Good to be back at work – and ready to opine on what 2018 holds for work comp. Here, in no particular order are my educated guesses, considered opinions, and wild-assed speculations.
- M&A – specifically big deals – will increase.
I expect we’ll see more very large transactions this year, mostly driven by strategic purchases of other companies. Work comp is a very mature industry, scale and size matter a lot, and that means getting bigger is key. Expect to see several billion-dollar plus deals in the service sector.
- The market will stay soft.
Claims frequency continues to decline, medical costs are pretty much under control, margins are healthy, and there’s still a lot of allocatable capital in the industry. Unless there’s some major – as in huge – crisis I don’t expect a hardening of the work comp insurance market.
- Cost containment’s focus will shift to facilities and hospitals.
Hospitals are increasingly vulnerable due to consolidation among payers, reductions in governmental program funding (thank you Trump Tax Bill), changes to Medicare reimbursement, and the systemic shift of care to lower-cost settings. Facilities have already – and will continue to – look for revenues from payers less able to reduce reimbursement. That’s us, kids. Expect to see payers more closely analyzing facility costs, looking for solutions, and implementing programs focused on the issue.
- TPA growth will accelerate.
Driven primarily by work comp insurers’ outsourcing. With a soft market, there’s little incentive for employers to self-insure, but the long-term decline in claims frequency is driving down insurer claim counts. Some insurers are making the strategic decision to shift claims to reduce fixed costs and capital investment requirements. Expect the big four TPAs to add significant new business from insurance companies and similar entities.
ok…maybe not this much… - Tele-everything will take off
Tele-triage, -medicine, -rehab, etc is going to grow quickly. Expect lots of activity from companies big and small; Concentra, MedRisk (HSA client), CHC Telehealth, Coventry, Work Comp Trust of CT and others are pushing this care delivery model hard – as they should. Expect thousands of “visits” will logged by the end of 2018.
Tomorrow, I’ll finish up with the other five…
nice Joe
I continue to try to get my hands around this “blanket” approach a lot of folks are taking to telemedicine. it has been around a while especially in the triage world. to actually consistently “treat’ a patient without the ability to touch the patient continues to be an elusive concept to me. having been in Ortho/Occ Med for over 30 years my anecdotal experience has been people get better quicker when there is a human component. additionally I have witnessed the misuse of the midlevel by physicians that to me decrease the quality of care. before all the NP’s and PA’s freak out I will qualify that these providers are an integral part of healthcare(I R one)but our education does not make us MD’s. I will watch with great interest as this technology continues to develop and how it is utilized or abused?)
Great blog, as always. Please reconsider using .gifs. My ancient system, provided by my government employer, had a hard time opening this entry, and was unable to load many of the gifs. The two that did load managed to draw much attention, and I had to explain that yes, what I\’m reading is indeed work-related.
G-Wonk – apologies for creating stress; I rarely use gifs; thought this was one of those rare times when a bit of humor might convey the message with a bit more spice.
Warning – tomorrow’s will likely include gifs as well – perhaps you can open on your smartphone (if available).
cheers Joe