The world according to Zachry.

I had the pleasure of chatting recently with Bill Zachry, senior fellow at the Sedgwick Institute. You can find him on Twitter @wzachry. He is a trusted industry colleague and I am grateful to call him my friend.

Many of you know that one of Bill’s hobbies is photography and he is quite good at it. I love seeing the world through his lens. I also love his approach to workers’ compensation. It is firmly entrenched in the belief system…”If we do the right thing [in workers’ compensation], everyone wins.” He should know. He has the experience and the achievements as a risk manager at Safeway / Albertsons to prove it.

He spent 15 years as vice president of risk management for Safeway / Albertsons. He was introduced to workers’ compensation early in his career when he was stabbed on the job while working at a park in Daly City, CA. In case you missed his People’s Choice presentation at last year’s Comp Laude Awards & Gala,” it is worth watching. Even if you know him, you may learn a few things you didn’t already know.

The reason for our chat is that I reached out to pick his brain about industry topics. As a marketing consultant who is involved in many facets of events and event planning in our industry, I’m always thinking about what topics people consider to be important. I spend a great deal of time listening to many industry thought leaders who present at conferences, seminars, webinars, etc.

Here is a summary of our chat…

Q. Thanks for spending some time with me today Bill. Always good to hear what you have to say. As a thought leader in our industry, what do you think is lacking or missing from the conversation? What are are we not talking about, or not talking about enough?

A. I think cyber security as a comp issue is something we are not talking about enough. When I was still a risk manager, I saw Greg Case, CEO of AON talking about how there is over a trillion dollars of cyber losses and only $4 million of cyber insurance to cover it. I think this is an important issue and one that should be discussed and studied in detail. For example, on the dark web, medical records are sold for $1,200 each while credit cards go for $1.50. I think that is something we should be talking about more often and we are not.

Q. Wow. That is really thought-provoking. In doing a preliminary search about the dark web, I don’t think I want to go there. Scary stuff. Are there any other topics can you think of?

A. While artificial intelligence is talked about more and more these days, we need to be talking about AI and how it will bring changes to the claims administration process and the delivery of benefits.

Also, permanent disability and the fact that the industry lacks a standard definition of what that is. There are several different guides or guidelines related to permanent impairment, but there is no industry standard. There is no high-level perspective of this, what it is and what it really means, e.g. if you are a 56 year old female machine operator who loses her thumb in a work accident, the amount of your disability should be the same as any other 56 y.o. machine operator. Yet that is not the way it is. That’s why we have so much litigation. People often feel like they are being cheated, or that someone else somewhere else is getting more than they are. Consistency of applications is lacking and there is a serious problem in the big picture of things.

And then there is the gig economy and issues related to employment / non-employmentor independent contractors. Read this article that lays out the specific issue Lyft is facing.

Q. Great ideas Bill. What else are we, as an industry, not talking about or need to talk about more in terms of workers’ compensation issues?

A. Two things: first, apportionment. I have spent my entire career fighting over apportionment. The problem with apportionment is that no one has the data on how much money is saved on apportionment or permanent disability and therefore no one has any idea about how much money is being spent and what is getting fixed. Let me illustrate an example. A person loses a finger when they are in their twenties handling fireworks. Then when that same person is in their thirties, they lose their entire hand (same hand that lost a finger 10 years prior) in a legitimate industrial accident. The insurer does not feel they should cover the entire hand due to the fact that the finger was lost in an earlier accident that was not related to the industrial accident. Here are some examples on California WCAB rulings related to apportionment.

And second is cost shifting. Throughout my career as a risk manager, I have spent millions of dollars trying to figure out if injuries are industrial or not and to figure out if there is fraud. I’ve spoken to hundreds of people who claim they did not report an injury because they simply didn’t want to deal with the stigma of filing a workers’ comp claim. There is no study (that I know of) that focus on these issues:

• % of legitimate injuries that never get filed
• what % of claims legitimately belong in group health

The bottom line is that this is a function of the claims examiners’ job, yet no one measures the quality of their achievements to this end. It is absolutely something we should be doing more of as an industry. There are significant friction points in the system we need to fix and we should be discussing them more often.

In closing, as we head into Easter weekend, it has been a week teeming with unpleasant news. We all watched in horror as the news unfolded about the destruction by fire of historic Notre Dame cathedral. Here are some photos that Bill shared from recent trips to France and to Notre Dame.

Take a moment to review all the photos. They are amazing and as I said earlier, I love to see the world through Bill’s eyes. And since I have not yet made a trip to Europe, I am really grateful to have friends like Bill who have captured these images…what do you think?

Bill’s photos are from his 2015 trip to France:

More recent photos from a 2017 trip to France with photos of the Notre Dame cathedral:

Thank you Bill! As usual, you are a wealth of information and ideas. My wheels are spinning and I appreciate your time very much. Happy Easter!