Tag Archives: workers compensation

Perils of Pandemic Premium Audits

Because workers’ compensation premiums are usually driven by employer payroll, carriers audit the payroll figures to ensure that the worker classifications are accurate and that the premiums reflect the covered risks. States and the rating bureaus have stringent rules around what counts as payroll and how to calculate premiums. Regulators also audit carriers to ensure their premium calculations are consistent and accurate. Every carrier is held to the same standard to create a fair and competitive market. 

The premium audit process can be very contentious because it is labor-intensive, and no one wants to be told they owe an additional premium on an expired policy. However, every workers’ compensation policy has this as a condition of the coverage.  

Many do not realize that the leading cause of workers’ compensation fraud is related to payroll reporting. Some companies will try to lower their premiums by intentionally reporting lower payroll figures by misclassifying workers. Companies classify workers as either independent contractors or positions with lower premiums (e.g., reporting foundry workers as “clerical”). Sometimes, these companies will simply report a lower payroll than was paid. 

All this complexity and controversy relating to workers’ compensation premium audits existed long before COVID. However, the pandemic made things much worse. Many states issued emergency rules requiring immediate premium audits with the thought that this would bring premium relief to troubled businesses. However, these rules mostly created confusion and added high administrative costs to both businesses and carriers. No one was prepared for the massive data collection and analysis effort that the states mandated.  

While there is significant state variation in the emergency rules, here are some examples that help explain what carriers, brokers and businesses are dealing with while trying to manage their businesses during a global pandemic:

  1. It does not matter if you are self-insured and rarely report data to the bureaus. The states have imposed data reporting requirements on carriers and businesses relating to COVID. The orders apply to all workers’ compensation coverage: first dollar, deductible and self-insurance. 
  2. Furlough pay is complicated. Furloughed payroll may be excluded from premium calculations where the state has approved this exclusion and if the employees meet the definition of a furloughed worker. These definitions vary by state.
  3. If an employee is on leave due to COVID (either diagnosis or quarantine), that time off may be classified differently than someone on leave due to another illness. 
  4. If an employee’s COVID-related leave is due to exposure while on the job, it could result in a workers’ compensation claim. 
  5. Employers with temporarily reassigned workers may have premiums adjusted based on new classifications. Again, there are significant state variations on this. Essentially, this makes employers and carriers look at payroll week-to-week instead of once at the end of the policy term. It is an extremely labor-intensive process for everyone involved. 
  6. Employers are expected to maintain extensive records on furlough pay and other variations, which must be reported to the carriers and, ultimately, the states.
  7. It is important to understanding the difference between severance and furlough. Furlough is temporary, and you plan on bringing them back.
  8. Every workers’ compensation policy has a minimum premium, and these still apply. Some carriers have decreased these premiums to accommodate current circumstances, but not all have adjusted.
  9. Self-insured employers are expected to comply with the state rules in monopolistic states such as Washington and Ohio. 
  10. It cannot be stressed enough that there are many variations by state. Even all the National Council on Compensation Insurance (NCCI) states are not operating under the same rules.

See also: Has Pandemic Shifted Arc of Insurtech?

Are you confused by all the complexities? Don’t worry. You are certainly not alone. Chances are, there will be more emergency rules issued soon to add to the confusion. The best advice right now is to document everything and be patient. The carriers didn’t make these rules; the states did. Carriers, brokers and businesses need to work together to satisfy these extensive state reporting requirements.

5 Safety Keys for COVID-Era Building

In a year of COVID-19, contractors and crews need to stay vigilant and celebrate successes during Construction Safety Week.

Construction Safety Week was created six years ago by more than 40 companies in recognition that construction crews face countless risks of injury every day on job sites. COVID-19 has added risks and uncertainties. 

That’s one reason Zurich, a supporter from the start, remains a committed sponsor of Safety Week in 2020. Zurich Risk Engineers have been working to help protect construction workers in many cities and states where building has continued in exceptionally challenging times. Safety Week is an opportunity to heighten awareness of practices that can help manage those challenges to protect workers’ lives and livelihoods. 

Construction has always been a high-risk occupation. However, this Safety Week is like no other due to the additional risks crews are facing from COVID-19. Zurich has sponsored Safety Week since 2014, and we will continue encouraging practices that can help mitigate both the perennial risks and the unprecedented ones.

Here are five points that are top of mind for this year’s Safety Week, which consists of both virtual and live events across the country Sept. 14-18.

1. Continual training and communication

Crews need continual training and communication in the best of times, but the evolving challenges of COVID-19 heighten that need. Socially distanced huddle meetings at the start of a shift can offer a preview of the risks anticipated during the shift and prescribe actions to prevent injuries or accidents. Refresher training on how to wear a fall-protection harness, for example, can be especially crucial for workers who might have been out of work for weeks during the height of the pandemic, as well as for subcontractors who may lack the training resources that general contractors have. 

“Contractors should have a communications plan in place for their crews and subs, and there should be regular meetings where they’re communicating how they expect work to be performed to get everyone home safely at the end of each shift,” said Rick Zellen, construction senior risk engineering consultant for Zurich North America. 

2. Personal responsibility

Contractors and workers need to be vigilant about monitoring and adhering to state and county requirements related to COVID-19. This is complicated by the fact that mandates are evolving as COVID cases rise and fall in different areas. 

“Key points to know are requirements for wearing face coverings, temperature taking and social distancing,” Zellen said. “One of the biggest things for workers is, if you feel sick, don’t come to work.” 

Furthermore, workers need to protect themselves even when they’re not at work, which is part of looking out for each other’s well-being, too. 

3. The fundamentals

COVID concerns have at times overshadowed the Focus Four Hazards that the Occupational Safety and Health Administration talks about with construction. Workers still need to maintain situational awareness and safety practices related to the Focus Four Hazards, which include falls, electrocution, being caught in or between, or struck by, objects.

“Some contractors have us come in, and they want information about cutting-edge technology,” said Robert Labbe, another construction senior risk engineering consultant at Zurich. “I say, ‘First, let’s talk about the basics. If you don’t have people who are tying off, or something is missing in the training, let’s talk about that before we talk about the cutting-edge tech.’ Fall protection and safety glasses still have to be an integral part of safety training from the first day a worker comes to a site.”  

See also: COVID-19: Next Steps in Construction

4. Mental health

Construction is an occupation with one of the highest rates of male suicide, according to the Centers for Disease Control and Prevention, and misuse of opioids is also higher in construction than in many occupations. Social isolation and new stressors, such as providing care for children who can’t return to school because of COVID-19, can take a toll. 

Superintendents, foremen and others on a construction job site need to be attuned to subtle signs that another crew member may be suffering, get to know people on a first-name basis and take the time to pull up a five-gallon bucket to listen and talk, albeit while wearing a face covering and maintaining physical distance, if required. 

“Mental health issues in the past were swept under the rug,” Zellen said. “Our people need to be aware of the issues and know how to recognize signs and symptoms of serious distress.”

5. The power of “thank you”

In a time when contractors and crews may be rushing to make up for time lost to the pandemic shutdown, it’s easy for supervisors to forget to thank their crews for their efforts to work safely — including when they report near-misses. Many jobs have close calls, which can shed light on what action prevented a potential tragedy or what action could be improved to reduce the risk next time. 

“A lot goes into making jobs a success,” Zellen said. “On a daily basis, there are a lot of people who do good-quality, safe work; who plan, inform, protect and prevent accidents. Especially today when people are dealing with so many issues, Safety Week is a good opportunity to recognize people and celebrate the successes.”

Addressing the Rise in Topical Prescriptions

Across the country, healthcare providers are shifting their prescribing practices in response to the opioid epidemic. According to IQVIA Institute’s Medicine Use and Spending in the U.S. — A Review of 2018 and Outlook for 2023, prescription opioid volume declined 43%, from 246 billion morphine milligram equivalents in 2011 to 141 billion in 2018. Many factors have driven the decline, including news media coverage, state and federal initiatives (e.g., prevention, intervention, treatment and recovery support), the Center for Disease Control and Prevention’s 2016 guidelines for prescribing opioids for chronic pain, healthcare provider education, lawsuits against companies that manufacture and distribute opioids, the arrest and prosecution of healthcare providers and efforts taken by insurers to reduce opioid prescribing.

Although there has been significant progress in some ways, unintended consequences periodically emerge in the fight to reduce opioid dependency and addiction. For example, in early efforts to address the emerging opioid epidemic, law enforcement officials aggressively targeted and shut down opioid pill mills overnight. This abruptly left many opioid-dependent patients without access to opioids, resulting in a spike in heroin use. As another example, several states and private companies have successfully implemented policies to limit opioid prescriptions on initial fills to seven days or less under specific circumstances. In response, some healthcare providers have avoided these limitations by prescribing 30 days (or more) of pills in the shortened time frame. Lastly, as prescribers look for alternatives to opioids, the healthcare industry has seen a dramatic increase in the use of topical and compounded pain relievers. This has increased the cost of providing care in a healthcare system already struggling to contain medical costs. Despite the increased spending, these options often fail to demonstrate a corresponding desired therapeutic outcome.

This article will share some strategies being used by insurance companies to help injured workers receive cost-effective and therapeutically effective pain management drugs, with the ultimate goal of returning them to work and more productive lives.

Topical vs. Compounded Pain Reliever

By definition, a topical medication is a medication administered externally. Commercially available topical pain relievers usually contain one or more of the following ingredients: lidocaine, menthol, methyl salicylate, capsaicin and camphor.

The Food and Drug Administration (FDA) defines drug compounding as “combining, mixing or altering ingredients to create a medication tailored to the needs of an individual patient.” It notes: “[c]ompounded drugs are not FDA-approved.” Compounded medications can be made into a variety of dosage forms (e.g., oral, injectable, topical, etc.), but the majority of compounded medications we have seen in workers’ compensation are topical (i.e., applied to your skin).

Coventry and First Scripts 2018 Drug Trend Series Report noted that topicals represent 5.1% of high-impact drug classes by volume but 14% of costs. 68 of every 1,000 workers were using topical prescription analgesics, and nearly eight of every 1,000 workers were using private label topical analgesics. As Coventry’s Director of Pharmacy Product Development Nikki Wilson noted, retail, mail-order and out-of-network prescriptions for compounds costs and use decreased while topical costs and use increased in 2018. Topical costs increased due to the use of private label topical analgesics (PLTA), some of “[w]hich add little to no value clinically but increase costs exponentially” according to Wilson.

Studies Making News

In November 2016, CVSHealth published The Rise and Fall of Compound Spend – Ongoing Monitoring Enables Early Identification of Lidocaine Spend, which noted that gross costs per compounded claim “increased nearly 1,700 percent for employer clients” from January 2011 to March 2014, while the “[a]verage gross cost per 30-day script increased more than 10-fold over a three-year period.” Leveraging a multidisciplinary team that included pharmacists and physicians, CVSHealth developed criteria to provide “coverage consistent with labeling, FDA guidance, standards of medical practice and evidence-based drug information to help ensure patient safety and appropriate utilization.” Their strategies drove the use of lidocaine products down on average by more than 80%.

In the August 2018 Office of Inspector General (OIG) report, Questionable Billing for Compounded Topical Drugs in Medicare Part D, OIG found that about 550 pharmacies and 124 prescribers had questionable Part D billing for compounded topical drugs in 2016 based on five measures that OIG has developed as indicators of possible fraud, waste and abuse. The study was driven by the 625% increase in compounded drugs from 2006 through 2015. OIG made several recommendations, including clarifying Part D coverage policies, conducting training for Part D sponsors on fraud schemes and safety concerns related to compounded topical drugs, clarifying that sponsors may apply utilization management tools, and following up with the pharmacies and prescribers identified in the report.

Workers Compensation Efforts

Several insurance companies have been monitoring and addressing compound spending across the country. The Connecticut Interlocal Risk Management Agency (CIRMA) has achieved success curtailing prescription costs and opioid use by adopting a comprehensive managed care program that combines communication, education, collaboration and data. Through nurse collaboration, prior authorizations, managing the use of compound drugs, excluding long-acting opioids, discussing best practices with prescribers, addressing claims with high morphine equivalent doses and using generic drugs over brand drugs, CIRMA significantly lowered utilization of opioids and compounds. For compound drugs, CIRMA and Coventry created a dedicated drug evaluation team that managed compound drugs and prevented processing of such medications without adjuster approval and clinical input. The effort included providing adjusters with recommendations for appropriate management of compound prescriptions, which “led to a decrease in both compound spending and utilization,” where “the percentage of compound costs dropped 42% from 4.0% in 2015 to 2.3% in 2017.” 

According to CompPharma’s 15th Annual Survey Prescription Drug Management in Workers’ Compensation, the survey of 29 state funds, insurers, TPAs and self-insureds showed that there has been a 49% reduction in compound usage among survey respondents with data for 2016 and 2017. Of the respondents who provided figures, only one had an increase in total compounds reimbursed. A number of reasons were cited for the decline in total drug costs, including a continued focus on improving clinical management programs, expanding utilization review and prior authorization, dramatic reductions in compounds, changes in prescribing patterns driven by physician awareness of opioid risk, state formularies and more structured drug alerts and alert management processes.

Effective July 1, 2018, the Texas Division of Workers Compensation revised Title 28 Texas Administrative Code, amending the definition of the closed formulary to exclude “any prescription drug created through compounding” and “required pre-authorization for all prescription drugs created through compounding.” The background section stated that reimbursements per compounded drug increased 141% from calendar year 2010 to 2015, with ingredient costs for a selected group of 10 commonly compounded drugs increasing between 82% and 1,474% from 2010 to 2014.

Chesapeake Employers’ History with Opioids

For more than a decade, Chesapeake Employers has been trying to turn the tide against the opioid epidemic. In 2009, a dedicated pain management review nursing position was established within the Health Services department to identify and monitor concerning claims. Since that time, the scope of the internal pain management program has evolved and expanded greatly. Now, in addition to a dedicated pain management nurse, Chesapeake Employers’ leverages the data analytics from its Pharmacy Benefit Manager (PBM) Express Scripts and the expertise of an in-house pharmacist, physicians and nurses to stay cutting edge in the approach to care. While there are many indicators of success, the above efforts have helped reduce the dollars spent on dispensing opioids by almost 76% over a five-year period and seen the number of injured workers receiving opioids decrease by 66%. 

Some of the most notable initiatives provide necessary resources to raise awareness for providers, the public and our employees. In 2016, Chesapeake Employers gave $750,000 to the Department of Health to be used for the state’s prescription drug monitoring program (PDMP), which allows prescribers and pharmacists to review opioid fills from all sources within the state. In 2017, Chesapeake Employers launched the STOPIOID addiction campaign via radio ads, safety kits and online safety posters to help educate Maryland about the dangers of opioid abuse and addiction. The Chesapeake Employers’ Communication Department won four awards from the Public Relations of America – Maryland Chapter, including “Best in Show” for our Let’s Work to Stop Opioid Addiction Now campaign in 2018.

See also: Access to Care, Return to Work in a Pandemic  

A final highlight was the 2019 rollout of the Opioid Overdose Response Naloxone (Narcan) training authorized by the Maryland Department of Health, which teaches employees and the public about opioids and overdose and provides materials and training to save lives. 

Chesapeake Employer’s Compound and Topical Strategy

As stated earlier, a costly effect of reduced opioid prescribing seen throughout the industry has been a proliferation of prescribing for topical and compounded pain medications. A recent analysis of Chesapeake data reveals hundreds of thousands of dollars, a larger share of annual drug expenditures, is spent on compounded or topical medications. Similar to trends seen in the industry, Chesapeake Employers’ has observed an increase in cost and use of these medications. Since 2016, pharmacy-dispensed topicals have increased from 2.8% of scripts to 4.4% and from 6.1% to 9.3% of total costs in 2019. This does not include costs for compounded medications and physician-office dispensed topical medications, which further inflate costs. 

Chesapeake Employers leverages a multi-disciplinary team approach when managing pharmacy cost and utilization. This includes the in-house pharmacist, physicians, nurses, claims and legal professionals. The goal is to facilitate rapid injured worker recovery by using cost-effective and therapeutically effective drugs and appropriate means. 

In 2011, Chesapeake Employers’ began researching and educating our claims and health services professionals on compounded medications. The research included documenting the available medical literature and outlining the circumstances under which the use and payment for a compounded medication may be considered reasonable. The research is updated periodically and peer-reviewed by an external independent medical expert.

Closed formulary states, such as Texas, Arizona and Tennessee, only cover drugs on the adopted Official Disability Guidelines (ODG) Workers’ Compensation Drug Formulary list. According to the NCCI’s June 2019 Research Brief Formulary Implementations and Initial Impacts on Workers Compensation, use of topical and compound drugs in Tennessee decreased 35% following the requirement of pre-authorization for all topicals and compound drugs, regardless of the ODG Formulary status. By contrast, Maryland is an open formulary state, which allows physicians to prescribe any medication available on the market. In an effort to address the use of costly topicals and compounds, Chesapeake Employers leverages established medical policy supported by evidence-based medicine and guidelines to help educate healthcare providers. Assessment of the topical’s therapeutic value becomes necessary in continuing its use with our injured workers. Research shared from the American Medical Association (AMA) Opioid Task Force, medical journals and the Federal Drug Administration’s Opioid Analgesic REMS Educational Blueprint shows healthcare providers are less likely to prescribe medication when educated about the risk, especially when guidance is supported by medical guidelines and continuing medical educational training focused on opioid prescribing, non-opioid alternatives and pain management. An educated prescriber provides another layer of protection to the process, because providers are asked to provide the rationale that supports medical necessity and appropriateness. 

In addition to discussions with providers, Chesapeake Employers has implemented other successful initiatives. The company partners with a local compounding pharmacy to meet the prescription needs of injured workers at a lower cost. The company also provides educational letters to prescribers for high-cost topicals for which there are therapeutically equivalent alternatives at a much lower cost. Some individual claim recommendations generate cost savings of greater than 85% without compromise of the desired clinical outcomes.


Educating patients, educating prescribers, using a multi-disciplinary team, enhancing data analysis and reporting, in addition to using peer reviews and independent medical evaluations (IMEs), offer a cohesive approach to evaluating the medical necessity and therapeutic effectiveness of compounds and topicals.

In the face of rising use and cost, insurance companies must help injured workers receive cost-effective and therapeutically effective drugs so they can receive the care they deserve and ultimately return to work and more productive lives. 

See also: Can AI Solve Health Insurance Fraud?  

However, there is still a lot of work to be done when it comes to taking care of our injured workers. It is strongly believed that healthcare professionals are conscious of prescription costs when they are educated about the cost ramifications of their prescribing habits. Greater awareness and transparency about topical pain medications results in better, informed patient care decisions. As Larry Winget said in his book “It’s Called Work for A Reason,” “Knowledge is not power. The implementation of that knowledge is power.”

When all parties involved in the workers’ compensation system understand the therapeutic equivalence, effectiveness and cost savings from using alternatives; and the importance of only prescribing drugs when it is medically necessary for the injured worker, everyone wins.

Impact of COVID-19 on Workers’ Comp

There is much discussion right now on the impact that COVID-19 (Coronavirus) will have on workers’ compensation. Most of this discussion has focused on the potential for claims activity arising from the virus. The determination of whether a communicable disease is “work-related” is a case-by-case evaluation. The large employers that I work with tend to retain risk on both their workers’ compensation and employee benefits programs. Thus, they are not concerned about which financial bucket the money comes from but are prioritizing caring for their workforce instead. Potential claims arising from COVID-19 are not the focus of this column. Instead, I’m looking at how the challenges arising from this virus will affect the workers’ compensation industry.

Individual Claims Costs

In the short term, expect the overall costs per workers’ compensation claim to rise due to the increased duration of claims caused by many factors: 

  • There will likely be delays in treatment as the healthcare industry focuses on fighting COVID-19. That means physicians, hospitals and testing facilities are tied up and that elective surgeries are on hold until this crisis passes. This challenge is not unique to workers’ compensation, as the group health and Medicare setting will be experiencing similar delays. 
  • Modified work will likely be unavailable for many employers, due to the significant downsizing of workforces in many industries, including retail, restaurant, hospitality and airlines.
  • Return to work in any capacity may be a challenge for these same industries. In wage-loss states, indemnity benefits often cannot be stopped without a return to work. 
  • Courts are mostly closed in many states, halting the workers’ compensation adjudication process. 
  • Outside job placement efforts through vocational rehabilitation will be almost impossible, with so many employers idled and a significant percentage of the workforce looking for work. 

Total Claims Costs 

Due to the significant decline in people working in most industries, there will be fewer new claims over the near term. With so many businesses closed or functioning with reduced operations, there are simply fewer opportunities for workplace injuries to occur. 

On the flip side, it is too early to tell what the ultimate impact of compensable virus claims will have on the industry. No one can rule out that the costs from these claims will be as high, or even higher, than what we would experience typically. Specific industries, such as healthcare, some retailers and occupations such as first responders, could see an increase in claims and costs due to the combination of virus-related exposures and the significant overtime hours by their workforce.

Nationally, there is a significant increase in the number of people working from home in response to the outbreak. There is very little case law out there regarding what constitutes a compensable claim when working at home. It will be interesting to see what claims arise from these situations and how courts around the country interpret these situations.

See also: How Coronavirus Is Cutting Connections  

A decrease in total claims may mean less revenue for industry vendors with fee-for-service and per-claim business models such as medical management providers, including utilization review, bill review and case management. Third-party administrators are also often on per-claim contracts, and fewer claims could mean less revenue for them.

Later this year, there could be a spike in claims as things start to return to normal. There will be a massive influx of workers who are both deconditioned and may have forgotten procedures and loss-prevention policies. It will be challenging for employers to ensure their returning workforce is fit for duty and retrained appropriately.

Other Claim Considerations

As many restaurants shift to a delivery-only model, employees who are not usually commercial drivers find themselves adapting to this new role. Could that lead to a spike in work-related auto accidents in that industry? Possibly, but a more significant concern may be that many businesses may not have adequate commercial auto coverage because they did not have drivers until now.

Also, as non-essential businesses close, and many companies shift to a work-from-home model, there should be fewer auto accidents overall.

Industry Financial Implications

The dramatic drop in payroll for many employers may also mean a reduction in the corresponding workers’ compensation premiums they pay. It’s relatively simple; fewer workers equals lower premiums. Look for overall industry premiums to drop sharply for 2020 compared with prior years. Lower premiums also mean lower revenue for state regulatory agencies that are often funded by premium taxes and assessments.

The insurance industry, in general, and workers’ compensation carriers, in particular, depend on investment income as an element in their overall pricing model. With the Fed interest rate at zero and the massive drop in the stock market, those investments will be down across the board. Carriers may have to charge higher rates to make up for the significant decline in investment income.

Like all industries, the workers’ compensation industry is dealing with significant business disruption because of COVID-19. Many offices have closed, and, where possible, companies are implementing work-from-home models. Companies that focused on business continuity planning for such situations have an advantage over competitors that may not have been as diligent in these areas. It is imperative that insurance companies be included as “essential businesses” in any state or local shut-down orders because of the important financial backstop the industry provides to the economy and the workforce in general.

Finally, almost all in-person industry conferences are canceled right now until mid-May and possibly longer, including two of the largest industry events of the year, RIMS and the NCCI Annual Issues Symposium. The conference business is a challenging one because it requires you to invest up-front to secure facilities and resources with the hope you will be able to recoup that investment with sponsorships and attendee fees. Conferences have incurred costs preparing for now-canceled events, and they may not be able to recover those costs. Those unrecouped costs could put a significant financial strain on some event budgets, especially the smaller events that tend to operate with no surplus to tap into year-to-year.

See also: Coronavirus: What Should Insurers Do?  

On a positive note, most workers’ compensation carriers have strong balance sheets that will enable them to come through these challenges. The current crisis is an example of a time when the financial strength rating of your carriers matters most. Injured workers will continue to receive their benefits, and carriers are being very responsive to policyholders, including timely payment of claims. Many claims administrators use electronic banking where allowed, which means even injured workers under confinement receive their benefits in a timely matter.

COVID-19 will affect the workers’ compensation industry well beyond claims related to the virus. However, our industry is strong and resilient, and we will persevere and adapt to these challenges.

What Robots Mean for Workers’ Comp

History provides interesting insights into the debate around automation and employment. In 1632, King Charles I of England banned casting of buckets, for fear that allowing it would ruin the livelihood of the craftsmen who were making the buckets the old-fashioned way. In 1811, the Luddites in England started a movement where they smashed machines that they viewed as threats to employment. These examples have occurred with increasing frequency since the industrial revolution began. Not coincidentally, the per capita income in the world doubled every 6,000 years prior to the revolution and every 50 years afterward.

According to a Pew study, 52% of Americans think that much of our work can be done by robots, but only 38% believe that it could replace the type of work that they do. Additionally, 76% of Americans believe that robots would increase the inequality between the rich and poor.

But standing in the way of change, when viewed through the lens of history, has rarely worked. The key is to focus on the dislocated individuals and provide training to make sure that they can move into new positions. Historically, new positions tend to be more highly compensated, fueling an upward cycle.

It is clear that the pace of change and automation is increasing. In January, the parent company of Giant, Martin’s and Stop & Shop said it would introduce 500 robots to its supermarkets this year. Sure enough, if you Google “Marty the Robot” – a large, grey cone with a bright smile and “googly” eyes — you will find out that he is hard at work at 40 Stop & Shop’s in New Jersey, finding and reporting spills in the aisles and calling for a mop.

It will be interesting to see what retailers follow suit. Walmart has given robots a thumbs up. Target? A thumbs down.

The pros and cons of automation are widely written about. The pros: eliminating mindless tasks, saving money on employee costs, having a safer working environment. The cons: reducing human contact with the customer, eliminating jobs for people who need then and decreasing flexibility in the workplace as automated tasks occur at programmed times.

See also: What’s Beyond Robotic Process Automation  

As providers of workers’ comp insurance, we are watching the rise of automation in the workplace closely. One of the ways we do this is to analyze actual claims that are submitted by our insureds, which are most often small to medium-size businesses. In the restaurant sector, we analyzed over 84,000 claims. and in the retail area we looked at more than 20,000.

One area where we are convinced automation could help reduce worker injuries is in coffee shops. Workers who operate espresso machines eight hours a day are reporting repetitive motion injuries akin to “tennis elbow.” In fact, so-called “Barista Wrist” is now a recognized medical condition. Our study of workers’ comp claims in the restaurant industry found that cafés had more lost time due to injuries than any other restaurant type. And the cause of the highest number of days needed to return to work in cafés – 366 days – was due to wrist injuries.

In a parallel from the retail sector, workers in hair salons are reporting hand, wrist and arm injuries from drying hair with a blow dryer, setting the stage for a new condition that could be called the “Brazilian Blow Out Arm.” Perhaps an innovative, automated “Robot Blow Out” could eliminate these repetitive motion injuries.

Among the most dangerous and expensive injuries in our retail analysis (which includes some wholesale) came from workers engaged in the preparation of meat, poultry and fish, which involves cutting hazards caused by sharp tools and machinery. The average paid claim for a worker who sustains a cut ranges from $4,200 – $7,800, depending on whether it was caused by a non- powered tool, by a powered tool or by being caught in or between machinery.

But once again, repetitive motion injuries in meat, fish and poultry preparation are by far the most expensive at $16,200 for the average paid claim. Clearly, this is an area where more automation would be helpful.

See also: How Robotics Will Transform Claims  

All of this gets us back to our original thesis that history has shown that automation is a net positive for workers which, over time, leads to people taking higher-paying jobs. Yes, jobs are eliminated, for sure. With machines, come risk and injuries, that’s undeniable. But it is also clear that robots will take over the mindless, thankless (and dangerous) jobs and likely lead to a workplace that is safer overall.

With all that said, there is one robot that I don’t want to see and that’s: “Matt, The Workers’ Comp Insurance Executive.”