Category: Workers Comp

May
7

Watch those facility costs…

Posted by Joe Paduda on Thursday, May 7th, 2020 | Comments

As the coronavirus continues its relentless march, hospitals and health systems are getting crushed. With elective procedures banned in many states, the profitable patients hospitals relied on to generate profits have disappeared. Meanwhile, expenses related to preparing for COVID19 patients have gone thru the roof and so no signs of abating.

Florida is especially hard hit:

A new report by the national consulting firm Crowe shows Florida health systems have suffered nearly a 50% drop in patient volume in March and April.

Hospital owner UHS just withdrew its financial guidance, with management citing concern over the “financial uncertainty caused by the coronavirus disease.” The announcement followed similar moves by  hospital giant HCA, and Maryland’s hospitals are projecting a billion dollar revenue shortfall for the second quarter. Hospitals in Colorado are facing an even larger reduction in revenues and Michigan hospitals are laying off workers, 

“Patient volumes at our acute care hospitals and our behavioral health care facilities were significantly reduced during the second half of March as various COVID-19 policies were implemented by our facilities and federal and state governments. These significant reductions to patient volumes experienced at our facilities have continued into April, 2020.”

The billions sent to hospitals under the CARES Act is no panacea; on average the funds cover less than a week’s revenue.

Implications

More than a dozen rural hospitals  in the South closed last year.  We can expect more in 2020.

Hospitals and healthcare systems are drastically ramping up their “revenue maximization” efforts. Workers’ comp payers, long seen as hugely profitable, now have an even bigger and brighter target on their chests.

What does this mean for you?

Watch those facility costs. 

 

Apr
30

COVID catch-up

Posted by Joe Paduda on Thursday, April 30th, 2020 | Comments

In  less than 4 months, COVID19 has killed more of us than died in the Vietnam war’s 11 years. Some have stated this is a “great success story.”

Healthcare providers may not see this as such a great success, as COVID is crushing healthcare financials.

Research suggests almost 13 million workers have lost their health insurance due to the repercussions of COVID19. Multiplying that by 2 approximates the total number of employees plus dependents that lost coverage – 26 million.

Many will seek Medicaid coverage, but eligibility varies widely (and wildly) by state. People who don’t have coverage and contract the disease and need facility care should have their bills covered by the Feds – either at Medicare rates or via Medicaid.  Either way, reimbursement is likely half or less what their private insurer would have paid.

Anthem just informed us they expect the percentage of people covered by governmental healthcare plans to increase. The $100 billion+ health insurer saw its financial results for Q1 improve; my guess is the drop in elective procedures was a big factor.

All of this to say that COVID appears to be accelerating a trend towards a public option for health benefits – or perhaps a much bigger role for governmental programs in health insurance.

Hospital financials are getting hammered as elective procedures are way down, and many folks with all kinds of ailments are staying away for fear of coronavirus exposure. (chart from Kaufman Hall)

With receivables drying up to dust, facilities are going to redouble their efforts to collect every nickel they can from everyone they can.

Workers’ comp payers – you are hereby warned.

Willis Towers Watson has been publishing their perspectives on all things COVID19, from the impact on the LGBTQ community to a helpful discussion of paying premiums when cash is tight.

An early piece focused on employers’ considerations re workers’ comp liability for COVID19 claims. One item in particular stuck out – large employers with excess coverage should read their current communicable disease coverage details very carefully.  Friend and colleague Karen Caterino was kind enough to paraphrase for me:

For large employers purchasing excess, a multi-claimant disease incident carries the possibility of creating catastrophic financial loss.  If the transmission of a covered communicable disease is a series of incidents versus a single accident, the difference in retained loss could be significant.  A majority of work comp deductible agreements include a provision stating that the deductible applies per employee for occupational disease.  Some insurers are likely to suggest the statute requires they follow the assumption that occupational disease, by its very nature, is a series of occurrences for multiple claimant losses.

This is especially important for supermarket chains, who by now should know that paid sick leave may be the most effective risk management tool to prevent employee and patron exposure. There are many stories like this one detailing how quick, thoughtful action kept food coming while drastically reducing employee exposure.

NCCI has a helpful compendium of states‘ COVID19-related legislative and regulatory initiatives along with COVID19 FAQs.

And yes, surgical masks are quite effective at reducing viral transmission; thanks to Glenn Pransky MD for tipping me off to this research.

Finally, this is a terrific summary of what we know and don’t about how COVID19 affects the human body. It’s long, very well-written, and perfect for a lunch-time read. Spoiler alert – a lot of treatment these days is based not on extensive research but on what docs think works based on prior experience and communication with other clinicians.

From the physician author:

In the absence of data from randomized, prospective trials, we search for answers on colleagues’ Twitter accounts, in interviews with Chinese or Italian physicians, and in our patients’ charts.

What does this mean for you?

Wear a mask, and physically isolate, because we can’t take much more of this “success.”

Apr
27

We don’t know &^%$*(

Posted by Joe Paduda on Monday, April 27th, 2020 | Comments

Research published in HealthAffairs a study estimating COVID19 will cost somewhere between $164 billion and $654 billion.

Insurance industry trade group AHIP’s financial analysts calculate private insurers will pay between $56 to $556 billion for COVID19-related costs.

Kaiser Permanente in northern California – a plan with 11% market share – had a grand total of 377 hospital admissions for COVID19 in March.

According to the WCIRB, COVID will cost California’s work comp system between $2.2 billion and $33.6 billion.

Private conversations with work comp executives show something much different; COVID19 costs for a major insurer with significant exposure in the healthcare sector total about $1 million incurred to date.  A major state fund has seen less then a couple dozen cases. Multiple insurers have less than 40 cases that have incurred any costs to date.

What’s going on here?  

In a nutshell, researchers are either being forced (in WCIRB’s case) or otherwise decided to come up with analyses based on really skimpy, incomplete, and not-very-helpful data. For example, we

a) don’t know the real infection rate as we aren’t testing anywhere near enough people;

b) we don’t know the real death rate for a bunch of reasons;

c) different areas have been affected very differently. This has been a disaster in Albany GA and NYC…and not even close in most of California, or Alaska. Louisiana has been hit very hard, but neighboring Arkansas hasn’t.

d) different areas have responded very differently; California and Washington shut down early and broadly; New York did not.

e) different areas are different; NYC is very crowded, even California’s most populous cities are a lot more spread out.

f) but even in smaller cities that are more spread out, one infected person can expose a lot of people, resulting in a rapid increase in cases (Albany FGA).

I bring this to your attention just to point out that estimates are pretty useless, that COVID19’s impact is going to be massive in some places and a minor inconvenience in others,

So, look for data that’s specifically relevant to your geographic area and covered population. Figure out if that area is testing enough folks, is complying with common-sense prevention techniques (social distancing, for example), and is reporting data accurately.

And then don’t be surprised if you are really surprised. Because there are so many confounding factors and different things that can affect the numbers, as of now anyone who is projecting is doing this…

What does this mean for you?

Making decisions based on current data is as dangerous as standing near a guy throwing darts blindfolded. 

Apr
23

COVID19’s impact on workers’ comp – claim type

Posted by Joe Paduda on Thursday, April 23rd, 2020 | Comments

While we’re still wrapping our heads around COVID19, it is increasingly clear the pandemic will have implications for the workers’ comp industry that are deep and broad.

Perhaps the most important is the change in claim type.

Historically, 95% of workers’ comp claims were injury-related.

That’s about to change.

While still in flux, the number of states where workers in specific industries that contract COVID19 will be covered by workers’ compensation has hit the double digits, with more considering legislation every day.

Multiple states including IL, CA, KY, AL, WI, MN, NY, NJ, UT, PA, and OH have either adopted broader interpretations of presumption via executive order or legislation or are considering pending legislation. First responders, health care workers, employees of grocery stores and child care centers are examples of workers whose COVID19 infections may be presumed to be occupationally-based (different states include different professions).

Couple that with a national infection count that will almost certainly increase as testing finally appears to be ramping up, and the result will be a lot more disease-based claims.

At the same time, the national shut-down is drastically reducing the number of new injury-based claims – while keeping past claims open longer than normal because patients can’t access care, have their cases adjudicated and/or don’t have jobs to return to.

Everything claims-related has been oriented around injuries; claims intake, medical guidelines, investigation and compensability determination, network physicians and ancillary providers, clinical oversight, bill review, disability rating and determination.

With COVID19 claims certain to become more and more prevalent, the entire workers’ comp ecosystem will have to adapt, and do so rapidly.

Meanwhile, employers and insurers must find ways to get current patients into providers to get treated, get evaluated, and get better. While many have begun to adopt telemedicine, those efforts must be exponentially increased.

With the dramatic drop-off in new injuries, payers should be using claims staff’s down time to connect patients with providers, get telerehab started, schedule appointments out in the future so their patients are first in line when in-person care is back on line.

What does this mean for you?

Seven weeks into this, it’s time to plan for the new reality.

Apr
20

Are you paying too much for drugs, Part Two

Posted by Joe Paduda on Monday, April 20th, 2020 | Comments

The good news – most workers’ comp payers have seen their drug costs steadily decline steadily.

The bad – many are still paying too much due to poor contract terms.

One of the issues is a failure to update generic drug pricing tables; in several recent PBM assessments the PBM has apparently failed to update pricing tables. The result – the insurer, employer, or TPA is charged what the drug cost as much as 12 months ago. Because generic drug prices continually decrease, the insurer, employer or TPA is paying more than they should.

Meanwhile, the PBM is paying the pharmacy today’s price – which is almost always less than it cost a year ago.

The net  – the PBM makes a bigger profit because it is “buying low and selling high.”

While the “fix” is obvious – ensure contractual terms require updates to pricing are timely – there’s a much bigger issue.

This is just one reason many work comp insurers and employers pay too much for drugs. Pharmacy pricing is opaque at best, requiring a lot of experience and expertise to make sure you’re paying only what you should, updating generic pricing schedules is only one issue.

What does this mean for you?

Are you paying what you should?

Apr
16

COVID19 – how does it do its damage?

Posted by Joe Paduda on Thursday, April 16th, 2020 | Comments

This week we’re attempting to figure out how much of an impact COVID19 will have on the country in general and workers’ comp in specific. That requires:

  • estimating the number of people infected;
  • determining how deadly it is;
  • assessing our ability to contain it;
  • evaluating other health effects of the disease; and
  • knowing if and where and how much liability will be assigned to workers’ comp.
This last is best left for later; there are obvious implications for workers’ compensation, however until there’s more clarity around the industry’s liability for COVID19 we won’t be able to even guess what that liability ultimately might be. Of note, several states have asserted WC will be presumed responsible for patients working in pubic safety, healthcare, and some retail establishments who become infected with coronavirus.
The work comp COVID19 coverage situation is fluid and evolving rapidly; Nancy Grover’s piece in workerscompensation.com provides excellent insights on the current status of state coverage from knowledgeable professionals and is well worth a read.  I’m sure Nancy and her experts will keep us informed.

Health effects

Big caveat here – as one of the articles cited below notes and as is true for pretty much everything you read about COVID19 (including this post), physicians interviewed “are speculating with much less data than is normally needed to reach solid clinical conclusions.” COVID19 is so new and so little is known that there’s very little credible research. What we’re relying on are ‘reports from the battlefield”, information from the front lines that’s coming in real time, not careful, methodological, rigorous research using controls.

Another caveat, from the LATimes –

Patients with disorders that affect the heart, liver, blood and lungs face a higher risk of becoming very sick with COVID-19 in the first place. That makes it difficult to distinguish COVID-19 after-effects from the problems that made patients vulnerable to begin with — especially so early in the game.

But for now, this is all we have. The faster we collect and assimilate information, the more able we will be to respond quickly and with the right solutions.

Broadly speaking, the physiological effects seem to vary widely between victims; women seem to fend off the virus better then men; and people with pre-existing conditions, especially hypertension, appear to be at particularly high risk. The recovery process, which at first seemed pretty straightforward (lungs get better after intubation) even for those on ventilators, appears to be more complicated and take longer than originally thought.

We are only now seeing indications that COVID19 may have long-term health effects, and its reach extends beyond just the lungs.  From an extensive piece this morning in the Washington Post:

coronavirus kills by inflaming and clogging the tiny air sacs in the lungs…clinicians around the world are seeing evidence that suggests the virus also may be causing heart inflammation, acute kidney disease, neurological malfunction, blood clots, intestinal damage and liver problems.

One study indicated some patients with relatively mild cases appeared to have significant warning signs of long-term health effects – in this instance impaired liver function.  Another study noted cardiac issues post-discharge, and a nephrologist at Yale’s School of Medicine reported that almost half of “the people hospitalized because of covid-19 have blood or protein in their urine, indicating early damage to their kidneys…”

How can this be happening?
The coronavirus attacks by attaching to the ACE2 receptor on cell surfaces. These receptors are on cells in the lungs and other organs as well. From the WaPo:
there is increasing suspicion that it is using the same doorway [ACE2 receptors] to enter other cells. The gastrointestinal tract, for instance, contains 100 times more of these receptors than other parts of the body, and its surface area is enormous.
In particularly bad cases, severe inflammation can occur, causing significant problems throughout the body. This has its own set of challenges as it appears to be driven by a hyper-active immune response. There appear to be some treatment approaches that are having positive results using lessons learned from prior viral outbreaks.
Again, this is so new that many treatments are being developed and tried on the fly as doctors scramble to learn what works and what doesn’t on which kind of patients exhibiting what signs and symptoms.
What does this mean for you?
As awful as this is, the more cases that physicians encounter, the greater the knowledge gained.
With much of our medical establishment and resident brain power focused on COVID19 and caring for its victims, things will improve.
Apr
10

COVID, small business, and workers’ comp

Posted by Joe Paduda on Friday, April 10th, 2020 | Comments

The small business sector is in deep trouble – with big implications for workers’ comp – starting with what looks like an 8% decrease in monthly premiums and equivalents due to massive layoffs and business closures.

Without immediate funding from the SBA’s $350 billion Paycheck Protection Program (PPP) and Economic Injury Disaster-Relief Loans (EIDL), many small businesses will disappear. Work comp premium payments will dry up and jobs for laid-off, injured and sick workers will too.

Here are the implications for workers’ comp; details on why small business is in deep trouble follow.

My best estimate is annual premiums and equivalents will be down about 10% by the end of April. Here’s the math:

In December of 2019 average annual income was $48,700. Workers’ comp insurance costs on average $1.30 per $100 of payroll for a total of $633.41 per year or $52.71 per month.

Businesses with less than 500 workers account for about 60 million jobs (I know, 499 workers is a pretty big “small” business, but that is how many entities categorize “small); credible sources estimate we’ll lose somewhere around 12.3 million small business jobs.

note this includes ALL jobs, not just small employers

Multiplying the average payroll cost of workers’ comp by the average monthly wage, then by the number of layoffs adds up to a loss of about $650 million in workers’ comp premiums every month, or roughly $50 million for every million jobs lost.

NASI reports total premiums and equivalents were just over $97 billion in 2017; that equates to about $8 billion per month.

Given earlier job losses coupled with yesterday’s announcement, my best guess is we will be down somewhere around a billion dollars in premium and equivalents by the end of the month.

The small business support situation

Okay, now for the current status of aid for small businesses.

Hundreds of billions of dollars have been earmarked to help businesses stay afloat, and more billions are on the way. That’s great – but only if those dollars actually get into businesses’ bank accounts. So far, that has not gone well.

Business owners were told Small Business Administration (SBA) dollars would be flowing in “days” and depending on their need and the size of their business, they could get loans and grants up to $2 million.

The programs are a clustermess.

Business owners are getting conflicting answers from the SBA – when they get any answers at all. If anything, lenders are worse off, unable to get clear guidance from the SBA. Grant amounts under the Economic Injury Disaster-Relief Loans (EIDL)’s Advance program have been reduced to a maximum of $10,000 – or less (depending on which official you listen to). Banks are already running out of SBA money, making business survival dependent on how fast you get to the front of the line.

Initial loans have also been capped – at a maximum of $15,000. And applications for long-term loans under the Paycheck Protection Program (PPP) are also in limbo, with applicants desperately hoping they’ll get relief before it’s too late.  Many business owners have heard nothing about their applications for grants and loans despite hours stuck on hold. I

It’s easy – but wrong – to point the finger at incompetent government bureaucrats or lenders.

The SBA’s is woefully understaffed, its computer systems haven’t been updated for decades, and went without an official leader for nine months, a permanent leader appointed just three months ago. Neglected for far too long, the SBA just isn’t ready or able to do what needs to be done.

I provide that detail so we’ll understand that things are not going to improve quickly – and improvements will be scattered and spotty.

Implications

Fewer jobs = less payroll, fewer premium dollars for insurers, fewer claims for service entities, less medical care for providers, and less income for others in the workers’ comp ecosystem.

 

 

Apr
8

COVID’s impact on workers’ compensation, Part 4

Posted by Joe Paduda on Wednesday, April 8th, 2020 | Comments

Monday I finished a survey of 16 payers, getting their views and perspectives on a variety of COVID-related issues germane to workers’ compensation. The genesis for the survey was several conversations I had with work comp execs two weeks ago; all were struggling to figure out what the impact would be, how to adapt their organizations to deal with COVID, how to set priorities and a host of other questions.

It became apparent that some were much further along in one area and hadn’t thought of other issues. Ideally the survey will help us learn from each other, accelerate adoption of approaches/policies/ideas that work, and shorten the learning curve.

Here are the top takeaways; note that only respondents receive the detailed survey report.

  • Claim volumes have dropped about 25% on average, with very different decreases depending on the type of employer involved.
  • Tele-medicine in all its versions is exploding as employers seek ways to continue current claimants’ treatment and triage new claims quickly.
  • Unlike injuries, respondents’ take is the vast majority of COVID claims will resolve quickly, with most patients recovering with minimal need for care.
  • However, there’s a growing concern that some patients may have lasting lung damage and other trauma as well as potential cognitive deficits. This could trigger a whole host of future issues and complications.

A couple more complicated findings bear discussion.

Illness v Injury

Several respondents noted that the industry is struggling to shift from injury-caused claims to disease-caused claims. Historically the vast majority of claims have been injuries – trauma, repetitive motion, burns, slip-and-falls and the like. These are (mostly) relatively straightforward to investigate.

Not so with disease. Where did the exposure occur? Could the patient have been exposed outside the workplace? What do the state laws and regulations say? Where is the burden of proof; claimant or employer, and what constitutes “proof” of occupational exposure?

Needless to say, this is a dynamic situation that’s going to evolve over time.

Which brings up point two…

Multiple respondents noted that what they do now may/will have a big impact on how these claims are adjudicated and if/how responsibility is assigned down the road.

Workers’ comp payers are making decisions on the fly, decisions that in times past would have been deliberated, researched, considered, and reviewed by attorneys, committees, boards, and executives.

There’s no time for that now.

That is causing a lot of stress, angst and worry as individuals are forced to figure out what to do in a situation no one ever encountered before, considered, or even thought remotely possible. Decisions on everything from:

  • questions to ask on intake to
  • whether or not to authorize COVID testing to
  • what constitutes occupational exposure to
  • a payer’s potential liability if it rejects a COVID claim

and many others are being made every day by hundreds of workers’ comp professionals who are mostly flying blind.

When the crisis has passed, executives, Boards, regulators and other leaders should not fault front-line staff and their managers for decisions made and actions taken while in crisis mode.

I want to thank the professionals who took time out of their very busy day to share their knowledge and experience with others. We aren’t publishing their names or their organizations’; you know who you are and I deeply appreciate your willingness to share your hard-earned and hugely valuable knowledge with others.

As with all of our surveys, only respondents get a detailed survey report; that’s only fair as they volunteered their time and expertise and this is the only way we can thank them and encourage others to follow their lead.

I will be conducting a follow-up survey in a few weeks; if you are interested in participating please let me know in the comment area below (all comments are moderated, so your information will not be published)

What does this mean for you?

We are learning a lot every day, including how to adapt to a really difficult situation. Don’t be too hard on yourself.

 

Apr
6

COVID’s impact on workers’ comp – part 3

Posted by Joe Paduda on Monday, April 6th, 2020 | Comments

We are three months into the COVID pandemic, and the impact on workers’ compensation is altering the entire industry in ways unimaginable just weeks ago (early takeaways are here).

(before we jump into this, you have to watch a few seconds of this video)…leave it to a Brit to come up with the most bizarre way to deal with a lockdown…

Now, back to our regularly scheduled post…There’s a lot of angst and fear over how COVID will affect jobs in workers’ comp and this is both legitimate and warranted.

Claim volumes are plummeting, patients are unable to get treatment and employers aren’t able to re-hire recovered workers.  Some service companies are reducing staff, payers are revising claim intake processes, and tele-everything is surging in popularity.

Here are some of the changes we’re seeing.

Tele-everything

With patients reluctant to enter medical facilities and providers equally reluctant to expose their staff, there’s been an explosion in the take-up of tele-rehab, tele-triage, and tele-medicine.  Sure, providers still struggle to navigate the spider’s web of state-specific regulations, reimbursement schedules and other requirements. Nevertheless reality is forcing change at a pace never before seen.

Concentra CEO Keith Newton and I connected via email to discuss his company’s tele-services.

Newton reported two different tele-medicine “channels” [my word not his] are up and running. National payers are accessing occ med doctors for telemedicine services through the company’s centralized Addison, Tx intake group.  The physicians aren’t physically located in Addison but are 100% dedicated to the group and multi-state licensed.

In the field, local employers and municipalities that already use specific clinics  are starting to use center-based telemedicine and tele-rehab. This was “stood up and live over the last week at all 500+ centers.” So far, most initial injury intake and treatment is in person with followup visits and rehab available by telemedicine by the center-based clinicians.

The company is piloting an initial injury process in a couple of states for initial injuries as well.

Other companies, including OneCall, MTI America [HSA client] and MedRisk [HSA client] are also delivering tele-rehab services.

Staffing changes

In an email conversation with Concentra CEO Keith Newton, we also discussed staffing changes in light of anecdotal reports of a significant drop in new claims. Long story short, while Concentra has – and will continue to adapt to changes in injury counts, Concentra has not laid off any employees and kept furloughs to a minimum.

Given the rapidly evolving nature of COVID and responses thereto, I’d expect Concentra’s clinicians will find more than enough to do as employers seek to screen workers, train workers in exposure control/risk mitigation, and change policies to ensure workers manufacturing PPE [personal protective equipment] and COVID test kits and related materials – and the manufacturing  itself – are safe and protected.

[note a “furlough” and a “layoff are different; A furlough is temporary and requires a worker to take some unpaid time off or work reduced hours. It could last from a couple of days to a couple of months. A layoff is a temporary separation of employment, meaning the worker is removed from the payroll for a limited time. more on this here]

One Call’s furlough has been widely discussed throughout the industry and appears to be driven by two issues – the previously mentioned decline in claim volume and the impact of India’s shutdown on One Call’s document processing operation. The furlough has affected top execs and front-line staff alike. Sources indicate One Call is working to on-shore much of the document processing, a step necessary to keep work flowing and bills processing. This will be a challenge as reports indicate almost half of the company’s US-based workforce was furloughed.

To One Call CEO Tom Warsop and the Board’s credit, the company is continuing to pay premiums for furloughed workers’ health insurance and other benefits and will be sending those workers an $825 check as well. Unfortunately, One Call will keep its non-compete in place for furloughed workers…Warsop did say he would be happy to talk individually with any furloughed workers and consider their individual situations.

I’ve also heard and read reports of significant staff reductions at CorVel; I sent an email to the company three days ago asking for a response by 9 am eastern this morning. No response came.

Friday the company filed an 8-K with the SEC providing notification it was suspending stock buy-backs but there was no mention of the staff reductions; I could not locate any other public report of the furlough/layoff.

Given CorVel’s reaction to a ransomware attack, this isn’t surprising.

The good news is the federal relief program should provide furloughed, laid-off, and terminated workers with much-needed cash while they are off work; the bad news is reports indicate state unemployment phone lines are jammed 24/7 due to unprecedented call volume.

For those who are having tough discussions with management, coworkers, or employees about this situation, here’s a helpful guide to help you make it thru.

Later this week I’ll post a detailed report on a just-completed survey of 15 payers’ reactions to COVID later this week.

Mar
30

COVID19 and Workers’ Comp – top 10 takeaways

Posted by Joe Paduda on Monday, March 30th, 2020 | Comments

I’m in the midst of a survey of workers’ comp payers re the impact of COVID19; will update you as we get more information from more participants.

As always, responses are completely confidential and respondents receive a detailed survey report; a public version is also produced which is much less informative.

If you want to participate, please email HelenAtKingKnightDotCom.

I’ve spoken with a number of payers, vendors, and other stakeholders…for now, there are a lot more questions than answers. Here’s what I’m hearing:

  1. Frequency and claims numbers are way down – as in 20-40%. That’s not surprising as far fewer people are working, and those that are don’t want to go out on work comp as they want to keep their earnings coming.
  2. Companies with large offshore workforces – think India – are scrambling to get things working after widespread shutdowns and mandatory workplace closures. This is particularly problematic in document management, scanning and Key-From-Image operations as well as off-shored UR and case management (think Philippines)
  3. COVID claims are starting to come in, mostly from nursing home, medical and first-responder entities.
  4. Disability duration for current claims will likely increase as a) patients don’t want to or can’t access medical treatment; b) some treating physicians are postponing non-essential care and won’t see patients to give them RTW approval; and c; there aren’t jobs to go back to.
  5. On a closely related issue, some payers are (finally) fully embracing tele-services; PT, triage, medical visits, etc. Unfortunately, many slow-walked tele-services for years so they are not prepared to shift patients from on-site services to tele-services, thus contributing to longer disability duration and higher indemnity expense.
  6. Cash is king. Suppliers/service entities in tight cash positions and/or with significant leverage (lots of debt) are in a very tough place. These firms have been paying their debt expense with cash flow from ongoing operations; with new claims counts falling off a cliff cash flow is also way down.
  7. Conversely those companies with little to no debt are in relatively strong positions.  Look for these firms to snap up debt-heavy competitors.
  8. Sectors including PT, home health, transportation and translation are among those feeling the pressure.
  9. Individual industries – think energy, hospitality, healthcare, are showing markedly different impacts from COVID19 and other drivers. While premiums are holding steady for now (from a very small sample set), there will be a big drop in payroll for April which will reduce future premiums.
  10. Generally speaking, US P&C insurers’ statutory surplus is high (about $850 billion) and investment income is in good shape, altho as 23% of US P&C investments are in equities that could change.  Conversely, as most assets are in very secure bonds, the appreciation in bond prices – particularly for high quality bonds – will have a positive effect on surplus.

The key questions are:

How long will this last?  I’ll be posting on this tomorrow – or more accurately posting on why we don’t know and won’t for some time.

How much will COVID claims cost?

Will work comp end up with a large COVID19 exposure?