Insight, analysis & opinion from Joe Paduda

Mar
3

Wildly off topic…why Ukraine is winning

Posted by Joe Paduda on Thursday, March 3rd, 2022 | Comments

As the son of two parents in the CIA who grew up on military bases all over the world, I’ve had a special fascination with the minutiae…the (seemingly) minor and (seemingly) random things that cascade into defeat or victory.

After hours in the TwitterSphere, here’s my totally amateur take on why the Russians are losing despite an overwhelming advantage in military technology and hardware and personnel and the West’s absolutely correct decision to NOT intervene militarily.

stick with me here…the journey is worth it.

You’ve seen lots of photos and video of that gigantic convoy sitting on the road north of Kyiv…one that will ensure the total destruction of the capital and pretty much everyone in it.

Except that column hasn’t moved in three days. Two reasons…tires and rasputitsa.

Tires.

If you don’t keep tires inflated, move vehicles around, and minimize exposure to sunlight, they rot.

If tires fail, what was a HUGE asset – mobility, and a logistics train (supplies of fuel, food, water, ammunition, medical supplies, spare parts) – becomes a HUGE liability…modern armies consume gigantic quantities of everything, and when that runs out, they stop moving, shooting, and surviving.

A military tire expert(!) posted this…

If that column had been able to move quickly, Kyiv and Ukraine would be flying the Russian flag…sure the Ukrainians have done everything humanly possible to slow/stop it, but AK-47s and molotov cocktails are no match for masses of T-90s.

Okay, but it’s just tires, you say?

Rasputitsa

Rasputitsa is the Russian word for mud, which in the steppe country is bottomless. The incredibly fertile and deep soils of eastern Ukraines turn to mud when the spring thaw hits.  Reports indicate Putin bowed to China’s demand that Russia not invade Ukraine until after the Olympics…after the weather had turned just a bit warmer.

The Ukrainian defense, coupled with lousy Russian vehicle maintenance, likely caused breakdowns at the head of the column. So, the Russians had to get off the road to make any progress.

But…

Tires that work really well on roads have to be de-pressurized to get through mud, and when you lower the pressure, sidewalls flex, crack, and fail, and gazillion-rouble mobile air-defense vehicles, troop carriers, and fuel trucks get stuck.

Which allows very mobile, incredibly brave, and highly motivated Ukrainians to either fix and then use them to fight Russians or destroy them.

So, the rest of the convoy is stuck on the roads, where it runs out of fuel, food, water, and esprit de corps.

 

Well…Russia’s still got a huge and deadly air force…right?

Good question.

If the Russians didn’t take care of tires, what else did they ignore? Modern military equipment is incredibly maintenance-intensive. US fighter jets need more than 30 hours of maintenance per flight hour. 

The Russian air force has 4 times more planes than the Ukrainians, yet hasn’t achieved air dominance over Ukraine – a situation that has puzzled every “expert” pundit.

While I haven’t seen any current insights into Russian air force maintenance practices, there have been a LOT of problems of late, problems due to crappy maintenance, inexperienced crews, and a lack of training.

Net is, there’s a lot more to fighting and winning than lots of troops and fancy equipment.

Back story

There’s a LOT more to this, as in why the Russian military is so poorly maintained, trained and led (hint – Putin’s buddies are oligarchs that get huge contracts to provide tires to the military, contracts they fill by using cheap, crappy Chinese knock-offs so they can spend the rest on superyachts and apartments in London).

What does this mean?

Support Ukraine. 

Please consider a contribution to Care. Care is a very reputable and highly effective NGO with a rich history of successfully mitigating disasters and helping people.

Screenshot your contribution and put it in comments. I’ll post it – and my ever-lasting thanks.

Mar
1

Stuff you should know

Posted by Joe Paduda on Tuesday, March 1st, 2022 | Comments

When Physician Management Companies took over anesthesia practices, the units (amount of services) and prices went up dramatically (when compared to other practices).

As in 16.5% and 18.7% respectively.

No surprise, prices went up even more – as in 26% – if the PMCs were owned by private equity companies.

The fine folks at WorkCompCentral published the news that OptumRx settled with the Commonwealth of Massachusetts over the Commonwealth’s claim that OptumRx failed to follow workers’ compensation prescription drug pricing procedures. OptumRx agreed to pay the state $5.8 million. The settlement is here.

I’m trying to get more detail on this as the Commonwealth’s press release is a bit confusing.  You’ll know if/when we get more details.

Finally, the conspiracy theory that somehow COVID came from a lab has been put to rest – at least for those of us who believe in science. Somehow I doubt the tin foil hat crowd will accept the news that the virus originated in the Wuhan market.

Where COVID originated 

From Michael Worobey, a co-author on both studies and an evolutionary biologist at the University of Arizona via Medscape “When you look at all the evidence together, it’s an extraordinarily clear picture that the pandemic started at the Wuhan market…”

More details on the two studies:

In one study, researchers used spatial analysis to show that the earliest COVID-19 cases, which were diagnosed in December 2019, were linked to the market. Researchers also found that environmental samples that tested positive for the SARS-CoV-2 virus were associated with animal vendors.

In another study, researchers found that two major viral lineages of the coronavirus resulted from at least two events when the virus spread from animals into humans. The first transmission most likely happened in late November or early December 2019, they wrote, and the other likely happened a few weeks later.

There’s an excellent synopsis of the research and methodologies here. If you want to weigh in, please review the article at the link first.

What does this mean for you?

For-profit healthcare can be very problematic, and science always wins.

We are all shocked and heartsick over Putin’s War on Ukraine – if you want to help Ukraine and Ukrainians, please consider a contribution to Care. Care is a very reputable and highly effective NGO with a rich history of successfully mitigating disasters and helping people.

Feb
28

This one works…COVID, facility cost drivers, employment – don’t miss WCRI’s annual confab

Posted by Joe Paduda on Monday, February 28th, 2022 | Comments

My apologies for the previous attempt to post this…a picture in the post somehow blocked the view of the body of the post.

What’s the deal with long-term COVID?

Why are facility costs increasing and where?

How will labor market disruptions affect work comp?

These and other questions will be addressed in Boston March 16 and 17 at WCRI’s Issues and Research Conference. I caught up with WCRI CEO John Ruser and Communications Director Andrew Kenneally to get the scoop.

remember these days…?

[Register here…don’t put it off as this often sells out]

COVID

26 months into the COVID era we know a lot more about the short-term health impacts of COVID (and associated medical costs and duration) but we’re only starting to understand how COVID infections affect us – and may impact work comp – over the long term. Dr Ruser noted the:

“majority of COVID claims are short duration and most don’t have medical expense, things that are going to surprise us may well be long covid associated (issues)…(we are) doing studies on covid claims and persistence in terms of services provided that WC payers are covering”

Denise Algire, Dan Allen, and Craig Ross DO are the panelists for a discussion of the workplace “after” COVID; mandates, return to worksites, and medical care are all on the docket. [I’m not sure there will ever be an “after” COVID; more likely we’re entering a “COVID era.”]

Facility costs

WCRI’s members have identified facility costs (inpatient and outpatient hospital and ambulatory surgery facility) as a key concern; one of the biggest drivers is provider consolidation.  Dr Bogdan Savych and Dr Sebastian Negrusa will discuss their research into the effect of provider consolidation on workers’ comp medical payments; Dr Ruser:

“WCRI’s stakeholders raised this as a top issue…there will be some eyebrows raised as there hasn’t been research on the impact of vertical and horizontal integration’s effect on workers comp. We will discuss the implications for costs from both vertical integration and the acquisition of Primary care practices by larger health systems.“

More on this issue here here and here.

Employment

The estimable Dr Bob Hartwig will educate and engage as only he can. Somehow Dr Hartwig manages to make the densest of topics relevant and entertaining. With employment a key driver of all things workers’ comp;

“disruptions in labor markets are going to have lasting impacts on the way we work and on workers’ comp claims. Bob Hartwig is coming to talk about these disruptions and their implications for workers’ comp”

What does this mean for you?
All in all, a festival of facts, a cornucopia of content,  await us in Boston…along with a most-needed opportunity to see old friends and, dare I say…shake hands?

Feb
25

COVID, facility cost drivers, employment – don’t miss WCRI’s annual confab

Posted by Joe Paduda on Friday, February 25th, 2022 | Comments

What’s the deal with long-term COVID?

Why are facility costs increasing and where?

How will labor market disruptions affect work comp?

These and other questions will be addressed in Boston March 16 and 17 at WCRI’s Issues and Research Conference. I caught up with WCRI CEO John Ruser and Communications Director Andrew Kenneally to get the scoop.

remember these days…?_DSC2004.jpg

[Register here…don’t put it off as this often sells out]

COVID

26 months into the COVID era we know a lot more about the short-term health impacts of COVID (and associated medical costs and duration) but we’re only starting to understand how COVID infections affect us – and may impact work comp – over the long term. Dr Ruser noted the:

“majority of COVID claims are short duration and most don’t have medical expense, things that are going to surprise us may well be long covid associated (issues)…(we are) doing studies on covid claims and persistence in terms of services provided that WC payers are covering”

Denise Algire, Dan Allen, and Craig Ross DO are the panelists for a discussion of the workplace “after” COVID; mandates, return to worksites, and medical care are all on the docket. [I’m not sure there will ever be an “after” COVID; more likely we’re entering a “COVID era.”]

Facility costs

WCRI’s members have identified facility costs (inpatient and outpatient hospital and ambulatory surgery facility) as a key concern; one of the biggest drivers is provider consolidation.  Dr Bogdan Savych and Dr Sebastian Negrusa will discuss their research into the effect of provider consolidation on workers’ comp medical payments; Dr Ruser:

“WCRI’s stakeholders raised this as a top issue…there will be some eyebrows raised as there hasn’t been research on the impact of vertical and horizontal integration’s effect on workers comp. We will discuss the implications for costs from both vertical integration and the acquisition of Primary care practices by larger health systems.“

More on this issue here here and here.

Employment

The estimable Dr Bob Hartwig will educate and engage as only he can. Somehow Dr Hartwig manages to make the densest of topics relevant and entertaining. With employment a key driver of all things workers’ comp;

“disruptions in labor markets are going to have lasting impacts on the way we work and on workers’ comp claims. Bob Hartwig is coming to talk about these disruptions and their implications for workers’ comp”

What does this mean for you?
All in all, a festival of facts, a cornucopia of content,  await us in Boston…along with a most-needed opportunity to see old friends and, dare I say…shake hands?

Feb
24

The Ukrainian War’s impact

Posted by Joe Paduda on Thursday, February 24th, 2022 | Comments

Equity markets are getting hammered, the bond market is up substantially, and energy prices and assets are zooming.

Those are the immediate effects of Russia’s invasion of Ukraine.

What will happen now is anyone’s guess, but here’s how I see it.

  • Putin is all in.  Attacks are hitting cities hundreds of miles from the Donbass and eastern Ukraine, signifying Putin’s intent to take over the entire country.
  • The western countries – Europe and North America, as well as some Asian nations will rally around severe penalties for Russia – blocking access to the SWIFT system, banning trade in Russian debt and equities, and instituting a broad ban on exports to Russia.
  • This isn’t going to end anytime soon.
  • Ukraine will be very hard-pressed to hold off Russian forces; the Ukrainian military is much smaller, has fewer armored vehicles and airplanes, and isn’t positioned well to fend off attacks from the north and southwest.
  • China is a bit of a wild card; it
    • consumes a lot of Russian foodstuffs, gas and oil,
    • sees Russian aggression as a not-very-big-deal,
    • likes the strategic problems the invasion creates for the West (China could move aggressively on Taiwan), but
    • knows Russia’s financial situation is going to deteriorate quickly,
    • has tens of billions invested in Russia, and
    • understands that Putin is playing with a fairly weak hand.

So, I’d expect:

On the scarier side, expect Russia to launch cyber attacks in retaliation for Western sanctions, attacks that will very likely target financial institutions, infrastructure and commercial entities.

What does this mean for you?

Uncertainty breeds stasis…until we see where this is headed, expect interest rates to rise which will increase the cost of debt and reduce private equity investment.

Feb
23

Cash cows, Corporate cut-backs and Corporate-speak

Posted by Joe Paduda on Wednesday, February 23rd, 2022 | Comments

Six weeks ago I predicted:

TPAs will add more business, mostly from carriers.
As work comp continues to shrink, insurers will ramp up efforts to shed assets and expenses to reduce their cost structure. By outsourcing claims, carriers are trading the high fixed costs of a claims infrastructure for the variable cost of a per-claim admin fee.
The smarter carriers will negotiate hard so they don’t get screwed by medical management and other non-fixed fees…but many carriers aren’t that smart…

and…Insurers will reduce staff, particularly in claims.

Here’s an update.

There’s been lots of rumors out there about AIG’s plans to get out of the claims business and associated layoffs, so I reached out to AIG. (full conversation below)

Net is I’m hearing there have been layoffs in IT (never a strong suit at AIG), work comp claims, and medical management services.  Likely other areas as well.

Focusing on work comp/medical management, this is a) wholly predictable and b) likely to happen at other insurers.

The reasons are straightforward:

  • work comp is a declining industry
    • in 4 years there will be 10% fewer claims than there are today
  • work comp is a classic cash cow; mature, throwing off lots of cash and stagnant

The implications are clear – why would an insurance exec invest in a business that is declining, way behind in technology investment, has an aging workforce and can’t attract young talent?

Especially when it can outsource claims to a TPA, thereby:

  • reducing fixed costs and unallocated loss adjustment expense (ULAE)
  • eliminating the need to invest in IT upgrades for claims and medical management systems
  • getting rid of an older and expensive workforce and the attendant costs for real estate, IT support, telecom, benefits and on and on.

Congratulations to Gallagher Bassett, which appears to have landed a lot more work. This will help GB immensely as it will gain revenue it can use to make those IT investments, hire and train staff, and upgrade operations.

Finally, corporate-speak.

Why AIG would not answer questions clearly and cogently is beyond me. Without those answers, one has to look to message boards and contacts at the company and those recently departed, sources that have – by definition – more narrow perspectives influenced and affected by the impact of AIG’s actions and non-actions.

That doesn’t mean those perspectives aren’t valid – not at all. It does mean that you, dear reader, don’t have the full picture as to what is happening at AIG and why.

What does this mean for you?

If AIG work comp is a customer, pay very close attention.

Email conversation:

here’s what I asked AIG

I’m working on a blog post re carriers using TPAs for workers’ comp claims.  I understand AIG is in the process of outsourcing WC claims to Gallagher Bassett; evidently there was an internal communication to employees in December addressing this.

My questions:

        1. AIG has long used TPAs for claims handling, but also handled claims internally. Is AIG in the process of outsourcing all/most WC claims that were previously handled internally?
        2. If so, what is driving this decision?
        3. Sources indicate the timing is Q2 2022; is this accurate?
        4. Indications are AIG is also reducing the role of HDI; can you speak to that?

Here’s AIG’s response:

AIG has entered a strategic partnership with Gallagher Bassett for the shared management of our “bundled” workers’ compensation claims in the U.S. This partnership will combine AIG’s in-house claims expertise and customer service with Gallagher Bassett’s industry-leading infrastructure, analytics and technology. AIG will continue to handle major loss and specialty claims and medical management, while also providing technical and strategic guidance for all claim management and resolution.

And here’s my follow-up

So, thanks for the statement.
Is AIG staff handling claims?
Is AIG doing all the Managed care work but using GB’s IT for claims?
My understanding from AIG staff is that GB will handle claims, so I’m a bit confused.
AIG’s response was classic corporate-speak and – as you can see – didn’t answer my questions. AIG also didn’t respond to my follow-up.
Feb
17

COVID update

Posted by Joe Paduda on Thursday, February 17th, 2022 | Comments

yes, things are getting better – but that’s not universal, as some states/regions are still dealing with the Omicron tsunami.

First, idiot alert…

An Oklahoma hospital was forced to lock down its ICU due to what can only be described as rampant idiocy.  From Medpage Today:

In a recent press release, [a] church group [that has been protesting outside the facility and making threats against its staff online], known as Ekklesia Oklahoma, called Mercy Hospital an “evil Marxist controlled death camp.” [emphasis added]

Court documents stated that the founder of the group called one of the hospital’s doctors a “murderer,” noting that members even posted the doctor’s home address online, according to KFOR.

It’s not just Oklahoma…in Boston, a neo-Nazi group protesting outside the hospital called Brigham and Women’s Hospital “anti-white.” The stupidity of the protestors is stunning, as is their twisting of facts.

As I’v noted multiple times, we have family members in emergency medicine/critical care.  These types of attacks happen every day, everywhere. Patients yell, scream, hit, spit on staff. Some patients’ family members call and make demands, cursing at staff who refuse to dispense ivermectin. They abuse them mercilessly.

And nurses and staff are supposed to stand there and take it.

Would you tolerate that in your job?

What does this mean for you?

These idiots and their enablers are destroying our healthcare system. Call them out. 

Facts

COVID infections are associated with much higher use of medications to address behavioral health conditions. That’s from a study published in the British Medical Journal. The study was conducted by the Veteran’s Administration and analyzed data on over 150,000 patients with a previous acute COVID diagnosis.

From the BMJ:

people with covid-19 show an increased risk of incident mental health disorders, including anxiety disorders, depressive disorders, stress and adjustment disorders, opioid use disorder, other (non-opioid) substance use disorders, neurocognitive decline, and sleep disorders. The risks were evident even among those who were not admitted to hospital during the acute phase of covid-19—this group represents most people with covid-19 [emphasis added]

Vaccinations are good

A UK meta-analysis focused on long-COVID found that individuals previously infected with COVID benefited from vaccinations, and those with COVID that got a vaccination did better than those without a vaccination.

  • Six of the 8 studies assessing the effectiveness of vaccination before COVID-19 infection suggested that vaccinated cases (1 or 2 doses) were less likely to develop symptoms of long COVID following infection, in the short term (4 weeks after infection), medium term (12 to 20 weeks after infection) and long term (6 months after infection).
      • Six of the 8 studies assessing the effectiveness of vaccination before COVID-19 infection suggested that vaccinated cases (1 or 2 doses) were less likely to develop symptoms of long COVID following infection, in the short term (4 weeks after infection), medium term (12 to 20 weeks after infection) and long term (6 months after infection).

      Finally, more support for the benefit of vaccinations for those previously infected with COVID.  

      A study published in the new England Journal of Medicine found that:

      Among patients who had recovered from Covid-19, the receipt of at least one dose of the BNT162b2 vaccine was associated with a significantly lower risk of recurrent infection.

      So, yeah, just because you had COVID doesn’t mean you don’t need the jab.

      What does this mean for you?

      Get vaccinated. 

Feb
16

Quick hits…

Posted by Joe Paduda on Wednesday, February 16th, 2022 | Comments

I’ve done a few podcasts recently, and find them to be a lot of fun. Yvonne and Rafael hosted me in a kick off the second season of their Deconstructing Comp pod…we dove into opioids, humility, making things real, testifying before Congress, physician dispensing, blogging and grandkids.

CWCI’s annual meeting is DIFFERENT this year.

The fine folks at CWCI recognize that many members and other usual attendees are still under travel restrictions and may have personal and/or public health concerns. To accommodate as many people as possible, this year there will be both live (3/8) and virtual (3/10) conferences.  Register for both the live and virtual meetings here:  https://www.cwci.org/conferences.html; the virtual meeting will combine recordings of the live sessions with a live Q&A.

There’s a lot on the agenda related to legislative targets including access to care/MPNs, presumptions, med/legal & QMEs as well as the usual claims monitoring report (COVID/Non-COVID claim dynamics, utilization, pharmacy).

Michael Marks, a most insightful attorney will tie together the theme (“Are We There Yet”) with a comparison of the original grand bargain to our current state.

Not to be outdone, NCCI’s out with their latest economic briefing; highlights include:

  • Unemployment rates at or below 4% in December and January indicate that the US economy is nearing full employment.
  • Job losses are now concentrated in just two major sectors: Leisure and Hospitality, and Education and Health Services. (With family members in healthcare, I know first hand why so many are quitting)
  • January’s employment numbers showed no effects of the Omicron surge…deferred jobs hit in February is unlikely.

The Conference Board forecast that the US economy will grow by 2.6 percent (year-over-year) in 2022. I’m no economist (yippee!) but I’m betting we’ll see significantly higher growth – which will positively effect employment, wages, and thus workers’ comp and group health premium growth.

What does this mean for you?

Things are getting better. 

Feb
14

Hospital CEO pay ≠ Outcomes

Posted by Joe Paduda on Monday, February 14th, 2022 | Comments

An excellent piece by Merrill Goozner highlighted – among other things – the disconnect between not-for-profit hospital CEO pay and their hospital’s ability to control costs. 

Merrill cited the Lown Institute’s analysis of hospital performance, DEI results, outcomes, cost and pay equity

Since 1996, hospital costs have risen about 2 1/2 times faster than overall inflation…

Why?

Quoting Merrill..

You’d think the boards of trustees at the nation’s non-profit hospitals, which account for 80% of all staffed beds in this country, would be up in arms over top management’s inability to keep prices and thereby patient costs under control. At the least, they might want to incentivize their chief executive officers and other C-suite staff to take cost control seriously.

Nope.

up to 40% of a CEO’s bonus depended on measures that directly affect hospital finances.

Not for profit hospitals are a BIG part our healthcare problem; most don’t care about rising healthcare costs, and they don’t tightly link CEO compensation to clinical outcomes.

Now I know why I had to pay $355 for ear wax removal.

What does this mean for you?

Hospital leaders’ and their boards’ priorities are not ours. 

Subscribe to Merrill’s posts here.

Feb
10

Wait…what??

Posted by Joe Paduda on Thursday, February 10th, 2022 | Comments

Science denial – or perhaps a total absence of common sense – is nothing new – if anything it has gotten more pervasive of late.

Here are a few examples of willful ignorance guaranteed to make you smack your head (I hope…)

This from Scott Galloway…

I

Here’s the map they use…

Belief in Evolution

Belief in creationism

This is NOT a Right vs left, Liberal or Conservative issue.

an almost-comprehensive view of the many, many examples of nonsense…

What does this mean for you?

Joe Paduda is the principal of Health Strategy Associates

SUBSCRIBE BY EMAIL

SEARCH THIS SITE

SEARCH THIS SITE

Health Wonk Review Archives

CATEGORIES

Categories

ESSENTIAL
BLOG READS

A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

OTHER BLOGS
I LIKE

BLOGS TO WATCH

INDUSTRY NEWS

INDUSTRY ORGANIZATIONS

 

DISCLAIMER

© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.

ARCHIVES

Archives

HEALTH STRATEGY ASSOCIATES

About Joe Paduda
Engagements
Strategic Planning
Operational Improvements
Sales Improvements
Investor Guidance