PORTLAND PUBLIC SCHOOLS Portland, Oregon. Risk Management. Annual Report FISCAL YEAR

Transcription

1 PORTLAND PUBLIC SCHOOLS Portland, Oregon Risk Management Annual Report FISCAL YEAR

2 TABLE OF CONTENTS Letter from the Superintendent 1 Risk Management Staff 2 Overview 3 Services 4 Key Accomplishments 6 Self-Insured Liability Claims 7 Self-Insured Auto Claims 8 Student Injuries 9 Self-Insurance Savings 10 5-Year History 10 Property Losses 11 Workers Compensation 12 Benchmarking Risk Management Goals 17 Summary 18 The Portland Public Schools Risk Management Department is pleased to present our 2011 annual report. The report represents current data analysis of loss statistics for the school year. We hope this information will help Portland School Board members, district leaders and managers, employees and the community understand the depth of the Risk Management program and its value to the district. Our objective is to use the data in this report to shape future Risk Management services and programs in order to further mitigate risk at PPS. We appreciate our partnerships with Pinnacle Risk Management and Beecher Carlson Insurance Agency and the assistance they provided in helping prepare this report. Risk Management Department Portland Public Schools 501 North Dixon St. Portland, Oregon,

3 LETTER FROM THE SUPERINTENDENT The school year included a constructive community-wide conversation about the state of our school buildings. The bond measure to make upgrades at all of our schools failed by a narrow margin, but parents, community members and civic leaders alike are engaged in the conversation on next steps to create the learning environments we want for students. We also made a number of district-wide improvements to safety for our students and employees last year: 1. PPS received the nation s third-largest federal emergency management preparation grant focused on school districts and their community. We are using $658,000 over two years to fully train staff and equip each school to be able to respond to a range of emergencies, including communications with families during emergencies. 2. The district added managed occupational health care as part of our workers compensation program. 3. We provided web-based safety training to a broad spectrum of our employees on topics ranging from preventing slips, trips and falls, to safe storage of science lab chemicals. These efforts promote school safety and preparedness, which are essential for our students and staff to learn and thrive. I appreciate the leadership and collaboration of our Risk Management team in these initiatives. In this report, you will learn how the frequency and severity of claims on the PPS selfinsured programs compare to past years and to similar Oregon school districts. To learn more, visit Risk Management s website at I hope this report provides useful information to you about our efforts to promote the safest possible learning environments for our students, employees and volunteers. Carole Smith Superintendent, Portland Public Schools 1

4 RISK MANAGEMENT STAFF The Risk Management Department consists of five staff members with varied backgrounds in education, work experience and professional credentials that balance and complement one another. Risk Management employees work as a team and partner with all areas of the district as well as several companies and governmental entities. Our primary customer is each school s staff and students. Rachel Cunningham, ARM Assistant Risk Manager rcunning@pps.net Candy Snell, CDPM Workers Compensation Coordinator csnell@pps.net Philip March Senior Risk Specialist pmarch@pps.net Carol Wilks Clerk III Last school year the Risk Management Department provided web-based safety training to more than 1,750 of our employees who sucessfully completed nearly 2,000 classes on such topics as preventing slips, trips and falls, bullying, and safe storage of science lab chemicals. Our goal is to prevent on-the-job injuries at Portland Public Schools. Preventing injuries to our staff is our most successful approach to controlling our workers compensation costs. In addition, we provided in-person consultation and encouragement to 23 schools regarding safety committee best practices. These committees are made up of a cross-section of our work force and act as the schools safety-oriented eyes and ears. As our superintendent noted in her greeting, these efforts are important steps in influencing and improving the safety culture throughout the school district. With the district leadership s support, we plan to continue our vigorous efforts to make Portland Public Schools work and learning environments as safe as possible. I m very proud of our schools efforts this past year to promote health and safety and their willingness to work in partnership with Risk Management in these endeavors. Thank you for reading, sharing and discussing this report on the state of risk management in PPS. If you have questions or want to discuss issues of particular interest, I encourage you to contact me or visit our website. Benson M. Meyers, MPA Director of Risk Management bmeyers@pps.net 2

5 OVERVIEW The Risk Management Department s mission is to foster a safe environment for students, staff and the community. Specifically, the department is responsible for the management and administration of the district s workers compensation, liability, property and auto insurance programs. This includes informing prospective insurance carriers about the district s safety programs and purchasing excess insurance policies, administering claims, developing policies and procedures, evaluating contractual risk, mitigating loss and supporting schools. Other key aspects of Risk Management include claims administration, loss prevention and risk financing. The department is responsible for financing the district s self-insurance program and controlling the cost of risk. The school district self-insures and self-administers its liability, property and auto claims. Workers compensation claims are self-insured and administered by a third-party administrator (TPA) through a contract. In fiscal year , the self-insured retention was $1 million for each line of coverage. The school district purchases excess coverage for claims that may reach more than $1 million. In all areas, the Risk Management Department strives to provide excellent customer service while achieving significant savings to the district. 3

6 SERVICES Risk Management staff services to Portland Public Schools GENERAL Provide leadership, assistance and support to schools and operations on risk assessment, loss control and insurancerelated matters and contracts management in order to foster a secure and productive learning and work environment. Purchase and administer general/auto liability, property, workers compensation and other excess insurance policies and bonds. Attend school health and safety inspections and safety committee meetings to assist with current risk issues and train staff on best practice operations. LIABILITY, AUTO & PROPERTY INSURANCE Manage and administer self-insured liability, auto and property claims including tort claims, burglary and fire claims, district facilities and vehicle liability, crime-related losses and professional/general liability exposures. Develop, implement and train staff for online student accident reporting. Analyze and recommend student insurance options. Assist in the assessment of ongoing risks of transporting students and develop policies and procedures. Review and approve field trip requests and provide guidance to schools. Negotiate recovery of funds for all aspects of the self-insured program, including third-party insurance companies, the Multnomah County District Attorney s Office and juvenile mediation. Review contracts for insurance requirements and indemnification agreements. Develop and evaluate statistical reports to assess progress and conditions of Portland Public Schools risk exposure. Provide internal consulting services for school and operations staff on loss control, liability exposures and policy development. 4

7 SERVICES WORKERS COMPENSATION INSURANCE Administer a self-insured workers compensation program and coordinate claims in collaboration with a third-party administrator. Lead, develop and implement, in partnership with the Human Resources Department, an early return-to-work program. Provide assistance and support to injured workers. Actively participate in the state s Employee at Injury Program (EAIP) and Preferred Worker program. Comply with OSHA (Occupational Safety and Health Administration) regulations, and maintain OSHA reporting logs. SAFETY AND LOSS PREVENTION Coordinate with the Facilities and Asset Management (FAM) and Security departments to implement loss control and prevention measures throughout the district. Contract with a vendor to provide web-based safety training to teachers, para-educators, school administrators, campus monitors, custodians, maintenance staff and Nutrition Services workers. Consult with and train school safety committees on how to meet best practices and comply with external regulations. Develop and implement Administrative Directives to improve existing safety protocols. Write and publish safety bulletins for staff. Manage health and safety funds and allocations to mitigate hazardous conditions. Assist FAM in conducting facility health and safety inspections. Support the district s school crossing guard program. Conduct accident/safety investigations. Administer an ergonomic assistance program. EMERGENCY MANAGEMENT Provide leadership and coordination with other departments and senior management to enhance current practices. Participate on the district s Incident Command leadership team. 5

8 KEY ACCOMPLISHMENTS The Risk Management staff is proud of the following significant accomplishments in : Expanded return-to-work options for injured employees into a variety of our schools, further benefiting injured teachers and para-educators. Expanded the district s comprehensive workers compensation program to include specialized occupational health treatment options via contracts with managed care organizations. Retained a workers compensation third-party administrator to manage the district s claims. Reduced the frequency of on-the-job injuries by 11% compared to the previous year. Secured $212,000 in support of work station safety through the state s Employer at Injury Program (EAIP) and Preferred Worker program. Appropriated $60,000 to address the safety features of 13 school buildings and their equipment. Led and paid for the implementation of a web-based safety training program throughout the district involving: teachers, para-educators, maintenance staff, custodians, Nutrition Services workers and school administrators. Provided best-practice safety consultations to 23 school safety committees and to the Nutrition Services, Maintenance, Transportation and administrative departments. Upgraded the district s Risk Management Liability Information System. Developed an online reporting tool for staff to report property losses to Risk Management, Security Services and Information Technology simultaneously. Partnered with Student Transportation Services and Athletics to create and implement a Service Level Agreement to ensure Oregon Department of Education compliance and reduce the district s transportation liability. Assissted in the coordination and distribution of materials for the state Healthy Kids Program insurance initiative. Developed a document tracking system for certificates of insurance and employee auto insurance. 6

9 SELF-INSURED LIABILITY CLAIMS NUMBER OF LIABILITY CLAIMS PPS is self-insured for liability loss exposures up to $1 million and purchases excess liability insurance. The district maintains a risk management fund to pay expenses relating to self-insured claims. The liability program consists of both bodily and personal injury to students, visitors and members of the community. Claims can range from tort liability to employment wrongful acts. The number of annual liability claims has decreased steadily since In addition to the annual reduction in claims, there are no liability claims currently in litigation, which significantly decreases the cost of being self-insured. In , the cost of liability claims was dramatically reduced. These reductions in frequency and severity of claims are a product of timely and accurate claims investigations, research and development of district procedures to reduce risk, and direct consultation to schools and employees to mitigate future claims $300,000 $250,000 $200,000 $150,000 $100, DOLLAR AMOUNT OF LIABILITY CLAIMS $78, $285,832 $255, $128, $50,000 $0 $15,

10 SELF-INSURED AUTO CLAIMS NUMBER OF AUTO CLAIMS PPS is self-insured for auto loss exposures up to $1 million per occurrence and purchases an excess policy. The school district insured 328 vehicles in The district s fleet consists of school buses, maintenance, Nutrition Services and warehouse vehicles. The number of auto accidents in decreased by 33% when compared to prior years In , the district put 19 vehicles into service at high schools to transport students to athletic events. The athletic transportation program s expectations and requirements are codified in a service agreement between the Athletics and Student Transportation departments. This agreement promoted a positive change and fosters best practices for both student and transportation safety. The increase in the costs of auto claims last year is attributed to a few severe accidents. 0 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $ DOLLAR AMOUNT OF AUTO CLAIMS $68,813 $63,893 $59,929 $57,494 $55,

11 STUDENT INJURIES STUDENT INJURIES BY ACTIVITY Student injuries in totaled 1,109, which is comparable to the previous year. School building staff records each student injury incident. Risk Management analyzes incidents and works with principals, teachers, school secretaries and safety committees to reduce student injuries. The statistics for student injuries by type of activity and body part are consistent with previous years. Most injuries occur on the playground or in the classroom. 18% 35% 1% 3% 17% 17% 8% 1% Classroom Field Trip Lunch/Cafeteria PE Playground Other Shop Athletics PERCENT OF STUDENT INJURIES BY BODY PART 35% 32% 30% 25% 20% 15% 10% 5% 0% 4% 6% 5% 6% 4% 3% 2% Ankle Arm Back Elbow Eye Finger Hand Head Mouth/ Teeth 8% 5% 3% 1% 3% Knee Nose Shoulder Waist 9

12 INSURANCE VS. SELF-INSURANCE COMPARISON OF FULLY INSURED TO SELF-INSURED The cost comparison figures in this chart illustrate the difference in the district s cost of risk if it purchased first-party insurance compared to being self-insured. This analysis includes all Risk Management expenses including staffing, materials and supplies, all claims, legal fees and insurance. Self-insurance saved PPS nearly one million dollars in Such savings are realized because we can bypass high insurance premiums and insurance company overhead. Additional savings are achieved by directly controlling the cost of claims and safety programs. $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 $5,332,369 Insurance $4,336,720 Self-Insurance IN , SELF-INSURANCE SAVED PORTLAND PUBLIC SCHOOLS $995, YEAR HISTORY During the latest five-year cycle, PPS has cultivated stability of rates and catastrophic limits through its selection and partnership with our insurance broker and excess insurance companies. Risk Management continually analyzes carrier options to maximize coverage for the best value available. The district s effort to mitigate hazardous conditions, self-insure a portion of its risk, and improve safety features has directly affected its ability to purchase excess insurance protection. Insurance rates have been relatively flat in recent years, although we are seeing signs of restricted property capacity and increasing rate trends by major property carriers as a result of worldwide 2011 catastrophic losses. 10

13 PROPERTY LOSSES The property program consists of insuring 110 property sites valued at approximately $1.7 billion. Insurance covers property damaged by earthquake, fire, water damage, storms and burglary claims. In comparison to the previous five years, saw a significant decrease in the number of property claims. The previous year reflects large losses due to fire and storm damage claims, which did not occur in A significant percentage of property claims came from burglary incidents, with technology products the primary target. In a direct effort to respond as quickly as possible to technology losses, Risk Management worked with the Information Technology and Security Services departments to develop an online reporting tool. This tool simultaneously reports property losses to the three operations departments, which ensures that stolen property can be identified, recovered and/or replaced quickly. NUMBER OF PROPERTY CLAIMS (EXCLUDING BURGLARY) DOLLAR AMOUNT OF PROPERTY CLAIMS (EXCLUDING BURGLARY) $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 $83,065 $195,434 $302,199 $4,589,432 $112, NUMBER OF BURGLARY CLAIMS DOLLAR AMOUNT OF BURGLARY CLAIMS $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 $198,521 $151,860 $48,522 $108,842 $42,

14 WORKERS COMPENSATION Workers compensation insurance provides coverage for medical expenses and lost wages for employees who sustain on-the-job injuries or illnesses. Oregon employers must carry workers compensation insurance or be selfinsured. PPS is self-insured up to $1 million per claim and carries an excess policy. A thirdparty administrator (TPA) manages the workers compensation claims in collaboration with the Risk Management Department and external legal counsel. Risk Management, in collaboration with the Human Resources Department, coordinates a comprehensive workers compensation program including regular claims analysis and a districtwide return-to-work program. Last year, for the first time in Portland Public Schools, Risk Management provided a webbased safety prevention training program in which 1,750 employees successfully participated. In addition, the district introduced managed care organizations that provide occupational health care for employees hurt on the job with the objectives of providing specialized care and reducing the cost of claims. The top chart indicates that the frequency of workers compensation claims decreased by 13% compared to the prior year. However, the lower chart reveals that the severity of these claims increased by 13% as compared to the previous year. This is attributed to increased medical expenses. WORKERS COMPENSATION CLAIMS $ 3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000, Medical Only Time Loss DOLLAR AMOUNT OF WORKERS COMPENSATION CLAIMS $500,000 $0 $1,253,361 $2,591,584 $1,858,625 $1,683,021 $1,944,

15 WORKERS COMPENSATION CLAIMS BY BODY PART CLAIMS BY TYPE OF INJURY Back Knee Head Arm Finger Shoulder Foot Hand Average Claims Cost Back $3,210 Knee $12,229 Head $4,111 0 Strains Slip/Fall Struck Average Claims Cost Strains $6,664 Slip/Fall $8,246 Struck $2,127 Cut/Puncture/Scrape $1,512 Assault/Altercation $2,794 Cut/Puncture Scrape Assault/Altercation CLAIMS BY OCCUPATION CLAIMS BY SCHOOL TYPE Teachers Custodial Para Educators Ed Assistants Cafeteria Workmen PK PK BESC Transportation/ other Average Claims Cost Teachers $5,096 Custodial $6,845 Para Educators $8,837 Ed Assistants $2,458 Cafeteria $2,373 Workmen $15,190 Note: Teachers represent 48% of the district s work force. Custodians are 5% and Para Educators are 9% of the work force. 13

16 WORKERS COMPENSATION Insurance Premium and Experience Modification Rating Factor In Oregon, companies workers compensation insurance premiums are linked to their loss experience based on an experience rating. Understanding the experience modification rate (mod rate) and monitoring it regularly are key in reducing workers compensation costs. The mod rate is also a measure of how loss prevention and control practices compare to others in similar industries. More simply, the mod rate compares PPS workers compensation claims experience to other employers of similar size in the same type of business. The mod rate is directly correlated to how much PPS pays in workers compensation premiums. Each year PPS reports payroll and class codes for work groups (teachers, support staff, custodial, Nutrition Services, maintenance, warehouse labor and Student Transportation). The National Council on Compensation Insurance calculates the payroll and losses for a three-year period and compares our payroll and loss experience to the industry average losses for like businesses of similar size. If PPS is at the industry average, the rate is 1.0. If experience is better than the average, the rate is less than 1.0. If the rate is greater than 1.0, employers pay premium in excess of the industry average. Workers Compensation Savings Efforts Under Way to Reduce Workers Compensation Costs PPS EXPERIENCE MOD RATE HISTORY FY FY FY FY FY Return-to-Work In , Risk Management and Human Resources continued to refine a transitional return-to-work program begun in Transitional work is temporary work assigned to an employee who cannot perform regular duties because of medical restrictions and/or limitations. Last year 47 employees were placed in transitional light duty tasks. In addition, the Risk Management Department continued to apply for financial incentives that the Oregon Workers Compensation Division provides to employers to return injured employees to transitional work. In the department applied for and received $212,000 through the Employer at Injury Program and the Preferred Worker program. Medical Bill Audits In , PPS averaged a 34% savings on medical bills from medical fee schedule audits conducted by the State Workers Compensation Division. Quarterly Case Reviews All open claims are reviewed to develop strategies for closure and cost reduction. 14

17 WORKERS COMPENSATION Review of Defense Legal Costs Staff conducts monthly reviews of legal defense strategies with the general counsel. Safety Committee Focus Risk Management consults with operations departments and schools in implementing and administering safety committees. Investment in Safety Equipment Risk Management advises the district to make investments in safety equipment for departments and schools where necessary and affordable. Early Return-to-Work Wage Subsidy The State of Oregon reimburses up to half of the salary for injured employees who are able to return to modified jobs. Risk Management staff aggressively seeks such wage subsidy reimbursement when appropriate. Managed Care Organizations In , Risk Management implemented contracts with Providence and Kaiser occupational health systems to provide specialized occupational health treatment through their managed care programs. 15

18 BENCHMARKING Beecher Carlson, PPS insurance broker, benchmarked the dollar amount of claims per 1,000 students and the number of claims per student, as well as the dollar amount of claims per employee and the number of claims per employee. $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 LIABILITY/AUTO CLAIMS COST PER 1,000 STUDENTs $4.78 $4.49 $16.97 $13.54 $6.18 $7.93 PPS SD A SD B SD C SD D SD E 5-year average of dollar amount of claims of NUMBER OF LIABILITY/AUTO CLAIMS PER 1,000 STUDENTS PPS SD A SD B SD C SD D SD E 5-year average frequency of claims of some While the number of claims per 1,000 students in PPS is comparable to other districts, the cost of those claims is low relative to other districts. WORKERS COMPENSATION CLAIMS COST PER 1,000 EMPLOYEES NUMBER OF WORKERS COMPENSATION CLAIMS PER 1,000 EMPLOYEES $400 $350 $300 $250 $200 $150 $100 $50 $0 $351 $250 $192 $273 $256 PPS SD 1 SD 2 SD 3 SD 4 5-year average of dollar amount of claims of PPS SD 1 SD 2 SD 3 SD 4 5-year average frequency of claims of some PPS number of claims per 1,000 employees and the cost of those claims are high relative to other districts. 16

19 RISK MANAGEMENT GOALS Provide best-practice safety consultation to a minimum of 21 school safety committees and 10 additional principals. Complete an analysis of the district s self-insured retention amounts. Reduce workers compensation and liability aggregate legal fees by a minimum of 5% compared to the previous year. Develop a resource for students and families on the Risk Management website. Update the medical procedures Administrative Directive in coordination with the Student Services Department and health and safety services. Identify property owned by PPS and the responsible insuring party with respect to private schools and insurance coverage for damaged or stolen Information Technology equipment. Introduce options to FAM and the general counsel for Civic Use of Building permit holders to purchase a Tenant User Liability Policy. Develop a system with Payroll to track payment for substitutes of light-duty workers. Develop a system with the Budget Department to track EAIP/Preferred Worker revenue. Prepare materials for principals, secretaries, field operations supervisors, special education and other groups on current workers compensation procedures. Coordinate and complete an occupational equipment ergonomics assessment focused on custodians, maintenance and Nutrition Services workers. Review certificate of insurance and endorsement best-practice procedures and make improvements where necessary. Assist in the procuction of a fleet management policy for leadership s review and implementation consideration. Update the liabilities procedures manual. Complete six safety e-bulletins throughout the school year on timely topics. Increase school custodian knowledge of safety/hazard issues as evidenced by a reduction in observed hazardous conditions during site safety surveys. 17

20 SUMMARY Following are key Risk Management Department highlights for The department financially supported efforts to protect district employees from injury and/or exposure to harmful conditions by offering web-based safety training to our school-based administrators, teachers, most paraprofessionals, custodians, maintenance staff and Nutrition Services workers. The district secured $212,000 from the state s Employer at Injury Program and Preferred Worker workers compensation return-to-work programs. This was a 25 percent increase from The district saved nearly $1 million by self-insuring and effectively administering and managing its overall claims and risks. The frequency of liability claims against the district went down by 35 percent compared to , and the severity of those claims, as measured by dollars spent, was reduced by nearly 90 percent. Auto claims frequency decreased by 33 percent compared to the year before; however, their severity increased in cost by 19 percent. Property claims frequency lowered by 58 percent compared to , and the associated severity was dramatically lower (98 percent). The striking decrease was due to the severity of the Marysville K-8 School fire in Burglary claims frequency was lower by 40 percent, and the severity also reduced by 61 percent compared to the previous year. The department adopted goals for that continue its overall improvement strategies. The frequency and severity of the district s workers compensation claims continued to be higher than the other large school districts across the state. Thirty-five percent of all reported student injuries occurred in playground activities, comparable to previous years. As in previous years, PPS had a comparable number of claims per 1,000 students to other Oregon large school districts. However, the cost of PPS claims involving students was significantly lower than most other districts in Oregon. In summary, Risk Management continues to develop a cost-efficient insurance program that provides appropriate financial protection in the event of a loss. It is always our goal to understand the types of activities that might increase the exposure to losses through the district s work and mitigate the risk wherever possible. 18