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Cleaning up the comp mess and RM's image.

When it came to examining the workers' compensation industry, Susan Pardue did not mince words. "Workers' compensation is currently a mess," said Ms. Pardue, an attorney at the Charleston, South Carolina, law firm Nelson, Mullins, Riley & Scarborough.

Workers' compensation issues, both causes and cures, and the risk manager's awareness of career needs were key issues discussed during the recent 22nd Annual Southeastern Regional Conference sponsored by the Carolinas, Palmetto, Piedmont and Western Carolina chapters of RIMS.

Predicting no immediate end for the prolonged troubles facing workers' compensation programs, Ms. Pardue pegged escalating medical costs as key to the rise in workers' comp insurance premiums. Ms. Pardue suggested that a reason for these increasing figures was that "whenever the economic times get a little tough, people seem to get hurt a lot quicker. You can get hurt on the job and go home, drawing two-thirds of your wages. You can lose quite a bit of incentive going back to work unless you're taking a beating with the loss of one-third of your wages."

Contributing to the problems facing workers' comp are phony claims. Successfully fighting fraudulent claims can be achieved with video cameras, according to Steve Wall, director of national marketing for InPhoto Surveillance in Naperville, Illinois. Mr. Wall told conference attendees that some of his firm's best leads come when employees indulge in some good old-fashioned snitching on slacking colleagues.

"John, who's coming in and punching his ticket for nine hours, knows that Bill is out on a back claim," he said, painting a hypothetical situation. "However, last Saturday, he saw Bill carrying a cooler of beer. john doesn't feel good about that and he's going to come in and tell Bill's supervisor."

But if there are no company blabbermouths, how can a risk manager determine a fraudulent claim? "Take a look at the injury," Mr. Wall advised. "Does it coincide with a plant closing or the hunting season?" He added that an injured worker sporting a suntan or calloused hands has not been spending much time in the sickbed.

But before sending surveillance agents in pursuit of goof-offs, Mr. Wall warned risk managers to ask the surveillance firm for a copy of its professional liability coverage and a demonstration of its equipment.

Living Well

Despite the cases of fraudulent workers' comp claims, there are still a great many claims rooted in serious illness. How can a risk manager work to decrease the rising number of such claims? Colleen Moring, health promotion manager for Blue Cross/Blue Shield of South Carolina in Charleston, believes that emphasizing good health can help.

"We are a sick care society," she complained. "We get people healthy after they're sick." She noted that negative lifestyle behavior, like smoking, poor diet and heavy drinking, results in many illnesses.

The answer, according to Ms. Moring, is a seven-step approach beginning with the consumption of a proper breakfast which, she noted, was not the traditional southern breakfast most members of the conference enjoyed. "That sucker is a killer!" Ms. Moring warned. Other pro-health patterns recommended were seat belt use, regular exercise, not smoking, maintaining proper weight and drinking alcohol in moderation or not at all. She further warned against deceptive advertising for "light" snack foods, urging that such goodies as potato chips should be substituted by "big old hunks of vegetables."

What it Takes

The conference balanced its sessions on risk management as a practice with a discussion of risk management as a career. C.J. Spivey, a former president of RIMS and president of C.J. Spivey Associates Inc. in Charlotte, North Carolina, presented his definition of the functions and responsibilities for today's risk manager.

"There is a recognition that a risk manager and an insurance buyer are at almost extreme ends of the spectrum," Mr. Spivey said. He added that today's risk manager must have a good deal of financial knowledge beyond traditional insurance matters, including taxes and investing, and must keep abreast of current regulatory and legal issues, engineering practices and physical and electronic security operations.

"Most of all," he continued, "a risk manager should have an infinitely detailed knowledge of the inner and outer workings of his organization. More than any other person in the organization, the risk manager must know what's going on," he said. However, Mr. Spivey said, a strong memory is not the only requirement of a great risk manager. He described the ideal risk manager as one who seeks imaginative and innovative ways to approach issues and obstacles.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:workers' compensation; risk management
Author:Hall, Phil
Publication:Risk Management
Date:Dec 1, 1991
Previous Article:Ugly truths about insurance dilemmas.
Next Article:The other side of the 1992 rainbow.

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