“If it can’t be measured, it can’t be managed”* has been a mantra of business for decades but all measurement can be corrupted. One of the most contentious elements of occupational health and safety (OHS) is the measurement of safety performance and a recent prosecution in the United States provides an important lesson for OHS managers everywhere, even though details are scarce.
“On Apr. 11, 2013, Walter Cardin, 55, of Metairie, La., was sentenced to serve 78 months in prison followed by two years of supervised release…. after being charged by a federal grand jury with eight counts of major fraud against the Tennessee Valley Authority (TVA), an agency of the United States.” [link added]
According to the US Attorney’s Office
“Cardin generated false injury rates which were used by the Shaw Group to collect safety bonuses of over $2.5 million from TVA. … Cardin was convicted of providing the false information about injuries by underreporting their number and severity… The evidence presented at trial encompassed over 80 injuries, including broken bones, torn ligaments, hernias, lacerations, and shoulder, back, and knee injuries that were not properly recorded by Cardin. Some employees testified that they were denied or delayed proper medical treatment as a result of Cardin’s fraud. Evidence showed that Cardin intentionally misrepresented or simply lied about how the injuries had occurred and how serious the injuries were.” [link added]
There are many safety management issues related to the conduct of Walter Cardin. Under-reporting of injuries is clearly a breach of OHS law. Most OHS regulators have requirements for businesses to notify them when certain types of workplace injuries occur, such as RIDDOR or other mechanism. This is usually clear-cut with OHS laws or regulators providing a list of notifiable incidents but no one wants to gain the attention of OHS authorities even if there was little that could be done to prevention the incident.
Fessing-up to a regulator will expose one’s safety and production methods to outside scrutiny and there are few companies or safety managers who do not see this as an intrusion.
More common is hiding injuries or recategorising them. For instance, there may be a requirement to report any workplace incident that results in a certain number of stitches. A specific number provides clarity on obligations and seems like common sense. But what if an injury results in one less stitch than is reportable? Is the incident less significant? Is the hazard that generated the injury any less important?
Also, some incidents are no longer treated with stitches. Glue is often used for minor injuries but as there are no stitches, there is no need to report! In Cardin’s case above, glue was not the issue. Cardin may have fudged the figures and broken the law but the consequences to his work colleagues was
“Some employees testified that they were denied or delayed proper medical treatment as a result of Cardin’s fraud.”
Safety Manager or Medical Manager
This is outrageous but one wonders what Cardin’s role was with the Shaw Group at the time. One article describes Cardin as “the safety manager for the Shaw Group, a construction contractor”. Another describes Cardin as:
“a Medical Case Manager for Stone & Webster Construction Inc., a Shaw Group Inc. company…” [link added]
Walter Cardin’s LinkedIn profile describes him currently as Environmental Health and Safety Manager at Shaw Group and as a Medical Manager for the period of the offences. Cardin describes the Medical Manager role as:
- “Oversight of medical case managment thropughout division
- Tracking industrial injuries from onset through maximal medical improvement or return to full duty work; Significant reduction of cost associated with work place illnesses and injuries;
- Provide manamgent support for critical medical and injury incidents; serve as lead investigator for serious injury investigations; coordinat3e third party health services.” (sic)
It will be interesting to see if this profile is updated during his incarceration.
Cardin’s Linkedin profile implies that he was less involved with safety and the prevention of harm than with the post-incident injury management. This role that has in the past sat with Human Resources or a Return-To-Work coordinator is increasingly being allocated to an expanded safety manager’s role. One effect of this is a closer alignment with injury treatment and injury reporting and the techniques resulting from this has raised the ire of the Australian Council of Trade Unions (ACTU).
In November 2012 the ACTU complained about increased interference in the medical treatments of injured workers by employers. ACTU Assistant Secretary Michael Borowick said
““There is a growing trend of employers insisting injured workers visit company-approved doctors rather than a worker’s own doctor. This can lead to substandard care that is focussed on employers’ needs, rather than the health of the patient.
”We’ve also had reports of doctors being pressured to change medical certificates and return-to-work plans.”
A summit in November 2012 was to hear of:
- “Employers or their representatives attending medical appointments with workers
- Injured workers being subject to constant medical assessments even after their doctor has cleared them to return to work
- Growth of Doctor Networks, funded by employers, and concerns that these are providing substandard care and sending injured workers back to work too soon
- Employers seeking access to ALL of a worker’s health information rather than that directly linked to a workplace injury
- Employers inappropriately sharing medical information with third parties, such as insurers and superannuation funds”
The ACTU media release refers to a case in Fair Work Australia which found against Boral Australia over a minor injury involving stitches.
Key Performance Indicators
Behind much of this is the imposition of Lost Time Injury Frequency Rates as key performance indicators. Walter Cardin took advantage of the opportunity to obtain performance bonuses by manipulating safety performance figures to defraud the Tennessee Valley Authority of US$2.5 million. According to a November 2012 article by law firm Covington and Burling LLP:
“The criminal indictment alleged that Cardin fraudulently misclassified injuries as non-work-related, knowing such injuries were recordable and work-related, and that Cardin consulted a doctor who participated in the fraud by concurring in the injuries’ misclassification. Cardin submitted these documents to Stone & Webster, knowing the false documents would be transmitted to the TVA to support the award of bonus payments.”
Significantly, a doctor seems to have colluded with Cardin. One could argue that this example of fraud illustrates a need for a company to verify a doctor’s diagnosis and treatment, however there is simply insufficient details of the prosecution and judgement publicly available to deduce relationships, contractual obligations, inducements, key performance indicators or other management decisions relevant to Cardin’s actions.
This prosecution deserved a more detailed investigation to identify the motives of Walter Cardin in this fraud. From the information available it is unclear if Cardin benefited personally or to what extent. Shaw Group paid back more than the fraud amounts following a civil case prior to Cardin’s prosecution but what was the type of corporate and workplace culture that allowed Cardin to think he could get away with it or hide the injuries in the first place? Did the service contract allow for inadequate oversight, monitoring or auditing of safety performance?
In an OSHA Quicktakes newsletter (April 15 2013) Dr. David Michaels, assistant secretary of labor for occupational safety and health,was quoted saying:
“This case shows the destructive consequences that purely rate-based incentive programs can have. Far from promoting safety, the bonus led to a systematic effort to conceal injures. Injured workers were denied or delayed medical treatment. Underlying workplace safety issues went unaddressed. There is a better way. A comprehensive injury and illness prevention program in which employers commit to finding and fixing hazards can achieve real safety in the workplace.”
Most of the information on this case has originated from media releases from the US Attorney’s Office with embellishment and distribution through Associated Press. It is hoped that local investigation occurs into this case. The trial transcript or judgement would be a fascinating read with, probably answers to some of the questions above. Questions that could easily appear in relation to many Australian workplaces.
[Special thanks to the SafetyAtWorkBlog reader who brought this to my attention]