Liberty Mutual Follow-up: Breaking Its Promises?

News that President Trump has slated NIOSH for a 40% cut sends shivers through anyone who thinks that strong, well-funded research plays a crucial role in developing effective programs to prevent workplace injuries and illnesses. A couple of weeks ago we reported on another blow to the workplace safety and health research community when it was learned that Liberty Mutual Insurance plans to abruptly shutter its famed Liberty Mutual Research Institute for Safety (LMRIS), laying off its staff of 44 and canceling its ongoing research contracts.

I thought now is a good time to go back for a more critical look at the alleged reasons the Institute is shutting its doors.  After the report, Business Insurance and the Boston Globe published articles quoting a Liberty Mutual spokesperson who attempted to justify, or at least explain the Institute’s closure. And I use the word “attempted” deliberately.  I spoke with some people who had worked at or with the Institute over many years  and asked them about the statements of Liberty Mutual spokesperson,  John Cusolito. The general consensus of experts familiar with Institute is that Cusolito spoke with all the credibility of Sean Spicer (my words).

First, Liberty Mutual argues that the services of LMRIS are not really needed any more because “Other organizations and universities are better positioned to do that kind of research,” according to Cusolito.

That statement baffles the experts I spoke with.  According to Harvard Professor Jack Dennerlein who has worked with the Institute most of his highly distinguished career, “LMRIS is a unique model based in industry with hard money to do research. It is unlike any other worker safety and health research group in the US. While there are institutions that do workplace safety and health research, none of these places have the collaborative and multidisciplinary approach of the LMRIS.”

Tom Leamon, who headed the Institute from 1991 to 2006, thinks that LMRIS was able to do research others cannot.  “Being linked with Liberty mutual they were at the main intersection where research meets practice.  No top-tier research groups have had that link to practice.”

What really seemed to set everyone off was Cusolito’s statement that the Institute wasn’t needed because “the nature of work has changed. More people are working remotely or in shared spaces and manufacturing now involves robots doing assembly line work.” Most observers I’ve spoken with think the exact opposite: that issues like robotics and automation are the very issues facing American workers that require more research, not less. Dennerlein notes that “Lots of people are hurt and killed by robots. And the fact that work relationships have changed (e.g. temporary workers) doesn’t mean that the nature of the work itself has changed.”

Leamon thinks that this statement is typical of the myth there are no factory jobs in the US. Nevertheless, even with the changing American workplace, LMRIS was on the cutting edge “They were looking at state of the art topics such as safety culture and climate, psychosocial factors, and the modern office,” according to Leamon.

While Cusolito tries to reassure the public health world that Liberty Mutual will continue to “engage with independent specialists and external partners to assist us in meeting our customers’ evolving safety and accident prevention needs and in delivering exceptional experiences and outcomes,” experienced observers are less confident and the statement betray’s a lack of understanding about how premier institutions like MIT and the University of Massachusetts at Lowell and Amherst work.

Joe Paduda, the principal of Health Strategy Associates and president of CompPharma, in an article in Workers Compensation.com faults Liberty Mutual leadership for its failure to “effectively leverage the terrific work done by the Institute, never really connecting the work it does to support Liberty’s overall ‘lead safer, more secure lives’ brand statement.”

In fact, the real reason the Institute is being closed, according to the general consensus, is to make their balance sheet look better, the company apparently feeling more of an obligation to their shareholders and short term profits than they do to their clients, the profession, and the long term impact on their brand. As the “gig economy” changes the workplace, the workers’ comp business is changing as well. Most workers in the gig economy are independent contractors and are therefore not provided with the traditional benefits packages including workers’ compensation insurance. And Leamon also thinks that the bean counters think they can make more money on shiny customer service brochures than by funding valuable, but less exciting (or profitable), peer reviewed studies.

But Paduda thinks Liberty Mutual is actually betraying its stakeholders, even if the Institute had no direct dollar benefit:” While corporations are obliged to support their shareholders, Liberty is a mutual insurer; its owners are its policyholders. One could, and I am, make the argument that the Institute was and remains prima facie evidence of Liberty’s commitment to its “owners”.”

Leamon thinks back fondly to the words of former Liberty Mutual President Ted Kelly who remarked at the Institutes anniversary in 2004 “In short within these walls, we changed lives.  We kept our promise and we honored our pledge to help lead safe more secure lives.”

So what is to be done? According to Steve Newell, a partner at ORCHSE Strategies, LLC, “Now we need to come together as a community and figure out what can be done to plug the gap.  Maybe that begins by our lobbying to increase the budget for NIOSH.”

Or maybe it begins by not cutting NIOSH’s budget by 40%.

 

NIOSH Workers Compensation

5 Comments

  1. Robots do not have such a large impact on worker numbers or safety issues. The Tesla plant in Fremont, CA has lots of robots but also has 7000 employees performing hand intensive work and suffering from pain and injuries (see recent Confined Space).

  2. Their rationale assumes that NIOSH and its ERCs can pick up the slack, but Trump wants to eliminate those too, as well as OSHA Harwood grants. Basically, industry is succeeding in killing further research to advance occupational safety and health … they don’t want any inconvenient findings to disrupt their activities and force further protections.

  3. Why wouldn’t organized labor step in and take over the research? There is no stronger connection between organized labor and their members and doing this research would have a direct impact on members. Form a collaborative of sorts and each union would pay a % per memberships to fund the new group. I am sure there is some available space at one of the union headquarters that could be used. Negotiate a deal on the research equipment. And the research could go one for decades, all directly benefitting workers.

  4. Why should union workers, through their dues, bear the financial burden of funding research that benefits all workers? This research should properly be funded by taxpayer dollars, because safe and healthful workplaces confer a societal benefit upon all. Of course, both industry groups and unions should be encouraged to support additional research and work in synergy with each other and government agencies such as NIOSH and NIEHS, as well as academia, so that maximum benefits are obtained from the research dollars invested, redundancies are eliminated and gaps are filled. But it doesn’t make sense to eliminate government funded research, eliminate insurance sector research, and conclude that any future research should be essentially funded by the dues of 15% of working Americans.

  5. It was just a suggestion to try and save the research that was currently going on. Organized labor is large enough to absorb the infrastructure if the research center. Maybe NIOSH could, but with all the planned cuts there it may be tough. I would agree about the tax payer funding, but wonder if Liberty Mutual got external funding for their research???

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