Risk Management Loss Control

Metrics That Matter

Jason Bible, MSM, ARM, CHMM

Risk ManagerThe University of Texas Health Science Center at Houston

1851 Crosspoint Drive, OCB 1.330Houston, Texas 77054

(713) 500-8100

Jason.p.Bible@uth.tmc.edu

Colleges & Universities as Worksettings

Very unique places of work due to the potential for simultaneous exposures to all four hazards types Physical Chemical Biological Radiological

And a diverse “population at risk” Students, faculty, staff, visitors, others

Training Gap

• There are over 4,700 colleges and universities in the U.S.

• Interestingly, none the loss control professionals who serve them were formally trained on how universities operate

• This lack of understanding results in a lot of frustration and confusion

• Enhanced understanding can improve services and support

Objectives

• To begin to articulate the risk control needs of an institution, we first must understand its characteristics

• To accomplish this, we need some basic descriptive institutional data such as…

Institutional Measures

How big is your campus?

How is size measured?

What measures are important (e.g. resonate with resource providers?)

What risks are present?

How are these risks managed?

Are these risks real or hypothetical?

How might you determine that?

How does management determine that?

Loss Prevention Measures

How many staff? In your opinion, are you

over or understaffed? How would you know? How would others know? How are you performing? Within the context of the

mission of your institution, is your program viewed as hindering or helping?

How is your program’s performance measured?

In your opinion, are these measures true indicators of performance?

What do the clients served really think of your program?

Do clients feel there are real (or perceived) loss prevention program duplications of effort?

Loss Prevention Staffing

An age old question: how many EH&S (or loss prevention) staff should I have?

Perhaps an equally important question is: what can we realistically hope to obtain from a benchmarking exercise involving staffing metrics?

At best, we can likely only achieve a reasonable estimation of “industry averages”, such as number of EH&S FTE’s for an institution exhibiting certain characteristics

Sampling of Possible Staffing Predictors and Influencing Factors

Quantifiable Institution size Number of labs Level of funding Population Geographic location Deferred

maintenance Public/private Medical/Vet schools Disjunct campus

Non-quantifiable Regulatory history &

scrutiny Tolerance of risk by

leadership Level of trust/faith in

program Ability of EH&S program

to articulate needs

Desirable Characteristics of Predictors for Benchmarking

Consistently quantifiable Uniformly defined by a recognized authority Easily obtained Meaningful and relevant to decision makers

(provides necessary context)

Consider something as simple as the definition of “number of EH&S staff”

Suggested Definition

“EH&S Staff”: technical, managerial, and directorial staff that support the EH&S function Suggest including administrative staff, but it probably

doesn’t make a big difference

Can include staff outside the EH&S unit, but must devote half time or greater to institutional safety function (0.5 FTE) Example

Safety person in another department Student workers (>0.5 FTE)

Contractors included only if on-site time is half time or greater (0.5 FTE) Example –

contract lab survey techs, yes if >0.5 FTE Fire detection testing contractors, likely no.

Preliminary Results

Findings indicated that Total NASF and Lab NASF are the most favorable (statistically significant) and pragmatic predictors

On a two dimensional graph, we can only show 2 parameters, but the relationship between sq ft and staffing is clear.

Number of EHS FTE vs. Total NASF

0

10

20

30

40

50

60

70

80

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000

Total NASF

Num

ber o

f FTE

Predictability of Various Models (based on n = 69)

Total campus sq ft

Lab + non-lab sq ft

ln (total campus sq ft)

ln (lab) + ln (non lab sq ft)

Med/vet school

General “others” category

BSL3 or impending BSL4

R Squared Value

X 47.69

X 50.46

x 64.90

X 71.10

x x 78.19

x x x 78.41

x x x 80.05

# EH&S FTE# EH&S FTE = e = e [(0.516*School) + (0.357*ln (Lab NASF)) + (0.398*ln (Nonlab NASF)) + (0.371*BSL)] - 8.618][(0.516*School) + (0.357*ln (Lab NASF)) + (0.398*ln (Nonlab NASF)) + (0.371*BSL)] - 8.618]

Definitions for predictor variables:

Lab NASF: the number of lab net assignable square footage

Nonlab NASF: the number of non-lab net assigned square footage (usually obtained by subtracting lab from gross)

School: defined as whether your institution has a medical school as listed by the AAMC or a veterinary school as listed by the AAVMC; 0 means no, 1 means yes

BSL: this variable indicates if the institution has a BSL3 or BSL4 facility; 0 means no, 1 means yes

Current Metrics ModelCurrent Metrics Model

RR22 value based on 69 observations = 80% value based on 69 observations = 80%

Staffing Predictors The data from 69 institutions from across the country indicate that

four variables can account for 80% of the variability in EH&S staffing:

Non lab net assignable square footage Lab net assignable square footage Presence of Medical or Vet School Existence of BSL-3 operations

These predictors important because they are recognized and understood by those outside the risk control profession

With the collection of more data, the precision of the model could likely be improved to the benefit of the entire profession

Caveat

Note: even an estimate for the number of EH&S staff doesn’t give us any indication about their proficiency and effectiveness

So what should we be measuring in loss prevention?

And how should we communicate what loss prevention does?

Why Metrics?

“When you measure what you are speaking about, and express it in numbers, you know something about it; But when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.”

- William Thomson, Lord Kelvin

Note; Kelvin also said man wouldn’t fly

Metrics

What measures?

What units?

How often to collect the data?

How to communicate the information?

Measures versus Metrics

A metric is a unit of measurement that objectively quantifies an organization’s performance

- What’s measured gets managed

What Measures?

Compliance

External

Internal

Client Satisfaction

External

Internal

Losses

Personnel

Property

Financial

Expenditures

Revenues

Measurements as Indicators

Output - workloadnumber of individuals trainedsurveys or inspections completedviolations assessed

Outcomes – does the program achieve its desired resultsis safety training or inspections effective in reducing injury or illnesses

What Units?

• $ (Cost)

• Square feet

• Time

• Number of events

Fire & Occupational Safety

Individuals trained

Number of inspections

Deficiencies identified and resolved

Incident response

Plan reviews

Risk Management & Insurance Program

Number of first reports of injuryby population typeby locationby cause

Equipment floater lossesother retained losses

Fleet descriptionCertificates of insurance issues

FY07 Property Losses

Losses incurred but covered by UTS Comprehensive Property Protection Program

MSB sprinkler loss total of $460,000

Currently pursuing subrogation to at fault contractor, $250,000 retained by deductible

Losses incurred but covered by 3rd party

RRF Fire $10-$14 Million

Potential retention of $1-$3M

Retained losses

Water leak in MSI $210,000

Theft total $65,000 (predominantly laptops)

Electrical power disruption no implicated in any losses

Other losses $65,000

Fire1%

Burglary<1%

Environmental <1%

Water Related88%

Theft 10%

Criminal Mischief1%

*Not inclusive of any recorded Capitol Assets inventory irregularities. For additional information contact UTHSC-H Capitol Assets Management

Retained Property Loss by Peril( Total $645,895)*

Help Avoid the 3 Main Causes of Property Loss at UTHSC-H

The three main causes of property loss at UTHSC-H in FY06 were water leaks, theft, and electrical power interruption. These three perils resulted in over $331,000 in direct loss and untold disruption to teaching, research, and service activities. The deductible for the UTS Comprehensive Property Protection Program is $250,000 per occurrence, in FY06 none of the losses exceeded the per occurrence deductible, however the sum of retained losses exceeded the deductible by $140,000. In special cases additional insurance can be purchased*. Summarized below are simple steps that can be taken to avoid such losses.

Potential For Loss Simple Prevention Measures For more information and assistance

Water DamageWater damage accounted for $221,000 of loss in FY06. Water can enter a lab or office from the same floor or from the floor above.

Move equipment off of the floor and cover when not in use. Evaluate possible purchase of supplemental insurance for certain types of equipment*

Contact Facilities Planning and Engineering for more information, (713)500-3498.

TheftTheft accounted for $90,114 of loss in FY06, the majority of which were theft of laptops, PDAs and cell phones.

Secure laptops, PDA’s, or cellular phones. Always backup data and keep it in a physically separate location. For more information about how to lock a PC or laptop: http://www.uth.tmc.edu/med/msit/howdoi/physical_security.htmEvaluate possible purchase of supplemental insurance for certain types of equipment*

Contact University of Texas Police Department for more information, (713)794-4357.

Electrical Power InterruptionElectrical power disruption accounted for $20,000 worth direct losses in FY06. However this is not reflective of the loss of priceless research specimens.

Ensure that all critical equipment has backup power or has the ability to alert local personnel when power or temperature is disrupted. The production of duplicate or split samples is encouraged. Finally, some buildings are equipped with the necessary infrastructure to provide monitoring of temperature.

Contact Facilities Planning and Engineering for more information, (713)500-3498.

*Information about the purchase of additional insurance can be obtained by contacting Risk Management; 713-500-8100.

Annual Property and Workforce Insurance Premiums, by Policy Type, with Proportion That Might be Potentially Influenced by EH&S Efforts (based on

FY08 data)

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$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

*Property EmployeeWC

ResidentWC

Fleet EquipmentFloater

An

nu

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rem

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Portion possibly influenced by EH&S activities

Portion driven by size, construction type, and physical location

Portion driven by injury frequency and severity

Portion driven by payroll and head count

Portion driven by loss frequency and severity

Portion driven by asset value

*Does not include f lood premium on all buildings

CPPP PAM Elements That Might Be Readily Influenced By EH&S Operations

Fire System Supervision

10%

Construction Classification

10%

Occupancy Classification

10%

Fire Department Response

5%

Emergency Planning5%

Building Size15%

Fire Sprinklers15%

Exposure5%

Water Supply10%

Campus Management

Programs15%

Annual Employee Census

01,000

2,0003,0004,000

5,000

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

UTHSC-H Employee Injury Reports and Workers’ Compensation Insurance Premium Trends, FY01 to 08Note: insurance premium influenced predominantly by market conditions, employee census, employee payroll, and injury frequency and severity

Total Number of First Reports of Injury and Subset of Compensible Claims Submitted to UT System

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200

400

600

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

Oversight by SHERM

Annual Employee Payroll in Thousands of Dollars

$0

$100,000

$200,000

$300,000

$400,000

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

Annual Policy Premium

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

$560,000 in overall premium reduction since FY04

87 fewer reported injuries from previous year

49 fewer injuries requiring medical care

No Care or Lost Time (18% response rate)

Care But No Lost Time (57% response rate)

Supervisors (13% response rate)

Was this the first time you have reported an injury or exposure at UTHSC-H? 67%(Y) 33%(N) 62%(Y) 38%(N) 37%(Y) 63%(N)

Prior to the reported injury event, were you aware of your obligation to report any injury or exposure? 88%(Y) 12%(N) 88%(Y) 12%(N) 96%(Y) 4%(N)

Did you receive a copy of the completed first report of injury form? 70%(Y) 30%(N) 62%(Y) 38%(N) 96%(Y) 4%(N)

To your knowledge has the source of your injury or exposure been addressed? 81%(Y) 19%(N) 88%(Y) 12%(N) 88%(Y) 12%(N)

Did you encounter any issues with the reporting process that you didn’t know or anticipate? 12%(Y) 88%(N) 38%(Y) 62%(N) 27%(Y) 73%(N)

Our records indicate that you did not receive any health care in response to your injury or exposure. Who made the determination that health care was not needed?

72% Yourself 9% Supervisor 19% Other

Have you experienced any residual affects from your injury or exposure? 9%(Y) 91%(N) 12%(Y) 88%(N)

Where did you access health care? 53% Employee Health 20% Student Health 27% Other

Please indicate your impression of the level of service provided by the health care provider who addressed your injury or exposure?

38% Very Good 44% Good 6% Average 0% Poor 12% Very Poor

Were you able to easily access the necessary Supervisor's First Report of Injury form? 92%(Y) 8%(N)

If any assistance was needed in order to complete and submit the Supervisor's First Report of Injury form, was this assistance readily available?46% (Y) 8% (N) 46% (none needed)

Were you provided with the information needed for you to effectively manage the affected employee? 100%(Y) 0%(N)

Survey of Employees and Supervisors Filing UTHSC-H First Reports of Injury in 2007 (Email based Zoomerang survey for period February 1, 2007 to August 31, 2007)

Injured Employees Requiring Care and Loss Time (n = 39): Not Included in survey, as each injured worker that accrues lost time is assigned a case manager to personally assist in the rehabilitation process.

Employees requiring care, but no loss time (n = 28)

Employees not requiring care, no loss time (n = 179)

Employee Population (not reporting any injuries, n = 4,181)

Comparison of Annual Institutional Loss Control Costs (EH&S Budget) to People and Property Risk Financing Costs (WCI & Property)

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$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

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$3,500,000

$4,000,000

$4,500,000

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Risk Transfer

Academic Institutions Health Institutions

Comparison of Annual Institutional Loss Control Costs (EH&S Budget) to People and Property Risk Financing Costs (WCI & Property)

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Risk Transfer and Risk Control Cost per Square Foot per InstitutionAs of December 2006 (Source: THECB Annual Report)

Risk Transfer Risk Control

How Often Should Metrics be Reported?

“Smell the cheese often so you know when it is getting old.” - Spencer Johnson

Ongoing metrics communicate the effectiveness of processes (possible interactions?)

“Every time you get the chance” – Emery

Communicating Metrics

Focus on outcome metrics

Select emerging issues and opportunities to communicate

Report on strategic goals

Remember to tie it to the mission of the organization

Another Important Caveat

“Not everything that can be counted counts, and not everything that counts can be counted”

Albert Einstein