Senior Associate Jack Johnston joins us again, getting us up to speed on his research into work comp adjusters –

Over the past month or so I’ve been doing research on the claims adjuster profession to get a better understanding of what adjusters like, don’t like, and what their managers can do better – both in improving the adjuster’s lot and the companies they work for. From what I’ve gathered from various online sources, for the most part, adjusters aren’t the happiest, most fulfilled workers.

Gathering information from general websites such as www.glassdoor.com and adjuster-specific websites – www.claimspages.com, www.adjusterspace.org, and fromoneadjustertoanother.ning.com has produced a few positives and a lot of negatives.  Here’s what adjusters have to say about their job and the company they work for:

The Good:

Among those with good things to say, when it came to the pros a lot of them talked about the good benefits they received.  Getting paid during time off and having a 401k; can’t complain about that!  Another somewhat common pro was the flexibility of the work schedule.  Some adjusters stated that if they were doing well enough with work, they could get permission to work from home.  Other adjuster work-life positives included satisfaction with their compensation and the enjoyable camaraderie with co-workers.

The Bad & the Ugly:

While there were a lot of different complaints listed in the many sites I was researching, there were a handful that popped up repeatedly.

Let’s start with caseloads.  There seems to be a ridiculous number of cases handled by some adjusters, forcing them to work overtime (which they don’t get paid for).  Overall, most adjusters appear to be overworked; common complaints included: we are “always behind on work” and “There was an enormous amount of work that is expected of everyone, and it can be very defeating to have most of your days end without a feeling of accomplishment. (sic)” 

Even if an adjuster is doing a good job in the office (or at home), s/he probably shouldn’t expect much of a reward.  Promotions are scarce and raises tend to be paltry, with most getting a 1-2% increase (and that’s only if you are lucky enough to be given a raise).  The lack of ability to move up in the organization has upset many of the adjusters as they feel they aren’t rewarded for the work they put in with the heavy caseloads they deal with every day.

A fair amount of reviewers I read complained that instead of promoting within their company, the firm would hire someone from an outside company and place them in the higher position.  That’s a low blow to the employees who have been working there for years, expecting their effort and loyalty to lead to more responsibility and more income only to see the new person get the job.

Another common complaint is that managers are not qualified and don’t do a good job providing feedback to adjusters.  The adjusters never receive compliments or congratulations and are always told what they are doing wrong and how much more work they have to do.  They complain that they are not trained enough to handle some of their cases efficiently and they also feel that their offices are understaffed.  The adjusters want upper management to be realistic.

Conclusion:

I understand that this is certainly not the voice of all of the claims adjusters in the workers’ comp world but this is what I’ve found.  Websites like www.glassdoor.com can be easily accessed and false information, positive or negative, can be posted by bad actors. 

With that said, 69.2% of adjusters on the glassdoor website would not recommend their job to a friend.

Summary:

• Adjusters like their benefits, salary, and co-workers… for the most part.
• Schedules can be flexible (can work from home with permission).
• No raises, room for growth, and no pay for working OT.
• Overworked, large caseloads.
• Always behind on work.
• Lack of feedback from upper management.
• And perhaps the most telling quote – “Run, do not work here”

Sorry, no pun intended.  Not suggesting you inhale, but rather take a step back before you get all excited about a single court case.

Finally, there’s an actual real live bona fide true factual documented report of medical marijuana (MM) paid for by work comp.  To date, there’s been much speculation, a lot of pixels published, and way too much hot air – but now we have our first – and as far as I can tell only – time a work comp payer has been told to pay for MM.

Let the floodgates open.

Or perhaps not.

Our industry loves to hyperventilate endlessly on newly-emerging-highly-unlikely-but-really-scary cost drivers.  Medical marijuana, obesity, an aging population have had their day in the virtual sun, and although the latter two are worth discussing, the reality is the research indicates they just aren’t that much of a factor.

But now, a court in New Mexico has said an insurer has to pay for marijuana.  Thanks to the pros at WorkCompCentral, the case, Vialpando v. Ben’s Automotive Service and Redwood Fire & Casualty, is now on the tip of everyone’s tongue.  The claimant’s attorney is telling insurers to contract with marijuana dispensaries (!), others are opining the “floodgates” will open, and friend Mark Pew is advising employers to implement drug-free workplaces.

Before we spend a lot of time and energy on this, let’s consider the real world.

There is little credible research indicating medical marijuana is an effective treatment for pain.  Yes, there is some evidence that in relatively small populations MM has been beneficial, however they aren’t large enough, nor objective enough, to provide convincing proof.  Notably, it is difficult for researchers to study a Schedule I drug, and that has undoubtedly hampered the process.  Despite that limitation, over 40 studies have been conducted, and according to Medscape; “The majority of the studies showed an improvement in pain relief in comparison to a placebo or to other traditional pain medications. About a quarter of the studies showed no improvement.”

When one digs into the research, there’s quite a bit of variation in the study design, the pain type, duration, measurement methodology and assessment process making it difficult if not impossible to come up with an overall sense of efficacy or effectiveness. Some research even indicates THC can increase sensitivity to some types of pain.

THC – the most studied active ingredient in marijuana – has been studied extensively, with mixed results.  In a relativecly-small study of advanced-stage cancer patients, some subjects become highly agitated and anxious after ingesting THC orally.  Others reacted differently, and to varying degrees.

All that said, I could not locate any large-scale, double-blind randomized control studies addressing the effect of MM on pain.  The studies tend to be small, deal with discrete groups of volunteers (hey, want to get paid to get high?), and focus on one specific type of pain (neuropathic the most common, where the effect of MM seems to be pretty significant).

Does MM offer a possibly-better-alternative to opioids?  Absolutely.  Does it come with its own set of problems?  Absolutely: about 10 percent of users may become “addicted”; others experience very high anxiety levels; it certainly can be diverted.

What does this mean for you?

Until and unless there is credible research and a clear understanding of the risks and potential benefits of medical marijuana, we won’t see widespread – or even very little – use in workers’ comp.  Schedule I status, problematic side effects, social stigma, and legal issues are all major barriers – and will remain so.

Okay, let’s get back to real issues.

BTW, kudos to WCC; the article is comprehensive, well-researched, and provides a solid background on the overall issue as well as an explanation of the legal situation in New Mexico and other states.

There’s so much excitement about big data and the potential for it in work comp that it would be all to easy to forget some basics.

The law of small numbers chief among them.

Work comp accounts for a tad more than one percent of US medical spend – $30 billion in comp medical vs $2.8 trillion in total medical spend in 2012.

Many docs treat just a couple of work comp claims a year, and those who do handle a lot of WC claims see a wide range of injuries: knees, ankles, backs, shoulders, hands damaged by cuts, sprains strains and severe trauma.  When looking to compare providers – or procedures for that matter – researchers need enough data points to develop a statistically-valid sample set.  In most cases, no single provider has enough claims to enable clear-cut evaluation.  And, if they do, there aren’t any other providers in their service area with the necessary volume, making comparisons nigh-on-impossible.

The issue is statistical validity and statistical accuracy. Simply put, is the measurement procedure capable of measuring what it is supposed to measure. Without enough data, there just isn’t enough information to accurately assess performance.

That’s not to say researchers can’t do very meaningful and helpful analyses; the one just published on opioid prescribing by physicians dispensing docs to work comp claimants is a perfect example; the ongoing research by CWCI, WCRI, and NCCI provide plenty of additional examples.

The problem occurs when consultants, payers or managed care firms try to make definitive statements about individual providers based on inadequate data.  In my experience, provider rankings are often – but not always – based on little more than reimbursement or “savings” figures, and in no way account for “quality” measured by return to work, disability duration, cost-per-claim.  There isn’t enough data to case-mix adjust, not enough data to make comparisons, or really “rate” docs.

I would note that some payers, most often state funds, and some managed care firms, notably MedRisk (HSA consulting client) have a wealth of data and can (and do) make valid comparisons.

What does this mean for you?

Beware of rankings, ratings, and comparisons of individual providers.  Unless the underlying data is robust.

At the closing session at NCCI, Barry Lipton reported on their research on MSAs, research based in large part on 2200 files provided by Gould & Lamb. In 2011, CMS approved $1.1 billion of MSAs…

Key findings

• MSA dollars account for 40% of the average proposed settlement
• half of the MSA dollars are for prescription drugs
• “the differences between proposed and CMS-accepted MSA settlement are largely due to drugs”
• only 20% of submissions are for claimants <50
• 29% of submissions are for more than $300,000;
• but, most submissions are for much lower amounts;
• so 62% of costs are for the 29% that are for more than $200k.
• The highest initial submission approval rate was about t50% before 12/12; during 12/12, the approval rate zoomed up to 92%.  this happened to be the same month where processing vendors changed…
• median processing time has dropped dramatically to 41 days in Q4 2013
• Median MSA approved amounts have been very stable at around $42,000 over the last four years.
• recall CMS doesn’t cover off-label use of drugs, so any non-cancer claims with opioids are going to require full funding of future projected spend

The net – from my perspective, if you have an addicted claimant, CMS is going to want a lot of dollars set aside.

The geekiest part of NCCI is the research workshop that takes place after lunch on the second day – you know the people attending are committed if they are in Orlando on a Friday afternoon listening to economists…

Harry Shuford discussed the “mystery of declining claim frequency”, an oft-described trend that some believe will end at some point while others think it may continue ad infinitum.

While there has been a cynical pattern over the last 90 years, the overall decline has persisted since 1926 (using manufacturing claim rates, the only ones that go back that far).  That said, the decline steepened after 1990 and has continued to this day, and it is consisted across all states, industries, occupations, demographics, affected body parts…

Why?

Harry and his colleagues looked at a lot of factors to determine their correlation with injury rates and similar data points.  The correlation isn’t due to the decline in manufacturing in the US; the decline has happened globally and across all sectors of the economy, not just manufacturing.  

Harry then showed a graph of international work-related fatalities (across 120+ countries) which showed a similar decline trend, with a bit of leveling in the late eighties followed by a steeper decline till 2006  and an even more rapid drop after that.  On average, there’s been a 4.3% annual decline over the last 30 years.

The death rate decline also mirrored the increase in per-capita income, albeit at a lower rate (3.6%).

And it was, if not entirely consistent, at least similar across geographic regions.

Net – two drivers: time, perhaps driven by pressures to improve productivity; and as a country gets wealthier, there’s a decline in the injury rate.

The takeaway – the trend has been in place for 80 years (at least) and will very likely continue into the future.

What does this mean for you?

Frequency will continue to decline.