Category: Workers Comp

Mar
16

Health reform and Work Comp – more data is coming in

Posted by Joe Paduda on Thursday, March 16th, 2017 | Comments

The evidence is piling up; ACA is strongly associated with lower work comp premiums. Almost a year ago I attributed improvements in work comp’s medical expense trend to ACA; now, the impact is being seen in improving combined ratios particularly in states that fully adopted ACA’s reforms. (here’s a map of Medicaid-expansion states)

That view is now getting traction outside our little world, with the LA Times covering the issue earlier this week.

Premium decreases are now being seen in Medicaid-expansion states; here are a few examples.

  • Arkansas – 8.4% decrease
  • Michigan – 9.3% decrease in advisory rate
  • Montana – 7.8% decrease in loss costs
  • Nevada – 10.7% decrease in loss costs
  • Oregon – 5.3 % decrease
  • Vermont – 7.9% decrease

(I’ve purposely left out California, which has seen significant rate decreases however other factors beyond ACA are also affecting rates)

Of course, other factors are also in play here, including expanding employment and state-specific reforms. However, when you compare “ACA adopting states” with other states, the overall picture is compelling.

Bill Wilt of Assured Research kindly offered the following observations (more information is available here):

Assured Comment: American Health Care Act (AHCA) Likely Bad for WC Insurers

New 2016 data shows states maximally affected by ObamaCare outperformed WC industry

Newswires are on fire with analysis of the AHCA and its impact on the nation’s medically insured. Advocates point to the CBO’s estimate that it could reduce federal deficits by $337 billion over the ten years 2017-2026. Detractors, and there are many, focus on the CBO’s estimate that some 14 million Americans could lose healthcare coverage by 2021; climbing to 24 million by 2026.

New, 2016 industry data shows that the workers’ compensation loss ratio in states maximally affected by the rollout of the ACA (aka ObamaCare) have begun to outperform states minimally impacted by the ACA (see nearby figure). Our delineation stems from a recent New England Journal study which found that states expanding Medicaid and those introducing state-based exchanges saw the largest increase in the medically insured. In 2016, the WC loss ratios in those 18 states outperformed the 15 minimally impacted states by 440 basis points. The maximally-affected states also outperformed nationwide averages in 2016.

This new data comports with intuition and, increasingly, the anecdotes we pick up from industry sources. The ACA has likely been a contributing factor to the favorable trend in WC loss ratios. The evidence is significant: steadily declining WC loss ratios during the ACA-years, historically low medical inflation and favorable WC loss-reserve development. Most industry experts believe the expansion of the medically insured has resulted in less case shifting and less cost shifting (e.g., fewer fraudulent claims and comorbidities treated under WC).

The AHCA, in its current form, should have the opposite affect; it seems likely to lead to more WC claims and cost shifting – rising loss ratios. The nearly complete unwinding of the expansion in medically insured could accelerate cost-shifting, in turn putting pressure on WC loss trends and reserve margins. The initial wave of newly uninsured (14 million by 2018 according to the CBO) would result from the repeal of the individual mandate. We don’t have an estimate of the working population in that cohort but presume it’s meaningful. The second wave of newly uninsured (another 10 million) would result from changes in Medicaid enrollment. According to WC experts (link here to one prominent blog) some 81% of Medicaid families have at least one member of their family working. That presents plenty of cost-shifting opportunities.

We’d expect the negative impacts of the AHCA, if rolled out in its current form, would first appear in the states benefitting the most from the Affordable Care Act. Large states including California and New York are among the 18 included in our figure above – contact us for a complete listing.

WC rates across the nation have begun to decline – evidence that WC insurers discount favorable trends into their ratemaking. Regulators will probably have little tolerance for preemptive rate increases based on this evidence, but it will be interesting to see if the pace of rate decreases slow. If not, WC loss ratios will have almost surely found their bottom in 2016.

What does this mean for you?

Repealing ACA will be bad news for work comp premium payers, good news for service entities.

Mar
14

AHCA, CBO, and Workers’ Comp

Posted by Joe Paduda on Tuesday, March 14th, 2017 | Comments

There’s lots of news out there about the Congressional Budget Office’s scoring of the Republican healthcare reform bill known as AHCA; we’ll narrowly focus on what passage of AHCA would mean for workers’ comp – and highlight what’s missing from every other analysis of the CBO report.

Briefly, I’d expect case-shifting and claims-shifting to workers comp to increase significantly, resulting in higher work comp expenses for employers, and more business for the work comp service industry.

Here’s why.

The expansion of Medicaid and the individual mandate covered about 13 million more workers than pre-ACA; 81% of Medicaid recipients’ families have at least one member working. When workers who have health insurance get hurt, they are less motivated to claim it was on the job. And, if they are hurt on the job, work comp doesn’t have to pay for non-occupational medical conditions (e.g. dealing with hypertension before doing surgery).

The newly insureds are also working in jobs with higher claim frequency than average.

Some argue that the high deductibles and copays common in some insurance plans negates my argument; I respectfully disagree.  That’s because the newly insureds are poorer than average, thus they are much more likely to either:

  • get premium support payments from ACA which also cover deductibles and copays or
  • be covered by Medicaid, which has no cost-sharing (except in Indiana).

Since ACA was fully implemented in 2014 we’ve seen historically-low work comp medical trend rates, a strong indication that ACA is a major factor in lower work comp costs.

The CBO has projected:

  • 14 million will lose health insurance next year
  • 7 million more by 2020
  • another 5 million will lose coverage by 2026
  • most of those losing coverage would be older
  • deductibles and copays would be higher than under ACA

(credit Washington Post)

All of these projections are bad for work comp; older workers’ injuries are more expensive, and the higher deductibles and copays, along with a big drop in Medicaid coverage, would financially motivate workers to “claim shift.”

(credit Washington Post)

So, those losing health insurance would be:

  • much older
  • more likely to be employed in higher-risk jobs
  • more likely to be currently covered by Medicaid

What’s missing

…from all of the press reports and analyses of the CBO report is a discussion of how providers would react to passage of AHCA. That’s in part because the CBO report (full copy here) doesn’t address the issue.

Insurance coverage is just part of the story; doctors, hospitals, pharma and other providers are going to be hugely affected by a big decrease in their customer base.

More on that tomorrow.

What does this mean for you?

For work comp payers, higher claims and higher medical bills.

 

Mar
10

WCRI 2017 – California’s outcomes post reform, and plans for the next round of reform

Posted by Joe Paduda on Friday, March 10th, 2017 | Comments

One last post on last week’s excellent WCRI conference; Alex Swedlow CEO of CWCI provided a brief but information-rich profile of California – an Altered State.

The good news…

  • Medical trend has flattened
  • Fewer spine surgeries
  • Fewer Opioid scripts
  • $1.3 billion in system wide savings

One problem that seems almost specific to California – cumulative trauma claims. These claims are particularly problematic in the LA county area – and are outliers in terms of disability duration, cost, indemnity payments.  Moreover, cumulative injury cost are driven by LA county AND attorney involvement.

Medical treatment costs have been essentially flat for five years – due in large part to adoption of an RBRVS-based fee schedule.

The FBI’s involvement in tracking down miscreants in the spinal surgery industry may have been helpful in reducing overutilization of that much-criticized procedure.

Opioid spend has declined for the 5th consecutive year – kudos to the work comp PBM and payers who’ve done this. There’s also been a 26% decrease in cumulative MED over the first two years of the average claim.

This is very good news.

But, as Alex noted, we’ve only moved from the disastrous to the miserable, as opioid use is still far too high.

Overall, while a reduction of 8 percent in medical trend is welcome news, this happened before in the previous attempt to reform California work comp.  After an initial similar reduction, costs zoomed up, necessitating more reform.  So, while Alex is hopeful that trends are positive, he is wary indeed.

A few more key data points

Loss Adjustment Expense is just about equal to indemnity payments and is the highest across almost any comparison group.  And, this expense load has increased dramatically over the last couple of years. Medical cost containment expenses are a big part of this; the data presented was preliminary and thus can’t be cited yet but suffice it to say that costs account for a huge portion of overall medical expense.

Drugs

Rx spend accounts for 12.4% of medical spend but average expense for first 24 months after a claim is incurred is just under $2000 – this has decreased over the last few years.

A formulary is in the offing and it looks like the go-live date of July 1 2017 will happen. While the intent is to improve care and reduce cost, there will have to be strict enforcement for the hoped-for results to actually become real. One of the key issues unresolved is the formulary doesn’t address the difference in the price per pill of identical drugs – the variation can be wide indeed. This is an area that regulators have been focused on, yet none of the current solutions – change in fee schedule or adoption of a formulary – has addressed.

IMR and UR

Only 4.3 percent of medical care sought by treating providers was modified or denied, refuting claims made by other media outlets that there was wholesale rejection and denial of needed care thru the IMR process. Fortunately 99.4% of compound drug rejections were upheld – and over 90% of opioid denials.

What does this mean for you?

Things are getting better in California, but some of the “solutions” offered by regulators are misguided and will actually increase frictional costs. I’m going to dive into this in a post next week.

Mar
8

WCRI – What’s happening with medical?

Posted by Joe Paduda on Wednesday, March 8th, 2017 | Comments

Hospitals are losing work comp share. You would think that’s good news as non-hospital care is much cheaper.  But that may well be wrong. 

The hospital info was the headline from Carol Telles’ kickoff presentation Friday morning at WCRI’s Annual Conference. Workers’ comp patients are using less inpatient hospital care AND care is moving from hospital facilities to ambulatory surgery centers.

This isn’t specific to work comp.  Care has been moving from inpatient to outpatient to non-hospital facilities for decades.  Way back in the eighties – when I started my career in what was then known as “cost containment” – the big effort was to reduce hospital length of stay and admission rates. Over the last thirty (gulp!) years we’ve seen massive shifts in the location of care, as procedures that once HAD to be done on an inpatient basis – think back surgery – moved to outpatient facilities.

The result – outpatient/ambulatory facility use for all payers grew dramatically over the last 30 years, while inpatient admissions actually decreased over that period. This despite the aging and fattening of America.

For work comp patients, this trend persisted across all states – but this did NOT result in lower cost. In fact while the decrease in inpatient admissions was in the low single digits, costs per admit increased on average 24%. This makes sense. As providers and payers have moved patients to outpatient locations, only the sickest and most risky patients have required inpatient treatment. Unlike ambulatory surgery centers, hospitals have a broad array of emergency and life support resources needed.

Not surprisingly, hospitals are pretty unhappy about this. They are losing healthy, easy, well-insured patients to doctor-owned facilities, but get to keep treating the risky, low-health-status Medicaid and uninsured patients. Over the years, hospitals’ patient population has gotten more expensive to care for and less likely to have good outcomes.

What this means for workers’ comp

To fight back, hospitals are getting much better at revenue maximization.

In English, that means they get as much revenue from vulnerable payers as possible to offset lower reimbursement for unprofitable patients. And you, work comp payer, are about as vulnerable as it gets.

While fee schedules in some states (Maryland for example) generally protect work comp payers, most states’ fee schedules ensure work comp is very lucrative indeed for hospitals.

And no, your PPO isn’t helping.

Work comp PPO discounts may look ok, but the actual cost of treatment has been ballooning in many states. Payers THINK they are doing fine when they see the “savings” below fee schedule, but many aren’t focused on the real problem – how much they are paying.

What can you do about this?

Direct care to providers that deliver the best value, defined as cost divided by quality.

 

 

Mar
4

Calling out Coburn at WCRI

Posted by Joe Paduda on Saturday, March 4th, 2017 | Comments

Some WCRI attendees thought my public criticism of former Republican Sen. Tom Coburn (OK) was inappropriate (many did not).

Here’s why I called him out.

First, in talking about disability, Coburn asserted that SSDI – Social Security Disability Income – participation has exploded due to Democratic policies and politics. He said 25 million Americans are now covered by SSDI.  That is flat-out wrong.

I questioned him publicly about his figure, asking where he got it.  He immediately backtracked, saying it may be 22 or 25 million.  I responded that, according to a quick google search, the actual number was less than 15 million.

Coburn had blamed the opposition party for a huge growth in SSDI that NEVER HAPPENED.  He either made up the number of SSDI beneficiaries, was misled, or lied.

The real number, according to expert Yonatan Benshalom of Mathematica, is 9.8 million. Yonatan’s source is here. [Thanks Yonatan]

Why this matters

If Coburn’s false claim was allowed to stand, many in the audience may have left WCRI believing it.  As policymakers, regulators, and thought leaders in workers comp, they would then have perpetuated the myth.  That would lead to wrong decisions, lousy policy, and “solutions” for problems that don’t exist. For example, lawmakers may have sought legislation requiring an MSA-type allocation to indemnify SSDI for occupational disability from work comp insurers.

A more complex issue involves Coburn’s false assertion that the ACA was rammed thru “without any Republican input.” I noted that:

  • The ACA’s core design came from the conservative Heritage Foundation
  • The Gang of Six – half Dems, half Reps, met multiple times while ACA was being written – the Republicans were Enzi, Snowe, and Grassley, all of whom dropped out of the Gang under pressure from Republican Minority Leader McConnell.
  • As a results of those meetings and other dialogue, multiple components of ACA were added or changed in an effort to garner Republican support including:
    • removal of any public option
    • addition of the Cadillac Tax
    • reduction of the penalty for uninsurance
    • removal of funding requirement for abortion services
    • allowance for “religious” health insurance

Responding to my statements, Coburn said since he “was there”, he knew more about this than I did.  He said was part of the Gang of Six – which he wasn’t.  He WAS involved in a previous version of the “Gang” that dealt with tax reform –– but he was not involved in the Gang’s healthcare discussions. [I was peripherally involved via discussions with Congressional staffers and a meeting with Sen Ron Wyden (D OR) about reform]

There are many sources that refute Coburn’s false statements; here’s one.

For those interested in the real story, an excerpt:

[Senate Finance Committee] Chairman Max Baucus (D MT), in the spring of 2009, signaled his desire to find a bipartisan compromise, working especially closely with Grassley, his dear friend and Republican counterpart, who had been deeply involved in crafting the Republican alternative to Clintoncare. Baucus and Grassley convened an informal group of three Democrats and three Republicans on the committee, which became known as the “Gang of Six.” They covered the parties’ ideological bases; the other GOPers were conservative Mike Enzi of Wyoming and moderate Olympia Snowe of Maine, and the Democrats were liberal Jeff Bingaman of New Mexico and moderate Kent Conrad of North Dakota.

Baucus very deliberately started the talks with a template that was the core of the 1993-4 Republican [health reform] plan, built around an individual mandate and exchanges with private insurers—much to the chagrin of many Democrats and liberals who wanted, if not a single-payer system, at least one with a public insurance option. Through the summer, the Gang of Six engaged in detailed discussions and negotiations to turn a template into a plan. But as the summer wore along, it became clear that something had changed; both Grassley and Enzi began to signal that participation in the talks—and their demands for changes in the evolving plan—would not translate into a bipartisan agreement.What became clear before September, when the talks fell apart, is that Senate Republican Leader Mitch McConnell had warned both Grassley and Enzi that their futures in the Senate would be much dimmer if they moved toward a deal with the Democrats that would produce legislation to be signed by Barack Obama. They both listened to their leader. An early embrace by both of the framework turned to shrill anti-reform rhetoric by Grassley—talking, for example, about death panels that would kill grandma—and statements by Enzi that he was not going to sign on to a deal.

The false narrative that Democrats rammed thru ACA without any Republican involvement has become accepted fact by many who haven’t read anything but headlines. Coburn’s false statements perpetuated that nonsense, and he deserved to be called out publicly for them.

There’s a bigger problem here – ideological blinders worn by some make it seemingly impossible for those individuals to accept facts. Fact-free discussions, or, even worse, decisions based on beliefs that are the opposite of reality lead to bad public policy.

What does this mean for you?

The people who attend WCRI are enormously influential in our little industry.   They will determine the future of workers’ comp, how employees are treated and who will pay for that treatment.

They deserve to hear the truth.

PS – to the several anonymous commenters – as I’ve stated here numerous times, I don’t publish anonymous comments from cowards afraid to identify themselves.

Mar
3

WCRI – Does the “Grand Bargain” exist? Should it continue to?

Posted by Joe Paduda on Friday, March 3rd, 2017 | Comments

WCRI CEO John Ruser PhD led the final panel discussing the status and future of workers’ comp as the Grand Bargain between employees and employers.

Bruce Wood and Emily Spieler PhD sparred over who pays for workers’ comp and tort issues in workers’ comp, specifically negligence and the burden of proof.  Spieler suggested we need to consider costs, how those costs are distributed, and who pays those costs.

David Deitz MD PhD jumped into causation, noting this was a “particularly thorny issue in the 21st century.”  Home-based employment, diseases of life, and other factors make it very difficult indeed to establish who is “responsible” for 50% of the cause of an injury.  The issue – people need care, and we should be talking about how to get them the best care and not argue about who pays.

Editorial note – That, dear reader, is a critically underappreciated point.  We are fighting over who pays, and we should be focusing on optimal care.

David Michaels PhD discussed the challenges of occupational disease – attribution/causation, long-term loss of wages and compensation therefore, cost shifting to SSDI, and harm caused to undocumented workers. Bruce Wood asserted that the undocumented worker issue was not work comp related, but rather a failure to enforce immigration laws.

Spieler asserted that she doesn’t think WC was ever set up to pay for long-term wage loss, or permanent and total (PTD) disability.  She noted research indicated 20% – 40% of workers who suffered amputations didn’t file work comp claims – even if it was clear it the injury was work related.

Ruser asked Deitz about the level and quality of medical care given to work com patients. Uniformly, it isn’t as good as that delivered under group health. But, he argued that work comp is diverging away from where group health is headed, towards value-based care.  That divergence is highly problematic.  FFS – the ONLY reimbursement system existing in workers comp – rewards doing more to get paid more regardless of quality. That’s inherently in conflict with a drive towards quality which is happening in the real world outside work comp.

Deitz would roll work comp medical into group health if he was convinced anyone injured in the workplace could access care.  As not all employees have coverage, that world does not yet exist.

Michaels argued that we’ve really dropped the ball on injury prevention, especially when compared to Germany where there remains a strong focus on prevention.  I hear that, but given the steady decrease in claim frequency over the past three decades, I’m not sure there’s an economic argument to be made around that level of prevention. Tied to Michaels’ argument is an OSHA prevention program that links safety to profits and financial results.

In contrast Wood opined that most employers invest in safety and loss prevention, leading to a to-and-fro between Wood and Michaels on involving public health officials to intervene with employers who don’t adequately address loss prevention.

My takeaway – a bit too much in the weeds, and not enough discussion of where work comp is going given the dramatic changes occurring in our workforce today and tomorrow. I’d have liked to see a bit more on historical perspective; work comp laws and systems were set up 100 years ago when most work was heavy manual labor leading to trauma.  Today, it’s diseases of life, of aging, of comorbidities and cumulative trauma, which are inadequately addressed at best.

Thanks to IAIABC’s Jennifer Wolf-Horejsh for asking about the 50+ million workers who are in non-traditional employment arrangements (my words not her’s).  Spieler asked if we need a national non-employment linked disability program to help address this issue going forward.

Kudos to Spieler for noting that wage replacement adequacy is a major problem; Indiana just raised their very-low indemnity payment basis and few in the audience supported that increase in a show of hands.

Jim Hudak of Paradigm addressed this in a very good question summarizing how employment has changed drastically from days of pensions, good health benefits, and life-long careers with the same employer.  Work comp has NOT adapted, as the social safety net has deteriorated. and employment-based benefit system has all but disappeared

Mar
3

WCRI – will value based care come to workers’ comp?

Posted by Joe Paduda on Friday, March 3rd, 2017 | Comments

Value-based care is growing rapidly in the real world outside workers’ comp.  An excellent session asked if VBC will come to work comp.

Work comp care management today is really fee and utilization management using discounted networks and external vendors.

VBC involves bundled payments and is focused on the patient’s experience and results. Simply put, Value = Quality divided by Cost. That requires evidence based medicine, clinical practice guidelines, measuring outcomes, and monitoring and ensuring use of all these tools.

While VBC is complicated to implement in the real world outside work comp, the additional complexities inherent in work comp make it even more complex.  Dr Page noted there are few active VBC initiatives in workers’ comp.  While several states appear to support pilots, they are few, far between, and there doesn’t seem to be any results available just yet.

Dr Page sees objective measurement of outcomes – from the patient’s perspective – as key to the adoption of VBC in work comp.  She identified a sustained return to work as the desired end point.  While that’s true, as we learned yesterday – and undoubtedly you were well aware of this – there are any number of factors driving RTW that have nothing to do with medical care.  Employee-employer relations, psycho-social issues, the availability of employment are just three.  That being the case, I’m a little skeptical about the utility of RTW as the outcome point.

Other barriers to implementing VBC are

  • the need for accurate, consistent, and comprehensive data;
  • comfort and trust between the parties (alert!),
  • and the inherent complexity of designing payment formulae that consider outliers, risk adjustment, comorbidities, and specific state laws favoring or limiting opportunities to direct patients to use and stay with specific providers.

So, while VBC has a lot of promise, my sense is we aren’t going to see any widespread use for a very long time.

Dr David Deitz noted that one challenge is the lack of ability for or interest among orthopedic surgeons in sharing risk around RTW may be a significant obstacle to surgical bundles.

What does this mean for you?

VBC is an idea whose time has come in the real world, and likely won’t ever come in workers’ comp.

Mar
2

WCRI – worker outcomes – it’s blindingly obvious

Posted by Joe Paduda on Thursday, March 2nd, 2017 | Comments

Now on to the real stuff – deep research into issues of interest only to we real work comp geeks.

Dr Bogdan Savych started off this brief and information-stuffed session.

Across 15 states, 14 percent of workers with lost time injuries didn’t have a substantial and persistent return to work (this is PRELIMINARY and subject to change) – why?  what drives this?

Among the biggest drivers – workers who strongly agreed that they were afraid of being fired or laid off had “worse outcomes.”  As over a quarter of workers fell into that category, that’s a big issue. There are both literal interpretations of this – perhaps the worker was justified in fearing a layoff and broad interpretations of this – perhaps the work environment was low trust.  These workers were also more likely to hire an attorney.

Takeaway – the employee’s work environment, and interpretation of that environment, is a major driver of “permanent disability.”  So, think less about medical issues, and much more about these “other” drivers.

Glenn Pransky of Liberty Mutual was next up.  Dr Pransky is one of the industry’s leading researchers on disability issues (kudos to Liberty for continuing to support the Center for Disability Research and similar efforts.

Glenn noted that one driver was the patient’s communications with the payer.  Workers were sometimes thrown off by negative language used by the claims adjuster in the initial encounter or call.  If they feel their needs aren’t being taken into account or they are being treated unfairly they are more likely

The top return to work coordination skill – communications. That’s the result of research conducted in Canada about a decade ago, research that is very likely true today. In fact, Glenn and others conducted a study a few years back that evaluated the impact of improving the initial contact with the case manager, focusing the patient on problem solving and not using words like “claimant, investigation, liability, etc.

What’s interesting here is this is – in large part – old news, yet we still need to hear this.

More importantly, to paraphrase the previous White House, we need to STOP doing stupid stuff.

Clearly we KNOW this language, the style of communication, the employee’s workplace satisfaction are critically important to disability. Yet far too often we still talk to patients not as people but as “claimants”, and treat patients as legal claims, not as people.

Takeaway – treat patients as you would want to be treated.

Mar
2

WCRI – Congressional perspectives

Posted by Joe Paduda on Thursday, March 2nd, 2017 | Comments

Boston’s always beautiful in March – some days are even more beautiful than others. No better place for the annual gathering of the work comp geeks – myself included aka the WCRI Annual Issues & Research Conference.

The kickoff session featured two former denizens of Capitol Hill opining on the impact of the election on healthcare, labor, and work comp. Former Rep Henry Waxman (D CA) and former Sen Tom Coburn (R OK) took to the podium for a moderated discussion and audience Q&A.

WCRI CEO John Ruser started off asking about the Executive Orders issued by President Trump, specifically the drop 2 regulations for every one adopted. Waxman spoke briefly about the complexities, but focused on the lack of consensus among Republicans on healthcare reform and noted that, due to this lack of consensus, they are looking to the President for leadership.  But the President is not providing leadership on healthcare, so we’ve got a hot potato situation.

Coburn attributed problems to a lazy Congress passing large numbers of bills written by departmental Secretaries; elected officials aren’t developing the legislation but rather using language handed to them. He also believes Congress has abdicated and/or lost much of its rightful place as an equal player among the three branches of government.

ACA

Ruser led off with a hypothetical question about what parts of ACA should be kept if the law is repealed and replaced.  This was the wrong question, as it deals with a – in my view – highly unlikely hypothetical. Instead, the question should have been “what’s going to happen with ACA? Will it be repealed? What will pass if anything?”

Waxman doesn’t believe ACA will be repealed.  In contrast, Coburn thinks that all we have to do is publish prices for health services and outcomes and people will go to those providers with the best prices and outcomes.  I don’t know what planet he lives on, but parents with sick kids, individuals with mental health issues, or children of ailing and incompetent parents are never going to be able to make appropriate “Market based” decisions.  Oh, and insurers are never going to insure people with pre-existing conditions – and they’ll look to cancel policies for those who have the temerity to get sick.

This isn’t an economic decision folks, it’s your daughter or son.

Coburn promoted a bill that is under consideration – Burr Hatch Upton.  He believes this bill will be similar to what comes out of Congress.  Details on this here.

He also said there was no attempt by Democrats to involve the GOP in ACA – a statement that is patently false.

Cost shifting

Waxman responded to Ruser’s question about the potential for healthcare changes on case or cost shifting to work comp.  He talked about Medicaid changes that may well reduce enrollment in Medicaid – didn’t speak to workers comp.  Not surprising as he isn’t a work comp guy.

Coburn is a practicing physician, he discussed unfunded liabilities, asserting $105 trillion in future unfunded liability for medicare medicaid etc, noting that we are hurting Millennials as they will have to pay for this.  This is somewhat interesting as he voted against requiring the feds to negotiate pricing for drugs for Medicare.

Unfortunately these two gentlemen weren’t really equipped to address the question – no fault of their own as this is an esoteric topic.

Federal oversight of work comp

Waxman doesn’t see the new Administration moving to increase federal oversight of workers comp, as there’s been no indication from the nominee or administration about this.  that and there are too many other issues re far more important.  Coburn agreed with Waxman and cited lack of Constitutional support for federal involvement in workers comp.

Coburn discussed the expansion of the definition of disability under SSDI, and the subsequent increase in beneficiaries.  He sees SSDI as a social safety net.  All the data supports his case that SSDI enrollment has increased and there are now 25 million Americans are on ssdi – a number that isn’t right.  The actual figure is 4.8% of the population – or 15 million people.

An audience member asked if the Grand Bargain is being dismantled.  Coburn noted that there’s no requirement that SSDI factor in the cause of the disability; SSDI is responsible for disability regardless of the cause.  He said the real question is should work comp cover the entire cost of the disability?  

That’s an excellent question – I believe the answer has been, and still is, yes.

 

 

 

Feb
24

Work comp service companies – Don’t do this.

Posted by Joe Paduda on Friday, February 24th, 2017 | Comments

Call centers often use average call time (ACT, also known as Average Handling Time or AHT)) as a metric to measure customer service “efficiency”.

That is a really dumb idea. 

Especially in workers’ comp.  In fact, one could make a compelling argument that the lower the ACT, the worse the outcome – defined as customer loyalty and likelihood the customer will “buy” again.

In the real world outside of work comp, there are lots of ways customers can get answers to questions about products and services; YouTube, reddit, websites, and even Yelp are just a couple. In that “real world”, customers who call service centers have a specific question, which MAY lend itself to a pretty quick answer.  But it’s just as likely the customer has a complex question which does NOT lend itself to a quick answer…This from the article linked above:

AHT might have been a fine way to gauge performance on simple issues like address changes, balance inquiries, or delivery tracking, when throughput was the name of the game, it’s a terrible way to assess performance on complex issues that by definition take more time to handle. [emphasis added]

While YouTube et al do provide customers with helpful info, those “alternative customer service resources” don’t really exist in work comp.  The business just doesn’t lend itself to automation, because:

  • issues are often jurisdictionally-related and those regulations often change with minimal notice.  Moreover, many states are pretty small in terms of work comp claim totals, so it’s hard to justify allocating big business analyst/programming resources to automating answers about new state claim reporting requirements in Montana (no offense to my many esteemed colleagues in Big Sky Country)
  • answers may have significant downstream legal implications so nuance and opinions can matter a lot
  • patients rarely know much at all about workers’ comp and want to talk with someone who does.  The interaction is really more about listening and empathy than just providing correct answers.
  • Calming down an angry, confused, or upset customer takes time

More importantly, treating call center workers as machines who must produce X widgets (defined as handled calls) per hour isn’t likely to make those workers love their jobs, care about their customers, or want to stay at your company.

In fact, they’ll “perform” to expectations, working hard to get off the line as quickly as possible, regardless of whether the customer’s happy or not.

So, you’ll get what you want – “efficiency”.  And your customers will go elsewhere.

What does this mean for you?

Do you like it when a “customer service” rep hurries you off the line, can’t seem to understand or care about your problem, or even if they do, turfs you off to someone else or, heaven forbid, the company’s website?