Mar
1

Good news Friday…a robust economy and optimistic consumers

In out continuing effort to keep a positive outlook, we once again bring you news to brighten the day.

today – the economy – which is doing quite well, thank you – driven by rising wages.

First up – the US economy is “very strong – last quarter it grew 3.2%, a very good rate indeed.

Consumer incomes jumped 1.0 percent…”in January, aided by higher dividend payments and the annual cost-of-living adjustment in Social Security.”

and…”consumers have also become more optimistic about the economy, surveys show

Those factors likely helped drive new home sales up almost 2 percent year-over-year. This helps the construction industry and employment of tradespeople, durable goods such as appliances and HVAC and home goods.

from MarketWatch core inflation dropped to 2.8% in the 12 months ended in January. (PCE is personal consumption expenditures) – graph from US BEA

What does this mean for you?

Better economy = more jobs + higher wages + lower inflation = more disposable income = more jobs…


Feb
29

The heat is ON.

Heat exposure has killed 40 workers per year since 2011.

Heat – and other exogenous factors related to human-caused climate change will likely be the fastest-growing driver of occupational injuries.

Fortunately others are stepping into the gaps caused by a failure of leadership by the Federal Department of Labor and outright stupid behavior by some state politicians. (note dozens of elected Representatives have authored a bill that would require and enforce heat protection standards for workers…of course, the House can’t even pass a ^%$%&#* budget, so this ish’t going anywhere.)

California has been a leader and is on the verge of implementing standards to protect indoor workers from heat exposure; Minnesota and Oregon also have indoor heat standards. Colorado, Oregon, and Washington also have rules for outdoor workers.

Meanwhile, OSHA has been dithering for years, failing to establish enforceable standards while more workers die.

The American Society of Safety Professionals just published standards for protecting construction workers from heat….these standards have no teeth, but would very likely have prevented this death.

Meanwhile politicians in Florida and Texas are doing their best to kill more workers. That is NOT hyperbole…Florida passed legislation protecting student athletes from heat, but has actively promoted legislation that would prohibit local governments from requiring employers to offer the same protection to workers.

And then there’s Texas

Good news – WCRI’s annual meeting will include insights into climate-related drivers of occupational injuries.

What does this mean for you?

Higher workers’ comp rates, more injuries, and more dead workers in Texas and Florida – and elsewhere.


Feb
28

Ramona Tanabe on WCRI’s annual confab.

Ramona Tanabe, CEO of WCRI – a most excellent workers’ comp research organization – was kind enough to carve out a few minutes on the eve of this year’s gathering of the brainiacs to answer a few of your reporter’s questions.

MCM – Great to see a discussion of provider consolidation on the agenda – what was the trigger for this?

Ten years ago we looked at where care is being delivered across states…Massachusetts was particularly notable for how much care was delivered by hospital-based care providers. More recently this has been increasing in some states as facilities acquired practices. Stakeholders brought this up so WCRI decided to watch this and see how providers changed when they joined a larger group. [WCRI looked at provider billing before and after they were acquired by/joined a health system or hospital or large provider group]

  • MCM – What was one of the surprising findings from the research on consolidation?

We had a hypothesis that assumed we would find duration of disability would decrease due to coordination of care – and lo and behold numbers were the opposite – duration increased. We will get into the causes at the conference next week.

  • MCM – Thinking about the various sessions, which one will have the most long-term impact on workers compensation and why?

Two – excessive heat – this impact is external to comp system and is not going away…it is a different world.

And the changing medical workforce is going to have a long term effect – access to care specifically doctors RNs LPNs is changing . Prof Cutler will talk about changes to the healthcare workforce and what’s been happening about that – who is providing the type of care – how many providers, who owns them and hospitals it is all changing – it is not like it was 30 years ago and the effects of that will continue to impact workers’ comp.

  • MCM – There’s been what can only be described as a misunderstanding around medical costs in workers’ comp – in your mind what accounts for this? What WCRI research can help stakeholders grasp what’s really happening with medical costs?

Yes to the second question; there will be a session on medical costs and effect on inflation. At the last conference some said there is a delay in how inflation in the economy affects workers’ comp and that was why we had yet to see medical inflation…Have prices changed over time? that is how economists think about inflation…there’s also been a shift in services – where it is being delivered or changes in the types of services that also factor into pricing…location of service, intensity, utilization all affect costs

  • MCM – Drug costs have been declining for some years now – any indications this trend has ended or changed?

[Drug costs] have declined over time – [this varies] by categories of drugs, there have been decreases in some and increases in others – society helped with that change with publicity around drug issues…issuing report on this later this  year.

What does this mean for you?

Pay attention to WCRI. Their research will help you plan for the future.

 


Feb
27

Opioids in workers comp – spend is down a billion dollars.

More than 20 years ago I posted this:

Oxycontin in WC

Where are we today?

After a horrific spike in opioid prescribing for workers’ comp, the industry has done a remarkable job reducing unnecessary and inappropriate opioid usage.

Well, except for the Federal Office of Workers’ Compensation Programs, which was way too late to take action.

Leaving OWCP aside (if only we could), here’s a few statistics:

Our annual Survey of Prescription Drug Management has tracked opioid prescriptions for more than a decade.

  • The 2021 Survey showed a 12.5% drop in opioid spend over the previous year.
  • Opioids represented 13.4% of all respondents’ pharmacy spend, the lowest figure in the history of this survey.
  • A decade ago, opioids accounted for 29.4% of drug spend.
  • And, a decade ago drug spend was MUCH higher than it is today.

Net – workers’ comp has reduced opioid spend by roughly a billion dollars over the last decade.

What does this mean for you?

Thousands of lives saved, families preserved, moms and dads alive, kids not orphaned, addictions avoided.

Thanks to all who have done this – you are treasured.


Feb
23

Good news Friday!

Here’s stuff to brighten your day…

Our cities and rural areas are getting safer.

Overall crime rates have dropped – a lot...

unless you own a Kia or Hyundai.

 

Murder rates are dropping as well

Net – safer cities and towns.

Inflation???

Business owners’ consensus view is inflation will remain near 2 percent...this from the Atlanta Fed.

Healthier people!

2 Medicaid items of note

North Carolina is expanding Medicaid – terrific news for poorer folks in the Tar Heel State. Great news for the 346,000 residents who now can actually get healthcare.

In some states, Medicaid is expanding coverage to include housing and nutrition, a major step towards improving the health of Medicaid recipients.  What I love about this is research indicates housing and food stability enable people to a) get healthier, b) focus on school and work (hard to study or work when you are hungry and living on the streets).

Kudos to the Trump Administration for jump-starting CMS’ investment in social determinants.

CMS’ move is just the latest that recognizes the critical importance of stable housing and reliable nutrition. From WaPo:

social determinants of health — essentially, the conditions in which people live — have an enormous bearing on well-being. Medical care, studies have shown, accounts for only 20 percent of the difference in patients’ health, while social risk factors are responsible for half to 80 percent.

And it’s not just Medicaid…

Last year, the National Committee for Quality Assurance, which evaluates health plans and medical practitioners, updated a data tool used by 90 percent of health plans, requiring them to report whether they have assessed patients for shortages of housing, transportation and food.

See you in Boston March 5 – 6 for WCRI…it’s sold out BUT there is a waiting list… click on the link to sign up.

 


Feb
22

A.I.: The Basics

AI is all over healthcare, from assisting in diagnosis to evaluating new medicines, from allocating resources to triage. Sure, there’s enormous potential – there’s also big risks. At last fall’s National Work Comp conference AI was all over the exhibit floor….in recent surveys HSA has conducted we have seen a dramatic rise in AI-related comments.

What’s apparent from our conversations with industry execs is this: AI is…in the eye of the beholder.

While industry folks talk about AI’s potential, they readily acknowledge their understanding is superficial at best.

I asked Jay Stith, the brains behind HSA’s analytical work – he’s also worked extensively with AI applications in his work with HSA and on the national scale for disaster prediction and preparation – to give you, dear readers, a very brief overview of what AI is, how it “works” and where it might be useful.

At its core AI represents the culmination of efforts to infuse machines with human-like cognitive functions. The engine driving AI’s transformative power is machine learning – a discipline enabling algorithms to learn from data patterns. This not only facilitates automation but also empowers AI systems to continuously enhance their performance, making them dynamic and adaptable to evolving challenges.

This potential doesn’t come without cost. Once you decide to pursue AI, launching a competent AI system requires a lot of work:

• Determining what problem you want AI to address,
• acquiring the resources (money and infrastructure) ,
• earning management and staff buy-in,
• acquiring the talent to develop AI,
• assessing/cleaning up/revising the data used to “train” AI
• developing metrics to evaluate the AI’s output
• building the AI model/tool/program/etc. structure,
• adequately training the AI, and
• then…the dreaded implementation phase.

All while navigating the tricky ethical considerations associated with AI (privacy, ownership, algorithmic bias, hallucinations, and employee displacement) and the looming threat of increases/changes in regulations.



That said…safely navigating the path will lead to much improved productivity, clinical outcomes, and lower costs for all.

More specifically, stakeholders believe AI in worker’s comp can be very beneficial throughout the workflow –from the basics like increasing speed and accuracy across the board all the way to enhancing predictive analytic capabilities and most, if not everything, in-between.

What does this mean for you?

The potential is huge but be mindful of the arduous process to get there.


Feb
20

Rural hospitals – and healthcare – are in deep trouble.

With the unwinding of Medicaid post-COVID emergency, rural healthcare is falling deeper into financial trouble.

Consulting form Chartis just published their review of rural healthcare…among the findings

The unwinding issue is exacerbating problems in states that failed to expand Medicaid…the vast majority of which are those with the most hospitals in financial distress.  Simply put – they have to deliver way more healthcare to people without health insurance.

FromChartis:

Across the 10 remaining non-expansion states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming), the percentage of facilities with a negative operating margin increased year-over-year from 51% to 55%. These states are home to more than 600 rural hospitals…Several of these states are among the most severely affected by hospital closures and a loss of access to care.

The percentage of America’s rural hospitals operating in the red jumped from 43% to 50% in the last 12 months.

418 rural hospitals are “vulnerable to closure” according to a new, expanded
statistical analysis.

Healthcare deserts are a huge problem for rural America, especially in areas with lots of extractive industries (mining, energy, agriculture. Workers in those industries are much more likely to suffer severe occupational injuries, injuries that benefit greatly from care delivered in the “golden hour”.

What does this mean for you?

Not expanding Medicaid is killing rural healthcare.


Feb
16

Good news Friday…

In our ongoing effort to maintain or possibly even improve our collective sanity in these increasingly bizarre times, here’s some good news to start your weekend.

Jobs

Earlier this week I did a talk for the Montana Self-Insureds…researching to prep for the talk I came across this:

Recall a couple years ago Congress passed and President Biden signed the bipartisan Inflation Reduction Act into law.

The result – hundreds of thousands of very good-paying jobs in every state.

Plus, better roads, safer bridges, more efficient and safer airports, cleaner water, lower drug costs for seniors…Good news indeed!

Employment

This from the Economist…

At the end of last year jobless rates were, respectively, 5.2% for black Americans and 3.7% for white people—equalling the narrowest gap on record.

And…

image: the economist

Even more striking are shifting tides in labour-force participation. About 63% of black Americans are now deemed to be either in work or searching for jobs, more than the 62% level for white Americans—an inversion of the pattern seen in previous decades.

My take – Median wages for workers identifying as Black are at a historic high – which is good news indeed.

Yet…there’s still a long way to go. No time to rest on those laurels folks!

Bipartisan!

Gotta love it when our elected representatives work together…Lost in the news cycle was this – Senate Republicans and Democrats worked together to pass a much-needed foreign aid bill. Tough call for members on both sides of the aisle, and kudos to them for setting aside politics and “but I don’t like xxx” for the good of our country.

A hopeful sign indeed.

What does this mean for you?

Even in these days when it seems we are increasingly divided…we can work together – even when we don’t agree on everything.

When we do good things happen.


Feb
8

Drug prices and the power of consensus.

We Americans pay much more for drugs than anyone else.

Those very high prices are a major contributor to increasing health insurance premiums and Federal and state budgets.

Across the political spectrum, Americans support more government regulation of drug pricing.

Good news is Medicare is now actively negotiating drug prices with manufacturers. That will save patients and taxpayers billions of dollars.

What does this mean for you?

When we agree on what is the right thing to do we get things done.

And will save families and taxpayers lots of money.


Feb
5

Predictions for healthcare in 2024

Some of you know Jay Stith – he’s been working with HSA for half a decade now, heading up data analytics and research. Jay’s brilliant, has a great dry wit, and most of all very insightful.

He sees stuff – others – including me – don’t.

So, I asked Jay to make his predictions for healthcare in 2024…lest the work comp folks stop reading here, remember workers’ comp is the flea on the tail of the healthcare elephant.

Outside of employment, the biggest single factor affecting workers’ comp is healthcare – hands down.

  1. Hospital/ Health System M&A will ramp up in a big way leading to even more consolidation around the country.
    1. M&A dropped dramatically during COVID so there is an element of catch-up on top of a rapidly changing healthcare industry, financially distressed hospitals/health systems offering themselves as prime takeover candidates, and potentially dropping interest rates all point toward high levels of M&A activity.
  2. And…Facility fees will continue to be the elephant stomping around the room. Remaining high and potentially going higher all while limited efforts are made to curtail them.
    1. A next step to prediction #1 – as consolidation often means high prices. Little activity has occurred to combat facility fees so far and with sexier issues like AI monopolizing meetings I don’t see meaningful action broadly coming.
  3. Staffing shortages will keep already high labor costs high – looking at nurses in particular.
      1. The thousands of physicians and nurses entering the workforce lags the number of physicians who are retiring or simply exiting the industry. This decline coupled with the aging US population is exacerbating the already critical problem. We are, and have been, under-supplied with nurses across the healthcare landscape and between structural issues like not enough nurse education faculty and the median age of nurses >50 this issue is unlikely to change.
  4. Human-caused climate change will disrupt even more businesses with policy progress being slow and insufficient.
    1. We don’t know what we don’t know – climate-related problems are impacting a wide range of business and employee needs. In addition to the obvious employee-injury issues associated with climate change, disruptions to care access, employee-personal-life problems (e.g. damage to home), and climate migration make climate-associated changes more difficult to model and properly account for.
    2. As if we needed more proof, here’s what’s happening in California..
  5. The AI arms race will continue with companies everywhere announcing new AI tools for various business segments BUT true internal buy-in will still be far away as the tools will underwhelm managers dreams for headache-reduction.
    1. Managers are dreaming about the volume of tasks that AI will be able to effectively handle in a fraction of the time while producing higher quality work than their current teams. As companies learn how difficult properly training an AI tool is and how much time/resources are required to make even marginal gains, people will get frustrated about having over-promised and/or having to deal with poorly functioning AI tools – e.g. a bad chatbot or an internal system lacking proper training on a costly outlier situation.
    2. AI and technology improvements will dominate the headlines and capex allocations BUT customer service will remain more correlated to client satisfaction.
    3. Healthcare and insurance have changed a lot over the decades but as technology has gotten fancier and the industry more complex, high quality customer service has remained the top-rated factor when assessing a successful vendor-client relationship… and it will not change this year.

What does this mean for you?

Consolidation = higher facility costs.

Staffing shortages = higher facility costs.

Human-caused climate change = BIG problem.

AI ≠ panacea.