today marks the start of the annual Workers Compensation Research Institute in Boston. Um going to put up a couple of lengthy – but still well worth reading in their entirety – posts on today’s presentations later this evening. For now, an initial observation.
Several of this afternoons panelists talked about the future, in the context if trends we should watch for and cost drivers we should be on guard against.
Dr Peter Barth led off the conference with a grey review of the history of work comp in the US. Dr Barth warned that worker comp may be included in any health reform initiative. He also noted that comp was part of the Clinton reform initiative.
With all due respect, for several reasons I very much doubt comp will be directly impacted by or addressed in any health reform bill. First, any politician with half a brain (which I grant may not include everyone in DC) knows that the way to get a bill passed is to get more supporters than detractors. It is going to be difficult at best to pass health reform legislation; adding comp to any bill would not add any support but would almost certainly drive work comp stakeholders to lobby against the bill. There’s just no upside for including comp in health reform.
Second, nowhere do the words ‘workers compensation’ or similar terms appear in President Elect Obama’s website, policy papers on health reform, or in the several speeches he has made on the subject.
Third, comp is not mentioned in the Wyden/Bennett Healthy Americans Act or any of the other reform bills considered in this Congressional session. These may be thought of as drafts of future bills; if policymakers were actively considering incorporating work comp it is likely we’d have seen it appear in one or more of these bills.
What does this mean for you?
Don’t expect to see work comp addresses in reform legislation on the Federal level.

Yesterday was historic, nation-changing, incredibly rewarding. It was also exhausting and deeply disturbing.
The day started at 6 am. As an election observer, I was tasked with making sure a specific polling place was open and ready for business before 7. My precinct was up and running and ready to go, although not without a bit of confusion and scrambling around. By 7:30 the line was 45 minutes long, and it didn’t go down till well after 9.
From there I was sent to observe the polls in central Doylestown PA – a picturesque, tidy downtown with lots of good restaurants and shoppes. After checking in at one site, I was moved to another. It quickly became apparent that there were way more Democrats helping at each site than were really needed; I left and returned to what had been home base for the last two days – the Warminster Obama/Murphy GOTV office (get out the vote).
I walked in, was handed 150 door tags labeled with the correct voting site, a coded map, and assigned a co-canvasser and told to hit the road. My partner for the next four hours was an Indian-American retiree from ATT, a gentleman deeply committed to the democratic process who had been in Bucks for ten days, staying with a family friend. We walked in sporadic rain up one typical suburban street and down the next, knocking on doors, ensuring targeted folks had voted and if not knew where to go. The neighborhoods were spread out, with large lawns and lots and lots of walking. A quick lunch at 3 and back at it with a fresh list in a new neighborhood, this time solo. After two hours, dark and rain and lousy street lighting ended canvassing.
Returned to the Warminster office, and things got very interesting. I was sent with a local expert, a woman who had spent much of the past year working to increase voter registration in poorer areas of Bucks.
Make no mistake, Kathy and people like her won the election for Obama.
Now to the ugly stuff. Sorry, as much as we’d all like to revel in the wonder that is this country, rejoice in a new and amazing definition of ‘opportunity’, and pat ourselves on the back for contributing to the greatness of America, all is not good.
Kathy and I were sent to a polling place in a poor, very mixed neighborhood. There we found a single Democratic poll watcher over-matched by three very aggressive Republicans. I’ve come to learn there is a fine line between voter education (providing information) and voter intimidation (scaring away voters or otherwise disenfranchising them). The R workers pigeon-holed voters, blocking their way up a narrow ramp, encouraging them to split their vote while telling them about a candidate’s personal history. One R accosted voters, loudly telling them about how a candidate had personally helped her family.
This at a polling station where earlier in the day election officials had asked every voter for identification – a practice that is illegal in Pennsylvania for citizens who had voted previously at that location. And canvassers had heard on their walks through the neighborhood from voters told they had to bring their voter registration cards – again not true.
The local Judge of Elections allowed one of the R poll watchers into the voting area while she was wearing campaign buttons – also illegal. Repeatedly. This same R poll watcher stood immediately next to the door, buttonholing voters on their way in – also illegal, as the law prohibits electioneering within ten feet of the polling place.
When we protested, the Judge began screaming at us, called the voting constable, and threatened to have us arrested, claiming that until we showed up everything had been working fine. We politely and respectfully disagreed. By the time the constable showed up, it was almost closing time. I’ll spare you the rest, but it wasn’t pretty, and would have been more believable if it had happened in a third world country than in the US.
The net of the story is this – despite what appeared to my eyes to be a concerted effort to suppress the vote, this precinct went heavily Obama, as did Bucks County.
This was the only instance where I thought the Ds were outmaneuvered by the Rs; in a heavily Democratic precinct, the Rs put their resources where they would do the most good – targeting people likely to, or in the act of, voting. It could be the Rs were misinformed about Federal election laws regarding voter intimidation, or the Judge was ill-informed, or somehow over a dozen residents misheard a request for ID.
Anything’s possible – as the election of an African American President proved last night.
From there, to Obama headquarters in Doylestown to wait and watch. PA was called before we got to the office, so when we walked in their were high fives and toasts all around -even though most were dead on their feet. Shortly after, New Hampshire was called, and the celebration, although muted, went up a notch. Then Ohio went for Obama, and it was over.
Or rather just beginning.
Tomorrow, back to the world of managed care.

The Economist has an excellent, if not terribly detailed, explanation [subscription required] of why what happened to banks will not happen to insurers.
Although some insurers do indeed have ‘impaired assets’ due to significant exposure to credit default swaps and other investment vehicles, unlike banks it’s tough to see how there could be a ‘run’ on an insurance company. Here’s how the Economist sees it:
“Unlike banks, which rely heavily on debt funding, insurers’ main liabilities are the claims they will pay their customers–for life firms these stretch over many years. Whereas the depositors and lenders who provide funds to banks can jump ship overnight, insurance customers find it hard and expensive to wriggle out of their contracts.
A run on an insurance company is thus hard to imagine.”
Agreed.

Tomorrow night’s Presidential debate will undoubtedly feature a spirited discussion of the candidates’ views on health reform. I’m not going to be sitting in front of the tube (rather, panel) blogging in real time as I’ll be on a plane. More’s the pity.
Here’s what I’d like to hear and who I’d like to hear it from.
Obama
You’ve consistently argued against mandated universal coverage on the grounds that cost must be controlled first. Yet your plan does little to address cost drivers. What must be done to address costs?
Your plan uses the Federal Employee Plan as the baseline benefit design for all insurers’ offerings. There is some evidence that adding ‘consumerism’ features to plans can reduce inappropriate utilization. How would you modify the basic plan to encourage patients to be more cost-conscious?
Your plan will cost about a hundred billion dollars a year. In today’s economy, how would we pay for that and can we afford it?
Both
Do you view the Massachusetts reforms as positive, and what lessons can we learn from that state?
Lifestyle diseases account for a growing percentage of US health care costs, despite an expensive and ongoing campaign to increase fitness, reduce obesity, improve diet, and eliminate smoking. Is it time for Americans with controllable risk factors to be asked to pay higher premiums for their lifestyle choices?
McCain
You have based your reform plan on the individual market. As a cancer survivor you would find it all but impossible to find an insurer willing to cover you. Many other Americans would find themselves in a similiar situation should your plan pass. How would your plan ensure that the tens of millions of Americans with chronic or pre-existing conditions would be able to afford good insurance?
Your plan relies on high risk pools to provide coverage for those Americans that could not buy insurance from private insurers, yet most state high risk pools are underfunded, won’t cover the high cost care many enrollees need, are closed to new members due to lack of funding, and therefore are marginally helpful. You have suggested your plan would provide ten billion dollars to fund these pools, an amount that is insufficient by any measure. How would you resolve this?
Your plan calls for the elimination of the employer tax deduction for health insurance, a position that most employers firmly reject. How would you convince employers to give up this deduction?
We all know neither of these plans will become law. What we need to better understand is how they think about the hard issues, the details that will bedevil any and all reform initiatives.

Last night Gov Palin convincingly demonstrated her total ignorance of the health insurance market. The woman who, according to her, once went without health insurance (fact check please) said once again that eliminating state regulation of health insurers (the real world impact of allowing interstate sale of individual policies) would solve the health insurance crisis.
Not.
Deregulating health insurance would have the opposite effect. Sure, the market would ‘work’; insurers would get licensed in the most insurance-friendly state, the one with the least regulation, the fewest regulations, the lowest requirements for benefits and capital reserves. States with higher standards for insurers – like prohibitions against retroactive cancelation of policies, requirements that insurers have enough cash on hand to pay claims, and an appeals process so physicians and patients can quickly resolve disputes, would find themselves with no insurers to regulate. The free market would force all insurers to offer the cheapest policies, the ones with the lowest benefits. Any insurer that tried to offer richer benefits or covered folks with pre-existing conditions would sign up older and sicker people – you know, the folks who actually need health insurance. And be bankrupt soon after.
Supporters of McCain’s plan claim there would not be problems as insurance companies operate across state lines today. What they don’t tell you is the plans they use as examples are employer-based. Under McCain, these would go away, to be replaced by individual policies. There would be nothing to prevent the cancellation of policies by insurers suddenly deciding they didn’t want to pay bills for cancer treatment, a new pregnancy, or a special-needs child. Nothing, no appeal process, no regulator forcing the insurance company to pay claims or reconsider a policy cancellation.
Palin also said that McCain’s proposed health insurance tax credit would help families buy insurance. What kind of policy would $5000 buy a family? Perhaps a ‘mini-med’ without coverage for hospital stays and a $5000 deductible. Family plans cost more than $12,000 on the employer market; although they are cheaper in the individual market that’s only because the benefits are so much lower; individual plans typically have higher deductibles and copays, no coverage for drugs or pre-existing conditions and onerous pre-certification requirements.
Palin’s lack of understanding of the world of health insurance conflicts with her claim to speak for Joe Sixpack and his bride Hockey Mom. McCain’s plan would leave them with lousy coverage and no recourse, at the mercy of unregulated insurers.

Aetna is restructuring Aetna Workers Comp Access, Aetna’s workers comp network subsidiary. Sources indicate AWCA’s president,Pat Scullion, sales boss Tom Shivers, and operations head Shawn Fisher were terminated yesterday in what insiders are calling ‘a complete surprise to them’.
AWCA has become the de facto network for Coventry Health’s workers comp division, replacing Coventry’s own proprietary network in many states. Since the finalization of the Coventry-Aetna deal over a year ago, new customers could only access AWCA through Coventry. This may have contributed to Aetna’s decision to terminate the sub’s leadership as AWCA Is essentially a service provider to Coventry. Aetna does have a workers comp PBM, but sources indicate it has a rather modest customer list.
Although the picture is not yet clear, more details should be forthcoming as meetings are being held today at Aetna’s Hartford home office with the (now senior) AWCA staff. It is likely that the sub will not remain separate, instead report up through the existing health plan structure.
For more background on AWCA enter AWCA in the search box to the right on the blog home page.

I heard about the Fed’s bailout of AIG last night while sitting in the stands at Yankee Stadium (watching the White Sox defeat the Yankees, the desired outcome). The seats in front of me were occupied by Wall Street types, all expressing a great deal of relief that the Fed had come to it’s senses and done the right thing. Now the markets would settle down and they could get back to making money.
My reaction was somewhat different.
AIG’s failure was a direct result of it’s exposure to billions of dollars of liabilities from insanely complex financial instruments it sold to banks and other financial firms. These instruments were neither fish nor fowl; neither bonds nor insurance policies they were not subject to any regulation or oversight. None.
When things were good, the lack of onerous regulatory oversight was great; it allowed the free market to price, assess risk, and trade without the friction and inefficiency inherent in the oversight process.
This morning the ‘cost’ of regulation looks like a pretty good deal compared to the $85 billion taxpayers are paying to save AIG. I’d also note that our (we taxpayers’) ultimate liability may be a lot more than $85 billion. We own AIG and if it needs more capital, we’re going to provide it.
It is going to be interesting to watch how the financial industry reacts to this disaster. And disaster it is; the largest Federal takeover of a private company on record. Will they welcome oversight and regulation, seeing it as a necessary cost of doing business or will they chafe under the ‘burden’ of that oversight?
The broader issue is the impact of the disaster on government policies and politics. In the health insurance market, the GOP has been advocating a dramatically reduced role for regulators, calling for an end to mandated benefits, Certificate of Need processes, and prohibitions against the interstate sale of policies. This would almost certainly result in insurance companies filing their policies in those states with the least amount of regulation and the lowest capital requirements.
Individuals buying those policies would have to hope any problems would be quickly and competently addressed by an insurance department in some other state, led by a commissioner unconcerned with the problems of citizens living outside his/her voting district.
The current climate does not favor de-regulators, a dynamic that may well influence how voters feel about the candidates’ health reform proposals.

My post yesterday was over the top. Several readers were angry/frustrated/disappointed, and I accept – and appreciate their criticism.
Keep it coming.

I get approached a couple times a month by folks offering to give me great exposure to their gazillions of readers if I’ll agree to let them have unlimited access to anything I’ve written here. In a few cases (very few) it makes sense – WorkCompCentral is probably the best example of a site with significant overlap with MCM’s readership that selectively posts relevant stories from Managed Care Matters.
But most are just looking for free content, and the quid pro quo is heavy on the ‘quid’; they get my intellectual property and I get exposure to their (usually really small) readership.
Not much of a deal; in the almost three years I’ve been publishing MCM I’ve written over twelve hundred posts, commenters have added their own thoughts and contributions, and well over a thousand people a day visit the site. These aggregators want to take that work and use it to build their business, without any compensation. No surprise, I’m one of dozens of bloggers that get the same personalized request from really important folks blowing smoke up my skirt about how great my blog is and how wonderful it will be to work together.
The other business deal I get from time to time is requests from advertisers and agencies looking to place ads on MCM. I’ve resisted so far and see no reason to take ads any time soon. That’s not to say I disapprove of other bloggers’ decision to sell advertising; that’s their business and their decision entirely. For me, accepting ads might add a whiff of potential bias, a decline in objectivity, and that’s not a direction I’m interested in going. And I certainly don’t want to do have to check out potential advertisers who may be sketchy/unprofessional/have skeletons in their closet, skeletons that would then take up residence in my closet.
Which leads to my final point.
I get pilloried from time to time by (usually nasty) readers accusing me of bias towards my consulting clients (list is here). My response is always the same – I always identify a client if that client is referenced in a post, and because I know my clients, and the rest of their industry well, I’m very comfortable discussing issues that involve them. After a dozen years running my consulting practice and another ten in the managed care business, I’m fortunate enough to be able to work with clients I like and respect, and not work with anyone I don’t like or respect.
Am I biased? Sure, biased towards individuals, companies, ideas and strategies that make sense and deliver value honestly and ethically. Will some readers take issue with my opinions, think they have a better business model, get upset and ticked off? Sure. And if they are professional and have a good point, one backed up by solid research and data, I’m happy to listen and happy to share their criticism with you.