Breaking News: Insurance Scam In The Making?

So a friend of the site told me a juicy rumour a few days ago. They said that tonight's starting pitcher - Canadian boy RHP Shawn Hill - has an injury in his foot/ankle area that requires surgery. They also said that Shawn was called up to the Majors with the intention of only pitching a bare minimum number of innings. Apparently this has all been pre arranged between him and the brain trust of your Toronto Blue Jays. My source mentioned there are insurance implications.

Naturally, this news got my attention. So I decided to do some research, starting with the Twitter injury guru.

@injuryexpert is there any benefit for either player or team whether a DL trip and surgery happen in MLB vs MILB, in terms of insurance?
@1bluejaysway Yes, mostly the team. 
@injuryexpert Thanks for responding. Do you have a link to some articles that explains it for me? Any help would be appreciated. 
@1bluejaysway no sorry
@injuryexpert thanks anyways.
@1bluejaysway Writing about insurance issues isn't very popular.

Having my suspicions confirmed, I then proceeded to try to get some info on the topic. And let me tell you, the @injuryexpert was right. There just isn't a lot of people talking about this subject.

What happened next absolutely blew my mind. 

I must say that I do not consider myself an expert as it pertains to MLB player transactions. However, I do think I know more than the average fan. 

What I was able to find out on the insurance topic COMPLETELY changed my perspective. It feels like I have been enlightened.

Courtesy of Sports Business Daily:

December 2, 2002

"It's become so expensive that it's a cost item we really have to look at when you put your payroll together. If you're going to insure players, you almost have to include that as part of your payroll." Orioles COO Joe Foss said initial coverage now being restricted to the first three years of a player's contract "is going to have an impact on clubs' appetite for the length of contracts." Chass: "The Tom Glavine negotiations could be a case in point." Expos GM Omar Minaya added, "When you're negotiating a contract, the insurance issue comes up more and more, especially now that it's three years. When you take on a guy in a trade, you always ask what's the insurance situation." D'Backs GM Joe Garagiola Jr.: "The companies are more aggressive in trying to exclude conditions from policies. We don't do a lot of policies. Mostly our insuring is confined to pitchers. But our experience is you can have a policy effectively excluded out from under you. You can have a disability policy on a pitcher, and exclusions can cover injuries to his shoulder and elbow"

Courtesy of CBS Money Watch:

March 1, 2006

Major League Baseball found that it pays to take a team approach to purchasing insurance.
Instead of continuing to purchase insurance separately, Major League Baseball and the organization's 30 clubs decided to band together, set up a captive and develop a collective risk management strategy.
The results? Big cost savings, improved loss control and greater sharing of risk management best practices.
Major League Baseball has saved $40 million over the last three years after forming a captive known as MLB BASES, which stands for MLB Burlington Assurance Exchange Society. The captive is domiciled in Vermont and was launched in January 2003.
"Our strategy is simple. It's take high deductibles and use our captive to finance our retentions on a leaguewide basis," says Anthony Avitabile, the director of risk management at Major League Baseball.
Major League Baseball currently uses its captive for its workers' compensation and general liability programs and might use it eventually for some property risks as well.
"We felt our program should be put in place in the areas where every club is going to be purchasing insurance anyway," Avitabile says.

Courtesy of The Biz Of Baseball:

May 10, 2007

The New York Yankees signing of Roger Clemens to a prorated contract that will pay out $18.5 million and change has brought another aspect of player contracts these days: Insuring the player in case of injury.

With guaranteed contracts, clubs may wish to investigate the use of disability insurance for players to cover the losses they may incur, should a player have a debilitating injury that would end a season or career for the player.

The problem is, the rates to insure a player can be extremely high, and thus, clubs have to weigh taking the gamble of going it without insurance, or paying the premiums.

Comments by a spokesman for HCC Specialty Underwriters, one of the major insurers of professional athletes, goes on to say that it would be difficult for an insurer to take on the risk of Clemens due to the amount of salary involved and his age. A recent case that have touched on insuring players was the Astros suing the insurer for Jeff Bagwell who would not pay off their $15.6 million claim on his salary. 

Courtesy of Sports Business Daily: 

May 13, 2008

But MLB and insurance industry sources indicated that policies "often exclude areas of the body that have been seriously injured before." Also, position players are "less expensive to insure than pitchers." ESPN's Steve Phillips said that two events in '01 "changed the baseball insurance" marketplace: the Orioles received a reported $27.3M claim on the remaining $39M of injured LF Albert Belle's contract, and the World Trade Center attacks on September 11 "precipitated large payouts throughout the insurance industry at large"

Conclusion: 

So what does this all mean as it pertains to Shawn Hill and your Toronto Blue Jays? Well, I certainly don't have all the answers right now but this is what I think.

The Blue Jays must have an insurance policy out on Shawn. That policy no doubt excludes his oft injured right arm, elbow and shoulder. If this rumour of his foot/ankle injury is true, then they would be able to recoup some of his salary from the insurance company if he goes under the knife but only for a surgery that is not on an uninsured part of his body.

Thanks to the @injuryexpert, we know that this benefits the team in some way but only if it's done while he is on the Major League roster. It also benefits the player because he incurs service time while he is in the Majors, even if it's on the DL. For the record: Shawn Hill has 3.153 years of MLB service time according to Cot's Baseball Contracts.

So I guess everyone wins right?

Quickly:

I couldn't help but start wondering: How often has this happened in the past? 

A few names came to me right away:

Jesse Litsch (hip)
Dustin McGowan (knee)

More Quickly:

If Shawn Hill gets pulled early tonight and subsequently goes on the DL with a foot/ankle injury that requires surgery, you heard it here first.

Weekly Round Up: Aug. 2 - Aug. 8

Consider this your required reading for the week.

Consider this your required viewing for the week.

Courtesy of John Lott @ National Post

TOP OF HIS GAME

J.P. Arencibia is in the top 20 most offensive categories in the Pacific Coast League this season:
Hits 115 12th
Runs 71 8th
Doubles 32 3rd
Home runs 31 1st
RBIs 79 3rd
Avg. .303 20th
OPS .998 4th

Not much left for him to prove in AAA with the stick.  

Courtesy of Joseph Ballaro @ Las Vegas Baseball Examiner:

First of all, I have to admit, that I have seen Arencibia play a few times (mostly in 2009), and I really didn't understand what the hype was all about. I'd seen him close to the top of all sorts of lists ranking the best prospects in the Blue Jays system and I wasn't all that impressed with what I saw. However, he's made all the naysayers look very bad this year. He's posted a very nice triple-slash of .304/.360/.640 with a PCL-leading 31 homeruns, as well as 79 RBIs, and 71 runs scored. The Pacific Coast League is known as being a hitter-friendly environment, but even with adjusted numbers, Arencibia is having a very solid season. Minor League Splits calculates a park-adjusted line of .291/.348/.601 with 28 homeruns. In addition, his propensity to hit the ball in the air (50.5% fly ball rate this season) bodes well for a player with his type of power. Finally, while hitters are generally near .300, his batting average on balls in play (BABIP) sits at .310, meaning he has not necessarily benefitted from a lot of luck as far as balls falling in for hits. In other words, his breakout appears more legitimate, rather than a fluke.

His unreal MLB debut aside, J.P. should be on the Opening Day roster next season.  His bat is ready.  In the next few weeks I hope teams try to run on him a little bit so we can gauge his arm.  

Courtesy of Mike Rutsey @ Toronto Sun:

“Are you going to pitch like a man?”

It’s a simple question with an obvious answer but it has become a rallying cry for the Blue Jays starters this season.
“That’s been kind of our secret motto of the starters, “Pitch Like A Man,” Brett Cecil, who makes the start Friday to kick off a three-game series against the Tampa Bay Rays, said the other day In New York. “Every time I come in after warming up before I start a game, Shaun (Marcum) comes over and says: ‘Are you going to pitch like a man today?’
“Every time the answer is: ’Yes.’ And we do the same thing to him. He’s the oldest guy on the staff and we can say stuff like that to him.”
The starting rotation has been one of the unexpected strengths of the team since opening day.
In the past 19 games, the Blue Jays starters have forged an 11-4 record and posted a collective 3.26 ERA. Over their past 12 games, the starters have allowed two runs or less nine times.
That, folks, is pitching.
“Every start, somebody says something about it,” Marcum said of the unofficial motto. “I think it loosens us up a little bit and everybody goes out there and tries to pitch like a man, go deep in the game and give the team a chance to win.”

Whatever it is that you boys are doing or need to do.....keep it up!  Our starting rotation has been superb all season and I look forward to seeing them continue to grow together, as a group, in the years ahead.    

Courtesy of April Whitzman @ The Epoch Times:

Evidently, one is led to question where all his power comes from and why Bautista, who only batted .235 with 13 HR and 40 RBI in 113 games last year, has been able to have the season that he is having.
The obvious answer is that he has been given a chance to play every day. With Scott Rolen and Alex Rios leaving the team late last season, Bautista has seen a lot more action, and has moved up in the batting order.
In fact, dating back to Sept. 1, 2009, Bautista leads the majors with 44 home runs, 10 more than the next closest player, Prince Fielder of the Milwaukee Brewers.

April AKA Alleycat17 AKA JaysProspects ventures off into the dying world of print media.  Solid job.  

Courtesy of John Lott @ National Post:

Toronto Blue Jays pitcher Jesse Litsch will undergo season-ending surgery next week to repair a torn labrum in his right hip. Brad Mills has been recalled from Triple-A Las Vegas and will start in Litsch’s spot against Tampa Bay on Saturday.
Litsch told reporters before Friday’s game that he has had hip pain since 2006 but it never bothered him while pitching, only during workouts between starts.
General manager Alex Anthopoulos said Litsch complained about two weeks ago that he was having trouble sleeping and was experiencing groin pain. An MRI was taken Friday, July 30.
Litsch pitched Sunday. The MRI results came back Monday, and were sent on to a hip specialist, Anthopoulos said. The specialist’s report revealing the tear came back Friday and the surgery decision was made immediately.
The expected recovery time is for Litsch’s surgery is four to six months.

I was wondering how long the brain trust was going to keep running him out there every five days to get his head beat in.  I figured Boy Wonder did not want to burn an option year since we have less than two months to go.  This seems like a very convenient way of getting him off the roster.....and I hope he uses the rehab time to get back in shape for spring training. 

 Courtesy of Toronto Life:

The List: 10 things Alex Anthopoulos, the boy wonder Blue Jays GM, can't live without

1. Live music
There is nothing like seeing a great band live. My first concert was Poison, when I was in Grade 6. My all-time favourite is Springsteen: I saw him twice at the ACC. If you haven’t been to a Springsteen concert, you haven’t lived.
2. My native cuisine
Obviously, I love Greek food, especially feta and olives. One of my favourite memories is my dad roasting lamb on a spit every Easter. In Toronto, I go to Kalyvia on the Danforth (420 Danforth Ave., 416-463-3333).  
3. Raptors games
I love going to basketball games because I get to be a fan and relax, drink a beer, yell. When I’m watching baseball, I’m analyzing and thinking about how this applies to my job.

4. Hair gel
I’m not a big product guy, but I’ve been using KMS California HairPlay for a while—it gives me the kind of spiked look that I like. 

5. My workplace memento
The Expos are my home team, and my first baseball job was with them—I started as an intern. When I left in 2003, everyone signed this ball for me.

Those bastards stole our nickname!  Get to know our GM and what makes him tick off the field.

Courtesy of Mike Rutsey @ Toronto Sun:

In facing the Yankees on Wednesday afternoon, manager Cito Gaston put out one of his more creative lineups. He had slugging left fielder Travis Snider leading off.
“It’s the first time I’ve batted leadoff since I was 11 playing for the all-stars in Little League,” Snider said before the game. “It came as a little bit of a surprise.
“But any way I can get in there, I’m happy to help.”

Snider batting lead off for the first time since Little League?  I can't wait till we replace our manager with.....

Courtesy of Bob Elliott @ Toronto Sun:

“Cito told me he put my name in to manage, the last time the Jays were in Baltimore,” Samuel said Friday night from Estero, Fla. “Getting someone to back you like Cito means a lot.”
When Buck Showalter first took over as the Orioles manager, Samuel was offered the third-base coaching position he held under former manager Dave Tremblay. Now, he has been named assistant to O’s president Andy MacPhail. Samuel says he has been told MacPhail won’t stand in his way if another job offer arises.
After Saturday’s game against the Tampa Bay Rays, Gaston has 52 games remaining in his managerial career.
“I think I could bring a lot to the table,” said Samuel, 49. “I’m young enough to relate to younger players, but I’m enough of an old-school guy to know a team needs to be fundamentally sound to win close games.”

Samuel, whose O’s were 9-6 in one-run games, played the final three seasons of his 16-year career with the Jays, playing for Gaston in 1996 and ’97 and Tim Johnson in ’98.

The story goes on the mention the name Rob Thomson as a potential candidate as well.  Funny, we came up with that idea way back in March.  Check it.

Courtesy of Kevin Gray @ Union Leader:

Shawn Hill, 29, has shown a live arm since signing a minor-league deal with Toronto. He made three starts for the Padres last season before undergoing a second Tommy John elbow surgery.
The Ontario native allowed only three singles against the Flying Squirrels, striking out four and walking two. Hill's fastball ranged from 87-91-mph, and he mixed in an 85-mph slider and effective changeup. Hardly average stuff.
Based on his results, Hill may appear ready for the majors, but that's not the case. He's made on six starts this season, working his way up the ladder from the Gulf Coast League. He'll make his next start at Richmond next week.

This guy could be the equivalent of found money in September.  I think he gets a shot at Major League hitters again very soon, especially if we stay in this thing. 

Courtesy of Jim Callis @ Baseball America:

The Blue Jays have signed second-round pick Justin Nicolino for $615,000. His bonus surpasses MLB's guideline for the No. 80 choice ($450,000), making him the fourth Toronto draftee to have finalized an above-slot deal.
Nicolino follows second-rounder Kellen Sweeney ($600,000), sixth-rounder Sean Nolin ($175,000) and seventh-rounder Mitchell Taylor ($367,500). The Jays also are believed to have above-slot deals in the works with fifth-rounder Dickie Joe Thon (reportedly more than seven figures) and ninth-rounder Brandon Mims (for third-round money). Toronto has yet to sign first-rounder Deck McGuire, second-rounder Griffin Murphy and fourth-rounder Sam Dyson.

The deadline to sign our picks from this years Amateur draft is August 16th.  Bookmark this link and check it daily for updates.