.
  • Courts allowing the pursuit of separate “bad faith” litigation for actions taken during the handling of a claim.
  • Increased risk management exposures. 

A continuing trend of social pressures could make it very difficult and expensive for companies to secure liability coverage, as carriers continue to increase rates and reduce capacity in the marketplace.

See also: Realistic Expectations for Insurance in 2020  

6. The Power of Influence

Influence can be affected by cultural competencies, personal beliefs and how we feel about ourselves. Personal beliefs play a key role in influencing the level of participation and compliance, trust and communication and outcome of a workers’ compensation case. While technology advancements, wellness programs and regulatory requirements are important, an unsupportive environment, where employees feel dismissed, will affect their engagement. Companies are evolving their advocacy models and improving how they engage with injured workers and patients to accommodate the impact that personal beliefs can have on these cases.

7. Marijuana Workplace Considerations

With 11 states and D.C. having legalized recreational marijuana, it seems only a matter of time before it becomes federally legal. The Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which would federally legalize marijuana, has passed the House Judiciary Committee but will need to pass through the House and Senate for any further advancement.

State legalizations have created challenges for law enforcement and employers because there are no easy tests for impairment with the drug, and no agreed-upon standards of what level of tetrahydrocannabinol (THC) would constitute impairment. The Occupational Safety and Health Administration (OSHA) also restricts blanket post-injury drug testing policies. New THC breathalyzer tests are set to hit the market this year that could assist employers and law enforcement with setting an actionable standard.

8. Rethinking Industry Engagement

Industry engagement affects your marketing efforts, sales and client relations, customer service operations and governmental affairs. One critical area to take advantage of is educational conferences. They bring incredible value to stakeholders, but keep in mind that attendees want to see new sessions and topics presented without presenters selling their services. Additionally, using social media to not only promote your brand recognition and thought leadership but as a platform for real-time engagement with consumers advances your customer service model.

The easiest way to engage the industry and ensure relevancy is getting involved with organizations like the Risk and Insurance Management Society (RIMS), Public Agency Risk Management Association (PARMA), the Public Risk Management Association (PRIMA), the American Society for Health Care Risk Management (ASHRM), Disability Management Employer Coalition (DMEC) and the University Risk Management and Insurance Association (URMIA). 

9. Safety and Loss Prevention

Emerging technologies are assisting in safety and risk management. We are seeing advancements in tech such as wearables that promote safer behaviors and drones that can view dangerous working conditions. 

For all the advances we’ve made with technology, there is little that has been done to decrease injuries related to workplace violence. This challenge has been especially prevalent in the healthcare, retail, hospitality and K-12 industries. 

10. Informed Pain Management

There is no ignoring the opioid epidemic in our country, but the fact remains: The pain is still very real with patients. In 2020, pay close attention to the evolution of pain management as the pressure increases greatly to limit the prescribing of opioids. Focusing on patient-centered care and taking an interdisciplinary and individualized approach to pain care are valuable options to advance patient needs.

11. Defining Value of Risk Management for C-Suite

Risk managers are facing rising insurance costs across multiple lines of coverage for the first time in a decade. This means they have to show their value to the C-Suite without the associated benefit of decreasing insurance costs. Additionally, there are many discussions taking place on the structure of risk management programs, including what duties they should perform and where they should reside within the corporate structure. 

12. Talent ‘Reskilling’

Often referred to as “upskilling,” talent “reskilling” could help with talent gaps as well as provide further internship opportunities and assist with the training of newer employees and older workers. Moreover, training in empathy and communication furthers engagement. Organizations that are taking advantage of these particular training areas, in addition to using new technology and on-demand environments, will have a decisive advantage.

13. Data Privacy and Cybersecurity

It is estimated that, by 2021, there will be $6 trillion worth of damages due to cyber security attacks. While it has become increasingly difficult for company IT departments to stay ahead of hackers, timely corrections like updating systems to install patches and correcting known flaws can help prevent major shutdowns. 

With the introduction of the California Consumer Privacy Act (CCPA), the most extensive and restrictive data policy regulation in the U.S., the insurance community will need to make adjustments. Elements of this law contradict industry records retention regulations. 

14. Caregiving

An estimated one in six Americans is assisting with the care of a disabled family member, with more than half of these employees working full time. Although paid caregiver leave of absence programs are not widely adopted with employers, they are gaining traction with those that are more forward-thinking. 

When the responsibility of care for someone disrupts the life of an employee, the impact can weigh heavily on productivity and increase absence in the workplace. Companies like Wellthy, a digital communication hub focused on family care coordination, links families with a virtual care coordinator. Often a social worker, this individual advocates and schedules to take over many caregiving responsibilities, which can alleviate the strain on a caregiver, leading to less absenteeism.

15. Public Sector Pension and Workers’ Compensation Debt

The average public entity pension is less than 73%-funded, leaving over $1.6 trillion in unfunded pension liabilities nationwide. Many public entities also have millions in workers’ compensation liabilities without funds set aside for payment of the claims. While there are no easy solutions to these challenges, increasing taxes and reforming pensions may be necessary. Public entity insolvencies is also a threat, which has happened in the past. 

See also: Are You Ready to Fail in 2020?  

16. Does Our System Do Harm?

While we often debate varying state regulations and the resultant inadequacies, we do not ask ourselves enough whether our system does harm. Misaligned incentives, complex claims processes and procedures and a daunting system can all affect recovery for the injured worker. Emergent technologies and an abundance of data offer solutions to systemically improve our industry. These solutions need to be implemented to fulfill the industry’s obligations. 

17. Markets and Rates

For several years, there has been a downward trend in the rates for workers’ compensation guaranteed cost insurance. Claims costs have been steadily increasing, but a decline in accident frequency has offset these increasing costs. However, the focus of retention marketplace (self-insured and high-deductible) is on accident severity. The combination of increased accident survivability, longer life expectancies and new medical technologies mean that the industry is seeing more expensive individual workers’ compensation claims than ever before. 

Additionally, lower returns on investments in bonds, especially municipal and government bonds, could affect premium rates as the insurance industry invests heavily in these instruments. 

18. Mental Health

Access to proper care and a lack of providers continue to be major roadblocks for the mental health crisis in our country. As we continue to break down the stigma, promote wellbeing and assist in improving access to care, many workers’ compensation companies and health providers are offering unique and meaningful crisis management and behavioral health case management and will work to create a wellbeing program for your firm.

Organizations like the National Alliance on Mental Illness (NAMI) are collaborating with businesses and public entities to shed light on issues like suicide awareness and prevention to push a stronger culture of wellbeing. It is also imperative that our own workforces focus on their own mental health. We cannot be good advocates for others if we are not taking good care of ourselves. 

19. Data Validation

The reliance of data in our industry is more important than ever, but is our data accurate? There is no single source for accurate information on the entire workers’ compensation industry, as the National Council on Compensation Insurance (NCCI) and the independent bureau states all have only a piece of the puzzle. Data from self-insured employers is also missing from most analysis. 

The accuracy of data is very important for risk management decision making. Risk managers should be asking what stories their data is telling, including:

  • Is my data complete and accurate?
  • When my data conflicts with my expectations, what do I do?
  • Do I trust my data, follow my instincts or dig deeper?

20. The Americans With Disabilities Act (ADA) and Leaves

Continuing changes to regulations, litigation and risks make this an ever-present challenge for employers. Conditions such as obesity, diabetes, pregnancy-related impairments, depression and stress-related mental health impairments continue to be addressed

Leave programs continue to evolve across the country, with California, Connecticut, Colorado, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington and San Francisco and D.C. enacting paid leave. D.C. goes live in July, Connecticut in 2022 and Oregon in 2023. This makes it increasingly critical to understand how these policies run concurrent with a workers’ compensation claim. Alignment between leave programs must be outlined so claims teams are aware and properly engaging the necessary resources.

To listen to the archive of our complete Issues to Watch webinar, please visit https://www.outfrontideas.com/

Follow @outfrontideas on Twitter and “Out Front Ideas with Kimberly and Mark” on LinkedIn for more information about coming events and webinars.

Getting to 2020 — Defining the Unknown (Part 2)

Today’s exercise focuses on the best concepts you can dream up so your organization can thrive in the future. You’ll then need to perform a reality test on those ideas, using research you’ve developed.

This article follows up on my first, in which I argue that now is the time to prepare for what I call “Agency 2020.” In other words, you need to prepare your organization for the leap that will be required for future prosperity.

In that first article, I asked dozens of questions to help define the current reality of 2014. We searched for the knowns – and the known unknowns – of today. This time around, almost every question will be about a discovery in the “unknown unknowns.”

Your challenge is about asking the right questions – and then stretching yourself beyond your comfort zone to find good answers for tomorrow. Use a flood light on the dark horizon of tomorrow. It’s premature to focus with laser-like intensity.

Pursue this process with enthusiasm and childlike curiosity. Forget what you know and believe. Ask “what if?” Don’t try to define “what isn’t.” My intent is to broaden your horizon, stimulate imaginative thought, encourage you to focus and help you act as you develop your new organization for 2020.

To keep the process simple and open-ended, we’ll focus on four issues:

  • people
  • technology
  • the global economy
  • innovation

PEOPLE: The overriding challenge and opportunity in 2020 will be people: who they are,  their values, the cultures they will create and their wants and needs in their own world. Do their worlds and your world overlap? Is there some common interest and opportunity? How do you communicate with many … as well as with a niche of one?

Research the generational mix in 2020. What percentage of the population will be Gen C, Millennials, Gen X and Boomers? Will the Greatest Generation be gone? What will be the influence of each group in the decision-making process as consumers, managers, leaders, etc.?

If they are clients or prospects, what products and services can you offer to meet their wants and needs? How do you profitably deliver this at a price they are willing to pay? What message, media, metrics are necessary to ensure you maintain intimacy continually with each person and affinity, as well as with their population (generation) – however they define it?

Where and how can your interests align – whether as employers, employees, collaborators, competitors, decision makers, policy leaders, educators, friends or social media group members, etc.? Who is now – or who will be – in your world tomorrow, in 2020?

Consider the following as you try to put your arms around a new digital universe that will see the LAGgards (Last Analog Generation) leaving the scene and new Gen C – digital natives – begin to assert their influence before they finish high school. (Before you roll your eyes, have you ever had to ask a teenager to show you how to use your device du jour?)

John Naisbitt painted the picture of this phenomenon in his book Megatrends when he talked about “balancing high tech and high touch.”

If you are unwilling or unable to accept the new world, demographics and diversity, enjoy your retirement.

TECHNOLOGY: Decades ago, the scholar and organizational consultant Warren Bennis observed: “The factory of the future will have two employees, a man and a dog. The man is there to feed the dog, and the dog is there to keep the man away from the machinery.” Could he be right?

To provide perspective, remember that in 2003 the BlackBerry was considered state-of–the-art technology. Some believed this device owned the future of social connection. There was no iPhone, iPad, Facebook, Twitter, etc. By 2012, BlackBerry’s parent – then known as Research in Motion – was teetering on the edge of bankruptcy, and “i” technology, smart devices and social media were out-of-control adolescents.

Today, conversations are focusing on the Internet of Things, or IoT, where inanimate objects – smart watches, “intelligent” cars, home appliances, etc. – communicate without the intervention of people.

In 2020, will technology work for us, or will we work for technology? Will we know more and communicate better than Siri, or will artificial intelligence be the trusted advisers for most consumers? Will facial recognition technology allow your iPhone to read the mood of your clients better than you can, when you’re each sitting at the City Club texting each other over lunch?

Is this ridiculous? Can you afford to be wrong?

THE GLOBAL ECONOMY: Time and place are gone. The lights are always on, and the door is never locked in any place of business. That’s the good news: You can live on Main Street and still compete in Dublin, Dubai or Duson, La. The bad news is that your competitor and many hackers are on Main Street, peering into your shop. You can be a David in a world of Goliaths. But if you’re a Goliath, you’re more vulnerable than ever to a world of Davids. If your company is bureaucratic, you’re just a slower Goliath.

My best suggestion is to “capture population” and become the portal of choice for members of that universe. Don’t worry about selling products. Instead, focus on needs and solutions to problems. Facilitate the “buying,” or capture, of each individual in the group. Remember: If you control a large enough population, you can “insure” needs of the group – without the cost of issuing individual policies.

INNOVATION (the new power plays and power players): In a presentation on change in 1993, I declared: “Today GM, Sears and IBM are the kings of their respective jungles. In our lifetime, one of these companies will fail.” The audience shook their heads in disbelief. I was right, and in the long term I may win the trifecta.

From the Affordable Care Act, to Facebook, Amazon, Twitter, apps, artificial intelligence and IoT, the marketplace is being redesigned by the people who shop there. In other words, the deck is being reshuffled. Opportunities have never been greater, the stakes higher or the risks greater.

That the world will be different is a fact. Remember Einstein’s admonition: “Insanity is to continue to do what you’ve always done and expect a different result.” Don’t be insane. Be prepared.  It can work. As I noted in my first article, we’ve already walked on the moon!

With forethought, an organizational purpose, principles, a vision, a commitment and a plan that ropes you to that commitment, you can and will prevail.  Don’t try to conquer the world. Just identify and prevail in your part of that world.

Be bold and wise in your research and positioning for 2020. Today’s world includes unlimited data, much less useable information and less still actionable knowledge. By 2020 – if you’re willing to try – you’ll be able to take the actionable knowledge, shape it to the wants and needs of a specific group, align your offerings (helping them buy) and innovate your processes to ensure you can deliver at a price they are willing to pay. Align your message, media, meaning, etc. to each specific group. Test the concept. And then act – meaning experiment. Remember, wisdom exists at the intersection of knowledge and experimentation. When you fall down, stand back up.

As business management columnist Dale Dauten states: “Different isn’t always better, but better is always different.” Be better in 2020. Differentiate yourself from the sameness of today and tomorrow!  Take the giant leap of discovery for yourself … and all of mankind!

The Revolution Is Coming! Be Ready

The world, the world of risk and risk in the world will be as different in 2020 as the original 13 colonies were from the U.S. as it is today.

The bad news is that Paul Revere won’t ride through your town alerting you.

So you'll have to settle for me — and I am, in fact, giving you enough warning to design your future, and not just manage toward it.

Understand: When one thing is different, it is change. When everything is different, it is chaos.

Change works for dinosaurs. Chaos doesn’t.

But chaos brings opportunity for those who are prepared, and, if you’ve survived in this industry for any length of time, you are able to adapt. Your only issue is one of willingness.

What follows are the 10 environmental factors that, in combination, are triggers of the coming Risk Revolution. These cultural changes are fissures in the foundation of the “good old days” and render vulnerable all traditional institutions and structures that have done so well for so long.

  1. Loss of innocence: When President Nixon said during the Watergate scandal, “I am not a crook,” he acknowledged the end of command and control. Raw power could no longer sustain the most powerful man in the world. As citizens, we confronted the “feet of clay” of our leaders. What Nixon did to weaken our trust in our political leaders, terrorists in airplanes on 9/11 did to our confidence. We won two world wars and are insulated and isolated from the “evil” out there by oceans on our coasts, but it is not enough. We have to accept we are vulnerable.
  2. Katrina was a “girl” but she was no lady: When Hurricane Katrina hit the Gulf Coast in 2005, it breached levees and created a Mad Max world that none were ready to face. Our institutions – federal, state and local government, the Red Cross, etc. – were supposedly built for catastrophes but failed us. Our confidence in our system of order was lost. We must rethink the world.
  3. “Hell no, we won’t go”:  war protests, burned bras, tie-dyed T-shirts, Elvis and the Beatles, hippies who protested everything except the right to protest. This was the marketplace speaking for the first time. Tomorrow, the market won't be quieted.
  4. ________ – Americans:  African-Americans, Asian-Americans, you-name-it-Americans. We're no longer a homogeneous nation. One size does not fit all. The change will accentuate the world of niches, affinity groups and “verticals” and so fragment the market that mass customization will be required, down to a niche of one. We want it “our way,” and not just in fast food.
  5. The front porch and the back fence are gone: Time and place now have little value, and “pace” is as fast as the buyer wants it to be. The question is: If Gen Y is known for a lack of empathy, how do you sell in a nonverbal world?
  6. Tennis balls and Patty Hearst: Sgt. Gill, an intelligence officer, told me in 1972 about satellites that could read the label on your tennis ball while you were playing. In 1973, Jim, another military intelligence guy discovered that, while his data mining model couldn’t help the FBI find Patty Hearst, he could find everyone in America who was just like her. In an era of satellites/drones/etc. and big data, what happens to privacy?
  7. Miss Hathaway: In the finance department of LSU, Joan always reminded me of Miss Hathaway from “The Beverly Hillbillies.” She told me decades ago, “Mike, this LexisNexis thing is going to be big.” She was talking about the Internet. She was right.
  8. From Ozzie and Harriet to Archie Bunker to the Huxtables to the Simpsons to the Modern Family and maybe to the Jetsons: The world keeps changing, and lots of people don't like that. They want to hold on to the past. Political correctness, shouts of racism and sexism, a bipolar political process, extremes, etc. all limit our willingness to hold hands and sing “Kumbaya.” We are changed forever, and so is our society and its most basic building block – the family. Deal with it.
  9. “If you have all your eggs in one basket, make sure it’s a strong basket.”: That line, from a Volvo ad, circa 1980, applies today because we are betting the economy and our world on technology . What happens if a natural disaster, a terrorist, an enemy or sun spots disables our technology for a week, a month, a year?
  10. Addictions: Addiction to the status quo is the worst. In this most serious form of dependency, we sacrifice everything to do nothing but protect our comfort zone. The insurance industry once owned the world of risk. Now we have done more than “let the camel’s nose under the tent.” We are now sleeping with the camel. When the market demanded innovation, we too often failed to provide it. Instead we gave up our responsibility and let government and others do what we didn’t want to do. Captives, alternative risk funding, HMOs, the ACA, self-insurance and the National Flood Insurance Program are all examples of decisions being made without us. That is the nature of markets. We were too slow, and something else filled the void. We still face two fundamental challenges: Our products are priced beyond the ability of many consumers to pay, and some embrace a “nanny state.”

The trends identified are not all right and they are not all wrong. They just are. What will 2020 bring your world? What will you do to prepare?

Remember the admonition from Peter Drucker, “Whom the gods wish to destroy, they send 40 years of prosperity.” The last decades have been good to us. The next decades can be, too, but only with the right amount of awareness, preparation, discipline and commitment.

George C. Scott, playing Gen. George Patton in the movie “Patton,” said: “In times of war, all other forms of human endeavor shrink to insignificance.” 

Are you ready, willing and able to fight and prevail in the coming Risk Revolution?