UPDATE – Friday catch up, and follow up on the Aetna-CWCS story

Congratulations to Accident Fund’s Jeffrey Austin White – Jeff has been named Director of Innovation at the top-ten workers’ comp insurer.  I’m honored to consider Jeff a good friend.  He’s also one of the smartest people I know, and has two other all-too-rare abilities; he gets to the crux of knotty issues very, very quickly, and communicates really technical, complex stuff clearly and simply – so much so that we far-less-brilliant folks can actually understand it.

Kudos to Lisa Corless, AF’s Chief Administrative Officer for creating the position.  Innovation at a work comp carrier – there is hope for the industry yet!

Thanks to WorkCompWire for highlighting Liberty Mutual Research Institute’s recently released Workplace Safety Index.  The top two causes of injuries – overexertion and falls.  C’mon folks, let’s get in better shape!

Health Reform Implementation and health insurance

Great article by Steve Davis in Health Business Daily on the public health exchanges – couple key data points:

• the average benchmark health plan premium increase this year was 0 percent.
• this despite only a 1 percent increase in the average deductible
• a lot more health insurers are offering plans on the Exchanges; McKinsey reports a 27% increase in available plan options and 19% bump in the number of insurers participating.

It’s about the prices, stupid!

It’s long been known that the primary reason health care costs in the US are so much higher than in other industrialized countries is that medical services prices are way higher.  The good news is there’s more price transparency now than ever.

The latest comes to us from WaPo’s Wonkblog, reporting the price of a knee replacement varies from $17k to $62k – in the same city (Dallas). Hip replacement costs in Boston show an even greater range – $18k – $74k.

What’s interesting about this report (which comes originally from the Blue Cross and Blue Shield Association) is it is based on the price PAID for the service by Blues plans.

UPDATE – after a query from sharp-eyed reader PW, I spoke with the Blues about the price v cost question. Media contact Robert Elfinger told me the dollar figures are, in fact, the Blues Claims Rate.  That is, what was PAID for the service.  The report was not clear on this as it mixed “price” and “cost” repeatedly.

For those who bitch about “narrow networks”, this is precisely why narrow network plans will become the industry standard in the near future; health insurers must identify low-cost, high-quality providers and direct their members to those providers if they are going to survive in the hyper-competitive Exchange-based health insurance marketplace.

Low cost or wide networks – pick one.

And health insurers are doing just fine, thank you.  From UBS comes a brief summary of Unitedhealth Group’s recent financials, and they look pretty darn good. Medical costs are coming in lower than projected despite a pretty nasty flu season, and membership growth has been higher than projected (in part due to narrow network products).

Aetna and the layoff at Coventry Workers’ Comp Services

Last week I wrote about Aetna’s decision to raise the company’s minimum wage to $16 an hour and the subsequent layoff of 11 workers at subsidiary CWCS’ office in Franklin, TN.

I’ve been talking (via email) with Aetna’s Communications folks in an effort to a) make sure I get the details right; b) get their side of the story; and c) find out what the future holds.  To their credit, my sense is they’ve been really trying to be helpful – however for some reason they’ve not been able to provide much information.  Of late, they’ve been radio silent. Here’s what I have so far.

First, I said there were 11 workers fired; Aetna says there were only 8.  It appears that there were indeed only 8 laid off, however sources indicate an additional 3 will be.

Second, in their internal announcement of the increase in the minimum wage, Aetna said there would be no layoffs, that these would of happened in December if we were going to do anything like that.”  I reviewed all press releases after April 2013, and didn’t see anything about CWCS layoffs.  In talking with some of the laid-off workers, they told me they had no indication a layoff was coming and couldn’t recall any communication of any kind about a layoff. I’m not sure the “communication” over a year ago about “targeted job reductions” can be counted as a notice by any reasonable standard. Via email, I asked Aetna if the CWCS layoff had been communicated, and was told:

in the fall of 2013 after we closed [on the deal to purchase] Coventry (in May), we communicated integration activities over at least three years, including targeted job reductions as business units conducted the activities. 

This is obviously just an oversight; CWCS is a tiny part of Aetna, and on balance Aetna is clearly doing the right thing for the vast majority of its lower-paid workers.  For several thousand employees, the wage increase is a very big deal and one Aetna should be lauded for.

CWCS is a slightly different matter.  Clearly Aetna is looking to unload the division; equally clearly (at least to me) unless they accept a very low price, that’s not going to happen. While things play out, CWCS management is doing the cash-cow thing; slashing costs and outsourcing whatever they can in an effort to maximize profits.  I get it; it makes sense from a business perspective.  However, one would hope that CWCS would follow mother Aetna’s kinder and gentler employee relations philosophy.

Note – I informed my Aetna contact I’d be posting about this today and asked three questions about possible future layoffs and any efforts to help laid-off workers find other jobs; as of now they’ve not responded.  Fortunately, after reading the post, two area employers got in touch with some of the laid-off workers as they have open positions.