Title: Chairman of the Board, Thoits Insurance Service, Inc.
Resume: Way served in the United States Marine Corps from 1965-1968.
Schools: Way earned his bachelor of arts from Stanford University in 1970 in political science.
Awards: IBA West’s Ramsden/Sullivan Memorial Award, 2004
Boards: Former member Palo Alto Unified School District Board of Education, City of Palo Alto Human Relations Commission; Ironsides Re, Ltd., Bermuda; Mid-Peninsula Bank; IBA WEST (former president) (these are all former)
Certifications: CPCU, CLU, ARM
Inspiration: Stanley Zax
Favorite quote: “Never give up.” (Winston Churchill)

Known for his from-the-trenches, no-nonsense perspective, Way encompasses what a producer is supposed to provide for its policyholders. Way emphasizes safety and ergonomics up front, then aggressive claims handling and finally hands-on interaction with injured workers on the back end. He began his career at Thoits as a student at Stanford and worked his way up through the ranks, holding numerous positions. He’s an active member of IBA West, and because of his vast insurance expertise, he’s recognized as a litigation consultant.

What are the top three issues in California workers’ comp today?  
(1) Cost impact on the state’s job market and economy: The reforms helped, but we still are non-competitive and the reforms are being threatened. (2) This is down the road a couple of years, I think, but I believe we will face another round of California workers’ comp insurer insolvencies – the national multi-line players will do OK, but monoline California-only work comp insurers are vulnerable. (3) Fraud and excessive applicants’ attorney involvement creates huge wastes in the system – whatever happened to the original “bargain?” (No litigation from employees vs. employers in exchange for swift and sure benefits.)

Are we headed for a hard market, and if so, when will it come? How long should we expect it to last? What are the repercussions for employers?  
Not yet, but in the future certainly. If I knew the answer to “When?” I would outdo Warren Buffett, and I know better. Maybe a couple of years. Developing loss ratios are unsustainable. When insurers fail, the employer insureds suffer, as do claimant employees, and costs escalate.

Now that it looks like the sale of State Compensation Insurance Fund’s future is a no-go, what does the future hold for State Fund, especially if there is a hard market around the corner? Are additional reforms needed for State Fund’s governance?  
SCIF governance is a problem. They just hired a new CEO – bright guy, and experienced – and they are paying him much less than most large local and regional brokers pay theirs. The management structure and the culture of entitlement need drastic reform.

Are medical provider networks a help or a hindrance? How should they be improved?  
They help. The good ones provide predictable and consistent care.

How should utilization review be improved?  
The amount of money being spent on utilization review is an embarrassment to the system and testifies to its adversarial nature and its rampant fraud.

What needs to be done to improve return-to-work?  
Employers need to be better educated on its advantages to their workers and to themselves.

What do you see, other than medical, as the next big cost driver?  
DRE (durable medical equipment) and pharmaceuticals are out of control. Our inability to close old cases threatens the integrity of insurers’ balance sheets and their financial reports. Managing earnings has become routine.

What steps can insureds take to keep their claims costs down?  
Employers can attack on two fronts: loss prevention and claims cost control. This is not rocket science. Simple ergonomics would eliminate or drastically reduce many claims. Proper employer-employee post-injury follow-up would drastically reduce costs and improve morale – as well as limiting attorney involvement and fraud.

Where do you see applicant attorneys focusing litigation in the future?  
Follow the money.

Now that the federal health care bill has become law, what impact, if any, do you see the health care law having on workers’ compensation?  
Too early to tell. The devil is in the details.

What is the effect of more than $1 billion in payroll being absorbed by the self-insured groups?  
There is a solvency issue.

Are loss adjustment expenses leveling out or are they still climbing? What is the cause?  
They are out of control. What was designed as a no-fault system has disintegrated into a full employment opportunity for attorneys. The more complicated the system gets, the more money is wasted in frictional costs.

Is medical severity going to continue to climb or is it just a blip? Are there any changes to claims frequency?  
It is NOT a blip. Look at what is happening to medical insurance rates.