After the blur that was the NWCDC in New Orleans last week, here are a few impressions.

Tough week

There were fewer insurance types this year, and a couple TPA execs noted they brought fewer people and most of their people only got Expo passes. The timing – after Thanksgiving – seemed to be a bit of an issue.  End-of-year stuff including closing whatever deals they could to make this year’s revenue budget and finalization of budgets and 2017 plans kept some at their offices, while the all-too-common “let’s stop traveling to control expenses” played a part as well.

Next year the show returns to Las Vegas, and it’s another week later.  We’ll see if that helps or hurts attendance.

Notably, overall attendance was reported as flat – after a couple years of record high numbers, that’s good news for conference owner LRP.

Presenters

Folks, please please please don’t be so damn dull. Workers comp is boring enough without we presenters making it even worse.  If you aren’t used to presenting, get coaching. If your slides just include a bunch of bullet points, get your design folks to translate words into pictures. DO NOT READ YOUR PRESENTATION. Do not read your slides. Engage, entertain, focus. Make damn sure you tell them why what you’re talking about is important TO THEM. 

No matter how important your points are, if your audience is asleep or playing words with friends you might as well be singing in the shower.

There are many, many people with different approaches and styles who are really effective. Friend and colleague Alex Swedlow, President of CWCI, uses a lot of charts and graphs – and a sardonic style and dry wit – to make complex issues understandable.

Bob Hartwig PhD has way too many slides, talks way too fast, presents way too much information – and is a terrific presenter.  Why? Because he’s found a style that works for him.

Some need a lot of practice, others shouldn’t as it makes their talk seem wooden and stilted. Some can ad lib, others can’t.  Find what WORKS well for you, and stick with it.

And always ask what you can do better.  People will always blow smoke up your shirt about how great you were – ignore that.  Sure, take away the things you did well, but seek out what you can do better. We can always improve.

Execution

There are few new ideas in the industry, few real innovations – but lots of talk about innovation. What there is – is a very real and very strong focus on execution by some vendors, TPAs, brokers, and service providers.  The people and companies that impressed me were mostly the ones that were “innovating around execution”. What can they do to make their customers’ jobs, lives, operations, functions easier/smoother/less stressful? How can that be measured? And who are their customers – what do they do every day? How are those individuals measured and rewarded? What do they need, want, and have to have? What makes their job harder? Where’s the nuance, the small difference, the unseen need that can be exploited to differentiate?

Figuring out the “execution opportunity” is a big part of success, but it’s a total waste of time if it isn’t translated into different workflows, services, business practices.  This can be tedious and frustrating and appear to be marginally rewarding at best.

But the whole is greater than the sum of the parts. Customers – buyers, front-line staff, employer supervisors, work comp patients – notice and appreciate the effort. More business comes your way. And competitors find it hard to get a foot in the door.

In several deep dive conversations with a wide variety of folks, I kept noting the ones that are doing well are relentlessly probing, asking questions, wondering why?. This isn’t flashy or in many cases really obvious – but it sure is working.

Industry Isolationism

The conference is useful in many ways; one can get lots of meetings done in a brief period; new, intriguing approaches/vendors/programs are on display; and reconnecting with colleagues is always rewarding.

What stuck out for me this year was something that is both troubling and encouraging: the insularity of the work comp industry is receding.  Perhaps it’s the election, a vastly improved economy, or just more awareness; for whatever reasons, many of the people I spoke with are more attuned to and aware of external factors that may well impact work comp.  A few examples:

• Inflation rates will affect investment income, which in turn moves reserve adequacy
• Automation decreases risk for industrial workers, while reducing re-employment opportunities
• Changes to health insurance status may increase or decrease claiming patterns, cost shifting, case shifting

This is good news indeed.  However, there’s a lot of misinterpretation due to misunderstanding or just plain ignorance (not saying that pejoratively, but rather noting the fact that a lot of folks just aren’t very aware) about some of these issues.  I’d suggest it’s always best to try to understand what’s really going on before jumping to conclusions about what “that” means.

A lesson I try to keep in mind myself…

 

It’s been a blur – here are the quick takeaways from the last 3+ days in New Orleans

The new new thing is…

Telehealth.  Several entities are either specializing in telehealth, telemedicine, or some aspect thereof.  Provider organizations have proprietary applications, independent third parties have theirs (CHC is one I met with), and others are talking about what they’re going to do.  Seemed like there was a lot of product development happening on the fly – which is fine – and a good thing.  Hearing from lots of stakeholders is always productive.

Blockchain.  When asked to name one thing that people aren’t talking about that they should be, I named Blockchain.  Here’s what this is – and why you need to know about it. That was actually one of two things I discussed – the other is admin expense – which we’ll dig into next week.

What wasn’t there?

More accurately, who wasn’t there.  Young executives in positions of significant responsibility were noticeably rare.  BTW “young” is a very relative term in workers’ comp; people who I think of as “young” are 51-52.

In other industries, I’d guess young is rather…younger than that.

As many have been noting, we’ve got a real dearth of young talented professionals in positions of responsibility.  That’s pretty damn scary, as the work comp world is in for massive changes over the next decade, and old guys like me aren’t nearly as prepared to anticipate and address these changes as younger people are.

There was also a noticeable lack of insurance folks at the gathering. Im hearing this is due to end-of-the-year cutbacks on travel to make those 2016 financials just a little rosier.  TPAs were also a little light on staff this time around.

Deals

While the pace of acquisitions has tapered off significantly, I spoke with several owners who are in the process of working on transactions.  Not big ones, but what we’re going to see is more small transactions beefing up a company’s core capabilities or expanding its product lines.  Prices are also down, as at least two investors told me the OneCall situation has significantly affected valuations.

 

 

(Edited to correct my error, Jimmy Morales is a woman.  MY apologies to Ms Morales for mis-identifying her.)

This morning’s WorkCompCentral brings us a report that Miami Beach’s City Manager is rejecting two police officers’ work comp claims for coverage due to Zika infections.

Reportedly the officers work in Zika-infected areas, but the mosquito has not been found where they live.

City Manager Jimmy Morales refuses to cover these cases, saying:

“He/she must show that the exposure/bite took place while on duty and identify the specific infected mosquito,”

To be fair to Ms Morales, she claims that the two officers have yet to comply with requirements to submit full medical documentation.  If that is the case, then they need to do so. HOWEVER her “requirement” that the officers bring the the specific infected mosquitoes isn’t just ludicrous, it also makes her – and her city – out to be heartless, uncaring bureaucrats.

If Ms Morales wants to perpetuate the meme that workers’ comp folks are heartless, penny-pinching, claim-denying, conniving, scheming bastards,s he’s nailing it. I don’t think that’s Ms Morales’ intention, and I’m hoping she mistakenly relied on a legal interpretation in a misguided attempt to stick to the “letter of the law.”

Ms Morales has not only damaged her relationship with his City’s police force, she’s also provided system detractors with yet another iconic example of how work comp is grossly unfair. And she’s done this in Florida, where the workers’ comp system is already on shaky ground.

Thanks, Jimmy. 

What does this mean for you?

People, please think before you act. You can’t unring the bell, take back what you said, or in this case claim you were misquoted.

 

Injury rates are plummeting, insurance premium rates are flat or dropping, medical costs are down as well.

This morning Todd Foster of WorkCompCentral reports big rate decreases in Louisiana and Texas and a slight decrease in Georgia.  This comes on the heels of drops in most other southern states, some well into the double digits.

Out of 36 states reviewed by NCCI, all but four will get rate decreases.

In Texas, a drop in energy service employment is one factor; this is a high-severity, high-frequency industry (injuries are worse and occur more often than in other industries).

Another article in WCC reported that American Financial’s work comp results improved due to “prior year loss development” improvements.  In English – claims costs for last year came in lower than they predicted.

Injury rates are continuing to decrease every year. Medical costs are flat or down slightly.  And, while wages are slightly higher, employers’ and taxpayers’ workers’ comp premiums are lower.

Make no mistake, this is good news for the three constituencies that matter – workers, employers, and taxpayers. Fewer workers are suffering the trauma and uncertainty of injuries. System costs are dropping for everyone.

There are a couple of things that could will change this.

If Congress and the next President (whoever that is) can work together (yes, I believe in the Easter Bunny too), there will be a massive investment in infrastructure in the near future.  We’re talking hundreds of billions of much-needed spending on bridges, roads, rail, the energy grid, clean energy, broadband.  With interest rates still right around zero, now is the time to finally fix stuff our legislators have avoided for decades over fear of political repercussion.

This work will take years, and as it is high-risk for workers, undoubtedly lead to more injuries.

Longer term, we can look to what’s happened in manufacturing to forecast employment trends in other sectors.

The US is the second largest manufacturer in the world – despite the decline in jobs in that sector, output is just slightly lower than China’s.  Despite what any politician says, those “lost” jobs are NOT coming back. What’s happened in manufacturing will be felt in every other business and industry, from hospitality to transportation to health care.

What does this mean for you?

Workers’ comp is driven by macro factors. 

 

Last week One Call Care Management conducted another round of layoffs, with most coming from field sales. I’ve heard a few operations folks were also let go.

Word is the field force reduction is driven by two factors.  First, former CEO Joe Delaney hired approximately 20 reps with NO workers’ comp experience earlier this year in what has been characterized as an “experiment”.  Evidently, the experimental stage is over – these reps are gone.

Second, after keeping the sales staff aligned with products and services (one for DME, another for imaging, a third for PT…), OCCM decided this wasn’t working.  Going forward, reps will be assigned to specific customers/prospects, and will have to be up to speed on all OCCM products.

Sources indicate that out of 118 reps, 38 will be terminated.  It appears some will get with severance and non-competes will be enforced, however I’ve been told OCCM will consider letting terminated reps out of their non-competes on a case-by-case basis.

That would be the right thing to do.

Interestingly, OCCM made the layoff and change in focus while the head of field sales position is open – as it has been for some time.  I’m not sure how this transition from seller-of-one-service to seller-of-all-services is going to progress without someone in charge over the long term. This kind of change isn’t simple, requires ongoing training and evaluation, as well as coordination with the service delivery folks to ensure the inevitable glitches and misunderstandings are handled quickly.

For a company with more than 3000 employees, a reduction of slightly more than one percent isn’t a big deal, and may actually make sense, IF those reps are really capable of “repping” all OCCM products and services.  And if they are treated equitably and given the opportunity to work in the industry.

Going forward, I’d expect we’ll see additional consolidation at OCCM. The company has multiple domestic call centers, and as OCCM off-shores various functions (clinical, scheduling, A/R) the need for US-based staff will likely decrease.

What does this mean for you?

Hopefully new opportunities for the newly-unemployed.