Its that time again, when I throw caution (and good sense) to the wind, polish up the crystal ball and guess reveal what big things will happen in worker’s comp this year.

Off the diving board, and hope there’s water in the pool…

1.  The soft market continues…
   And it won’t harden in 2023. Medical costs remain very much under control (with  an exception), rates continue to drop, employment remains very strong (essential for return-to-work) and there’s lots of payers fighting for market share.
2. Medical spend is NOT a problem – and will NOT be in 2023.
   With a couple notable exceptions – to be covered in a future post – medical inflation will remain under control. In part this is driven by much lower drug spend and more specifically the continued decline in opioid spend. The latter has a big impact on claim closure and total medical spend.
3. Behavioral health and its various iterations will gain a lot of traction.
   More State Funds, carriers and TPAs will adopt BH programs, more patients will benefit, and more dollars will be spent. There’s a growing recognition that medical issues aren’t hindering “recovery” near as much as psycho-social ones. This is great/wonderful/long-needed and will really benefit patients and payers alike. Kudos to early adopters, and LETS GO to you laggards!
4. One Call will be sold. 
   I keep forecasting this…and one day I’ll be right.  It has to be this year. CEO Jay Krueger and colleagues have OCCM on a better track, but structural problems (i.e. declining claim volume) and internalization of One Call-type services by Sedgwick and others make the future…less than promising. Couple that with recent ratings actions by Moody’s and S&P and it’s time to do the deal.
5. New technology will make its impact felt.
   Wearables, chatbots (I HATE THEM), and Virtual Reality-driven care are three ways tech platforms/systems/things will significantly ramp up in ’23. Expect several large/mid-tier payers to adopt new tech in a major way – aka not just a small pilot.
   Structural issues with health care (try to find a LCSW or Psych-trained counselor), lack of trained adjusters, and frustration with rising rehab expenses are all contributors.  

Later this week – the other 5 predictions.

Today’s the latest in a three-part update on Russia’s war on Ukraine – we covered military manpower and the motivation to fight before the holidays, today we finish with (a very brief) discussion of losses and supplies of materiel and ammunition, and the overall supply (logistics) situation.

Weapons

According to Ukraine’s Ministry of Defense, Russia has lost over 2000 artillery systems, 4700 trucks and fuel tanks, 550 planes and helicopters, 3000 tanks and over 6000 armored trucks to date. I’m skeptical; opponents’ claims re the casualties and destroyed materiel and machines suffered by the other side are usually pretty – if not downright wildly – optimistic.

I’d suggest the UK’s figures are more accurate:

4,500 armored vehicles, 63 fixed-wing aircraft, 70 helicopters, 150 unmanned aerial vehicles (UAVs), 12 naval vessels, and over 600 artillery systems.

And yet another source which seems to have pretty specific data…and is summed up neatly in this piece.

The latest analysis shows that in the ongoing war in Ukraine, total Russian equipment losses reach 8,515 as of 21 December. In contrast, Ukraine’s military has lost 2,613 pieces of equipment in combat.

Russia had far more materiel at the outset, but is having a very difficult time replacing losses of their more modern equipment and vehicles.

From Army Technology – Ukraine has received:

the Patriot air defence missile system is on the way – this will help combat Russia’s assault on civilian infrastructure

US has provided or promised to provide more than 11,000 military platforms for the land, sea, and air domains (crewed and uncrewed) and more than 105 million small arms, mortar, and artillery munitions, among an undisclosed number of other high-end missiles.

Platforms provided include Mi-17 helicopters and T-72 tanks, and western equipment such as the High Mobility Artillery Rocket System, 155mm, 122mm, and 105mm artillery, and armoured mobility vehicles such as the M113, M1117, and Mine Resistant Protected Vehicles, also known as MRAPs.

While Russia is getting drones, some armored vehicles and tanks and ammunition from a few allies/suppliers, it doesn’t have near the supply chain enjoyed by Ukraine. The NATO equipment is more modern, more lethal, and harder to locate and destroy than much of the equipment Russia is now using as replacements for lost equipment.

US Javelin rocket – used against armored vehicles

HOWEVER, a rule of thumb is about a third of equipment is out of action at any one time due to maintenance, repair, upgrade, or training.

AND, there are reports that NATO and US supplies of some munitions and equipment are running low, and replacement/restocking will take time. A very detailed study is here.

Logistics

I wrote a pretty detailed post 10 months ago about logistics, which is simply getting enough supplies to the units that need them – when they need them. Simple enough in concept  – incredibly hard in practice, and while one could certainly think planning is everything, history suggests that pre-war plans are usually based on the wrong assumptions.

Here are key takeaways…

• Russia’s incredibly corrupt government has enriched a handful of oligarchs. These gazillionaires got huge contracts to supply tires, medical kits, rations, clothing, winter gear and spare parts; build military bases; fabricate tanks, airplanes, helicopters, rockets, ammunition, armored vehicles, airplanes, trucks and artillery; and spent most of those rubles on huge yachts, estates in Switzerland, supercars, Caribbean resorts, designer baubles and personal security staff. As a result, the military is short of pretty much everything, which is why…
• Russia is running out of ammunition.  Reports indicate it may need to use artillery shells that are years past their use-by dates. turning to Iran and North Korea for ammunition, drones, and other materiel.
  This from Military.com…
  • Degraded ammunition can injure or kill troops who fire it. “You load the ammunition and you cross your fingers and hope it’s going to fire, or when it lands that it’s going to explode,” the official said.

(a very good discussion of this is Martin van Creveld’s SUPPLYING WAR)

What does this mean?

Ukraine is winning. That does NOT mean it has – or will – win.

That depends on continued support from NATO and all of us. 

Last night, Ukraine President Volodymyr Zelenskyy spoke to both Houses of Congress, both parties, and all of us.  He spoke eloquently and passionately, describing the suffering of his people and their total commitment to defeating Russia and reclaiming all Ukrainian lands stolen by Putin.

What Zelenskyy knows – and I mean KNOWS – is the more Putin bombs Ukrainians, the stronger those Ukrainians become, and the more committed they are to seeing this through to Putin’s bitter end.

Net – Putin’s attack on civilian targets will strengthen Ukrainian resolve, not weaken it.

Here’s why.

I had long thought that the horrific bombing campaigns of World War II helped bring the war to a close by battering Germans and Japanese into submission. [full disclosure – my father was a machine gunner, bombardier, and armorer in the 8th Air Force in England during the second World War.]

Boy was I wrong.

Credible research indicates German production actually increased during the war; while it didn’t reach planned levels (which were likely overly optimistic) it did exceed pre-bombing campaign volumes. Research by the US Strategic Bombing Survey came to the opposite conclusion, however there’s a) big time confirmation bias and b) no evidence that the Survey captured civilian morale data.

Research conducted during Germany’s Blitz (aerial bombing) of UK cities concluded…

the Germans gained nothing from their investment in bombing British civilian targets as part of “The Blitz” (1940-41). Before “The Blitz”, they may not have been happy about having their air force destroyed by the Nazis, but they were also not eager to put their lives on the line to support a hereditary aristocracy that just over 20 years earlier had wasted a substantial portion of a generation of young men in a senseless war. However, as their homes were being destroy and their neighbors killed or wounded by German bombs, ordinary British men and women did not all rabidly support Churchill’s exhortation, “We shall never surrender“, but they continued to work, and they took action to ensure that essential services were provided when their official leaders failed to do so.

long as I get my cuppa tea, dearie…

TO be sure, this was NOT the whole story; there were many instances of looting, bigotry and finger-pointing, panic and social conflicts. That said, definitive research into civilian morale during the Blitz found the bombing produced:

a people who became actively committed to the project their leaders put before them, who cooperated with the drastic re-ordering of daily life that this entailed, and who, on the whole, did so in a spirit of stoical endurance that did not exclude good humour’. [emphasis added]

Further research on the impact of aerial bombing from 1917 to 1999 found:

(1) air power coercion attempts are more likely to work if they exploit military rather than civilian vulnerabilities, (2) the regime type of the target affects the chances of success, and (3) success is less likely if the attacker demands that the target change its leadership. Results show that coercion is more likely to work if the target’s military vulnerability is higher, but higher levels of civilian vulnerability have no effect on the chances of coercion success; that target regime type has no effect; and that success is less likely when the attacker demands the target change its leadership

In his book TRIBE, author Sebastian Junger details how people react to  having a common enemy, using examples from the Serb-Croat war’s effects on teenagers in Sarajevo and data on depression, anxiety, suicide among British citizens during the Blitz…the net is those issues declined rather significantly. Junger concludes that a common enemy draws people together, all working as one to defeat a single threat.

What does this mean for you?

Ukraine will win.

The more support we give them, the sooner this happens and the fewer Ukrainians will suffer and die. 

It’s been four months since we talked about Ukraine, a period during which Russia put scores of thousands of poorly-equipped, pretty-much-untrained, and wholly incompetent civilian men into army uniforms (or facsimiles thereof) and fed them into the meat grinder that is Donetsk, Kherson, Bakhmut and surrounding areas.

With this result.

With things on the front lines pretty static, it’s time to think through the factors that will decide who wins. In layperson’s terms, I’d say there are three main drivers

People to do the fighting – today’s topic

Will to fight

Stuff to fight with

Yes, this is pretty basic, but stick with me here.

The “people” need to be found, trained, equipped, clothed, fed and led. These are all hard to do – especially in winter, in Ukraine, after 10 months of often-brutal combat dominated by death-by-artillery.

In addition to the usual recruiting efforts focused on patriotism and duty, Putin has resorted to two primary sources – poor men from far eastern Russia, many of whom don’t speak Russian, have never traveled outside their immediate area, are poorly educated and according to some reports not really interested in fighting.

Prisoners who, in exchange for a release from jail, agree to enter the army, often in mercenary units set up by the Wagner Group make up a large portion of the new recruits.

Reports from these new “soldiers” indicate they are mostly cannon fodder, placed on the front line to be killed by Ukrainian forces while the regular Russian army sites in relatively safe trenches in the rear.

This is typical (from Ukrayinska Pravda)

Quote from Agafonov: “We were dumped into the forest and ordered to entrench; we had only three shovels for the battalion, and there was no support at all. We entrenched as best we could, and in the morning the [Ukrainian] attack started. [Ukrainian forces used] artillery, Grad MLRS, mortars and copters; we were just shot.

What is disturbing is the lack of information about casualties and replacements in the Armed Forces of Ukraine (AFU). After way too much time spent searching the interwebs I was unable to find any credible data on recent losses, replacements, or changes in AFU manpower.

It’s highly likely that Russia has more men, even after both sides have suffered horrendous losses. (while there are women in both countries’ armed forces, men make up the vast majority of the fighting forces) It’s also clear that many new Ukrainian recruits are not exactly fully trained.

However, 5 weeks training by professional soldiers in Britain is a lot better than a few days with minimal training on how to actually shoot, load, and clean a rifle, bandage a wound, use a radio, read a map, and recognize a Russian or Ukrainian fighter jet.

Oh, and the UK and other European countries supporting the training give every trainee “combat clothing, body armour and ear defence, waterproofs and sleeping bags plus a fully stocked individual first aid kit and extreme cold weather kits…”

(for more on this I suggest you review multiple sources, as this will enable you to question each of them and arrive at your own conclusions…  War on the Rocks, Phillips Payson O’Brien, Institute for the Study of War are three I’ve found useful)

Tomorrow – the will to fight.