Feb
25

What’s the deal with long-term COVID?

Why are facility costs increasing and where?

How will labor market disruptions affect work comp?

These and other questions will be addressed in Boston March 16 and 17 at WCRI’s Issues and Research Conference. I caught up with WCRI CEO John Ruser and Communications Director Andrew Kenneally to get the scoop.

remember these days…?_DSC2004.jpg

[Register here…don’t put it off as this often sells out]

COVID

26 months into the COVID era we know a lot more about the short-term health impacts of COVID (and associated medical costs and duration) but we’re only starting to understand how COVID infections affect us – and may impact work comp – over the long term. Dr Ruser noted the:

“majority of COVID claims are short duration and most don’t have medical expense, things that are going to surprise us may well be long covid associated (issues)…(we are) doing studies on covid claims and persistence in terms of services provided that WC payers are covering”

Denise Algire, Dan Allen, and Craig Ross DO are the panelists for a discussion of the workplace “after” COVID; mandates, return to worksites, and medical care are all on the docket. [I’m not sure there will ever be an “after” COVID; more likely we’re entering a “COVID era.”]

Facility costs

WCRI’s members have identified facility costs (inpatient and outpatient hospital and ambulatory surgery facility) as a key concern; one of the biggest drivers is provider consolidation.  Dr Bogdan Savych and Dr Sebastian Negrusa will discuss their research into the effect of provider consolidation on workers’ comp medical payments; Dr Ruser:

WCRI’s stakeholders raised this as a top issue…there will be some eyebrows raised as there hasn’t been research on the impact of vertical and horizontal integration’s effect on workers comp. We will discuss the implications for costs from both vertical integration and the acquisition of Primary care practices by larger health systems.

More on this issue here here and here.

Employment

The estimable Dr Bob Hartwig will educate and engage as only he can. Somehow Dr Hartwig manages to make the densest of topics relevant and entertaining. With employment a key driver of all things workers’ comp;

“disruptions in labor markets are going to have lasting impacts on the way we work and on workers’ comp claims. Bob Hartwig is coming to talk about these disruptions and their implications for workers’ comp”

What does this mean for you?
All in all, a festival of facts, a cornucopia of content,  await us in Boston…along with a most-needed opportunity to see old friends and, dare I say…shake hands?


Feb
24

The Ukrainian War’s impact

Equity markets are getting hammered, the bond market is up substantially, and energy prices and assets are zooming.

Those are the immediate effects of Russia’s invasion of Ukraine.

What will happen now is anyone’s guess, but here’s how I see it.

  • Putin is all in.  Attacks are hitting cities hundreds of miles from the Donbass and eastern Ukraine, signifying Putin’s intent to take over the entire country.
  • The western countries – Europe and North America, as well as some Asian nations will rally around severe penalties for Russia – blocking access to the SWIFT system, banning trade in Russian debt and equities, and instituting a broad ban on exports to Russia.
  • This isn’t going to end anytime soon.
  • Ukraine will be very hard-pressed to hold off Russian forces; the Ukrainian military is much smaller, has fewer armored vehicles and airplanes, and isn’t positioned well to fend off attacks from the north and southwest.
  • China is a bit of a wild card; it
    • consumes a lot of Russian foodstuffs, gas and oil,
    • sees Russian aggression as a not-very-big-deal,
    • likes the strategic problems the invasion creates for the West (China could move aggressively on Taiwan), but
    • knows Russia’s financial situation is going to deteriorate quickly,
    • has tens of billions invested in Russia, and
    • understands that Putin is playing with a fairly weak hand.

So, I’d expect:

On the scarier side, expect Russia to launch cyber attacks in retaliation for Western sanctions, attacks that will very likely target financial institutions, infrastructure and commercial entities.

What does this mean for you?

Uncertainty breeds stasis…until we see where this is headed, expect interest rates to rise which will increase the cost of debt and reduce private equity investment.


Feb
23

Cash cows, Corporate cut-backs and Corporate-speak

Six weeks ago I predicted:

TPAs will add more business, mostly from carriers.
As work comp continues to shrink, insurers will ramp up efforts to shed assets and expenses to reduce their cost structure. By outsourcing claims, carriers are trading the high fixed costs of a claims infrastructure for the variable cost of a per-claim admin fee.
The smarter carriers will negotiate hard so they don’t get screwed by medical management and other non-fixed fees…but many carriers aren’t that smart…

and…Insurers will reduce staff, particularly in claims.

Here’s an update.

There’s been lots of rumors out there about AIG’s plans to get out of the claims business and associated layoffs, so I reached out to AIG. (full conversation below)

Net is I’m hearing there have been layoffs in IT (never a strong suit at AIG), work comp claims, and medical management services.  Likely other areas as well.

Focusing on work comp/medical management, this is a) wholly predictable and b) likely to happen at other insurers.

The reasons are straightforward:

  • work comp is a declining industry
    • in 4 years there will be 10% fewer claims than there are today
  • work comp is a classic cash cow; mature, throwing off lots of cash and stagnant

The implications are clear – why would an insurance exec invest in a business that is declining, way behind in technology investment, has an aging workforce and can’t attract young talent?

Especially when it can outsource claims to a TPA, thereby:

  • reducing fixed costs and unallocated loss adjustment expense (ULAE)
  • eliminating the need to invest in IT upgrades for claims and medical management systems
  • getting rid of an older and expensive workforce and the attendant costs for real estate, IT support, telecom, benefits and on and on.

Congratulations to Gallagher Bassett, which appears to have landed a lot more work. This will help GB immensely as it will gain revenue it can use to make those IT investments, hire and train staff, and upgrade operations.

Finally, corporate-speak.

Why AIG would not answer questions clearly and cogently is beyond me. Without those answers, one has to look to message boards and contacts at the company and those recently departed, sources that have – by definition – more narrow perspectives influenced and affected by the impact of AIG’s actions and non-actions.

That doesn’t mean those perspectives aren’t valid – not at all. It does mean that you, dear reader, don’t have the full picture as to what is happening at AIG and why.

What does this mean for you?

If AIG work comp is a customer, pay very close attention.

Email conversation:

here’s what I asked AIG

I’m working on a blog post re carriers using TPAs for workers’ comp claims.  I understand AIG is in the process of outsourcing WC claims to Gallagher Bassett; evidently there was an internal communication to employees in December addressing this.

My questions:

        1. AIG has long used TPAs for claims handling, but also handled claims internally. Is AIG in the process of outsourcing all/most WC claims that were previously handled internally?
        2. If so, what is driving this decision?
        3. Sources indicate the timing is Q2 2022; is this accurate?
        4. Indications are AIG is also reducing the role of HDI; can you speak to that?

Here’s AIG’s response:

AIG has entered a strategic partnership with Gallagher Bassett for the shared management of our “bundled” workers’ compensation claims in the U.S. This partnership will combine AIG’s in-house claims expertise and customer service with Gallagher Bassett’s industry-leading infrastructure, analytics and technology. AIG will continue to handle major loss and specialty claims and medical management, while also providing technical and strategic guidance for all claim management and resolution.

And here’s my follow-up

So, thanks for the statement.
Is AIG staff handling claims?
Is AIG doing all the Managed care work but using GB’s IT for claims?
My understanding from AIG staff is that GB will handle claims, so I’m a bit confused.
AIG’s response was classic corporate-speak and – as you can see – didn’t answer my questions. AIG also didn’t respond to my follow-up.

Feb
17

COVID update

yes, things are getting better – but that’s not universal, as some states/regions are still dealing with the Omicron tsunami.

First, idiot alert…

An Oklahoma hospital was forced to lock down its ICU due to what can only be described as rampant idiocy.  From Medpage Today:

In a recent press release, [a] church group [that has been protesting outside the facility and making threats against its staff online], known as Ekklesia Oklahoma, called Mercy Hospital an “evil Marxist controlled death camp.” [emphasis added]

Court documents stated that the founder of the group called one of the hospital’s doctors a “murderer,” noting that members even posted the doctor’s home address online, according to KFOR.

It’s not just Oklahoma…in Boston, a neo-Nazi group protesting outside the hospital called Brigham and Women’s Hospital “anti-white.” The stupidity of the protestors is stunning, as is their twisting of facts.

As I’v noted multiple times, we have family members in emergency medicine/critical care.  These types of attacks happen every day, everywhere. Patients yell, scream, hit, spit on staff. Some patients’ family members call and make demands, cursing at staff who refuse to dispense ivermectin. They abuse them mercilessly.

And nurses and staff are supposed to stand there and take it.

Would you tolerate that in your job?

What does this mean for you?

These idiots and their enablers are destroying our healthcare system. Call them out. 

Facts

COVID infections are associated with much higher use of medications to address behavioral health conditions. That’s from a study published in the British Medical Journal. The study was conducted by the Veteran’s Administration and analyzed data on over 150,000 patients with a previous acute COVID diagnosis.

From the BMJ:

people with covid-19 show an increased risk of incident mental health disorders, including anxiety disorders, depressive disorders, stress and adjustment disorders, opioid use disorder, other (non-opioid) substance use disorders, neurocognitive decline, and sleep disorders. The risks were evident even among those who were not admitted to hospital during the acute phase of covid-19—this group represents most people with covid-19 [emphasis added]

Vaccinations are good

A UK meta-analysis focused on long-COVID found that individuals previously infected with COVID benefited from vaccinations, and those with COVID that got a vaccination did better than those without a vaccination.

  • Six of the 8 studies assessing the effectiveness of vaccination before COVID-19 infection suggested that vaccinated cases (1 or 2 doses) were less likely to develop symptoms of long COVID following infection, in the short term (4 weeks after infection), medium term (12 to 20 weeks after infection) and long term (6 months after infection).
      • Six of the 8 studies assessing the effectiveness of vaccination before COVID-19 infection suggested that vaccinated cases (1 or 2 doses) were less likely to develop symptoms of long COVID following infection, in the short term (4 weeks after infection), medium term (12 to 20 weeks after infection) and long term (6 months after infection).

      Finally, more support for the benefit of vaccinations for those previously infected with COVID.  

      A study published in the new England Journal of Medicine found that:

      Among patients who had recovered from Covid-19, the receipt of at least one dose of the BNT162b2 vaccine was associated with a significantly lower risk of recurrent infection.

      So, yeah, just because you had COVID doesn’t mean you don’t need the jab.

      What does this mean for you?

      Get vaccinated. 


Feb
16

Quick hits…

I’ve done a few podcasts recently, and find them to be a lot of fun. Yvonne and Rafael hosted me in a kick off the second season of their Deconstructing Comp pod…we dove into opioids, humility, making things real, testifying before Congress, physician dispensing, blogging and grandkids.

CWCI’s annual meeting is DIFFERENT this year.

The fine folks at CWCI recognize that many members and other usual attendees are still under travel restrictions and may have personal and/or public health concerns. To accommodate as many people as possible, this year there will be both live (3/8) and virtual (3/10) conferences.  Register for both the live and virtual meetings here:  https://www.cwci.org/conferences.html; the virtual meeting will combine recordings of the live sessions with a live Q&A.

There’s a lot on the agenda related to legislative targets including access to care/MPNs, presumptions, med/legal & QMEs as well as the usual claims monitoring report (COVID/Non-COVID claim dynamics, utilization, pharmacy).

Michael Marks, a most insightful attorney will tie together the theme (“Are We There Yet”) with a comparison of the original grand bargain to our current state.

Not to be outdone, NCCI’s out with their latest economic briefing; highlights include:

  • Unemployment rates at or below 4% in December and January indicate that the US economy is nearing full employment.
  • Job losses are now concentrated in just two major sectors: Leisure and Hospitality, and Education and Health Services. (With family members in healthcare, I know first hand why so many are quitting)
  • January’s employment numbers showed no effects of the Omicron surge…deferred jobs hit in February is unlikely.

The Conference Board forecast that the US economy will grow by 2.6 percent (year-over-year) in 2022. I’m no economist (yippee!) but I’m betting we’ll see significantly higher growth – which will positively effect employment, wages, and thus workers’ comp and group health premium growth.

What does this mean for you?

Things are getting better. 


Feb
14

Hospital CEO pay ≠ Outcomes

An excellent piece by Merrill Goozner highlighted – among other things – the disconnect between not-for-profit hospital CEO pay and their hospital’s ability to control costs. 

Merrill cited the Lown Institute’s analysis of hospital performance, DEI results, outcomes, cost and pay equity

Since 1996, hospital costs have risen about 2 1/2 times faster than overall inflation…

Why?

Quoting Merrill..

You’d think the boards of trustees at the nation’s non-profit hospitals, which account for 80% of all staffed beds in this country, would be up in arms over top management’s inability to keep prices and thereby patient costs under control. At the least, they might want to incentivize their chief executive officers and other C-suite staff to take cost control seriously.

Nope.

up to 40% of a CEO’s bonus depended on measures that directly affect hospital finances.

Not for profit hospitals are a BIG part our healthcare problem; most don’t care about rising healthcare costs, and they don’t tightly link CEO compensation to clinical outcomes.

Now I know why I had to pay $355 for ear wax removal.

What does this mean for you?

Hospital leaders’ and their boards’ priorities are not ours. 

Subscribe to Merrill’s posts here.


Feb
10

Wait…what??

Science denial – or perhaps a total absence of common sense – is nothing new – if anything it has gotten more pervasive of late.

Here are a few examples of willful ignorance guaranteed to make you smack your head (I hope…)

This from Scott Galloway…

I

Here’s the map they use…

Belief in Evolution

Belief in creationism

This is NOT a Right vs left, Liberal or Conservative issue.

an almost-comprehensive view of the many, many examples of nonsense…

What does this mean for you?


Feb
7

Our healthcare system is breaking, part 4

This is the fourth attempt to warn you about the impending disaster facing all of us. 

Our incredibly dysfunctional healthcare system is collapsing, falling apart as thousands of highly-experienced and very well-trained critical staff leave care provider roles.

Two national nursing experts:

  • nurses who are inexperienced are replacing those who retired or were enticed by financial incentives to become travel nurses.
  • So many older nurses have quit, and younger nurses are at the bedside.

Hospitals are turning to traveling staff, costing facilities 4 to 5 times more than full-time workers. In response, and in a classic “treat the symptom while ignoring the problem” move some well-intentioned but pretty clueless elected officials are trying to pass a bill that would restrict traveling staff agencies’ pricing.

That is both pointless and pathetic. It reflects those officials’ paying attention to healthcare executives while ignoring what’s happening to care workers on front lines.

Instead our Representatives should be:

  • confronting those who are lying about COVID and vaccines,
  • using every tool and lever they have to support health care workers,
  • implementing financial penalties for illegitimate vaccine refusers in the form of higher premiums, copays, and deductibles.

It’s even worse at long-term care and rehab facilities…and it has undoubtedly gotten worse since those data were collected back in June 2021. And it’s happening in Florida, California, and Indiana – and in your state too.

Here’s why. And no, it’s not vaccine mandates.

From a great piece in The Baltimore Sun:

The great “financialization” of the health care industry has finally trickled down. Capitalism and the unfettered and unfiltered drive for the dollar has degraded the nursing profession in many regards. The historic exploitation of nurses to increase productivity and reduce costs, worsened by the pandemic, has led to a historic nursing shortage being faced today. [emphasis added]

This is the macro, structural driver – the unbound drive for profits..

COVID – and more specifically disinformation and vaccine resistance – has greatly accelerated and deepened the crisis. 

The multiple waves of COVID and the relentless flood of disinformation and lies have crushed the life out of nurses and healthcare workers, each successive wave burying healthcare workers ever deeper until many can see no escape.  Nurses are at much higher risk for suicide than most other workers.

Experienced, trained, passionate and skilled nurses and healthcare workers are leaving patient care.

What does this mean for you?

Sooner or later you will bring a family member to a hospital.

The staff will be less experienced, less skilled, less knowledgeable and less able to provide care.

Lies and disinformation have consequences.

 


Feb
3

Stuff you should know

In my ongoing effort to help you, dear reader, stay informed and on top of important stuff, I have this email folder titled “Blog Fodder” wherein I park news items worthy of your attention.

Here’s the fodder filling the folder these days…

Cash assistance = potentially smarter kids

A really interesting – and important – study found that babies of mothers that had received cash assistance had increased brain activity when compared to mom’s without cash assistance. From the study…

The resultant brain activity patterns have been shown to be associated with the development of subsequent cognitive skills.

WCRI’s Annual confab will include a session on Drug Formularies and the impact thereof. Register for the meeting here.

The good folks at Ametros collaborated on a study assessing CMS’ denial of payments for work comp-related claims. Evidently some folks thought this didn’t happen…turns out it does. Extrapolating from a random sample, researchers estimate CMS denied 36 thousand claims annually from 2018 to 2020.

Hear all about it in their February 15 webinar; register here.  And download the report here.

COVID good news.

From the NYT, the CDC released a study showing:

[boosters] are 90 percent effective against hospitalization with the [Omicron] variant, the agency reported. Booster shots also reduced the likelihood of a visit to an emergency department or urgent care clinic. The extra doses were most effective against infection and death among Americans aged 50 and older…

How effective for us oldsters?

VERY..unvaccinated Americans between 50 and 64 were 44 times more likely to end up in the hospital with Covid than those in the age group who were vaccinated and received a booster shot.

And really good news; from Charles Gaba, the uninsured rate for U.S. population was 8.9% for the third quarter of 2021 (July – September 2021), down from 10.3% for the last quarter of 2020 – corresponding to roughly 4.6 million more people with coverage over that time period.


Feb
2

Acquisitions and takeaways therefrom, Part 2

Yesterday we dove into the Paradigm-HomeCare Connect transaction and opined on the whats and whys. Today the TRISTAR-Risico deal is up for discussion.

Background

TRISTAR is a mid-tier national TPA, known for its work with employers and public entities. TRISTAR focused on workers’ comp for most of the time I’ve known the company, although of late it has grown its non-work comp services; Auto and liability now account for almost 30% of TRISTAR’s business.

Q&A

I caught up with President Tom Veale via email, here’s our Q&A…

  1. MCM – there’s a lot of overlap in the companies’ target industries of ag and public entities; is TRISTAR looking to strengthen its presence in these markets?
    Tom – We like both industries and have a significant presence in both, especially in the west.
  2. MCM – I noted the emphasis on geography; how does adding more business in California’s Central Valley tie into TRISTAR’s strategy?
    Tom – The central valley is the breadbasket of America.  We love doing business there.  The Ross & Castillo firm gave us a great base to build from sixteen years ago.
  3. MCM – Re managed care offerings, what and how does RISICO managed care services add to TRISTAR’s capabilities?
    Tom – Risico has a great team of case management and bill review professionals that will strengthen our team in California.  They also have a team of network developers and managers who will significantly expand our capabilities.  Total Managed Care will be integrated into TRISTAR Managed Care.
  4. MCM – You noted the cultural fit.  Can you provide more color around that?
    Tom – Bill and Steve built a company that operates like an extended family in many ways.  They take care of each other and in doing so, take care of their clients injured workers.  We strive to do the same at TRISTAR.  Being privately held, both of us can make the long-term investments required in our industry today – not having to worry about quarterly earnings, borrowing covenants and the like.

We then got into a discussion of what’s happening with TPAs, which look to me to be one of the only sectors of the work comp industry that is growing.

Tom’s views on what’s happening with TPAs and why…

  • I think WC TPAs are consolidating.
  • The number of claims keeps dropping for most employers – and has for twenty years. Improved safety practices and automation are the two big culprits. A while ago you talked about the industry shrinking – I think it was 2 to 3% a year. We have seen that as our average client with stable operations has less new and less open claims today than five years ago.
  • The increasing cost of operating a TPA is becoming painful for many. Real SOC1 and 2’s, carrier oversight, IT costs, staff costs lead the way. Your (and others) shining the light on some predatory TPA practices has been painful for many bad actors. The industry will be smaller, and hopefully better in the long run.

The net

TRISTAR is a consolidator, and this latest transaction is strategically sensible. It adds depth in a key market sector and a key geographic area for TRISTAR, while also building TRISTAR’s internal managed care operation.

Tomorrow – other big doings in the TPA space.

What does this mean for you?

Watch what the smart people are doing.