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Liberty Mutual--Dover, NH 1/15/92 [OA 7566] [1]
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Liberty Mutual--Dover, NH 1/15/92 [OA 7566] [1]
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This is not a textual record. This is used as an
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Record Group/Collection:
George H.W. Bush Presidential Records
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Speechwriting, White House Office of
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Speech File Backup Files
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Folder Title:
Liberty Mutual--Dover, NH 1/15/92 [OA 7566] [1]
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TRANSFER SHEET
BUSH PRESIDENTIAL MATERIALS PROJECT
COLLECTION Bush Presidential Records
ACC.NO:
Office of Speechwriting
93-01
The following material was withdrawn from this segment of the
collection and trasferred to the XXXX AUDIOVISUAL COLLECTION
BOOK COLLECTION
MUSEUM COLLECTION
OTHER (SPECIFY:
)
DESCRIPTION:
Two photographs; one of a cafeteria and one of a bridge
SERIES
BOX NO.
Speech File - Backup
I
FILE FOLDER TITLE:
Liberty Mutual Dover, NH 1/15/92 [OA 7566]
[1]
TRANSFERRED BY:
DATE OF TRANSFER:
Samme Clue
7/5/96
RECEIVED BY:
DATE RECEIVED
many Find
THE WHITE HOUSE
Office of the Press Secretary
(Portsmouth, New Hampshire)
For Immediate Release
January 15, 1992
REMARKS BY THE PRESIDENT
TO EMPLOYEES OF LIBERTY MUTUAL INSURANCE
Liberty Mutual Office Building
Dover, New Hampshire
2:11 P.M. EST
THE PRESIDENT: I'd like to know what these people had
for lunch over here. (Laughter.) Let me first thank, of course,
Governor Gregg, who's heading up our campaign in this state. And let
me also single out Senator Bob Smith -- I don't know whether you all
have been introduced -- Senator Bob Smith over here; Congressman Bill
Zeliff, both extraordinarily good friends, tremendous supporters for
the values that you and I share; and then also a former Senator,
Gordon Humphrey who is also in my corner and working hard. And I'm
so proud to have these leaders and others -- Warren Rudman and others
who couldn't be here today at my side.
Somebody said, well, why do you want to go to Liberty?
And I was thinking back, coming over, the last time I was here in an
earlier campaign effort, somebody in a parking lot ran over Governor
Hugh Gregg's foot. (Laughter.) And I wanted to come back and try to
do better this time -- (laughter) -- and thank everybody here for
this welcome -- Mr. Laszewski, Mr. Countryman -- and just say it is a
pleasure to be back in this state.
Let me deny a vicious rumor that's circulating here. I
have not come back to New Hampshire to personally renew my
subscription to The Union Leader. (Laughter.) I did come back to
talk about jobs. But I wanted to start with something. I was just
over to a cafeteria at Davidson, and this guy -- I don't know what
his politics were. Really is indifferent. And he asked me what for
some might be an easy question. And he said, if you had to name one
thing, what would your message be today; why are you here? We were
sitting with our sleeves rolled up at the table.
I said, well -- my thought process went this way: I
think I know this state. I know I know the problems of this state.
We live near this state. I went to school across the border to
Massachusetts and have a feel for this New England where I grew up.
I think I understand it -- I understand the heartbeat, I understand
the hardship. And I said to this guy, we've got all of these issues
-- health care, which I'll mention; we've got world peace; we have
economic stimulation to get the economy -- I said, one message I want
the people of this state to know that I care. I care very much about
the people that are hurting in this state, the people -- and I am
determined to turn this state around. And that is the message.
(Applause.)
And I have not simply just discovered New Hampshire.
You ask some of these characters running around there with these
scatterbrained ideas and these quick fixes to something as tough as
this economy, when were you last in New Hampshire, and you'll find
they've never been here at all. They wouldn't know how to get here.
I know the heartbeat of this state. I know the values,
the family values of this state. Barbara and I try to live those
values in our lives as President and First Lady of this country. And
I can identify with those who are hurting in this state. And that
2
one is -- please give me credit for that and do not listen to these
guys that want to take political opportunity, come up with a quick
fix to something as complicated as this economy, and then be gone and
never to return. I've been here, been here a lot. And I will return
-- as President, and when I get through being President, as neighbor.
So you've got my pledge on that one.
And I know times are tough. This state has gone through
hell. It's gone through an extraordinarily difficult time, coming
off of a pinnacle, you might say, of low unemployment. Now you're at
about the national level. And, yes, people are hurting. And I am
determined to turn it around.
I told some of them over there -- there's a big
difference, you know. People say to me, the difference between
domestic and foreign policy -- how could you lead the world -- and
they gave me some credit for that in Desert storm, that the American
people still feel very, very strongly about -- (applause) -- how can
you do that and then have such difficulties with this economy? Well,
let me tell you something. When I moved those forces I didn't have
to ask Senator Kennedy or some liberal Democrat how -- whether we
were going to do it, we did it. (Applause.) I didn't have to ask
some smart aleck columnist who was saying Bush hasn't explained this
to the American people. We did it.
And the young men and women, the best fighting force
we've ever had, stood up and lifted the spirits of this country. And
now I want to take that same leadership, bring this country together
after the State of the Union, and solve the domestic economic
problems, and do it in a sound, sensible New Hampshire way. And that
is why I'm here. (Applause.)
It's a weird year here. You've got crazy people running
all over, thinking that the way to put this country back to work is
to stop exports. In other words, they call it this: they call it
protection. I'm going to protect an American job. Do not listen to
the siren's call of protection if it comes out of the far right or
the far left. What that means is shrinking jobs, getting into trade
wars and retaliation.
What we're trying to do is to expand exports by making
that playing field level and getting access to foreign markets. so
when someone says to me, some politician out of some state that never
heard of New Hampshire before, comes up here and says, the President
ought not to worry about world peace or the global economy, I'm going
to say, let me run my business the way I think is best. I am going
to continue to work to open markets, to take this question of equal
opportunity -- that's all the American worker needs -- equal
opportunity in the global marketplace.
And those workers I saw at Davidson and you in this
business are the most efficient there is. And you can compete with
anybody. And don't try to do it by shrinking world markets and going
into some siren call of protection that threw this country into a
depression back in the '30s. I'm talking 25 percent unemployment
back in those days. Let's not set the clock back. Let's continue to
exercise world leadership. We are the United States of America. And
I am not about to give up on world leadership. (Applause.)
And to those cynics out there, these political newcomers
hitting this state for the first time, let me say this: I won't
apologize one minute for the fact that your kids and my grandkids
might just have an opportunity because of the way we've conducted the
foreign affairs of this country to grow up in a world with a little
less worry about nuclear war. There has been dramatic change.
(Applause.) And I'll take the hit -- I'll take my share of the blame
for the economy, and I'll dish out plenty to Congress on that, I
might add -- (laughter.) But just give us a little credit for the
fact that we now have a tremendous change in the world.
5
when I needed him? (Laughter.) I said, let me tell you something.
And I say this -- I don't know whether any ministers from the
Episcopal church are here -- I hope so. But I said to him this:
You're on to something here. You cannot be President of the United
States if you don't have faith.
Remember Lincoln, going to his knees in times of trial
and the Civil War and all that stuff. You can't be. And we are
blessed. So don't feel sorry for -- don't cry for me, Argentina.
We've got problems out there and I am blessed by good health, strong
health. Geez, you get the flu and they make it into a federal case.
(Laughter.) Anyway that goes with the territory. I'm not asking for
sympathy, I just wanted you to know that I never felt more up for the
charge. I wish I could tuck each one of you for 10 minutes into that
car as you ride along and see the reception that Judd Gregg talked
about that we're getting as I return to this state that I do
understand.
And it's been great. I'll go back to Washington all
fired up for tomorrow and tackle the President or the Prime Minister
of this or the governor of that coming in. But I'll have this
heartbeat, vigorous and strong, because of what I've sensed here
today.
So now, listen, here's the final word. Vote for me.
And listen, go listen politely. These guys, these executives,
they've got to do their thing here and have fair play for all. Don't
vote for them. Vote for me, okay? (Applause.)
Thanks a lot. (Applause.)
END
2:30 P.M. EST
(Smith/Grossman)
January 12, 1992
Draft Four
HAMP
PRESIDENTIAL REMARKS: LIBERTY MUTUAL
DOVER, NEW HAMPSHIRE
WEDNESDAY, JANUARY 15, 1992
Gary Countryman. [[Other acknowledgments]] The men and
women of Liberty Mutual. It is always a pleasure to be here, and
to again see my good friends in New Hampshire. //
( (Let me begin by denying a vicious rumor. I have not
traveled to New Hampshire to personally renew my subscription to
the "Union Leader. ")) I am here to talk about the jobs and
economic growth that is my highest priority. //
On Election Night four years ago, I spoke from the heart
these four words: "Thank you, New Hampshire." // New Hampshire
helped make me President. // I love its people / feel its
concerns / share your values and, yes, your hurt. //
I know times are tough up here. I also know that in a world
forever smaller, foreign and domestic policy have never been more
entwined. // We will not build prosperity by building a fence
around America. Instead, we need the initiatives overseas today
that mean American jobs tomorrow. //
I went to Asia to help secure those jobs by telling foreign
leaders: We don't want just free trade. We want fair trade. //
Americans don't ask for a home-field advantage. We do insist on
a level playing field where our workers can compete. // Your
emblem says it all: "America believes in liberty." // I mean
2
the liberty from trade barriers that can open markets / increase
exports / and achieve a business renaissance. //
We didn't fight all these years to bring down the walls of
Communism in Eastern Europe only to now build up the walls of
isolationism around America. / Protectionism doesn't work //
didn't when it caused the Great Depression // won't work better
now. // Like it or not, we live in a global economy: When it
comes to trade, we will "live free, or die. " //
We don't need the cheap ploy of protectionism. We need a
real plan for economic growth -- not a quick-fix, but long-term
solutions. // Proposals are now being floated by the candidates.
Some rest on fact -- others, fiction. / Here are standards by
which to judge these proposals -- including the program I will
unveil two weeks from now in the State of the Union. //
First, a real growth package should make sense in the real
world -- ensuring the freedom to create, build, invest, and dream
// I want a nation of entrepreneurs who are encouraged to take
risks -- not forced to take refuge. // Second, a real growth
package should make America more competitive -- increasing our
exports and creating new jobs. //
Third, this package must not increase the deficit. We need
to cut spending -- not opportunity. / Finally, it must preserve
basic assets. I speak of the value of the home -- and the need
to help all Americans -- especially lower- and middle-class --
raise a family and educate our kids. That, and only that, will
restore faith that tomorrow will be better than today. //
3
That is especially true in health care. We must make it
accessible. We must also make it affordable. // ( (I just want
to clear up a misconception. I didn't collapse at last week's
State Dinner in Japan because they gave me a bill. )) // Today,
skyrocketing health care bills are hurting the lives of millions
of Americans. // A proverb says, "He who has health has hope,
and he who has hope has everything." // In State of the Union, I
will unveil a health care plan to give hope to Americans who
despair of rising costs. //
For several years, Liberty Mutual has shared its expertise
to help us form our health care package. Even before, I felt a
kinship. // I remember campaigning here in 1987 at your mill
then under construction. / I have admired Liberty Mutual as a
point of light -- donating a rescue vehicle to the Dover Fire
Department / helping high school kids through the Project Invest
program / creating jobs as New Hampshire's ninth-largest
employer. // There's also our longest link -- the Liberty Mutual
Legends of Golf Tournament in Austin. ( (I was down there several
weeks ago, and it rained every day. I felt right at home. / The
way I play golf, I spend most of my time in the water, anyway.) )
I want to thank people like Bob Laszewski, Liberty's
Executive Vice-President, for enriching those ties. // Bob has
worked with Secretary Sullivan of HHS -- and with Senator
Rockefeller and the Pepper Commission. He knows how the U.S. now
spends more on health care than any nation -- twice the per
capita of Germany and Japan. // I am confident Liberty will help
4
us achieve the best health care -- and I appreciate your advice.
You know how health care can help cure our ailing economy. //
Nearly seven decades ago, Robert Frost said, "[New
Hampshire's] one of the two best states in the Union." // FYI:
He named Vermont the other. // He knew that New Hampshiremen
deserve strong leadership. I intend to provide it. // You
expect your President to make tough decisions. I have -- and
will continue to. / /
But I need your help. I need your help to keep America No.
1 at home, and abroad -- to keep trade free and fair -- and
democracy free and strong. // I know what I owe you. Today, I
again ask for your support. // Let me close with this promise:
I will never -- ever -- let you down. // God bless you, and God
bless America.
#
#
#
#
JAN 09 '92 12:35 LIBERTY MUT/ (617)426-3589 426-35
P.1
FACSIMILE TRANSMISSION
COVER SHEET
LIBERTY
MUTUAL
DATE 1/9/92
DEPARTMENT
NAME
TO:
OFFICE Bob OR COMPANY
OFFICE Simon DEPARTMENT Speeches NAME
FROM:
Diane Twner -617-574-5752
SUBJECT/COMMENTS
POLICY NUMBER
Webe located an expect on the
Dover Cocheco Falls Millworks,
but keep missing him. eve
also unearthed a look in
Dover & will ferward to you
that historical information
once we ASAP.
Diane
These all just seme more backgid
info. ON LM4 Dover activities.
PAGES FOLLOW If all pages not received, call sending attendant Immediately.
BENT BY
TIME BENT
COD7-R1
PRINTED IN USA
JAN 09 '92 12:35 LIBERTY MUT/(617)426-3589 426-35
P.2
UNION LEADER
MANCHESTER, MH
68,092
JUL 2 1991
126
TM
Dover's Liberty Mutual Wins
Business Excellence Award
DOVER 1 Liberty Mutual of Dover was
the first recipient of the Excellence in
Business Award given by the City of Dover
and the Greater Dover Chamber of Com-
merce.
The award is for businesses who have
"enhanced the business climate substantial-
ly and shown outstanding business prac-
tices." Bob Goodman, general manager of
Liberty Mutual, accepted the award from
Dover Mayor George Maglaras and Cham-
ber president Rosie Walker-Bois at an
open-house in the Cochecho Falls Mill-
works.
Any business may be nominated for the
award; the selection rests with a panel
including city, chamber and other local
representatives. Once the program is fully
established, awards will be given bi-annual-
lyin May and November.
For more information call 742-2218.
JAN 09 '92 12:36 LIBERTY MUT (617) 426-3589 426-35
P.3 P.3
OCT
C4
DU DOVER ADDRESS DERY
Portsmouth Heraid (N.H.), Friday, October 19, 1990
IBERTY
MUTUAL
IM
CESS IS NO
Paff photo by Sadia Greenway
US Postmaster General Anthony Frank, left,
president of corporate treasury operations
presented a plaque of appreciation from the
for Liberty Mutual Insurance Co., at the
US Postal Service to Elliot Williams, vice
firm's Dover mall facility Thursday.
Local insurer cited by US postal
chief for automation of mailing
DOVER - U.S. Postmaster General Anthony M.
ber of mail-related projects to minimize postage expense
Frank Thursday recognized Liberty Mutual Insurance
and improve customer service In the mailing of invoices,
Co. for Its extensive efforts in mail automation at Its fl-
notices and checks as well as in the process of receiving
nancial mailing operations and remittance-processing
incoming mail."
center in Dover.
Liberty Mutual's financial mailing operations center
Billot Williams, vice president and manager, corporate
handles over 100,000 pieces of mail per day. A com-
treasury operations for Liberty Mutual, accepted 8 plaque
puterized zip code reader and sorter saves over $1 million
from Mr. Frank that cited Liberty Mutual's "Implements-
dollars annually in postage. In addition. scanning proces-
tion of U.S. Postal Service work-sharing programs" in
sors are capable of handling an average of 650-700 enve-
the areas of pre-sorting, zip-plus-four coding, and bar
lopes per hour.
coding of outgoing mail.
Liberty Mutual provides a wide range of personal and
Liberty Mutual is the largest first-class letter mailer in
business insurance, as well as financial services. It has
northern New England, The Dover facility handles 30
been one of the leading writer of workers compensation
million pieces of mail annually, serving customers
Insurance since 1936 and employs more than 23,000 peo-
throughout the country,
ple in over 340 locations throughout the united States and
"Improving mail management was identified as a goal
Canada. Based on total assets of over $35 billton. Liberty
of Liberty Mutual many years ago." Mr. Williams said in
Mutual is one of the loading providers of insurance and
accepting the plaque. "We have Heen working on n num-
financial service products.
JAN 09 '92 12:36 LIBERTY T/(617)426-3589 426-35
P.4
LIBERTY
MUTUAL
FACT SHEET
Dover Financial Mailing Operations
Housing the largest 1st class letter mailer in Northern New England, Liberty Mutual
Insurance Company's Financial Mailing Operations Department, located in Dover,
NH, mails over 45,000 checks and notices and over 65,000 invoices each day. This
amounts to over 30 million pieces annually, making it the central mailing facility for
Liberty Mutual, nationwide.
The state of the art equipment located at Financial Mailing Operations handles the
printing and inserting of checks, notices and invoices, and the sorting of all outgoing
mail to take advatage of Postal Service discounts. Computerized inserting machines
at the location are capable of selectively inserting different return envelopes and other
information in policyholder's monthly bills. The highly automated equipment also
reads nine digit zip codes, spraying them onto envelope as a bar code and sorts all of
the mail by zip code. This one process allows Liberty Mutual to save over $1,000,000
annually in postage.
Remittance Processing Services
The handling of incoming mail properly is an important fucntion performed at Liberty
Mutual's Remittance Processing Services Department in Dover, NH, where an average
of 24,000 payments are received daily through pre-printed envlopes, bar coded to be
read by a scanner. Non-scannable systems receive 1,800 pieces of business mail each
day. Mail is opened and sorted by the scanning processors and can handle an average
of 650-700 envelopes per hour, allowing policyholder accounts to be updated nightly.
The Dover center handles incoming mail from all of the New England States, New
York and Middle Atlatic states. Incoming mail from the remainder of the U.S. is
received at another Remittance Processing Service center in Des Moines, Iowa.
P.5
FOSTER'S DAILY DEMOCRAT
DOVER, NH
DAILY
28,391
TUESDAY
JUN 25 1991
10
BURRELLE'S
PA
Liberty Mutual celebrates its completed move
By ROBERT TANNER
While elowns holding balloons
Democrat Staff Writer
joked with children, and while
adults and children alike wandered
DOVER Liberty Mutual cele-
on earefully mapped tours of the
brated its completed move to
renovated old mill, others sat at ta-
JAN 09 '92 12:37 LIBERTY MUT/(617)426-3589 426-35
Dover by throwing a citywide par-
bles set up in the courtyard and en-
ty Saturday.
joyed the suil.
Weather cooperated with clear
"What got this whole things
warm skles and a light breeze,
started was we've just completed
while crowds filled the Cochecho
all the planned moves we originally
Mills Courtyard and took tours of
wanted to accomplish back in '87,
the mill building and the insurance
when we first got going here,"
giant's business operations. Every-
Goodman said.
DDE feasted on free food, listened to
"The last department came up
*50s and '60s music, and spent a re-
(from Boston) in April. So we de-
laxing day in the midst of the city.
cided to have a hig open house and
"The Fire Department helped
a kind of celebration," be said.
out, the Police Department helped
For Dover's DuBois family - 10-
out. It's just a good time," Liberty
year-old Alice, 12-year-old Chris,
Mutual spokesman Bob Goodman
and mom Boanie and dad Tom
said, relaxed in shorts and sun-
the open house served as a family
glasses.
outtag.,
The city said thanks, too, crown-
The crew finished their tour and
ing the company with an Excel-
picked up complimentary balloons,
lence in Business Award from the
pens and visors.
Greater Dover Chamber of Com-
"We're fanciers of the mill,"
merce.
Tom DuBois said. "It's wooderful
"They've just been the biggest
what they done with it."
supporter of the Chamber and the
And for the rest of the summer,
City," said the Chamber's Execu-
Goodman noted, residents can
tive Director Jamie Batson, noting
come to the courtyard for the
Dover's Liberty Mutual threw a public party Saturday to
that officials accelerated the pro-
weekly musical offerings of the Co-
celebrate the completion of moving its staff north from
cess to have the award prepared in
checho Arts Festival, which begins
Boston with music, food and tours of the renovated Co-
time for the open house.
Friday.
checho Millworks.
(Democrat photo - Tanner)
JAN 09 '92 12:38 LIBERTY (617)426-3589 426-35
P.6
Dover High School senior Dana Smith, one of 14 students who participated in Project
Invest this year, accepts a carnation from teacher Becky Lenzi. The official incorporation
of the new business course on Insurance was celebrated Thursday night.
BURRELLE'S
(Democrat photo - O'Neill)
Project Invest prepares Dover
students for working world
By MARTY O'NEILL
companies, we could benefit," Ms.
class periods and next year it will
Democrat Staff Writer
10968
Shepphard said.
be offered for one period through-
And the students could benefit as
out the year.
DOVER Fourteen Dover High
well, she said, noting, "You can go
Senior Dana Smith, who took the
School seniors will enter the work
very, very far in insurance without
course this year, said the course is
world this spring, better prepared
a college education. It's a great
confusing but challenging. "We
for work in the insurance business
opportunity.'
have learned à lot just doing auto
because of a new program titled
Project Invest is a national pro-
insurance." she said.
Project Invest.
gram already incorporated at
Her classmate Lanette Cardin
many high schools, including Con-
said Project Invest gives the stu-
The students, their teacher, ad-
cord, Manchester and Plymouth.
dents opportunities to run a busi-
ministrators and representatives
In the program. students oper-
ness from top to bottom.
from area businesses involved in
ate their own mock insurance
Ms. Shepphard said area busi-
the program gathered Thursday
companies and, through Instruc-
nesses donated about $1,200 for
night to officially celebrate the
tion, learn and perform every pro-
seed money to buy necessary ma-
program's addition to the high
cedure needed in the company,
terials and to start up the pro-
school roster.
ranging from banking and policy
gram, and the Seacoast Insurance
The course was first offered this
writing to accounting and un-
Women donated money they had
winter, following two years of
derwriting.
raised through an annual fashion
preparation by teacher and de-
Ms. Sheppard said the students
show to host events for the pro-
partment Chairwoman Becky Len-
study the auto insurance world -
gram.
zi, who worked with 13 area busi-
because they're most interested in
The companies that helped spon-
nesses that helped support and
that and It accounts for the largest
sor the program from Rochester
fund the program.
volume of insurance sold - but
are Bernier Insurance, Bergeron
Donna Shepphard, a personal in-
noted the skills learned there can
Insurance, Jenness & Jenness
surance manager with R-W Insur-
be attributed to all areas of insur-
Agency and Kendall Insurance:
ance in Dover and member of
ance.
from Dover, Morrison Agency, R-
Seacoast Insurance Women, ex-
Ms. Lenz said she prepared for
W Associates and Richardson
plained that she approached Ms.
the course by training through a
Agency; from Portsmouth, Liber-
Lenzi two years ago because of the
correspondence course and visit-
ty Mutual Insurance: from
need for well-trained workers in
ing schools where the course is al-
Somersworth, Dunlap Agency and
the insurance business, and be-
ready underway. "It put every-
from Stratham, Executone of New
cause she thought the program
thing they've learned in four years
Hampshire.
would take off at Dover High
in the business department and
Others businesses are Savage
School, her alma mater.
brought It all together," Ms. Lenz
Computers Inc. of Avon. Connecti-
"We felt If we could pick up even
said. This year the course was of-
cut; Seacoast Insurance Women
one or two students into insurance
fered during one term for two
and Young Agents Committee.
JAN 09 '92 12:39 LIBERTY MUT/ 426-3589 426-35
P.7
It
Boston Business Journal
June 4, 1990
Largest New Hampshire Employers
(Ranked by number of employees)
NH
'89 Sales
NH Top
Main NH Subsidiary
Products/Services
Year
Rank Parent Company/Heedquarters
Employees
Worldwide
Management
Location
Established
Diokal
Maynard MA
2
Lookheed Corp.
5900
$9.8
Dr. John R. Kreick
Lookheed Sanders Inc.
Datense electronics
1986
Calabasas, CA
billion
NHQ1-485 Box 668
South Nashua, NM 03061
(603) 886-4321
Dartmetime
8360
Hernary
Henover
million
(revenues
Manavar
cer research
4
Shaw' $ Supermarkets Inc.
3300
WND
David Jankins'
Shaw's
Supermarket chain
1899
East Bridgewater. MA
James Demme
Daniel Webster Highway. Rt. 3
Neahua, NH 03082
(803) 888-8796
Hanovar
million
college
fagerating
budget>
6 DeMoulas/Markst Basket
2800
$1.1
T.A. DeMoulas
DeMoulss/Market Basket
Operator of 43 supermar-
1954
Tewksbury MA
billion
375 Amherst St.
kets
Nashua, NM 03080
(603) 888-1120
General Electric's
2700
exercapace
1892
Fairlield
100 Main
NW03878
maior appliance
8
NYNEX Corp.
2567
$13.2
Patrick Duffy
New England Telephone
Telecommunications. voice
1984
New York, NY
billion
1228 Eim St.
and data services
Manchester, NH 03101
(800) 457-8700
Boston, MA
executy and
pota
commentation Insurance
sssats
10
Hannatord Bros. Co.
2300
$1.6
James L. Moody Jr.
West Street Shopping Center
Martin's Food Centers
1883
Scarborough, ME
billion
Keene, NH 03431
Sun Foods and
(603) 357-2832
Wellby Drug Stores
2803
Providence PR
billion
Farrari
Importe
03820-1504
fasteners,
(BUST
12 Manpower Inc.
2146
$3 billion
William E. Marvin
Manpower of Manchester
Temporary employment
1948
Milwaukee, Wi
Ann W. Marvin
102 Bay St.
agancies for office, light
Manchaster. NH 03104
industrial, marketing and
(603) 625-6994
technical jobs
James River Card
Richmond VA
n paper board
droveign
14 Sears, Rosbuck & Co.
1950
$54 billion
Edward Brennan
Sears
Subsidieries include Cold-
1886
Chicago. IL
1500 6. Willow St.
wall Banker, Dean Witter
Manchester, NH 03103
Reynolds Financial and
(503) 669-8280
Sears Merchandise Group
DTE Con
billion
wes Street
business
cluding systems products)
152,538
18
Public Service of New Hampshire
1904
$819
N/A
Pub. Serv. of New Hampshire
Electric utility
1926
Manchester. NH
million
1000 Elm St.
Manchester. NH 03105
(603) 568-4000
17 The Timken
Canton OH
SAZ
hearthor ans/ore
NH/03/24
products
(603)
18 Ames Department Stores Ino.
1800
$4.9
Stephen L. Platner'
Ames
Discount department store
1958
Rocky HM, CT
billion
Maple Avenue
chain
Clarement NH 03743
(603) 542-4290
Supermarkets
Carteror, NM
that
(603) 688-0743
20
First NH Banks Inc.
1705
$2.8
Frank 0. Buhl
First NH Banks Inc.
Muiti-bank holding com-
1973
Manchester, NH
billion
Robert J. Frank
1000 Elm St.
pany with 64 branches and
(total
Manchester, NH 03101
12 affiliates in New Hamp-
assets)
(603) 688-5000
shire
address The
Note: This order
Complied by Wendy Howe
10avidion Rubber was 1357
400-33
P.8
TRUCK DONATION
DOI
RESCUE
Liberty Mutual donated 8 rescue vehicle to the Dover Fire Department for It to pull the Fire
Safety Trailer to educational events. Public Education Officer Steve McCusker, left, takes
the keys from Liberty Mutual's Assistant Vice President Robert Barber as Assistant Chief
Ronald Clymer stands by. Other businesses who donated time or equipment to the vehicle
were Dover Motor Mart, Robbins Auto, Dana's Auto Body, Communications Specialists and
Sears.
(Staff photo - Deb Cram)
NEWS RELEASE
L BERTY
Diane Turner
MUTUAL.
CONTACT:
Rick Kinigson
617-574-5752
LIBERTY MUTUAL INSURANCE GROUP
PUBLIC RELATIONS DEPARTMENT
175 BERKELEY STREET, BOSTON, MASS. 02117
FOR RELEASE:
April 11, 1991
LIBERTY MUTUAL DONATES HIGH-TECH
AUTO-THEFT TRACKING DEVICES TO BAY STATE CITIES
BOSTON -- In an effort to help fiscally strapped law enforcement agencies fight
auto-theft crime, which shot up nationally by 19 percent in 1990, Boston-based Liberty
Mutual Insurance Company is donating 49 electronic auto-theft tracking computers to the
police departments in 16 cities and towns throughout Massachusetts.
As part of a company pilot project to "put the brakes on vehicle theft", Liberty
Mutual is giving LoJack trackers to Boston, Brockton, Cambridge, Chelsea, Everett, Fall
River, Lawrence, Lowell, Lynn, Malden, New Bedford, Quincy, Somerville, Springfield,
Taunton and Worcester.
"Countrywide, a car is stolen every 20 seconds," John B. Conners, executive vice
president and manager of Liberty Mutual's personal market department, said. "We also
realize that a substantial portion of our law enforcement resources are being used to fight
the war on drugs and that funding is hard to come by. We wanted to help."
"For instance, in Springfield, the National Auto Theft Bureau reports that in the
first six months of 1990 there were 1,431 vehicles reported stolen compared to 785 in the
first six months of 1989," Conners continued. "And, many Massachusetts cities are faced
with having to lay off police officers due to budget cuts."
The recovery systems are installed in police cruisers. They pick up a silent homing
signal from the anti-theft device which is embedded in the vehicle and is activated by a
police computer when the car is reported stolen. The police cruiser equipped with the
tracker is then able to pinpoint on the monitor attached to the dashboard the location of the
stolen vehicle.
Auto theft is a big business. Auto thieves are known to steal cars to provide quick
money to fund their drug habits, to provide parts for 'chop shops', and to export cars to
foreign countries. All this, according to the NATB, costs the American public more than
$7 billion a year in out-of-pocket expenses, higher insurance premiums and increased
taxes to support higher levels of law enforcement.
"These electronic recovery systems also provide another distinct advantage, a public
safety one," Conners said. "The systems help the police catch the thief while still in the
vehicle, increasing the rate of arrest and at the same time lowering the incidence of a
dangerous high speed chase, since the thief is probably unaware that the car is being
tracked by police, sometimes from miles away."
Boston-based Liberty Mutual's pilot program to help fight vehicle theft began in
the fall of 1990 when it donated 10 LoJack trackers to Boston's police department.
According to the U.S. Department of Justice, the increase of 19 percent in the rate
of motor vehicle theft in 1990, 1.4 million completed auto thefts and 770,000 attempted
thefts, is the highest number since the National Crime Survey began in 1973.
###
NEWS RELEASE
LIBERTY MUTUAL INSURANCE GROUP/BOSTON
NEWS RELEASE
NEWS RELEASE
LIBERTY
MUTUAL
Richard E. Kinigson
CONTACT:
(617) 357-9500, Ext. 43168
ERTY MUTUAL INSURANCE GROUP
PUBLIC RELATIONS DEPARTMENT
At Will
175 BERKELEY STREET, BOSTON, MASS. 02117
FOR RELEASE:
SURVIVING THE TEEN DRIVING YEARS
Auto accidents are the number one killer of our nation's youth, and alcohol is
present in nearly half of all fatal car crashes, resulting in the death of an estimated
3,300 teenagers each year. The Atlanta Liberty Mutual office reminds you that
December 9-15 is National Drunk and Drugged Driving Awareness Week and, to help
assure a happy holiday season, is offering a free brochure which provides suggestions
on ways that parents and teens together.can deal with the hazards associated with teen
driving.
The holiday season is a dangerous time of the year for most people to be driving,
as the likelihood of drunk and drugged drivers being on the roadway is increased.
This, coupled with the fact that teen drivers tend to have the least developed driving
skills, increases the risk of a life threatening motor vehicle crash. "How To Survive
The Teenage Driving Years. A Guide For Both Teenagers And Parents," addresses
these dangers, including night driving, speeding, and driving under the influence of
drugs and alcohol. Now, and throughout the year, Liberty Mutual recognizes the
importance of parents communicating with teens about the cautionary methods available
to reduce the risk of a fatal car crash. Cautionary methods such as avoiding
unnecessary driving, especially late at night, wearing your safety belt, and complying
with all posted speed limits are some of the tips included in the brochure.
In addition to the dangers associated with drinking and driving, the faster one
drives, the greater the chances are of being killed or seriously injured in an auto
(more)
accident. Thirty-three percent of teen boys and 14 percent of teen girls admit to
regularly driving at speeds higher than 70 m.p.h. One important way to help their
children learn safe driving habits is for parents to set a good example by following safe
driving rules and recommendations. And, drivers should always wear their safety belt,
and insist that passengers do the same.
Additionally, the fatal crash risk of teenage drivers is higher between 9:00 p.m.
and 5:00 a.m. than at any other times. Nighttime driving is more difficult for all
drivers because visibility is reduced, the glare of oncoming headlights can be blinding,
and generally drivers are more tired at night. The teen driving guide suggests that
parents should lead by example, helping teenagers make-smart driving decisions when
faced with peer pressure to drink and speed.
"How To Survive The Teenage Driving Years: A Guide For Both Feenagers And
Parents" brochure addresses these issues from the perspectives of both parents and
teens, is an excellent tool for helping families discuss measures teen drivers should take
to prevent and avoid life threatening accidents, and can help you to have a safer, more
enjoyable holiday. For your free copy, write to Liberty Mutual, Box 777TDR, Boston,
MA,02116.
###
Editor's Note: Liberty Mutual provides a wide range of personal and business
insurance, as well as financial services. It has been the leading writer of workers
compensation insurance since 1936 and employs more than 23,000 people in over 340
locations throughout the United States and Canada. Based on total assets of over $35
billion, Liberty Mutual is one of the leading providers of insurance and financial
service products.
G- 275
11/30/90
NEWS RELEASE
LIBERTY MUTUAL INSURANCE GROUP/BOSTON
NEWS RELEASE
NEWS RELEASE
LIBERTY
MUTUAL
CONTACT: Diane Turner
Jerry C. Guerriero
LIBERTY MUTUAL INSURANCE GROUP
(617) 574-5752
PUBLIC RELATIONS DEPARTMENT
175 BERKELEY STREET, BOSTON, MASS. 02117
FOR RELEASE:
February 4, 1991
CORRECT USE OF CAR SEATS SAVES LIVES
The number one killer and crippler of children in the U.S. is motor vehicle
crashes, according to the National Highway Traffic Safety Administration
(NHTSA). And, one of the major reasons for this is due to the improper use of
child safety seats. Your Liberty Mutual (local) office reminds you that,
according to NHTSA, one out of every three child safety seats are used incorrectly.
"February is National Passenger Safety Month and the week of the 10th
through the 16th is Child Passenger Safety Awareness Week," John B.
Conners, executive vice president and manager of Liberty Mutual's personal
market department, said. "We just want to remind all family members that it is
extremely critical to know how to properly use safety restraints for children when
travelling."
A child safety seat should be selected based on the size and weight of the
child. It is extremely important to know that an infant-only seat, designed for a
baby weighing under 20 pounds, must be placed backwards in the vehicle so that
the baby rides facing the rear. According to the Washington, D.C.- based
Insurance Institute for Highway Safety, children under the age of one have the
highest rate for vehicle passenger deaths.
(over)
"In 1989 alone, over 700 children under the age of five died in roadway
accidents," Conners said. "Liberty Mutual is committed to helping people live
safer, more secure lives and we urge parents, and grandparents, to always follow
the instructions for installation and use given by the child safety seat
manufacturer."
Safety seat manufacturers must meet federal safety standards. Always look
for the federal safety certification label. For confirmation that a model meets
those federal standards, one can call NHTSA's auto safety hot line at 1-800-424-
9393.
In honor of Child Passenger Safety Awareness Week and National
Passenger Safety Month, Liberty Mutual's (local) office also suggests that
you become familiar with your state's child passenger safety laws and protect your
child by correctly using child safety restraint systems in your vehicle. For a free
brochure entitled "Child Safety In Your Automobile," write to Liberty Mutual,
P.O. Box 777CHS, Boston, MA 02116. And remember, buckle up!
###
NEWS RELEASE
LIBERTY
MUTUAL
CONTACT:
Diane Turner
Jerry C. Guerriero
LIBERTY MUTUAL INSURANCE GROUP
PUBLIC RELATIONS DEPARTMENT
175 BERKELEY STREET, BOSTON, MASS. 02117
FOR RELEASE: (617) 574-5752
December 4, 1991
EMPLOYERS TO ADDRESS OCCUPATIONAL STRESS
BOSTON -- An uncertain economic future, day-to-day work pressures, and the
holiday season, all contribute to an ever increasing problem in today's workplace -
occupational stress. This problem, and what employers should do about it, will be the
subject of a December 5-6 Liberty Mutual Loss Control Institute Seminar to be held at
the Red Lion Hotel in San Jose.
The seminar, titled "Occupational Stress - What Should Management Do About
It?," will be attended by representatives from over 100 major companies, medical and
ergonomic professionals, and will focus on finding effective ways to prevent and help
reduce the increasing incidence and cost of occupational stress. In 1987, for example,
the average value of a California mental stress claim was $13,200, and by 1990, the
average value had risen to $17,700, according to a study of California mental stress
claims.
"In 1990, California continued to lead the country in mental stress, and between
30,000 and 40,000 mental stress claims are filed each year in the state, with 90 percent
of those ending up in litigation," Kenneth A. Berkov, senior vice president of Liberty
Mutual's Pacific Division said. "Management must understand that the reduction of
worker stress is relevant to organizational well-being and important to the
organization's future."
(more)
The seminar will focus on the types and sources of occupational stress and job
burnout, and how employers can decrease the occurrences of stress through early
detection, elimination of stress contributors, and by taking steps to help employees cope.
Seminar topics include health issues and worker stress, employee assistance programs,
the legal aspects of stress claims, and the effects of job design on occupational stress.
"There are certain physical, emotional and behavioral stress indicators managers
must be aware of, such as headaches, fatigue, irritability, apathy and poor
concentration, that can all be clear indicators of worker stress," Berkov continued.
"And ergonomic aspects of the workplace can directly contribute to worker stress,
along with employee workload, overtime, work shifts and pacing of tasks, which are all
areas where management can take an active role in working toward eliminating stress in
the workplace.
"Management needs to go beyond 'wellness' and employee assistance programs to
facilitate stress resistance," Berkov continues. "Work environments that encourage
creative involvement, commitment, and a sense of personal accomplishment can lead to
lower incidence of worker stress."
The seminar runs from 8:30 a.m. - 4:30 p.m. Thursday, the 5th, and 8:30 a.m. -
3 p.m. Friday, the 6th. Panel members will include Bruce E. Anderson, assistant vice
president and manager, employee relations, Liberty Mutual Insurance Group, Boston;
John Corral, Esq., resident attorney, workers compensation defense, Liberty Mutual,
Orange, CA; James A. Courtney, division claims service manager, Liberty Mutual,
Pleasanton, CA; Robert G. Lasky, Ph.D., director of psychology, Mercy Hospital,
Springfield, MA; Douglas L. Mace, Ph.D., associate director for education and training,
Veterans Administration Hospital, Syracuse, NY; Stover H. Snook, Ph.D., project
director, ergonomics, Liberty Mutual Research Center, Hopkinton, MA; Robert E.
Taylor, M.D., medical director, Austin Travis Mental Health Center, Austin, TX., and
Patti Lou Watkins, Ph.D., assistant professor of psychology, Washington State
University, Pullman, WA.
(over)
Liberty Mutual provides a wide range of personal and business insurance, as well
as financial services and has been the leading writer of workers compensation insurance
since 1936. The company employs more than 1,700 people in California, as well as
21,000 people in over 400 locations throughout the U.S. and Canada.
###
G-157
NEWS RELEASE
LIBERTY
MUTUAL.
John M. Cusolito
CONTACT:
(617) 574-5512
LIBERTY MUTUAL INSURANCE GROUP
PUBLIC RELATIONS DEPARTMENT
175 BERKELEY STREET, BOSTON, MASS. 02117
October 7, 1991
FOR RELEASE:
LIBERTY MUTUAL ANNOUNCES MAJOR EXPANSION OF ITS
WORKERS COMPENSATION MANAGED CARE PROGRAM
BOSTON -- Liberty Mutual Insurance Group, the country's largest provider of
workers compensation insurance and services, announced today that it has
significantly expanded its workers compensation managed care program in 29
states and Washington, D.C., through a hospital PPO and utilization review
services agreement with HealthCare COMPARE Corp. and its wholly owned
subsidiary, AFFORDABLE Health Care Concepts (see attachment).
Additionally, Liberty Mutual has contracted with Focus to provide hospital and
physician PPO and utilization review services in Georgia, Louisiana and
Tennessee. This expands a previous agreement between Liberty Mutual
and Focus for similar services in Alabama.
"Last year, the combined use of Liberty Mutual's medical cost management
programs saved over $140 million for our customers," said William E.
Commack, executive vice president and manager of business markets for
Liberty Mutual Insurance Group. "This expansion of the 'Liberty Preferred Care'
PPO network is further evidence of how our comprehensive managed care
approach is meeting today's increasing marketplace challenges."
(more)
Managed Care/Page 2
These new agreements, plus existing contracts with OUCH in California
and COMPRO in Illinois, enable Liberty Mutual to provide its customers with
enhanced medical cost management services through workers compensation
PPO networks in 35 states and the District of Columbia. These networks are
supportive of Liberty Mutual's total workers compensation managed care
approach which has among its features a Panel Physicians program. A key
component of the company's managed care approach for 40 years, this
program complements its PPO network by using locally approved physicians
across the country to provide expert, initial medical attention to an injured
worker.
"While many companies have recently discovered managed care through
employee benefit programs, Liberty Mutual has been delivering the advantages
of this unique approach to our customers for almost 80 years," said Commack.
"Liberty Mutual's definition for workers compensation managed care is broader
than the industry's because it starts with Loss Prevention and continues to
include extensive case management and rehabilitation services."
Along with its Panel Physicians program, Liberty Mutual's managed care
approach features:
- Medical Coordinator Program, a review process that guarantees all medical
costs are reasonable, necessary and directly related to the accident.
- Medical Advisor Program, a peer review process where Liberty Mutual's
specialists give medical input and guidance for treating physicians and
assist in evaluating the care and cost of a patient's case.
(more)
NEWS RELEASE
LIBERTY MUTUAL INSURANCE GROUP/BOSTON
NEWS RELEASE
Managed Care/Page 3
- A network of 150 Rehabilitation Nurses that provides case management
by working with the patient and doctor to ensure the best quality care and the
highest degree of recovery in the shortest period of time.
- The Liberty Mutual Rehabilitation Center and Medical Clinic, located in
Boston, which was established in 1943 to treat occupational injuries.
- Disability Management programs such as LIMBER for back injuries, and
vocational rehabilitation which works to restore employees to their pre-injury
job if possible, or modified duty.
The Liberty Mutual Insurance Group provides a wide range of business
insurance including workers compensation, general liability, commercial auto
and property insurance; personal insurance; individual and group life; and
financial services. The company employs 21,000 people in over 400 locations
across the U.S. and Canada.
###
NEWS RELEASE
LIBERTY MUTUAL INSURANCE GROUP/BOSTON
NEWS RELEASE
STATES WITH LIBERTY MUTUAL - HEALTH CARE COMPARE
CORP./AFFORDABLE HOSPITAL PPO AND UTILIZATION
REVIEW SERVICES
Arizona
Arkansas
Colorado
Connecticut
Florida
Indiana
lowa
Kansas
Kentucky
Maine
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
New Hampshire
New Jersey
New Mexico
North Carolina
Ohio
Oklahoma
Pennsylvania
Rhode Island
South Carolina
Texas
Utah
Vermont
Virginia/Washington D.C.
Wisconsin
MEETING AMERICA'S
HEALTH CARE CHALLENGE
Solutions for a fair, cost-efficient system
Cocheco Falls Millworks
100 Main Street
Dover, New Hampshire 03820
LIBERTY
Telephone: 603-749-2600
MUTUAL
Ext. 31000
LIBERTY
800-451-7065
MUTUAL®
Robert D. Goodman
Administrative Manager
Liberty Mutual
Insurance Group/Boston
Cocheco Falls Millworks
100 Main Street
Dover, New Hampshire 03820
LIBERTY
Telephone: 603-749-2600
MUTUAL
Ext. 800-451-7065 31000
Robert D. Goodman
Administrative Manager
Liberty Mutual
Insurance Group/Boston
ROBERT L. LASZEWSKI
BIOGRAPHY
Robert Laszewski is Executive Vice President and Chief Operating Officer, Group
Markets, for the Liberty Mutual Insurance Group. For the last three years, he has
participated in our country's public policy debate on health care reform.
Based upon total assets of more than $18 billion, Liberty Mutual Insurance Group is one of
the leading providers of insurance products and services, including health and disability
management.
Mr. Laszewski has written and spoken widely on the subject of health care reform
generally and insurance reform specifically. He has appeared in health care features on
CNN, NBC, PBS, and N.P.R.
Reactions to Mr. Laszewski's efforts have included the following:
"...one of his industry's harshest critics and its boldest advocate for
reform." (USA Today)
"The boldest proposals to come from the insurance industry." (Fortune
Magazine)
"...one who advises key congressmen and has been instrumental in several major
proposals pending before Congress has had a heavy influence on the Pepper
Commission report." (Health Market Survey)
Laszewski is "moving beyond the slogans and placards and saying what really
has to be done." (Hanns Kuttner, White House Aide, quoted in the Boston Globe)
Mr. Laszewski is a member of the Board of Directors of the non-partisan Alliance for
Health Reform, chaired by Senator Jay Rockefeller, and the Board of Directors of his
company (Liberty Life Assurance Company of Boston). He has participated on a number
of Health Insurance Association of America committees and task forces, including serving
as chairman of the Provider Relations committee and serving on the Board Task Force on
Cost Containment and the working group on the ethics of genetic testing and insurance.
His opinions are regularly sought by groups such as the Brookings Institution, the
American Lung Association, the American Academy of Orthopedic Surgeons, the American
Medical Association, the American College of Physicians, the Kellog Foundation, the
Society of Internal Medicine, and the Association of State Health Officials, as well as state
policy makers and regulators, hospital administrators, and religious groups. He has
offered his perspective on health care reform in testimony before several committees of
both the Senate and the House of Representatives.
Mr. Laszewski's opinions are often found in trade and national publications. He is the
author of a series of papers and articles accumulated under the title "Meeting America's
Health Care Challenge."
For further information contact John Cusolito, Liberty Mutual Insurance Group, 175
Berkeley Street, Boston, MA 02117 (617)574-5512.
MEETING AMERICA'S HEALTH CARE CHALLENGE
Solutions for a fair, cost-efficient system
Robert L. Laszewski is Executive Vice President and Chief Operating Officer, Group
Markets of the Liberty Mutual Insurance Group.
The Liberty Mutual Insurance Group has combined assets of over $35 billion. Its
operations include the management of health and disability management. In 1989,
Liberty paid $2.6 billion in health care costs on behalf of its customers.
Mr. Laszewski has been a leader in our nation's health care debate. He has been the
author of numerous papers that have been widely distributed in health policy circles.
His activities have gained wide attention and have been referred to in numerous articles
in the media.
Reactions to Mr. Laszewski's efforts have included the following:
" the insurance industry is trying to fend off heavy-handed political solutions with
proposals of its own. The boldest comes from Robert Laszewski, Executive Vice
President of Liberty Mutual Insurance, Boston "
Fortune
"Three basic insurer factions are currently forming, although the battle lines are still
being drawn. The first is supporters of most of the original Pepper Commission
proposal, which was heavily-influenced by the congressional consultations of Liberty
Mutual top exec Robert Laszewski."
Health Market Survey
Hanns Kuttner, an aide to President Bush at the White House, applauds
Laszewski " for moving beyond the slogans and placards and saying what really
has to be done."
Boston Globe
In this folder you will find four of Mr. Laszewski's papers on health care reform:
The American Health Care System: A Challenge to Conscience
America's Health Care Crisis: Now Is the Time for Action
Social Responsibility and Free Market Efficiency (Prepared for the Pepper
Commission Staff)
An Outline for Health Care Financing Reform: Moving Toward
a Rational System
We hope this material provides you with a new perspective on our country's health care
crisis. Please complete and mail the enclosed reply card to receive additional copies of
the "Meeting America's Health Care Challenge" folder for you or your associates.
LIBERTY
MUTUAL
Liberty Mutual
Insurance Group/Boston
HC-E
BIOGRAPHICAL SKETCH
Name:
Gary L. Countryman
Birthplace:
South Bend, Washington - 7/30/39
Marital Status:
Married - four children
Education:
University of Oregon - M.S. in Business and Economics,
Cum Laude, 1963.
University of Oregon - B.S. - 1961.
Career at Liberty
Mutual Insurance
Company:
1963 - '64 --San Francisco, variety of Operating
Departments.
1964 Home Office Actuarial Department, Research
Associate.
1975 Assistant Vice President.
1977 Vice President and Director of Corporate Research.
1980 Senior Vice President.
1981--President.
1985 President and Chief Operating Officer.
1986 President and Chief Executive Officer.
1987--Chairman of the Board and Chief Executive Officer,
Liberty Life Assurance Company of Boston.
1991 Chairman of the Board, President and Chief
Executive Officer, Liberty Mutual Insurance
Company and Liberty Mutual Fire Insurance
Company.
Directorships:
Liberty Mutual Group - (see attachment)
Bank of Boston Corporation, Boston
First National Bank of Boston
Boston Edison Company
The Neiman-Marcus Group, Inc.
Northeastern University - Trustee
Alliance of American Insurers
Dana-Farber Cancer Institute - Trustee
Institute for Circadian Physiology - Trustee
Museum of Science - Overseer
United Ways of Eastern New England - Executive Committee
Massachusetts General Hospital - Overseer
Sudbury Valley Trustees - Trustee
American Institute for Property and Liability Underwriters/
Insurance Institute of America - Director
Clubs:
Algonquin - Boston, MA
Mid-Ocean Club - Bermuda
LIBERTY MUTUAL INSURANCE GROUP
Chairman of the
Board:
Liberty Mutual Insurance Company, Boston
Liberty Mutual Fire Insurance Company, Boston
Liberty Financial Services, -Inc., Boston
Liberty Life Assurance Company of Boston
Liberty Mutual (Bermuda) Ltd., Bermuda
Liberty Mutual Management (Bermuda) Ltd.
Liberty Insurance Corporation
Liberty Mutual Insurance Co. (Massachusetts) Ltd.
Liberty International Insurance Agency
Liberty Northwest Corporation, Oregon
Liberty Mutual Capital Corporation (Boston)
LEXCO Limited
Berkeley Management Corporation
Helmsman Management Services, Inc.
Helmsman (Underwriting) Limited
St. James Realty Corporation
St. James Village Ltd.
St. James Court Ltd.
St. James Holding Co. (Bermuda) Ltd.
St. James Management Co., Ltd.
Stein, Roe & Farnham, Inc.
SteinRoe Services, Inc.
LM Insurance Corporation
The First Liberty Insurance Corporation
Dover
City/State: NH uberryMutual
Event:
Date:
OFFICE OF PRESIDENTIAL ADVANCE
CONTACT SHEET
Name
Office
Phone Number
Presidential Advance Office
202/456-7565
Presidential Advance Fax Number
202/456-2820
Patricia Conved
WH AW
702 456 7545
MEL LUKICNS
WHAOV
202/456-7565
Barbara Russell
Dover Town chair
603/749-6889
Hugh Grege
Bush (Theyle NH
653/647-3000
Bob Simon
WH Speechwriting
202 -456 - 7750
Kerrie Dely-Ryan
Liberty matual
(603)749-2600 X31021
(659-7911)
home,
Carol Mathis
Libesty Mutual (603)749-2600 X 31950 664-1 5207
Lynn LAWSON
WH Political Affairs $ 702.4566510
name
603692
JohNE JohNE.Chodes Chodes
GUANdSMARK Security 749-2600-31977 7288
James Earle
Guardsmar4-Supervisor (617)423-0111 (617)545-5693 (hame)
Bob Steele
WHCA
202/395-4040
Richard Williams
WHCA
202/ 257 - 5196
Dave ulc Carthy
NH STATE Police
271-3636
Jim Fitton
crsss/concird
603 228-3428
LARRY SPERC
USSS/PPD
202-395-4112
PAUL King
WHS
617-382-7537
Bob GooDinGow
603-749-2600
31000
Brian Montgomery
White House Advance for Press 202/456-7565
Cory Tilley
Bush-Qrayle NH
603-647-3000
Kelley GANNON
WH Advance
202-456-7565
Diane TURNER
LM /Media Relatives
Boston)
w 617-5745752
# 617-648-2321
202 - 456-7565
DALE JENKINS
WH/ADLANCE
NH 603-431-2300
Workers Compensation:
A Call For Reform
The Customer's Advocate -
Because We Understand The Costs Involved
Today, many state workers compensation systems are in trouble. As the leading writer of this insurance, Liberty has a stake in
a healthy system. When Liberty was created in 1912 to underwrite workers compensation, it was our only business and it is
still our largest, accounting for 48% of our premium. When the system works well, we all benefit; if it works poorly, we all
lose - especially the injured worker. Using a national coalition and print advocacy campaign, we are trying to raise national
awareness about the seriousness of the workers compensation problem and inspire reform at the state level.
THE PROBLEM: Many states are suffering a severe workers compensation crisis. The primary threat to these systems is rapid
cost escalation of the underlying factors that comprise workers compensation. Rising medical and legal costs are partly to
blame, and so is a frequently inefficient state administrative system.
THE SOLUTION: We believe that to reform the system, a national organization is needed to help create and sustain coali-
tions at the state level. Liberty Mutual has undertaken two initiatives to help raise national awareness of our troubled workers
compensation systems, and to inspire meaningful reform at the state level.
1. To encourage a national dialogue, our Chairman, President, and CEO, Gary L. Countryman, has helped form a national
organization called, "The Labor-Management Group on Workers Compensation." The core group has representatives from
business, labor, the medical profession, and insurance. In addition, lawyers, academics, legislators and regulators are all
periodically invited to participate. We are also encouraging the creation of similar coalitions in many states.
2. Liberty Mutual developed a workers compensation advocacy campaign which has appeared in major national business
publications. Once again our message is simple: When the system works well, everyone benefits. When it fails, everyone
loses - especially the injured worker.
The following are what Liberty sees as the four pillars of a healthy workers compensation system:
I. LOSS CONTROL - A system that places heavy emphasis on accident prevention and rehabilitation.
II. QUALITY MEDICAL CARE AND ADEQUATE INCOME BENEFITS — A system that promptly provides the basic needs
of injured workers.
Liberty Mutual Insurance Group / Boston
III. EFFICIENT, DISPUTE-FREE BENEFIT DELIVERY - A system that delivers medical and income benefits to injured
workers in the most efficient and dispute-free ways possible.
IV. COST STABILITY - - A system that provides cost stability within the framework of common sense notions about inevi-
table rates of inflation.
As the consensus is built for workers compensation reform, Liberty Mutual is also advocating some important steps for
restoring our workers compensation systems. Some of these steps are designed to manage the cost of providing quality
medical care and are derived from years of claims experience as the largest workers compensation insurer. Other recommenda-
tions are based on well-run state administrative systems. All of the following, however, support the common goal of fast, fair
benefits delivered in as dispute-free manner as possible.
1) Provide quality managed care from the moment of injury. In addition to assuring that workers get the right kind of medical
care for an injury, this encourages teamwork between the employer and employee, to quickly get the employee back to work.
2) Coordinate treatment, rehabilitation and return-to-work efforts. It is important that the employer and insurer work together
to make sure there is timely and open communication with the employee. It is essential that proper treatment, occupational and
vocational rehabilitation, and plans for returning to work be developed in a reasonable and cost-effective manner.
3) Eliminate "doctor shopping." Most troubled systems allow for unrestricted treatment. This can open the door for abuse
by continually allowing new doctors into the process, which can unnecessarily prolong disability and sometimes lead to a
"battle of experts" over the extent of a disability. This can be curtailed by use of independent medical examiners or through
creating or strengthening appropriate provisions in the law.
4) Establish sensible fee schedules and periodic reviews for medical services. Medical service fees must be realistic and
reasonable. Fee schedules can reduce litigation and the associated costs.
5) Emphasize dispute-free resolution. This was the original intent of the system. Disagreement in any claim should be dealt
with promptly, thus reducing the need for attorney involvement. Educating employees of their rights and employers of their
responsibilities is a key to avoiding disputes.
6) Build efficient administrative systems. A well-funded, well-staffed and "hands on" administration for workers compensa-
tion would enable the system to work more quickly and efficiently.
Fighting The High Cost Of
Auto Insurance
The Customer's Advocate -
Because We Understand The Costs Involved
Over the past decade, rising auto insurance costs have hit everyone where it hurts most - in the wallet. Liberty Mutual
understands the impact high premiums can have on our customers and we work hard to help control costs and promote safety
- an important way of controlling costs.
Why Auto Insurance Costs Go Up. There are five simple factors that determine the cost of auto insurance. They are:
1.
People have automobile accidents
2.
Cars are expensive to repair
3.
Medical treatment for accident victims is expensive
4.
People steal cars
5.
Some people submit fraudulent or inflated claims.
Each problem requires different solutions. Some solutions can come from individuals, such as wearing safety belts or driving
within the speed limit. Others require substantial spending by government agencies that are already on a tight budget. And
some solutions require changes by large segments of society so that laws and regulations can be changed. Yet only by work-
ing together at all levels can we control auto insurance costs.
WHAT LIBERTY IS DOING TO CONTROL AUTO INSURANCE COSTS AND HOW YOU CAN HELP
1.
Reducing Accidents Through Research and Legislation. Liberty played a major role in researching the effectiveness
of safety belts, air bags and anti-lock brakes at our Research Center in Hopkinton, Massachusetts. Now we've joined with
other insurance companies and consumer groups to form Advocates for Highway and Auto Safety. We're working together
on legislation and proactive programs to address:
drunk driving
safety belt use
child safety seat use
speed enforcement
Liberty also offers "safe driver" discounts and discounts for putting safety equipment in your car. You can help by driving
defensively and within speed limits; supporting police in their traffic control efforts; supporting legislation to crack down on
drunk and reckless driving; and buying cars with air bags, safety belts and anti-lock brakes.
Liberty Mutual Insurance Group / Boston
2. Reducing Repair Costs. Studies show the cost of repairing a totally demolished car retailing at $17,500 is $60,755 in
replacement parts made by the auto manufacturer, plus labor charges. Liberty is working in two areas to reduce repair costs:
A) Reinstatement of federal 5 m.p.h. bumper requirements and introduction of legislation requiring car manufactur-
ers to include information on bumper strength on new car stickers, and
B) Recommending the use of less costly, high-quality Quality Replacement Parts made by independent manufactur-
ers. Liberty Mutual fully guarantees the use of these parts. You can help cut repair costs by supporting legislation to improve
the safety of cars, using guaranteed Quality Replacement Parts where appropriate and buying cars with 5 m.p.h. bumpers.
3. Programs to Prevent Injuries. Liberty Mutual supports ongoing efforts to control medical costs. The best short-term
solution, however, is to prevent injuries or reduce the severity of those that do occur. Individuals can help by obeying speed
limits, driving to suit road conditions, never driving while under the influence of drugs or alcohol, using safety belts and
purchasing cars with air bags.
4. Initiating New Laws And Devices To Combat Auto Theft. Auto theft has been on the rise steadily since 1983. Liberty
participates in Auto Theft Prevention Bureaus that make grants to local police departments in areas with substantial theft.
We have also taken the lead in promoting an electronic retrieval system to help recover stolen cars and we provide discounts
for installing anti-theft devices. To avoid having your own car stolen, you should park in well-lit areas, lock your car and take
the keys and install an anti-theft device.
5. Supporting Anti-Fraud Activities and No-Fault Laws. Fraudulent claims lead to higher insurance rates for everyone.
Liberty has established a special unit to root out fraud. We also support legislation that establishes government-run anti-
fraud units.
In addition, many claims for minor bodily injuries clog our courts and drive up auto insurance costs in some states. In these
states, the solution is a good no-fault system where victims receive benefits quickly, and lawsuits are only permitted for
serious injuries. With such a no-fault law, your insurance company pays you if you are injured, no matter who is at fault.
Encourage your state legislator and insurance commissioner to establish a good no-fault law.
Each state has different problems. Some have a high number of accidents, but low auto theft rates. Others have low accident
rates but a very high incidence of lawsuits related to bodily injury. While the combinations may be different, the end results
are the same. Whenever one factor is substantially higher than the national average, auto insurance costs will reflect the
difference.
Revamping The Health Care System
The Customer's Advocate -
Because We Understand The Costs Involved
Liberty Mutual is working on a national level to make our health care system fairer and more affordable for our customers and
create a "seamless" system that insures everyone. We believe that all the people involved - insurers, doctors, hospitals,
politicians and even consumers, need to work together for meaningful reform to occur.
THE PROBLEM
America spends 12% of its Gross National Product on health care. Not only do we spend nearly 50% more than other
industrialized nations, we clearly get less. More than 37 million Americans have no health insurance or are not eligible for
public "safety net" programs. Most employers have seen the cost of their group insurance plans rise by 20% in each of the last
three years. Each year, more and more employers must drop or severely restrict coverage, leaving their employees unprotected.
One of the biggest roadblocks to developing a better health care system has been fear of who will pay the bill.
THE SOLUTION
To overcome this barrier, Liberty Mutual is advocating a two-phase plan.
Phase 1 would implement the many solutions that can have a fundamental impact on the system without costing great
sums of money.
Phase 2 can then tackle the more costly changes that will create a "seamless" system and provide for adequate reimburse-
ment.
Here are a number of changes, most of them "revenue neutral," that can be accomplished in Phase 1 and have a profound
impact on the system:
1) Modify insurance industry practices. Eliminate the medical underwriting and pre-existing condition provisions that
exclude many people. Insurance companies should compete on the basis of how effectively they manage their customers'
health care dollars rather than on which Americans to exclude from coverage.
Liberty Mutual Insurance Group / Boston
2) Improve public programs. The government must broaden the "safety net" for those who cannot afford health
insurance. Primary care should first be offered to the poor, especially children and pregnant women.
3) Reform the method by which medical malpractice claims are paid. The threat of being sued for malpractice has an even
greater impact on the cost of health care than the actual cost of the malpractice insurance. Many times this threat forces
doctors to practice defensive medicine to avoid a potential lawsuit. Much of this paranoia can be relieved if before filing a
lawsuit, the claimant could submit their claim to arbitration. If the claimant felt that the outcome of arbitration were
unsatisfactory, they could then bring a court suit. This would resolve problems more quickly and still protect the consumer's
right to sue. Also, clearer and more rational criteria should be developed for what constitutes negligence.
4) Lower administrative costs. Currently various insurers, government agencies and Medicare use different claims
forms and procedures. The technology has existed for some time that would enable all payers to use one system of electronic
claim filing and payment, which would dramatically reduce adiministrative costs.
5) Reimburse the most efficient and effective providers. A common system could also be the basis for information on
relative costs among providers. With a central information pool, appropriate treatment guidelines can be established which
would tell doctors, consumers and payers a great deal about the most effective treatments.
6) Establish "Centers of Excellence." Hospitals should establish area "Centers of Excellence"to eliminate duplication of
expensive equipment which negatively affects both cost and quality.
Having accomplished Phase 1, we can turn our energies to Phase 2 to create a"seamless" system that provides care to all
Americans.
The health care crisis in America presents us with economic and political challenges as well as challenges of conscience. It's
not a problem that Liberty Mutual or the insurance industry can solve alone - it will take the cooperation of everyone
involved.
Dover
City/State: NH
Event:
Date:
OFFICE OF PRESIDENTIAL ADVANCE
CONTACT SHEET
Name
Office
Phone Number
Presidential Advance Office
202/456-7565
Presidential Advance Fax Number
202/456-2820
Patricia Conved
WH AN
702 456 7545
MEL LUKIENS
WHADV
202/456-7565
Barbara Russell
Dover Town chair
603/749-6889
Hugh Gregg
Bush (Theyle NH
653/647-3000
Bob Simon
WH Speechwriting
202 - 456 - 7750
Kerrie Daly-Ryan
Liberty Matual
(603)749-2600 X31021
(659-7411)
Carol Makis
Libesty Mutual (603)749-2600 X 31950 664-1 5207
LYNNLANSON
WH Political Affairs
$ 702.4566510
name
JohNE.Chodes
603692
GUANdSMARK Security 749-2600-31977 7288
James Earle
GuardsmarY-Supervisor
(617)423-0111
(617)545-5693 (hame)
Bob Steele
WHCA
202/395-4040
Richard Williams
WHCA
202/757-5196
Dave uc Carthy
NH STATE Police
271-3636
Jim Fitton
crsss/concird
603 228-3428
LARRY SPERC
USSS/PPD
202-395-4112
PAUL Kind
WHS
617-382-7537
Bob GooDmen
603-749-2600
X31000
Brian Montgomery
White House Advance for Press 202/456-7565
Cory Tilley
Bush-Qrayle NH
603-647-3000
Kelley GANNON
WH Advance
202-456-7565
Dicene TURNER
DALE JENKINS
LM / Media Relatives
w617-5745752
IT 202-456-7565 - 617 - 648 - 2321
WH/ADLANCE
NH 603-431-2300
AUTOMATIC CRASH PROTECTION
AND CHILDREN
Child
There are two kinds of automatic occupant protection
systems available today: air bags and automatic safety
belts. Each is designed to protect front seat passengers
and is available in all new passenger cars.
AUTOMATIC
SAFETY BELTS
Automatic safety belts
move into place around
Safety
front seat passengers
when the car doors are
closed. They are not
IN YOUR
designed, and should not
be used, to install child
AUTOMOBILE
safety seats in a car.
Some cars with automatic belts also have manual lap
belts. In these cars, the manual lap belt should be used
to install a child safety seat. For cars without manual lap
belts, the child safety seat must be installed in the rear
seat. Most cars without manual lap belts allow for belt
installation (check instructions in the owner's manual).
Shoulder-only Automatic Belts are designed to protect
adults. Children in a car equipped with shoulder-only
automatic belts should sit in the rear seat and use a lap
or lap-shoulder belt.
Lap/Shoulder Automatic Belts can be used for an
older child if the shoulder portion fits smoothly across the
chest and shoulder. If it does not, place the child in a rear
seat lap or lap-shoulder belt.
AIR BAGS
Air bags offer excellent
frontal crash protection,
especially when used in
combination with lap and
shoulder safety belts. The
air bag remains concealed
until a frontal crash of
about 12 mph causes it to
inflate.
Air bags are only part of a total occupant protection sys-
tem. Children in the front seat of an air bag-equipped car
should be secured in a child safety or booster seat or by
the car's lap belt. This will hold them in place for air bag
protection in a frontal crash, while protecting them against
side, rear and rollover collisions.
LIBERTY
MUTUAL
PR-134 R1
4/90
Chila Safety IN YOUR AUTOMOBILE
OCCUPANT PROTECTION
FOR CHILDREN
WHY IT'S NEEDED
Each year, hundreds of young lives could be saved and
thousands of injuries prevented or reduced in severity if
children were properly protected in cars.
During a crash, unprotected occupants are thrown around
inside the car after the vehicle hits an object and halts.
Even a sudden stop can hurl unprotected children through
a car like missiles. A child held on a grownup's lap "for
protection" may be crushed against the dashboard by the
adult's weight. No one has the strength to keep a child
from smashing into the car's interior, or from being ejected
from the car during a crash.
HOW IT WORKS
Occupant protection systems, correctly used, help keep
people from being tossed around in a car. They hold
All 50 states now have child
passengers in place and absorb some of the violent
passenger safety laws.
energy, while spreading the forces of a crash over strong
parts of the body. In short, occupant protection systems
limit the injury to the passengers inside the car.
Many safety systems are available to
HOW TO USE IT
protect young passengers on our
Child safety and booster seats are certified by the man-
roads. This brochure will help you
ufacturers to meet federal safety standards when they are
make a choice by answering the
used as designed. Improper installation or use may reduce
the protection to your child.
questions most often asked about
their use.
Always anchor the seat to your car with the car's lap belt
exactly as specified by the manufacturer.
If you need additional information
Always protect your child with either the harness or
padded front shield, depending on what model child
about child safety seats.
or
safety seat you have. Some seats have both and, in
another automotive safety topic.
call
that case, both must be used.
the National Highway Traffic Safety
Always adjust the harness around seasonal clothing,
Administration's Toll-Free Auto Safety
leaving an inch of room SO the child can move. The
Hotline:
strap ends must be doubled back through the buckles,
SO the harness will not pull apart.
(800-424-9393)
Always use the tether
if your safety or booster
(426-0123 in the
seat requires one.
Some older models
Washington, D.C. Area)
have a tether that must
be attached to keep
the child from being
U.S. Department of Transportation
thrown forward in an
Highway Traffic Safety Administration
emergency.
safety IN YOUR AUTOMOBILE
NEVER use plastic feeder seats, car beds, pillows, or
cushions which are not certified to protect children in cars.
Certified child safety seats have a label showing that they
Crash Protection For C
meet federal safety standards.
Child safety seats are a youngster's best protection a
INFANTS: BIRTH TO ABOUT 9-12 MONTHS
Protection for newborns should begin the first time they
The safest place for your child is the rear seat of a ca
ride in a car, using an infant safety seat or a convertible
seat in the infant position. When a convertible seat is in
All child safety seats manufactured after January 1,
]
the infant position, it looks and functions exactly like an
safety standards.
infant-only seat.
Not all models fit in all cars. Shop for a seat that is CO
Either of these seats cradles your baby in a semi-reclining
seat in your car.
position, protects the infant with a harness, and is an-
chored to the car with the vehicle's safety belt. The seat
Your child's safety depends on your willingness to и
must face the rear of the car SO that the baby's strong
your child rides in a car. Incorrect use of child safety
back can absorb the forces of a crash. By the time a child
chart below describes the most common mistakes m
is too big to face rearward comfortably, the chest and
hips will be strong enough for the forward-facing position.
When an infant-only seat is outgrown, a toddler seat must
Common Mistakes
replace it. A convertible seat, however, may be changed
to fit a toddler by following the manufacturer's
instructions.
Infant & Toddler Seats
Harness not fastened
shoulders.
CONVERTIBLE SEATS: BIRTH TO
ABOUT 4 YEARS
Convertible seats recline and face rearward for infants
Harness fastened too
1
and can be changed to the front-facing, non-reclining
position for toddlers.
When a convertible seat is in the toddler position, it looks
Toddler Seat
Car belt is routed thro
and functions exactly like a toddler-only seat. The man-
section of frame.
ufacturer's directions explain how to convert a seat from
one position to another, how to rethread the harness, and
how to reroute the car's lap belt through the seat in the
toddler position. In addition, the instructions will explain
Infant & Convertible Seats
Seat installed so infant
when the child is big enough to require the toddler position.
of car.
Convertible seats save
money because only one
seat is needed as the child
Booster Seat
Neither tether harness
grows. But convertible
( without shield )
shoulder harness used
models may be heavier
and more difficult to move
than infant-only and tod-
dler-only seats.
ALWAYS CONSULT THE MANUFACTURER'S INSTRU
Some convertible seats have a tether that must be an-
hildren
chored if the seat is in the toddler position. If a tether is
required, follow the manufacturer's installation directions
carefully.
gainst injury.
TODDLER SEATS
Toddler seats are de-
r.
signed for children who
981 have a label certifying that they meet federal
can sit up without sup-
port. They can only be
used forward-facing. Most
nvenient for you, try your child in it and then try the
contain a harness to pro-
tect a child's upper body,
but a few seats use a
shield system instead and
se the equipment correctly, and use it every time
some have both. It is im-
seats drastically reduces their effectiveness. The
portant to attach the lap
ade when using safety seats.
belt exactly as recom-
mended by the manufacturer. Some older models have
a tether strap that must be anchored to the car's structure.
Possible Crash Consequences
BOOSTER SEATS
Booster seats are intended for older children. NHTSA
over child's
Child could come out of harness
recommends that parents keep their children in toddler
or convertible seats as long as possible, at least until the
and be thrown against interior
child weighs approximately 40 lbs. Boosters elevate chil-
surfaces of car or ejected.
dren SO the car's lap belts fit across their hips and pelvic
bones, or the booster shield, rather than their stomachs.
oosely.
Child can tip forward and strike
Boosters with a harness must be used with the harness
interior surfaces of car.
or with the car's lap/shoulder belt. Models that come
equipped with a shield for upper torso support should
only be used with the shield and the car's safety belt.
ugh lowest
Seat can tip forward.
or
completely over and child can strike
interior surfaces of car.
YOUR CAR'S SAFETY BELTS
Child safety seats are more effective than safety belts for
small children. But when no safety seat is available, any
faces front
Injuries because of extreme pressure
child who can sit up unaided should be protected by a
on the most fragile parts of the
safety belt. Safety belts
body.
may be used for children
who have outgrown
safety seats.
nor
Child could be thrown against
interior surfaces of car.
Do not use the shoulder
belt if it falls across the
front of the neck. Instead,
use the lap belt only and
fasten it snugly and as low
as possible across a child's
hips. The safest place to
use safety belts for young-
CTIONS WHEN INSTALLING A CHILD SAFETY SEAT
sters is in the rear seat of
your car.
How to survive
THE
TEENAGE
DRIVING
YEARS
a guide for both
teenagers and parents
LIBERTY
LIBERTY
MUTUAL
®
MUTUAL
®
Liberty Mutual Insurance Group/Boston
PR-133 R4
Printed on recycled paper in the U.S.A.
8/91T
NIGHT DRIVING
The fatal crash risk of teenage drivers is
higher between 9:00 p.m. and 5:00 a.m. than
any other times. For example, the nighttime fatal
crash rate per mile for 16-year old boys is four
times that of their day rate and eight times the day
rate for girls.
80
Drivers in Fatal Car Crashes
Night
Per 100 Million Miles, By
60
Age, Sex, and Time of Day
Males
40
There is no better way for a young
Females
Night
driver to gain experience and driving
20
Day
knowledge than actual, hands-on experi-
Day
0
ence. Unfortunately, for many teenage
16
17
18
19
20-4
25-9
30-9
40-9
50-9
60-9
70
+
drivers their experiences are sometimes
Age
tragic. Auto accidents are the number
Source: Insurance Institute For Highway Safety, 1989
one killer of our nation's youth, killing
TO THE PARENTS: By establishing reasonable
more than 8,000 teenagers each year.
curfews for your children and making sure that
Liberty Mutual Insurance Company
they adhere to them, there will be fewer teenage
believes that if parents and teenagers
drivers on the road during those hours when the
work together, the injuries and fatalities of
fatal crash rate is considerably higher. Friday and
Saturday nights are the nights when curfews are
teenagers on our nation's highways can
the most important. "Cruising around" late on
be reduced.
weekends causes most teenage deaths in auto
Throughout this brochure, Liberty
accidents, and curfews for teenagers will help
Mutual provides facts and possible ways
alleviate this problem and will also help keep the
that parents and teenagers can work
nation's youth off the road during the time period
when drunk driving is more prevalent.
together to avoid auto accidents.
We urge parents and teenagers to
TO THE TEENAGER: Your parents may set cur-
discuss these points and establish a group
fews for you to follow. That doesn't mean that they
of common rules to live by. Now is the time
don't trust you, or that a curfew is some type of
punishment; all it means is that they care about
to address this important matter. It's too
you and are concerned about your safety.
late after tragedy strikes.
Nighttime driving is more difficult for all driv-
ers because visibility is reduced, the glare of
oncoming headlights can be blinding, and drivers
are generally more tired at night. Drunk drivers
are also a concern late at night, and while you may
be a safe and courteous driver, you always have
to watch out for the other drivers on the road.
ALCOHOL, DRUGS
AND YOUTH
SAFETY BELTS
Inexperience at both drinking and driving is
Belt use laws have increased the use of
often a fatal combination for teens. Alcohol, which
safety belts in many states, but the latest esti-
impairs the decision making and control process,
mates show that less than half of all drivers and even
is present in nearly half of all fatal car crashes. If
fewer passengers use safety belts. Teenagers
alcohol is consumed faster than the body can
wear their safety belts even less than older adults.
dispose of it, a gradual build-up takes place. This
Over 625,000 serious facial injuries, 180,000
build-up is called Blood Alcohol Concentration or
cases of brain injury, and 5,000 spinal cord in-
BAC. In most states, a BAC of 0.10 percent (unit of
juries result annually from automobile accidents.
weight/percentage of volume) is considered legal
Safety belts, when worn, reduce the number of
proof of intoxication. For teenagers, it has been
deaths or serious injury by 45 percent. States that
found that one-third of male drivers and one-sixth
have enacted mandatory safety belt laws have
of female drivers killed in motor vehicle crashes
noticed a reduction in the death and injury rate in
have even higher concentrations of alcohol in their
auto crashes.
blood.
TO THE PARENTS: Safety belts are an effective
TO THE PARENTS: Your children learn by exam-
means of preventing a disabling injury, or a fatal-
ple, usually your examples. If they see you using
ity. Over 50 percent of ALL drivers in the United
and abusing alcohol and other drugs, then they
States do not wear their safety belts, adults
may assume that it's okay for them to do the
included. Parents, this is the one area where your
same. Of course it isn't, but it can be difficult for
examples are closely followed. If your state has a
parents to justify why they can do something their
safety belt law, obey it. If your state doesn't have
children can't. As far as drinking and driving is
a law, set an example for others and buckle up.
concerned, no one should drive drunk. If you are
Whenever anyone gets in the car, insist that all
drinking, please don't drive. Once again, if your
passengers buckle up and make wearing a safety
teenagers see you do it, they'll probably do the
belt a requirement for your teenage drivers when-
same. This is one area where examples of your
ever they use the car.
social and driving habits will have a great effect
on your children.
TO THE TEENAGER: Disabilities resulting from
crashes can change your future in just a matter
TO THE TEENAGER: Alcohol and drugs are
of seconds. Those simple tasks, like running,
present everywhere in our society and are
talking and walking, that are so easily taken for
abused and misused by young and old alike. A
granted, could be gone forever. Just dialing a tele-
common belief among teenagers is that drinking
phone could become a difficult task. A facial
is "the grown- up thing to do," but the truth is that
injury could leave a scar for life.
being a responsible drinker and being account-
The best way for you to protect yourself in a
able for your own actions, drunk or sober, is the
car is by wearing a safety belt. A popular belief is
mature thing to do. Liberty Mutual would like to
that safety belts are only for bad drivers. Safety
urge teenagers to make responsible decisions for
belts are meant for everyone, and good drivers
themselves. Chances are very good that some-
wear their safety belts because they know that no
one you know has been killed or seriously injured
matter how skillful a driver they are, there is always
in an alcohol-related accident. Don't let peer
that chance that someone else might hit them.
pressure lead you to do something that may take
your life or the life of a friend.
TO THE PARENTS: Liberty Mutual hopes that the
information we've provided will prompt you to sit
SPEEDING
down and discuss these hazards with your teen-
age drivers, or if you have children who are
Thirty-three percent of teenage boys and 14
nearing driving age, start discussing driving haz-
percent of teenage girls admit to regularly driv-
ards with them now. It is most important that you
ing at speeds higher than 70 m.p.h. The faster
practice what you preach. For example: If you tell
you drive, the greater the chances are that you
your children they must wear their safety belts,
may be killed or seriously injured in an auto
wear yours also. Don't drink and drive after you
accident.
tell your children not to.
The teenage years are filled with new experi-
TO THE PARENTS: Many teenagers have a ten-
ences and new decisions to make. Combined
dency to drive above the posted speed limits.
with peer pressure, these decisions are some-
That places them at a greater risk because they
times not the right ones. Communication
are not experienced enough to know their own
between parents and their teenage children is
limitations or those of the cars they drive. Setting
an important means of establishing good driving
a good example by obeying posted speed limits at
habits, along with good social habits.
all times will provide a good foundation for your
teenagers.
TO THE TEENAGER: Your parents care about
you and your future, that's why they ask what you
TO THE TEENAGER: Speed kills. When driving
may consider to be nagging questions like,
at higher speeds, your chances of being involved
"Where are you going?" or, "Who are you going
in a serious auto accident increase significantly.
out with tonight?" They may also say, "Be care-
Driving fast gives you less time to react in an
ful!," "Be home at 10:00 p.m.," or "Drive safely!"
emergency situation, and it takes longer to bring
which you may interpret as your parents not hav-
your vehicle to a complete stop. Everyone drives
ing any faith or trust in you. But just remember, if
differently, and every car has its limitations
your parents didn't care about your safety, they
depending upon age, condition, and overall
probably wouldn't say these things.
design.
If you need to talk to your parents, or need
Through experience we learn our limitations,
help making a decision, don't be afraid to ask
but it takes time. Liberty Mutual suggests that you
them. They'l probably be pleased that you cared
play it safe when learning your own limitations.
enough to ask for their help.
Obey all posted speed limits. Don't push your
experience to the limit.
Liberty Mutual would like to remind you of these
key points:
Avoid unnecessary driving, especially
late at night.
Don't drink and drive.
Wear your safety belt at all times.
Obey all posted speed limits.
Ultimately, it's up to you to decide to drive
in a responsible and safe manner, and to make
mature, rational decisions using your own good
common sense.
Health Care Reform
SOCIAL RESPONSIBILITY AND
FREE MARKET EFFICIENCY
Prepared for the Pepper Commission Staff
Robert L. Laszewski
Executive Vice President, Group Markets
Liberty Mutual Insurance Group
Boston, Massachusetts
PREPARED FOR PEPPER COMMISSION STAFF
DECEMBER 23, 1989
REVISED SEPTEMBER 1990
SUMMARY
1. Access is a problem which must be solved.
2. But, access should be solved in such a way as to promote more market efficiency since
lack of efficiency is an even more fundamental problem.
3. The construction of public risk pools does not promote efficiency. In fact, the private
passenger auto and workers compensation risk pools that are currently in crisis prove that.
4. Health insurance carriers churn business and exclude individuals from coverage. This is
not good social policy and it does not contribute to the efficiency of the health care
system. The best way to manage these costs is to have the private sector take responsibility
for them, and therefore, have the incentive to manage them.
5. Barriers to access now in place in insurance contracts should be eliminated. Insurance
company rating for small groups should be on a community basis. The business of
insurance companies should be the basic pooling of risks and the effective management of
health care dollars.
6. While a transition government-run, or at least structured, risk pool may be necessary, the
private sector can and should continue to provide reinsurance. If there is government
reinsurance, the carriers will pass their bad claims on to the pool and will have no
incentive to compete on the basis of who is the best manager of expensive claims.
Expensive claims are the ones that need the most management.
7. Insurance carriers must act in a socially responsible manner. And, carriers must act in a
way that enhances the efficiency of the health care economy. Both of these things go
hand-in-hand.
8. Solving the problem of access through insurance underwriting reform is only one of many
elements that must be addressed. To address only underwriting reform, and not address
the need for tort reform, simplified benefits, better information about appropriate care,
appropriate provider and facility capacity, and consistency in data reporting, will fall short
of the comprehensive reforms that are necessary.
1
In An outline for Health Care Financing Reform: Moving Toward a Rational System, I discuss
a general outline for rationalizing the American health care financing system.
In this paper I will concentrate on one aspect of that: The underwriting behavior of health
insurance providers and the manner in which it should be improved.
When insurance began, the customer need was for insurers to simply provide for the pooling
of unforeseen and significant risk. As time went on, the more entrepreneurial group health
insurance underwriters came to realize that certain customers, particularly in the small
employer market, tended to have better claim experience than others. This led to the
collection and interpretation of data that could provide a competitive advantage.
Carriers began to compete over knowing who the "best risks" were and then providing rate
discounts to attract and hold them. The objective was to have the "cleanest" and therefore
most profitable pool of risks. Later, not only did carriers seek out the best risks at the time of
the initial underwriting, but they also learned how to discard the poorer risks from their
existing block of business. If they were wrong about a risk at the point of initial selection, or
if the case deteriorated over time, the response might be to eliminate that group through
cancellation, or more often, to charge a higher rate to compensate.
Many carriers became astute at risk selection and the churning of their business. At the
extreme, the most controversial behavior occurred when groups with very large claims were
cancelled and found themselves in a position of not being able to find group coverage. Or if
they did, having difficulty covering the most severe claims or being forced to pay a very high
price for it.
No insurance carrier has been immune from at least some of this behavior. Any carrier that
acted otherwise would find itself inundated by "poorer" risks that could not find coverage
elsewhere. The only practical course was to practice some form of medical underwriting or
customer selection to protect the insurance company's financial integrity. Or for the carrier to
move out of the small employer market where such practices are common.
The group insurance marketplace for companies with greater than 100 employees tends not
to be burdened by these difficulties, because risks of this size are most often "experience
rated," and stand primarily on their own claims experience. As a result, the emphasis on risk
selection, churning of business, cancellation, or claim exclusion is not so great a problem as it
is for the very small employer.
2
THE BARRIERS TO FAIR, COST-EFFICIENT HEALTH CARE
Inevitably, health care reform debates focus on the issue of access to health care and
ultimately come to an examination of these underwriting practices. And, this is appropriate.
However, while access and the impediment to access that these problems raise is indeed a
fundamental issue, I will argue that an even more fundamental problem is the cost of health
care. The fact that we spend 12% of this nation's Gross National Product (GNP) on health
care versus the 8% - 9% spent by other western industrialized nations is not because of access.
The high-cost of care is actually one of the fundamental problems that drives the access
problem.
Any solution to the access problem must be constructed in such a way as to also address the
issue of cost. The overriding problem in America's health care system is that the health care
economy is dysfunctional. The health care market suffers from great inefficiency because the
basic system of supply and demand is not working.
As we deal with the access problem, we must recognize that access for those now
excluded must occur, but it must occur in a way that is consistent with seeing the
market more efficient.
For example, many would argue that those who are "uninsurable" but able to pay for
insurance should enter a more rationalized system through risk pools. These risk pools could
be constructed at the state, or perhaps federal level, to provide health insurance for those
unable to get it because of existing underwriting practices. The objective is to cover these
people at a reasonable price without the private sector having to be burdened by these
"poor" risks.
RISK POOLS: PROBLEM OR SOLUTION
The use of these risk pools is well meaning, but I believe it does not address the most basic
requirement of effective health care reform - the system must be made more cost-efficient.
For example, creating risk pools in each state would be the wrong thing to do because:
1. The value of individuals from the private sector is that as entrepreneurs, they will be most
effective at managing their customers' money. Those individuals now considered poorer
risks are at great risk of having very sizable claims. They are the most in need of cost
management techniques. If these people are pushed off to state-run pools, there will not
be the financial accountability in these pools that there will be in a private-payers plan,
and these large and expensive claims will not be as well managed.
2. Politically controlled risk pools are nothing new. The workers compensation and private
passenger auto markets have had them for years. The risk pools have not made those
products mòre efficient. Rather, both the auto and workers compensation markets are in
more crisis than they have ever been.
3
It would be an incredible irony if the group health industry went the way of state-run risk
pools when the following have taken place:
a. Proposition 103 occurred in the California auto insurance market where risk pools
have existed for years.
b. New Jersey voters elected a governor on a platform of auto insurance reform where
the management of that state's system, including risk pools, had brought a crisis to the
state's drivers. New Jersey now suffers with more than a $3 billion deficit in its auto
insurance pool!
C. The Texas legislature held a special two-week session to reform the workers
compensation system where risk pools have been in force for many years.
Time and time again, we have learned that when risk pools are created and put
under a political jurisdiction, they are managed to respond to political pressure as
opposed to being managed in a manner that encourages financial efficiency.
3. Risk pools can take two basic forms, those that operate to reinsure carriers who "insure"
the claims but pass losses on to the pool, or risk pools that actually sell insurance to those
who cannot get it.
In the case of public risk pools that reinsure carriers, the problem is that the carrier does not
have economic incentive to manage the risk. This is simply a pass-through mechanism. In
this situation, a carrier can continue to medically underwrite and churn its business. This sort
of arrangement is nothing more than a means of sübsidizing those carriers who want to
continue to make money churning the market rather than managing health care risks. The
risk pool absorbs the poorer claims and charges each carrier proportionately. It's a level
playing field and a simple pass-through for everyone. That's fine for the insurance companies,
but it does little to help bring the health care economy to an efficient point. The carrier can
continue its underwriting practice and let the public system worry about those that are left
out.
For the public risk pool actually in the business of accepting risk from those who cannot find
coverage in the private sector, the problem of insurance companies being able to push off the
"poor" risk and continuing to compete on the basis of "creaming the market" continues. In
addition, a new problem occurs. These pools set their own rates. In a period of significant
price increases, politicians often find it difficult to increase prices as much as necessary. The
result is that pool deficits occur and they are passed on to those carriers operating in the
market in proportion to their market share. That works well in the beginning. However,
ultimately the "high-risk pool" price often becomes cheaper than what a "regular" risk might
find in the private market. Suddenly, the state pool begins to grow and what should have
been a pool for 2% or 3% of the market becomes a pool for -20% or even 50% of the market.
The marketplace simply becomes dysfunctional.
An unrealistic prediction? One need only look at the New Jersey and Massachusetts auto
pools to see that this has already happened. In fact, there are few auto or workers
compensation risk pools that are not already at this point or alarmingly close to it.
4
Both the workers compensation and auto insurance markets now face a major crisis. Why?
Because the response to insurance company underwriting practices and escalating claim levels
was to create risk pools where no one really had financial accountability, politicians controlled
the prices, insurance companies focused on risk selection, and fundamental reform was
avoided. The result was an even greater crisis.
If we are to rebalance this out of control health care economy, we must do it by
reinforcing financial accountability and not dilute that accountability with risk pools.
We must drive insurance companies to compete on the basis of who can manage their
customers' health care dollars most effectively, not who can churn business and find
the "cream" most effectively. And, we must address other fundamental issues that
prevent the health care system from operating efficiently.
In the short run, risk pools take insurance companies off the hook. In the long run, they
become political monsters that no one has the courage to control. And in the final analysis,
they do not make the health care financing system more efficient.
Risk pools do solve at least part of the access problem, because they grant access to
individuals who don't have it now. That problem must be solved. However, the larger
question remains, how do we grant access to those Americans who can pay for insurance but
are unable to get it because of existing underwriting requirements?
On the surface, the simple answer is to eliminate such requirements. But, the answer goes
further than that. Not only is access an individual problem for those people who have
significant health problems, it is also a problem for employer groups who have a
disproportionate number of high-risk or chronically ill participants.
MANAGING FOR EFFICIENCY
It is not enough to eliminate the offending medical underwriting practices. It is also
necessary to dismantle the method by which carriers cull and churn their blocks of business,
thereby competing on the basis of being the one with the most "select" portion of any given
market. As long as those who are supposed to be managing their customers' health care
dollars most efficiently turn their attention to which group is likely to be the healthiest, we
will not have an efficient supply and demand health care economy.
Insurance companies, HMOs, etc., are the method by which both the consumer and
employer attempt to be an efficient demander. Any reform that occurs must recognize that,
and either force or encourage people to take on that role. Any reform that dilutes the
incentive to be aggressive in the role of an intelligent demander or manager of health care
dollars is counterproductive.
5
I submit that reform designed at solving the access and cost issue would look as follows:
1. First, divide the market into two parts: those employers with 100 or more employees and
those with less than 100 employees. The reason for the division is that groups of 100
employees tend to be primarily experience-rated, and therefore, not subject to the culling
and churning that goes on with totally "pooled" business.
I have chosen 100 employees as the break point because the level of credibility for cases
smaller than this is relatively low. When cases of less than 100 employees are allowed to
stand on their own, it is because they are deemed to be a superior case. The result is the
culling and churning that does not serve the cause of market efficiency.
2. With respect to the market of less than 100 employee groups, all restrictions to
participating in the program on the basis of medical condition would be eliminated. As
long as the employee qualified as a full-time employee (perhaps 20 hours per week), paid
their portion of the premium, and served a reasonable waiting period before being made
effective (perhaps 60 - 90 days) there would be no barriers to participate in the employer
plan.
3. In addition, all insurance carriers serving the market would be required to "community
rate." That is, regulations would define communities (most probably geographic areas of
at least 250,000 in population) that the carrier would either choose or not choose to
compete in. The carrier would be free to set whatever rates it wished under the
presumption that it would provide the lowest cost by keeping its expenses under control,
and by being most effective at managing its claim costs through provider negotiations and
management. The "community rate" would include the following provisions:
a. One block rate for each community.
b. Each carrier "takes all comers."
c. In calculating a given customer's group rates, an industry-standard age table should
be used as well as a limited number of industry classifications. Such provisions used in
this manner would serve to both prohibit the "cherry picking" and "churning" of
business while still enabling small carriers to enter a market without having to fear
taking on an overly expensive block of business.
The carrier could vary its rates by type of coverage. Those employers wishing to exceed a
minimum level of required benefits could do so and would pay accordingly. Those buying
expensive or inefficient plan designs would pay for that luxury.
In an earlier paper, I discuss the need for a plan of minimum benefits and certain tort
reform pre-emptions that would serve to make such a health plan less costly.
4. Those groups of more than 100 employees would be subject to pricing on the basis of
their experience. This is almost universally the case now, and it does not cause the
inappropriate churning problems that exist in the small case market.
6
Groups of over 100 employees would also not be subject to any medical underwriting
requirements unless the employee is a full-time employee and serves a relatively short
qualifying period.
The purpose of requiring insurance companies to cover all employees and their
dependents, even those with serious or chronic conditions, is to force as many Americans
as possible into a rational system that concentrates on delivering effective medical care at
the lowest possible cost. The only consideration that third-party payers should have on
their mind is how to keep their overhead under control, and how to purchase required
medical care for their customers at a reasonable cost.
It is possible that an industry risk pool for very large shock claims will be necessary. It
is also possible that such a pool, administered in the industry and created through
enabling legislation, will only be necessary for a transition period. On a given day, the
barriers to access will come down and a flood of disabled and chronically ill people will
descend on the nation's private-pay system. Therefore, a transition pool may be
necessary, but only for a limited period of time. The carrier must know that it will be
ultimately accountable for these claims and it must begin to manage them. And, it
must know that its ultimate survival as a competitor will depend on how effectively it
does that, not on how effectively it avoids those who need coverage the most.
It is probable that many carriers will want to "reinsure" large claim exposures. This is
commonly done even today. This reinsurance, or pooling for insurance companies, is a
viable business, and can be accomplished as it always has been in the private sector.
And, for the sake of market efficiency, this reinsurance need should continue to be met
in the private sector where there can be financial accountability.
For example, if a carrier finds itself with a $500,000 claim but has all amounts over
$50,000 reinsured to a government pool, who has accountability to see if the
remaining $450,000 of exposure couldn't have been managed to $350,000? If a
private reinsurer is on the hook, it will either be managing that claim to reduce its
liability, or it will have an agreement in place to have the primary carrier managing it. If
the primary carrier proves not to be a good manager, the reinsurance costs will rise. In
any event, with reinsurance in the private sector, there will be an incentive for these
large claims to be managed. This serves to improve the health care system's efficiency.
7
In conclusion, I suggest the following:
1. Access is a problem which must be solved.
2. But, access should be solved in such a way as to promote more market efficiency since
lack of efficiency is an even more fundamental problem.
3. The construction of public risk pools does not promote efficiency. In fact, the private
passenger auto and workers compensation risk pools that are currently in crisis prove that.
4. Health insurance carriers churn business and exclude individuals from coverage. This is
not good social policy and it does not contribute to the efficiency of the health care
system. The best way to manage these costs is to have the private sector take responsibility
for them, and therefore, have the incentive to manage them.
5. Barriers to access now in place in insurance contracts should be eliminated. Insurance
company rating for small groups should be on a community basis. The business of
insurance companies should be the basic pooling of risks and the effective management of
health care dollars.
6. While a transition government-run, or at least structured, risk pool may be necessary, the
private sector can and should continue to provide reinsurance. If there is government
reinsurance, the carriers will pass their bad claims on to the pool and will have no
incentive to compete on the basis of who is the best manager of expensive claims.
Expensive claims are the ones that need the most management.
7. Insurance carriers must act in a socially responsible manner. And, carriers must act in a
way that enhances the efficiency of the health care economy. Both of these things go
hand-in-hand.
8. Solving the problem of access through insurance underwriting reform is only one of many
elements that must be addressed. To address only underwriting reform, and not address
the need for tort reform, simplified benefits, better information about appropriate care,
appropriate provider and facility capacity, and consistency in data reporting, will fall short
of the comprehensive reforms that are necessary.
8
LIBERTY
MUTUAL
R
Liberty Mutual
Insurance Group/Boston
AN OUTLINE FOR
HEALTH CARE
FINANCING REFORM
Moving Toward a Rational System
Robert L. Laszewski
Executive Vice President, Group Markets
Liberty Mutual Insurance Group
Boston, Massachusetts
AN OUTLINE FOR HEALH CARE FINANCING REFORM
JULY 1989
REVISED AUGUST 1990
1. Fundamental improvement can occur without major government spending or mandated
employer programs.
2. The American health care system is not working. Too many people are excluded or
receiving inadequate care.
3. Fundamentally, the health care supply and demand equation is out of balance. We do not
spend our health care dollars efficiently. As a result the costs are high and the value less
than it should be.
4. We are at a point in the debate where many argue that government should take over the
system. Government is not effective at making things efficient. It is appropriate for
government to set policy.
5. The incentives of the free market system are effective at improving efficiency. Since the
fundamental issue is efficiency, the solution lies with a more efficient market, not a
nationalized market managed by a bureaucracy.
6. We cannot solve the problem in a piecemeal fashion. A fundamental rebalancing must
occur and this can only happen in a comprehensive way.
7. There are two basic issues:
Providing access to health care for all Americans, including the 37 million who
are uninsured.
Improving the cost and quality of health care. We pay 12% of our Gross National
Product (GNP), far more than other industrialized nations, and we provide far
less access.
8. Access is a policy issue. Currently, people are excluded from coverage for various reasons,
including pre-existing medical conditions. Government can change that through
legislation. Access is also a cost issue, because many of the 37 million cannot afford to pay
for health insurance coverage. Government must pay for those who cannot pay for
themselves.
9. Health care is too expensive because the health care economy is very inefficient. These
inefficiencies can be addressed through a comprehensive program of structural change
that will have a nominal financial impact on the federal budget, and consumers and
sponsors of health insurance programs, such as employers.
About our health care system, an observer recently commented, "Americans ration care, but
not in an overt way. When we throw someone over the side, it's OK as long as we don't hear
the splash."
There are parents going to bed each night worried that one of their children will awake in
the middle of the night with a high fever and they won't have the money or the health
insurance to go to the doctor. Others go about their business every day knowing they are
somehow ill, but are not able to afford proper diagnosis and treatment. Relatively financially
secure Americans see the cost of their health insurance escalating in dramatic ways and hear
stories of unnecessary surgery and unnecessary pain. All the while, special interest groups -
doctors, lawyers, insurance companies, corporations, labor unions - jockey for position in a
"zero sum game" looking to at least hold on to their piece of the pie.
Everybody plays the health care financing game in America and fewer and fewer are winning.
1
THE HUMAN COST
America spends 12% of its GNP on health care. At the same time, many of our major trading
partners spend 8%-9% of their Gross National Product on it. Not only do we spend more, we
clearly get less. More than 37 million Americans have no health insurance or are not eligible
for public "safety net" programs. In order to qualify for Medicaid assistance, the poor are
required to meet unrealistic income requirements. In Alabama, for example, a family of three
cannot earn more than $2,000 per year in order to qualify. Across the country, the average
maximum household income for a family of three is $4,800. Beyond these income
maximums, it is expected that a family of three should be able to pay for all of their needs,
including the cost of health insurance, which will be $3,000 - $5,000 for a family. There is
little public insurance for long-term care, and what there is requires impoverishment as a
prerequisite for benefits.
Although the cost of health care is high, the quality is not always commensurate. We hear
that up to one out of every three surgeries is unnecessary when performed, our infant
mortality rate is extraordinarily high for a modern economy, and the large number and cost
of malpractice suits makes a statement about our confidence in the care we receive. It has
been said that 25% of what we spend on health care is unnecessary and wasteful.
POLITICAL REALITIES
America's health care crisis is quickly reaching a critical point. The American political system
now exists in an environment where "no new taxes" is a necessary theme. Today, this means
well-organized and well-financed special interest groups must vie to protect and grow their
piece of the political and budget pie.
In fact, the American political system has reached a point where little constructive change can
occur. These special interests are more adept at checking one another than they are at
building coalitions toward effective reform. Too many politicians survive day to day by doing
their best to give each powerful group something while offending as few people as possible in
the process. Survival for elected officials has really become a "zero sum game" as special
interests are compromised and budgets are severely limited.
In this atmosphere, political expediency becomes a dangerous reality as politicians look for
"the simple solution" that will offend the fewest powerful interest groups and appeal to the
greatest number of voters. Comprehensive solutions that address complex problems become
too difficult to sell in a "30-second sound bite" environment.
The problems of our health care financing system, as with other major social problems, are
especially vulnerable in this environment.
2
NO SIMPLE SOLUTIONS
Today, we see some people looking for that simple solution which can be expediently sold.
Often, it surfaces in national health insurance solutions generally, and in the duplicating of
the Canadian system specifically. These arguments miss the point that what is really needed is
not simply changing from private industry to public programs, but rather comprehensive
reform in the mechanics of how our health care economy operates. Those who argue for a
Canadian system must recognize that when the Canadian system was created in the 1960s, it
was layered over a health care economy generally in balance. More than anything else, what
the Canadian system has done is to maintain a balance in a system that was relatively stable
when the program was initiated.
Today, the American system is dramatically out of balance, with the fundamental problem
being the high-cost of health care. Government is not known for creating efficiency. In fact,
even the Canadian system has been unsuccessful in controlling costs. In each of the last three
decades, inflation in the Canadian health care economy has exceeded health care inflation in
the United States. Government is not known for creating efficiency, and to impose a federal
reimbursement system over a system out of equilibrium will only perpetuate those
imbalances. More than just the reimbursement system must be changed. Fundamental
reform is necessary.
THE MYTH OF MEDICARE EFFICIENCY
Many have argued that the federal Medicare system is extraordinarily efficient, because the
cost of its administration is only 2% of benefits paid, and the private-pay system can never be
so efficient. This argument brings to mind the old saying, "You get what you pay for."
The federal system is the cheapest in terms of operation, but it is also ineffective in managing
an exploding federal health care bill. And the Medicare system has not proven to be effective
in reducing the burdens of administration. A recent study by the American Medical
Association found that the average physician's office spends 47 hours per month on Medicare
paperwork. Federal programs have initiated such controls as Diagnostic Related Groups
(DRGs), which now look at the relative value scales and geographic caps for physician
reimbursement. But little or nothing is being done to manage the day-to-day purchasing of
health care on behalf of beneficiaries to improve both cost and quality.
While the more macro management schemes, such as DRGs, have made hospitals more
efficient, they have also forced providers to be adept at cost-shifting to the private sector. In
effect, the current federal health care program represents a budget out of control and a major
indirect taxing scheme as the value of government underpayment is "cost-shifted" to the
private sector. The value of just the Medicare cost-shift has been estimated to add 20% to the
bills of private-pay patients. Private-pay health care consumers, employers sponsoring
corporate group insurance plans and third-party payers all must pay artificially higher prices
to subsidize the federal and state "management" of public programs.
3
The point should not be lost that without a private-pay system to shift costs to, the per capita
price of public programs would be far higher and their rate of inflation far steeper. One also
needs to wonder how government would control its budget without the ability to shift costs.
Without the ability to subsidize the cost of public programs through cost-shifting, it is
possible the government would turn to rationing as a means to limit spending. After all,
government has not been effective at managing the waste out of the system with current
programs, and in every government-run program around the world rationing is the basic
cost control device. An entirely public health insurance system would not provide the
opportunity for cost-shifting "taxes" and so there would be no way to avoid paying the real
costs.
Efficiency should not be measured by the 2% factor that represents the government's ability
to cut checks fast, usually faster than the government's ability to cover those checks, but by
our ability to control cost and provide quality. Federal Medicare and Medicaid spending is
out of control and the quality of care provided is questionable. The notion of quality under a
federal program can be demonstrated simply by asking the question, "Who would choose to
be covered and treated under the Medicaid program?" The answer gives a good indication of
just what 2% buys us.
PUBLIC VS PRIVATE MANAGEMENT
Beyond the mechanics of health care reimbursement, one cannot avoid the philosophical
issues of public versus private management.
Abraham Lincoln said it best, "The legitimate object of government is to do for a
community of people whatever they need to have done but cannot do at all or cannot do so
well for themselves in their separate and individual capacities."
The notion that only a government agency can provide for the efficient management of
health care dollars is wrong. First, government is not known for efficient management.
Secondly, providing risk management services is what the insurance business is about. We
have an industry capable of doing this. If we accept the notion that the government should
provide services that the private sector is capable of providing, then why stop at insurance?
There are any number of products and services that one might argue could be produced
more "cheaply" by one giant government agency as opposed to many competitors.
What we have now is a giant system of health care reimbursement that is out of control. The
supply and demand mechanism usually capable of efficiently providing a quality product for a
reasonable price is not being allowed to work. There are fundamental elements of the system
that are not working efficiently and that is what must change.
The fault for these imbalances can be spread over the major players in the system. Real
reform will occur only when these major players and special interests are able to compromise
their own selfish interests with the broader public interest of creating a system that works.
4
Rather than "bigger" government involvement, the primary issue in today's health care
economy is our ability to manage the dollars we spend. Today we spend 12% of our GNP on
health care. The crime isn't just that so many Americans have no health insurance coverage
or receive poor quality care. The crime is that we spend 12%, almost 50% more than other
industrialized nations do, but many of our citizens are uninsured or receiving care of
questionable quality. As Americans, we probably wouldn't accept the overt rationing that
goes on in the U.K. and Canada, and we therefore could never hope to receive care as
cheaply as they do. But, for what we get, 12% of the GNP is too high a price tag. Yet, some
would argue that 13% or 14% or 15% is acceptable, if that is what it takes to open the existing
system to those now outside of it. Instead of spending more, our goal should be to open the
system up to all Americans and make the system efficient. To make it work for everyone for
less than the 12% we now pay threatens our ability to compete in worldwide markets.
Many would argue that the private system should be socialized so that those now not covered
may be included. We don't need to socialize the system to cover everyone. The success of the
U.S. economic system has long been due to the efficiency and ingenuity of the American
entrepreneur. The world, including the Soviet Union and China, is moving toward a free
market model and recognizing the value of individual actions over a government's ability to
manage a system. It would be ironic if the U.S. used a government model as the best way to
restore economic efficiency and customer satisfaction to our health care system just as the
Berlin Wall is coming down.
Solutions for health care reform will come when there is economic accountability and
freedom to act. Private third-party payers have economic accountability to their customers.
That is not the case with giant monopolistic government bureaucracies. A giant bureaucracy,
saddled with an even more gigantic paper flow and a bureaucratic monopolistic perspective
toward the consumer, is not going to rebalance a system already out of control.
It is this accountability, not simply who produces a reimbursement check, that must be
created before the system can once again provide quality care at a reasonable cost.
BUILDING A CONSENSUS FOR REFORM
We need to provide access for all of our citizens and use the efficiencies in our free market
system to realize our cost and quality objectives.
The key players are:
Government
Consumers
Physicians
Hospitals
Third-party payers (insurance companies, employers, HMOs, etc.)
Lawyers
Each of these players must be willing to accept reform that may have a short-run negative
impact on them, but will ultimately drive us all toward a more efficient system. And, to be
effective, reform must come in a comprehensive package with each of the changes occurring
simultaneously. Only when one group can see a quid pro quo from another part of the health
care equation will it be willing to accept the necessary self-sacrifices. This point cannot be
underestimated. Without this comprehensive quid pro quo, the various special interest
groups will simply check each other and cause a continued stalemate.
5
A reformed system must contain a distinction between those able to pay and those unable to
pay. As President Lincoln said, it is the responsibility of those able to pay to do so and it is
the responsibility of government to pay for those unable to do for themselves.
Ultimately, there must be a "seamless" system of health care financing for all Americans, one
that doesn't allow people to "fall through the cracks." How people should pay for their share
of that system should be distinguished only by their ability to pay.
The opportunity to exclude citizens because of pre-existing conditions or medical
underwriting, for example, must be eliminated. Those in-the insurance industry who would
advance a free market model cannot be responsible only for the healthy, the "cream" of the
market, while government absorbs the rest. A reformed system must be "seamless;" it can-
not allow people to "fall through the cracks." Insurance executives who continue to defend
medical underwriting are really saying that they are in the business of making money on the
basis of their ability to exclude certain Americans from coverage. That defense can no longer
be acceptable.
Currently, carriers exclude certain individuals because of prior medical history. The cost to
provide medical benefits for those excluded, therefore, falls to the individual even though
they may be able to pay usual health insurance costs. Often, these people fall into the public
programs when hit with a major health problem, or become "unreimbursed care" when they
cannot pay.
Realistically, however, no one insurance carrier can afford to simply waive these traditional
underwriting requirements. If they did, a huge wave of people with pre-existing medical
problems could swamp the carrier. On the other hand, if the entire private system accepted
those able to pay customary insurance premiums, the incremental loss cost to any one carrier
would be of a level that would raise insurance rates for the general population, but still be
affordable. In reality, much of this cost already falls to the private sector, through
unreimbursed care and government programs cost-shifted to private-payers.
There is the issue of carriers being able to absorb such a risk over a short period and to price
for it without incurring major short-term loss. The answer to this dilemma lies in the use of
reinsurance. Reinsurance is something the insurance industry knows how to use to level the
impact of lowering the medical underwriting and pre-existing conditions barriers.
State-run "risk pools" have also been proposed for citizens unable to secure immediate
coverage. The failure of workers compensation risk pools and private passenger auto
insurance risk pools shows these pools do not manage risk effectively. Placing the high-risk
individual in pools that tend to be poorly risk-managed is contrary to the notion of
managing the health care system with greater efficiency. Individuals with health problems are
the ones most in need of risk management, and the private sector currently does the best job
of managing these claims.
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In addition, state government tends to control risk pools. The tendency is to respond to
political pressure by not raising auto and workers compensation rates as aggressively as actual
results dictate. Any deficit ends up being subsidized by insurers operating within the state. In
some states, the result has been that insurance becomes cheaper in the "high-risk" pool than
it is in the private market. The result is more business in the risk pool, often not entirely the
high-risk business originally intended for it, and dramatically higher costs in the private
system as it subsidizes the pool. As claim experience deteriorates, the state-run pool does
little, if anything, to manage the spiral, and loss ratios only worsen. Auto and workers
compensation risk pools prove that state agencies are not good at being managers of
insurance pools.
The private sector is most adept at managing risk and the place for the most potentially
expensive claim is with the most effective manager.
In the long run, those that offer a private sector argument for health care financing
undermine their position if they are not willing to accept responsibility for all of the
population that is willing and able to pay for its insurance. Offering a private financing
argument based on the notion that the private sector manages risk more effectively is
undermined by not wanting to use those skills to manage individuals with pre-existing
conditions - the people in most need of the risk management services.
This should not be interpreted to mean that insurers should not be able to price risk on the
basis of behavior. There is nothing wrong with a smoker paying more for health coverage
than a non-smoker, for example, just as there is nothing wrong with a driver who has had a
number of speeding tickets paying more for auto insurance than a driver without any tickets.
Where the consumer can control behavior, where the risk isn't simply a matter of "luck," the
consumer must have economic accountability for that behavior.
There is no evidence to indicate that the healthy American consumer is not willing to pay
somewhat higher costs to create a "seamless" system that covers all Americans. And, logic
would dictate that the incremental cost for those now excluded by medical underwriting and
pre-existing conditions will be somewhat offset. This will happen when the administrative
costs for such underwriting, the inefficient "cost-shift" caused by unreimbursed care from
the now uninsured sector of the population, and the more costly care needed when the
uninsured put off treatment and ultimately need more acute services are taken into account.
FINANCING HEALTH CARE FOR ALL
Once the division of the population can be made into two parts - the vast majority who can
pay and a minority unable to purchase protection - the public system must be financed.
When provided with a totally accessible private system, some who can afford to pay will
choose not to spend the money to do so. Those that would make this choice should have the
incentive to do so through the income tax system. Since someone who is otherwise able to
pay would probably fall on the public program in a time of great medical expense, those who
choose to be unprotected by private insurance should be subject to a tax penalty equal to the
per capita cost of the public program at that time, plus a substantial penalty. In effect, those
who choose to be unprotected would pay the government for that protection, plus an
incentive to get into the private sector. And, they should be in the public sector. Public
health insurance programs, as a matter of policy, under-pay for their benefits. This results in a
program cost that is below what would be possible in a private program. These "legislated
discounts" should be available only to those in need of public assistance.
7
The income tax system should also facilitate the financing of those individuals who are above
a certain poverty level, but are still unable to afford the full cost of private insurance. Families
above a certain income level, taking into account the number of their dependents, would be
expected to participate in a private program. Those below that level, who cannot afford the
cost of private insurance should receive a tax credit, or reimbursement based upon a sliding
scale of income and dependent responsibility to allow them to participate in the private
system. Those below certain combination levels, the very poor, would be eligible for the
public program.
Such a plan recognizes the grey area between absolute poverty and the ability to really afford
coverage. It also recognizes that people must have incentive to earn more without being
penalized. The opportunity to move out of the public program and to buy into a private
program is an opportunity in itself as the individual improves their lot. This model also
minimizes the need for mandatory employer insurance, since such a "seamless" system would
not exclude anyone and would provide the means to finance the cost of insurance for the
working poor.
Mandatory employer-sponsored health insurance only solves the problem of the working
uninsured. And, it solves it by forcing employers, usually small companies hard pressed for
capital, to pay the bill. Mandatory employer insurance is nothing more than a taxing scheme
that unfairly targets small start-up or otherwise capital constrained companies. We need to
face the problem of all of those who are uninsured, and we need to pay for those who cannot
afford it as a society, rather then just shift this burden to the small, struggling employer.
The "dumping" of this problem on small businesses unable to afford the high-cost of
insurance can be avoided. Since employer-based group insurance is a more efficient means of
providing health financing than individual insurance, employers and employees would be
more apt to provide and to participate in group plans if lower-income workers received a
subsidy to do so from the public sector. Small employers who do not provide group
insurance do so because they cannot afford to subsidize their lower-income employees' cost
for this insurance. If such a subsidy were available that obstacle would be removed. In
addition, faced with a tax penalty for not purchasing insurance, higher-income employees
would have incentive to participate in lower-cost, employer-sponsored group programs.
Under this proposal, employer-sponsored group insurance would be a benefit to the
employee without being an onerous burden to the employer. At the same time, we need to
recognize that a free market solution to the problem of access cannot occur without
widespread use of employer-based health insurance programs. To avoid the burden of forcing
struggling small employers to pay for this expensive benefit, only those employers who can
truly afford to contribute to the cost of this benefit should do so.
8
Employers should be given the incentive to contribute to a health insurance program based
on their level of profitability per employee. Those small employers who are very profitable
and can afford to contribute to the cost of a health program should do so, or find these
excess profits subject to a tax that provides the incentive to contribute. Those employers who
are far less profitable would have no requirement to contribute until their business could
sustain these costs. A sliding scale of contribution level could then be developed that
produced a level of contribution appropriate to the employer's ability to pay. This solution
would create a system where profitable employers would sponsor programs, while those
employers unable to do SO would not be forced to make contributions, or would make
contributions based on their ability to pay. An employee working for an employer who could
not contribute, or could only contribute a small amount, would be able to purchase coverage
from a combination of government subsidy (based on income and number of dependents),
personal funds, and perhaps some employer contribution.
This solution would have the added advantage of solving the dilemma of employers dropping
covered employees should they become eligible for government subsidy because of their low-
income levels. Many worry, that if a government subsidy program is created without some
form of employer mandate, employers would have incentive to drop those low income people
from their programs. To the extent an employer is profitable, they would not be able to drop
already covered employees. The proposed solution avoids this problem. It emphasizes the
employer-based solution to the access problem, and it does not burden the marginal or new
employer struggling to survive and provide jobs to the economy.
The method of financing access for the marginally poor and those poor individuals not now
covered under existing Medicaid and Medicare programs could come from the taxation of
employee benefits. In the past, the taxation of employee benefits has been strongly opposed
by many. However, at that time, the taxation of employee benefits was purely a revenue
enhancing opportunity. If this revenue were to be earmarked for funding care for that
portion of those 37 million uninsured individuals who cannot afford to pay for it, the option
should be carefully studied.
The taxation of employee benefits past the point necessary to fund for the uninsured poor
should be opposed. The American people will be more willing to see taxes rise when they can
match that tax increase to a specific benefit. At the same time, it must be recognized that
additional taxes in this "no new taxes" environment are a remote possibility. Therefore, the
chances of system overhaul, in the short run, that funds access for the poor are slim.
However, that will change. The notion that we will, as a society, tolerate the permanent
exclusion of so many Americans from access to a decent health care solution is dubious. In
fact, it is hard to believe that we can fundamentally balance the system if these millions of
Americans are not admitted to the system on a rational basis. Today, the uninsured are
receiving some care, and private payers are footing the bill through unreimbursed or under-
reimbursed charges that are ultimately "cost-shifted." In addition, because people do not
have reasonable access to the system, many relatively simple disorders are left to deteriorate
to develop into more complex and even catastrophic disorders that ultimately cost a great
deal more.
In the short run, the admitting of the uninsured poor will cost more in the form of
additional taxes. However, the inefficiency that occurs as these people seek treatment but
can't pay for it, and the higher cost that occurs when disabilities are not treated early enough,
leads to what has to be higher overall costs. Eliminating such inefficiencies can only reduce
total health care spending. And, the opportunity to bring these people into a national system,
one that emphasizes the management of the cost and quality of treatment, can only enhance
the outcome for these people and produce lower ultimate costs.
9
Given the probability of "no new taxes," and therefore a delay in dealing with the problem of
access, it is most probable that we will first focus on short-term structural changes that will
not require additional tax revenue, but will produce meaningful improvements. Many of
these structural changes can be driven only by federal legislation. In the context of this
legislation, sweeping reform can occur.
THE ROLE OF GOVERNMENT
One might question why anyone in the private sector would turn to government
intervention. Simply put, the health care economy will never be entirely free. In fact, certain
state and federal laws and regulations as well as the behavior of government, which controls
41% of all health care spending, have had the impact of complicating and unbalancing the
health care equation. These impacts must be corrected or at least offset. This is critical. Each
of the special interests has acted to offset the other. The reform of the system can only be
facilitated by comprehensive and enlightened legislation.
National leadership is necessary to resolve this problem of terrific national scope. No one
private-sector player, or even one private-sector special interest group, can realistically be
expected to rebalance this equation on their own. And, to motivate the special interests to
join together in support of major reform each must know that their "give-ups" have been
offset. Everyone must know they will be better off as a result of working together.
The only "power broker" capable of engineering the kind of impact necessary is the central
government. Private enterprise may be a more efficient manager, but government is the more
effective manager of public policy.
BUILDING A NATIONAL HEALTH PLAN
Given the "no new taxes" reality, reform will have to come in two phases:
1. Structural reform - No New Taxes.
2. Universal access - New Taxes.
In order to accomplish the first phase, a national health plan that reshapes the playing field
for all participants should be created. This "National Health Plan" should:
1. Be privately financed by individuals and corporations on behalf of their employees.
Insurance companies, HMOs, Blue Cross Organizations, etc. should continue to
compete for business as they do now. Management of cost and quality is necessary, and
private enterprise is better at managing cost and quality than government.
2. Apply to both "group" and "individual" insurance.
3. Be a single national program taking advantage of "E.R.I.S.A. Pre-emption" by occurring
at the federal level. It must be one substantial reform, done at one time, and not a series
of conflicting and separate state actions.
4. Lay out a program of minimum benefits that provides adequate benefits and scope of
coverage. Today, the 50 states provide 50 different extraordinarily complex answers to the
question of minimum benefits.
10
These extensive regulations are very expensive for insurers, employers, and individuals to
comply with. To the extent that one set of rules can be created and followed, a major
administrative burden can be eliminated.
This plan of benefits should recognize that the consumer must participate in the cost of
health care, not simply to reduce employer costs, but because the consumer must have an
affordable stake in making health care purchasing decisions. Therefore, a deductible
should be a part of the plan that is not a fixed dollar amount, but rather a percentage of
income. For example, the deductible might be 1% of gross family income from the prior
year's tax return. A family earning $20,000 would have a $200 deductible. A family
earning $75,000 per year would have a $750 deductible.
5. Eliminate medical underwriting and pre-existing conditions limitations for entry into a
plan qualified under the national program. Also, eliminate provisions when an employee
changes employers and leaves a qualified plan at one employer to enter a qualified plan at
another.
These provisions should be eliminated from individual insurance as well. To make it
possible for insurance companies and self-insured employers to absorb these charges, the
following could occur:
a. A form of "community" rating should be adopted. Each carrier should be required
to adopt a "one block" approach to its system of small group rating. Carriers should
only be able to vary their rates by geographic area (the community), by age, and a small
number of industry bands. Both the industry bands and the age table should be
universal tables that all carriers would use, and should be based on actuarial sound
principles. The purpose of allowing these limited tables is to ensure that no carrier,
particularly a smaller carrier, finds itself with a disproportionately high number of high-
cost groups and, therefore, is driven from the market. The only difference in cost
between two carriers competing in any given "community" will be the carriers' ability
to control its overhead costs through good business management, and control of its
claim costs by selecting and/or working with the physician community.
Carriers should be required to "take all comers." If they elect to do business in a given
"community," they cannot be allowed to "cherry pick" the most profitable risk. Rather,
all carriers should receive both the "good" and the "bad" in random fashion.
The result of these reforms would be to eliminate those practices which cause people to
be dropped from a group, such as practices which produce artificially low rates only to
rise dramatically when a large claim occurs, and discriminatory rating practices designed
to force groups out of the pool because of their poor claim experience.
The "take all comers" provision will eliminate the problem of people being denied
access who can afford to purchase coverage. In order for the private sector to be able to
justify our existence, we must be willing to cover all of those who need access to the
system. Of course, this will increase insurance costs. However, the necessary cost
increase will be affordable - less than 10% of existing costs. While the exclusion of so
many who can otherwise afford to pay is a significant problem, the underwriting
11
practices exclude only about one person in 200 from getting insurance coverage
because of insurance company practices. Rationalizing these people into the system,
albeit with higher than average claim costs, will not drive up the cost of insurance by
dramatic amounts.
b. To build consistency into the ultimate objective of the government taking care of
those who cannot care for themselves, and the private sector servicing those who can,
the national program would be open only to those unable to pay and their dependents.
Those employees who are members of group plans and lose their jobs would be eligible
to continue participating in their employer's group insurance program, similar to what
is now the case under "C.O.B.R.A." provisions. People who lose their jobs should be
able to continue their insurance until they secure other employment.
People should not lose access to health insurance because of a strike or lay-off. The cost
to continue insurance should be paid for by the individual. To the extent that the
individual cannot continue to pay for private insurance, they should be eligible for the
public program in the same manner anyone else would be.
6. Provide for tort reform under "E.R.I.S.A. Pre-emption" for those physicians and
hospitals treating patients covered by the national program, and for the patients being
treated under the program. Tort thresholds should be established to reduce the impact
malpractice suits now have on health care costs.
The cost of malpractice insurance and its affect on physician fees has been widely
publicized. More importantly, there is a dramatic impact on practice patterns when
providers deliver otherwise unnecessary services to protect themselves from the prospect
of potential lawsuits. The cost of this malpractice paranoia only fuels the high health care
inflation we already have. We do not have better medicine because of the threat of
lawsuits, as much as we have more expensive medicine than can be afforded by fewer
people.
State legislatures have been seemingly paralyzed to act against this national tort dilemma,
which has become a crisis in its own right. A national health program, given "E.R.I.S.A.
Pre-emption," could finally establish thresholds that still protect the consumer and at the
same time dramatically decrease the malpractice paranoia that has gripped our providers.
Beneath the appropriate threshold, a system of arbitration should be operable as well as a
clearer and more rational criteria for what constitutes negligence. A physician using the
most up-to-date procedures and facilities, who has the appropriate certification and
experience, should not have to fear being held to a standard of near perfection or placed
in a position of performing unnecessary and wasteful tests and procedures simply to be
prepared for a potential lawsuit.
We should not take away the consumers' right to sue and recover for damages. Rather, we
should create a system of arbitration that would take place before a dispute could enter
the trial system. Such a system would be easier for the consumer to use. A recent Harvard
study found that only about 10% of those injured by malpractice actually sue, and only
about one-half of those are actually awarded anything. The current system of litigation is
not serving anyone well, including the consumer. Even with an increase of awards from
an arbitration system, the real cost of the malpractice dilemma is the cost of all of the
defensive medicine being practiced given the paranoia among doctors and hospitals about
the potential of being the one to lose a multimillion dollar suit.
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7. Create a quasi-government agency for the purpose of measuring and evaluating the
practice of medicine, so that quality can be better evaluated, and from that, acceptable
protocols and guidelines can be established for both practitioners and those who pay.
There is great inefficiency in the system because consumers of health care are not in a
position to judge the relative quality and efficiency of institutions and practitioners. Little
attention is paid to the cost of one hospital or physician as compared to another, and the
measurement of quality is almost totally elusive.
Such an agency could have responsibility for:
a. The collection of claim data from all sponsors of plans under the national health
program. All third-party payers and self-administered employers would be required to
report certain consistent data elements that could then be pooled and made available to
the same third-party payers, self-administered employers and to providers for better
managing health care expenditures.
b. The agency would use the data to evaluate protocols, procedures, technology,
therapies, etc. as to their effectiveness. This would furnish providers, consumers and
payers with data to make more educated decisions. Such an agency, much less a third-
party payer, would never dictate the practice of medicine on a case-by-case basis. It
would, however, allow for more informed providers and consumers with the objective
of a more efficient and productive system.
c. The education of the consumer as a health care buyer should not be
underestimated. As more and more Americans, many of them previously uninsured,
enter the health care economy they will not always be the most astute buyers of health
care. The American work force is becoming more heavily immigrant, with workers
often coming from a disadvantaged socioeconomic background. Providing these people
with easy access to the health system without training them how to use it may induce
inefficient utilization.
Even the comparatively well-off consumer of health care is in need of education on
how to use the system. We should expect consumers to take a larger stake in the cost of
their health care. However, we also must prepare the consumer to be more effective.
This element should not be confused with "Wellness" activities. Wellness generally
concentrates on providing information that helps the consumer avoid health care
problems. This element concentrates on the consumer's ability to actually help manage
the system once they are in it - to be more cost-efficient and more effective.
The agency would provide written materials aimed at this objective. Any third-party
payer in the national health program would be required to distribute materials at the
expense of the plan sponsor, in the case of a corporate program, or by the insurer, in
the case of an individual program. In addition, each plan sponsor would be required to
spend minimum amounts of time each year for an agency-created educational program
conducted by the insurer or self-insured employer.
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The agency would be funded by a relatively nominal "premium tax" paid by the third-
party payer or self-administered employer. This agency would be run by a board
appointed by the Secretary of Health and Human Services, and be representative of
providers, third-party payers, employers, and consumers. Its purpose would be to
facilitate the rebalancing of the health care economy by the dissemination of
information which enhances the quality and cost of health care.
8. Certain actions should be taken through public policy to improve the efficiency of
providers:
a. No Medicare provider should refer a patient to a facility where that provider has a
substantial financial interest. While this may not be appropriate in a very small minority
of rural areas, such a conflict of interest is not appropriate during a time when cost-
shifting is such a major issue.
b. Public policy should support limiting the supply of physicians in specialty areas that
are now overcrowded.
c. Physicians should serve for a minimum period in specialties or geographic areas in
need of additional practitioners. If they do not, they should have to reimburse their
medical school for educational costs that were not covered by their tuition. The medical
school subsidy, through private and public means, is still large. It makes no sense for
these public and publicly motivated private contributions to go to benefit specialties
and regional areas that have too many physicians and therefore inefficient health care.
d. Public policy should support the creation of "Centers of Excellence" for expensive
and difficult procedures. The notion that some hospitals perform 200 heart bypass
procedures each year while another hospital in the same city might do 30 is not good
for costs or quality of care.
In order for a procedure to be payable under a national health program, utilization of a
"Center of Excellence" for that procedure, when such a center exists in a given
community, should be mandatory. Such "Centers of Excellence" could serve to reduce
the number of hospitals creating a redundant supply of services, thereby increasing
costs and undermining quality. The certification of such centers could come under the
quasi-government agency established to measure and evaluate the practice of medicine.
Today, consumers and to some extent payers, don't necessarily know the best setting
for a specific procedure. Such a program would make the consumer more
knowledgeable and drive health care capital to its most efficient and effective use.
e. To reduce the redundancy of expensive capital equipment, the current Medicare
hospital reimbursement system should be amended to avoid simply permitting the pass-
through of capital investment costs. Hospitals must be at risk of overspending on
capital equipment. Medicare should incorporate capital reimbursement as part of the
DRG payment.
9. To improve the efficiency of all payers, and to reduce administrative costs, the national
health program should mandate a uniform system for electronic filing of claims, which all
providers and payers must use by a set date. This criteria would dramatically improve the
efficiency in the reimbursement system, including its cost, as well as facilitate the
construction of the national database discussed earlier.
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These steps can be taken without major new tax programs and with only the quasi-
government agency requiring funding. This funding would be a relatively nominal cost
and could be provided from insurance "premiums." These first nine steps are really
structural changes designed to rebalance or rationalize those elements of the health care
economy that are causing fundamental problems for both the cost and quality of health
care.
ACCOUNTING FOR THOSE OUTSIDE THE SYSTEM
The rebalancing and reform of the system cannot be complete until those who cannot afford
to pay a reasonable cost, whether in whole or in part, can be brought into the system. As
long as these people are outside the system, we are not meeting our social responsibilities. We
are perpetuating an inefficient financial system as these people become subject to
unreimbursed care only to be inefficiently cost-shifted. Or, they are treated only when their
condition has deteriorated to extreme and expensive levels. As long as this goes on, we will
have an irrational system.
To rationalize our entire population into a comprehensive system, the plan for including the
working poor and subsidizing them (with tax revenue as outlined earlier in this paper) should
be implemented into the system. We must face the reality that this will not happen in the
short run under a "no new taxes" environment.
We should not delay implementing the nine structural and essentially "revenue-neutral"
elements outlined. These elements must occur for the system to begin to rebalance.
The impact from these actions will not be short-term. It has literally taken decades for the
system to become out of balance to the extent it has, and it will take years of reformed
operation and fine tuning to remedy the situation.
Because the problem is so complex and will take so long to come back into balance may be
one of the major catalysts for those who favor a socialized system of national health
insurance. National health insurance is on the surface a quick remedy that is assumed will
make all of these difficult problems go away. In fact, the socializing of our reimbursement
system only changes who holds the pool of money and writes the checks.
But, socialization alone does not address why we spend 12% of our GNP on health care and
get so little for it. Socialization does solve the access problem since everyone would be
covered. But, covered by what? Without fundamental reform we will have only a national
social system with costs escalating out of control. Let's not lose sight of the separate elements
of the access issues as well as the cost and quality management issues. The problem of access
can be solved with a private system. The bottom-line problem of inefficient management of
health care spending will not be solved by creating a giant government bureaucracy and
monopoly. If it could, then the Canadian system would not have had higher rates of health
care inflation than the U.S. system over each of the last three decades.
The more fundamental issues must be solved through reform that goes well beyond who
"cuts the check."
15
AMERICA'S HEALTH CARE PERSONALITY
Americans are different when it comes to issues such as health care.
I recently watched a television report featuring the Oregon Medicaid program. It centered on
children who needed very expensive treatment with little hope for a positive outcome. It
showed one boy who needed a bone marrow transplant. Medicaid would not pay for it under
the Oregon plan, which has taken bold steps at rationing such high-cost, poor-outcome
treatments. The mother's courageous actions to raise enough money were impressive to see.
As much as I understand all of the financing issues in our health care system, the logic of
limiting care to those with such little hope in order to use the money for those with a better
chance of survival is a rationale I cannot accept. If that were my boy, and there was a 1%
chance he could be saved, and it cost $1,000,000 to do it, I would want it done. I wouldn't
want my son's care rationed, and I'd be a hypocrite to want some other person's son to have
their care rationed.
And, that's how any of us would react.
America is plagued by a terrible irony in that we would all want to save that boy. But there are
literally tens of thousands of stories like his that go on every day - where boys, girls and
adults are not getting the health care they deserve because they cannot afford it. The only
obstacle that stops these people from obtaining medical attention is that our system of public
policy excludes them. More than that, because our system is so out of control, its continually
escalating costs exclude approximately 1,000,000 or more people each year.
Some people simplistically think that one big government program will make everything work
well. It won't. A lot of hard work, hard choices, sacrifices, new attitudes, and time are what
will make the system right, and those choices need to be responsive to our citizens. In the
final analysis, there are two major issues:
1. Accesss
2. Cost and Quality
Access is easy. Through a socialized or free market system we could mandate an open plan
that would include every person, with government paying for those who can't pay for
themselves. Those who can pay will seek the competitors who compete most favorably to
satisfy their health care needs.
Cost and quality are more tricky. Here, the issue is who is better at managing for efficiency
and results. Government is better at policy and sweeping reform. The private sector is better
at achieving efficiency and results, although not all companies do this well. But, consumers
aren't dumb. There is no reason for government to make purchasing decisions that people
can make for themselves. Americans are smart enough to choose those entrepreneurs who
satisfy their needs for cost and quality.
Today, we need the structural reform to make this possible, and we need to recognize a social
responsibility to provide the funds to bring all Americans into a system of rational health care
financing.
16
LIBERTY
MUTUAL
®
Liberty Mutual
Insurance Group/Boston
Printed in the U.S.A. on recycled paper.
HC-D
11a
LIBERTY
MUTUAL
ILLINOIS
The Customer's Advocate -
Because We Understand The Costs Involved
INTRODUCTION
When it comes to putting the customer's interests first, no insurance carrier has a stronger -
or more comprehensive - record than Liberty Mutual.
Our mission of "helping people live safer, more secure lives" comes directly from our corporate creed,
articulated over half a century ago. It is, in fact, what we are in business to do.
Liberty understands the costs involved - both human and financial - when accident, injury
or illness strike. We work to address the roots of the problem, not just the consequences. This may
mean changing the workplace so it is safer or changing the insurance systems so they are fairer
and more efficient. We aim to be advocates for all who are protected by our coverage, whether
individuals and their families or corporations insuring themselves and their employees.
In today's complex insurance climate, this means mounting practical programs in:
safety: researching the causes of accidents and working to eliminate them.
affordability: striving to contain the underlying costs of insurance with
programs that improve system efficiency and effectively manage the costs inberent in providing
insurance.
fairness: working to make insurance systems fairer for everyone - those who suffer accident,
injury or illness and those who pay for the insurance which compensates them.
Whether covered by workers compensation, group health, general liability, auto, bomeowners or life
policies, being our customer's advocate means using our expertise and financial strength to do things
for policybolders - and in partnership with them - that they cannot do on their own.
1
O
!
THROUGH MANAGED CARE, WE
GET PEOPLE BACK ON THEIR FEET.
LIBERTY MUTUAL : AN ADVOCATE FOR THE BUSINESS MARKETS CUSTOMER
What Liberty is Doing to Keep Insurance Affordable
We understand the costs involved when an accident happens.
The human costs and financial costs affect all of us
employers, employees and families.
Dealing Directly with our policyholders gives us a real advantage in getting costs under
control, thus keeping our expenses significantly lower than those of our competitors.
Equally important, we build close, long-term relationships with policyholders, enabling
us to be true partners in risk analysis and cost containment.
Managed Care programs leverage this partnership to help injured workers and sick
"We have always worked di-
employees get back on the job. Liberty's Managed Care programs are built on years of
rectly with our policyholders.
workers compensation experience managing both medical costs and disability. Today,
Liberty people are personally
we're applying these risk management principles to group health - so our customers get
committed to helping our custom-
the full benefit of our experience. Through years of leadership in workers compensation
ers prevent loss, and to helping
we've developed these cornerstones of Managed Care:
mitigate the impact of those losses
which do occur. We see ourselves
Pre-Accident Management: helps avoid accidents or minimize their impact by
as advocates for our customers in
planning ahead. In decades of loss prevention research, we've learned where and why many
this essential job, and in helping
workplace accidents and injuries occur - and how to prevent them.
keep insurance costs reasonable
Disability Management: has been Liberty's strong suit for decades. Years ago, we
and insurance systems efficient."
created a national network of consulting physicians, primarily orthopedic surgeons, to
monitor complicated cases. Over 150 rehabilitation nurses also work directly with
William E. Commack
patients who have serious injuries, ensuring appropriate care and as prompt a recovery as
Executive Vice President-
possible.
Business Markets
Medical Cost Management: includes the 38 registered nurses who audit the bills in
"Our more than 40 years of
our Medical Coordinator program, along with loss studies, vendor audits and other
using case management tech-
programs. Last year, our billing review programs alone saved our workers compensation
niques, hundreds of rebabili-
policyholders over $141 million.
tation nurses and a national
Rehabilitation programs: help contain costs by restoring productivity wherever
network of advising and treat-
possible. In 1943, we became the first and only insurer with a facility dedicated to the
ing physicians are key reasons
treatment of life-changing work injuries. Today, we're developing new ways to treat major
for Liberty's continued workers
sources of disability - like a protocol for back pain treatment that we're sharing with
compensation leadership."
other medical leaders.
Joseph G. Tangney
Senior Vice President
Claims
4
What Liberty Mutual is Doing About Safety on the Job
Loss Prevention Specialists: work together with policyholders to analyze workplaces,
discovering and controlling sources of potential loss or injury. Last year, Liberty's 750
safety professionals made over 125,000 visits to customer sites, spending nearly 1 million
"The number one mission of our
work-hours addressing improved safety in policyholder workplaces.
more than 750 safety and
health specialists is to help our
Training Institutes: bring the latest safety research findings to our policyholders,
customers prevent loss and bu-
helping them change task design or employee behavior to improve safety. Institute topics
man suffering. They are
currently range from ergonomics to stress management to occupational health. Liberty
Liberty's advocates for safety
Mutual also publishes research and many of our specialists teach at major universities to
because we understand the costs
help share what we've discovered.
involved with accidents or in-
Improved Highway Safety: addresses the largest source of workers compensation death
juries."
claims — auto and truck accidents. Liberty's Skid School, developed at the Research
Center in 1964, teaches our Decision Driving techniques to help prevent skids. Today's
Kenneth D. Brock
anti-lock brake technology essentially uses the Decision Driving concept of "stabbing the
Vice President
brakes". At our Research Center in the Seventies, we evaluated the safety-effectiveness of
Loss Prevention
anti-lock brakes and became an early proponent of their use in cars and trucks.
What Liberty is Doing to Create Fairer Insurance Systems
Workers Compensation Reform: we initiated a national effort to
bring together the major stakeholders and help restore stability to
deteriorating workers compensation systems. Out-of-control
medical costs, needless litigation and burdensome administrative
procedures continue to threaten the future of workers compensation.
As an advocate for a better insurance system, Liberty Mutual is
helping build coalitions among business and labor leaders, legisla-
tors and regulators to address the problems challenging today's
workers compensation systems.
Healthcare Reform concerns businesses of all sizes - because
healthcare costs seem to defy any effort to moderate their escalation.
Liberty Mutual has articulated a comprehensive plan to tackle
healthcare costs - a revenue neutral approach which has been
applauded by business leaders and government officials. The key
to the effectiveness of Liberty's plan is in linking all players to a
common goal: quality care for all at a reasonable cost.
With Boston University, Liberty Mutual helped develop the Back
Analysis System, used today to help evaluate the potential for back pain
5
and to help monitor treatment.
PORTRAIT OF A PIONEER
How Liberty has Made Life Safer and More Secure Through Research and Rebabilitation
Along with the financial loss when accidents and injuries happen, the cost in human
terms can be crushing. Liberty Mutual is proud of its commitment to eliminate the cause
and cost of accidents through safety research and to help accident victims recover through
physical and occupational rehabilitation programs.
This philosophy is so much a part of our heritage that one of our first employees was a
safety engineer, hired at the company's founding in 1912.
The next year we established our Medical Clinic, specializing in the treatment of
workplace injuries.
In 1943 came Liberty's Rehabilitation Center, the industry's first and only compre-
hensive accident treatment facility. Company research showed how much could be done to
reduce disability resulting from workplace accidents - and we translated this into
everyday success stories.
Our medical advisors network was established that same year. These leading medical
specialists review serious cases SO both employers and employees are sure they're receiving
"Ever since I started as a claims
the right care.
adjuster nearly forty years ago,
Liberty initiated the industry's first rehabilitation nurse program. In the Forties, we
Liberty Mutual has approached
hired nurses around the country to manage the medical care and services injured workers
the problem of accidents and loss
needed, in conjunction with local doctors and employers.
in innovative ways. It's part of
our heritage to do much more
In 1954 we consolidated our growing safety research programs in a Research Center.
than just sell insurance
we
The only facility of its kind in the industry, it features 30,000 square feet of lab space. A
really do help people live safer,
three-acre driving range is used for auto safety studies and our deceleration sled was
more secure lives."
among the first to simulate crashes for research. The Center has always been closely linked
with Liberty's medical facilities to share research advances.
Robert J. Hytha
In 1982, at the expanded Medical Service Center in Boston, we added our Back
Executive Vice President-
School. Since low back pain is one of the most common work injuries, learning how to
Field Operations
live a productive life with this injury is a big benefit. This program was expanded into the
LIMBER program in 1989, an innovative treatment protocol for back pain.
Today, as we move from an industrial to a service economy, our scientists and medical
specialists are tackling new problems, such as stress-related disability and cumulative
trauma injuries. What we learn as new work-related illness and injury develop will be
shared with policyholders and the public, just as it has been for eight decades.
6
A Sampling of Liberty's Eight Decades of Innovation in Research & Rehabilitation
Safety belts and Airbags: Long before there was much interest in designing safer cars,
Liberty was developing and advocating auto safety features. In 1957 and 1961, we intro-
duced prototype "Survival Cars" with now-
standard features such as a wrap-around dashboard,
headrests to guard against whiplash, a collapsible
steering wheel and most notably, safety belts. We
began testing air bags in the early
Seventies, then demonstrated their
effectiveness to the public.
Boston Elbow: Many amputees can re-
turn to productive employment, thanks
Over the years, Liberty's research has
pioneered many safety devices now standard
to a myoelectrically controlled artificial
equipment on today's automobiles.
elbow, which restores their ability to
lift and reach. With Harvard Medical
School and M.I.T., Liberty helped design the "Boston Elbow".
Muscle Fatigue Monitor: More than 75 million Americans suffer from low back
pain, and 7 million more develop this problem each year. This innovative device,
which uses a computer to locate and measure areas of back muscle fatigue, has been
called "the EKG for the back" and is seen as a significant advance in targeting the
source of back pain so treatment can be more effective.
Our commitment to quality medical care
for injured workers dates back to the
Industrial Safety: From day one, workplace safety has been a critically impor-
second decade of this century.
tant area of research and Liberty Mutual has stayed in the forefront as the
workplace changed. Years ago, we developed devices such as the "Slipmeter" to measure
the slip-resistance of floor surfaces at policyholder sites and "machine guards" to protect
workers from moving parts in factories. Today, Liberty's
research topics cover everything from ergonomics to
toxic material exposure.
Ergonomics: We've been designing the job to fit the worker
for more than a quarter of a century. Studies of lifting and
carrying tasks show that over $5 million per year in low back
disability costs is saved thanks to proper job design. Today
our ergonomic research is addressing the growing incidence
of cumulative trauma injuries.
With Cornell University, we developed the Survival Cars -
prototype vehicles which showcased innovative features and
construction designed to improve driver and passenger safety.
7
LIBERTY MUTUAL: AN ADVOCATE FOR THE PERSONAL MARKET CUSTOMER
What Liberty is Doing to Keep Drivers Safer on the Road
Research continues at Liberty, building on our success in pioneering safety belts, airbags,
and other advances. We advocated safety features years ago that now save lives every day.
Reducing Drunk Driving: Liberty took a leadership role years ago. With the Insurance
Institute for Highway Safety, we helped develop the passive alcohol detection monitors
used by police to get drunk drivers off the road. In the legislative arena, we've supported
ARATHON
administrative licensing programs and other ways to discourage drunk driving. We filed
a brief supporting the constitutionality of random road blocks, and believe the recent
Supreme Court decision was a victory for all drivers.
Teenage Driving Dialogue: Teenage drivers are the least experienced drivers on the
road. To help parents discuss the realities of safety on the road, Liberty Mutual has
published "How to Survive the Teenage Driving Years". The importance of a dialogue
between parents and their children about the dangers of late night driving, speeding and
driving under the influence has also been taken to the media. Major radio and television
programs, as well as national newspapers, are carrying our message about this important
family discussion.
"In the current system, many
groups have a vested interest in
Other Highway Safety Initiatives: Liberty advocates reasonable enforcement of speed
maintaining the status quo.
limits, motorcycle helmet laws and banning radar detectors, all proven approaches to
Lawyers, body shops and auto
safer roads. Recently we helped organize Advocates for Highway Safety, a coalition of
manufacturers all derive sub-
consumer groups, the medical community, safety organizations and insurers who are
stantial income from today's
working together to reduce highway death and injury.
auto insurance system. Our cus-
tomers need someone who works
What Liberty is Doing to Hold Down Auto Insurance Costs
for them - as their advocate."
Anti-Fraud Action: Liberty's 12 Special Investigative Units in our Claims department
John B. Conners
work to uncover and eliminate fraudulent claims. We have also been instrumental in
Executive Vice President-
helping pass anti-fraud legislation in states plagued by excessive auto insurance fraud.
Personal Market
Anti-Theft Action: Liberty offers discounts for policyholders around the country who
install anti-theft devices. Also, we've donated 50 tracking units to Massachusetts police to
help recover stolen vehicles - and catch the thieves. Plans are underway to expand this
program to other cities with high auto theft rates. We also work with the industry in
promoting anti-theft legislation and in funding rewards for information leading to the
arrest of car thieves.
Quality Replacement Parts: For more than a decade, Liberty has supported the develop-
ment of standards for these cost-saving alternatives to auto manufacturers' parts. Today,
Quality Replacement Parts are bringing competitive prices — and lower repair costs.
8
Safety Feature Discounts: In 45 states, we give 10% discounts on cars with factory-
installed anti-lock braking systems. We also offer discounts for safety features, such as air
bags and automatic safety belts. Our philosophy is that premiums should be lower for
policyholders who take action to make their vehicles safer.
What Liberty is Doing to Make Auto Insurance Fairer for Everyone
No-Fault: the Best Option for Reducing Rates in Urban Areas
Liberty Mutual is advocating sound No-Fault laws in states experiencing excessive num-
bers of claims with attorney involvement. Some advantages of a good No-Fault auto
insurance system are:
costs are lower because litigation is reduced
lawsuits are allowed for severe injuries, but lawsuits for minor injuries - which force
premiums upward - are eliminated or reduced
accident victims are quickly compensated, because fault does not have to be determined
more compensation dollars go to the injured victim, rather than to attorneys
The benefit of a good No-Fault law is a fairer system for everyone:
those who suffer injury or accident
and those who pay for
the insurance which
compensates them.
Auto theft is one of the major factors driving up auto insurance rates- and Liberty
has donated tracking units to police which help recover cars and catch thieves.
9
CANA
IDAHO
- 12 PAY
I
/
I
1 "
is
my
$
THROUGH OUR AUTO SAFETY
RESEARCH, WE SAVE LIVES.
my
CONCLUSION
For eight decades, Liberty Mutual has been a pioneer in helping both corporate and individual
policybolders to be safer and more secure - at home, at work and on the highway.
Today, we continue this leadership through ongoing safety research, effective partnerships with
our policybolders to reduce cost and loss, and involvement in the political process to bring about
fair, efficient insurance reform. These efforts to act on behalf of our policybolders as "the
customer's advocate" are matched every day by the service delivered by our 21,000 employees.
The goal is customer satisfaction. To us at Liberty, customer satisfaction means even more than
delivering a good product at a fair price.
It also means effectively influencing the environment in which we operate.... to assure
policybolders that, as Liberty Mutual customers, they will be safer and can feel more secure.
12
Liberty understands the costs involved - both human and financial - when accident
or injury occur. We work to address the roots of the problem, not just the consequences.
This may mean changing the workplace so it is safer, or changing the insurance
systems so they are fairer and more efficient. We aim to be advocates for all who
are protected by our coverage.
"We firmly believe that in nearly 80 years of service to our policyholders, no one has
matched our efforts to support safety, cost containment and fair insurance
systems. Being our customers' advocate means using our expertise and financial
strength to do things for policybolders that they cannot do on their own."
Gary L. Countryman
Chairman, President and Chief Executive Officer
LIBERTY
MUTUAL
Liberty Mutual Insurance Group
175 Berkeley Street, Boston, MA 02117
Equal Opportunity Employer