Insight, analysis & opinion from Joe Paduda

Apr
26

There’s a LOT of good news today

The House finally approved a massive aid bill for Ukraine – and the aid is already flowing – hallelujah.

Several encouraging takeaways…

  • It was bipartisan, with strong support from both parties (who’da thought??)
  • It passed despite strong opposition from the Republican Presidential candidate
  • It includes long-range missiles that Ukraine can use to demolish Russian air defenses, oil infrastructure, shipping, bridges and railroads

Long range ATACMS

Here’s why this is so incredibly important…

Health insurance coverage

is benefiting more Americans than ever, thanks to expansion of the Affordable Care Act. Another major driver is the increase in insurance subsidies for lower-income folks.

This means more moms and dads, kids, and families have access to health care.

The addition of dental care is the cherry on top; new regs allow states to add that coverage.

Work comp

WCRI’s just released in-depth analyses in its CompScope series…this year they’ve added details on COVID’s impact in 17 states.

Work comp rates for employers continue to dropIVANS reported a drop of 0.9% for the first quarter of this year. (Hat tip to R&I for the news)

California is slamming work comp fraudsters, (sub req) with the latest conviction resulting in a 54+ year prison sentence for a scheming fraudster. The Golden State’s been ramping up its prosecution of these dirtbags...here’s hoping these massive penalties discourage others from stealing from employers and taxpayers. Kudos to WorkCompCentral for a comprehensive update on recent convictions.

What does this mean for you?

A safer America comes from a diminished Russia.

More insured Americans = healthier families.

More crooks in jail = hopefully less future fraud.


Apr
23

Dumbest law/regulation of the month – A tie!

Congratulations to Florida and Texas for passing new laws barring local governments from protecting workers from heat-related injuries!

This at a time when global warming is leading to record heat waves with temperatures hitting – and staying at – record highs for days on end.

Last week WorkCompCentral informed us that Florida is about to join Texas in prohibiting local governments from instituting heat protections from workers. This from a state with record high temperatures last summer…

Florida’s move is especially egregious; Florida does not have its own occupational health regulations but relies on OSHA and Federal regulations. But, the Feds continue to drag their feet on national protections for workers exposed to excessive heat…so the new law effectively prohibits ANY protections from heat-related injuries. 

Politicians in Florida and Texas are doing their best to kill more workers. That is NOT hyperbole…and is especially hypocritical because Florida passed legislation protecting student athletes from heat.

credit WaPo

But hey, in the air-conditioned offices in Tallahassee, with the brocade curtains drawn, one doesn’t see the workers outside the windows mowing lawns and doing landscaping.

Colorado, Oregon, and Washington have rules for outdoor workers.

Minnesota and Oregon also have indoor heat standards.

A committee in California’s State Senate passed a bill doing just that two weeks ago; hopefully that bill will be signed into law.

What does this mean for you?

More deaths, more heat injuries, higher premiums, and more devastated families.

Here’s hoping the industry’s “thought leaders” weigh in on this travesty. 


Apr
19

Good news Friday…Springsteen.

Bruce Springsteen and the E Street Band have long been a favorite…last night I got to see them perform – and wow did they perform – at the JMA Dome in Syracuse.

The energy this 74 year old rocker has is amazing…of the 17 musicians on the stage, he was the only one that never took a break. Bruce is going through what a lot of us are – confronting mortality, watching friends pass, grieving and trying to push through….and in his music shares both his pain while treasuring the memories.

Oh, and there’s a shipload of flat out great rock & roll, incredible interactions with the audience (gave his harmonica to a 10 year old who was playing along with him), and Nils Lofgren on guitar is phenomenal – as is Little Stevie..

If you ever get the chance, you gotta see Bruce and the Band…here’s the tour info.

What does this mean for you?

Bring joy to your life.


Apr
12

Good news Friday – protecting workers and an improving economy

Lots of good stuff to start your weekend…

First a California Senate Committee passed a bill to protect workers from heat-related injuries. SB1299 establishes a presumption that:

a heat-related injury that develops within a specified timeframe after working outdoors for an employer in the agriculture industry that fails to comply with heat illness prevention standards, as defined, arose out of and came in the course of employment.

Kudos to the Committee – this type of legislation is sorely needed – and should be promoted enthusiastically by anyone and everyone concerned about protecting workers.

And shame on the California Chamber of Commerce and APCA for their objections. The bill is clearly intended to encourage employers to comply with existing heat-related standards…yet these opponents are quibbling over minor definitional issues when they should be pushing their members hard to do the right thing.

More details on heat injuries here.

Hat tip to Workcompcentral.

Inflation – or not.

Wholesale prices edged up 2/10ths of a percent last month, significantly less than expected.

Reminder – retail price increases are closely related to increasing corporate profits. It is very clear indeed that big food is a major driver of consumer inflation.

Employment

Filings for unemployment benefits were also lower than expected, yet more evidence of a very solid jobs market.

 

 


Apr
10

What’s driving inflation?

There’s increasing evidence that higher corporate profits are driving inflation.

From the Hill:

Adjusted profits after taxes hit a record high of $2.8 trillion, beating the record of $2.7 trillion in the third quarter of 2022. Profits increased 3.9 percent on the quarter, above expectations of around 3.3 percent. [emphasis added]

This news preceded today’s announcement that inflation ticked up 0.4% in March, a number higher than expected. Annualized the rate is 3.5%, higher than wanted but much lower than this time last year.

Consumer goods prices have gone up much more than other goods and services, with prices for packaged foods and drinks noticeably higher.

So…corporate profits AND consumable prices are increasing, with both higher than expected.

The good news is wages are still trending higher than inflation, despite the profiteering of big corporations. 

What does this mean for you?

Wages are up – which means consumers are holding their own, but increases will affect WC premiums and indemnity expenses.

 

 

 


Apr
9

Consolidation among health systems and hospitals continues apace, and with it comes higher costs, more utilization, and longer disability durations.  Get the details from WCRI’s much-watch webinar on the impact of vertical provider integration on prices, medical utilization and outcomes.

It’s on Thursday May 2 at 2 pm eastern.

You can access the written report (free for members) here.

Another major factor that will greatly affect a state’s health, outcomes and costs is Medicaid expansion. A thorough yet simple discussion of implications of one state’s refusal to expand Medicaid is here.

The benefits of Medicaid expansion are broad, deep, and impactful.

Among the findings

  • A 2020 national study found that expansion was associated with a significant 3.6% decrease in all-cause mortality,
  • Two studies found significant declines in maternal mortality
  • expansion is associated with improvements in access to care and outcomes related to substance use disorder (SUD) as well as other mental health care.
  • hospitals in non-metropolitan areas and small hospitals experienced improved profit margins
  • Analyses find effects of expansion on numerous economic outcomes, including state budget savings, revenue gains, and overall economic growth
  • rural hospitals experienced particularly substantial improvements in financial performance following expansion

KFF on Texas’ uninsured population [note Texas is just one of 10 states yet to expand Medicaid]…

(a) significant proportion of adults in the coverage gap are employed unless they are elderly or disabled. The most common jobs among adults in the coverage gap are construction laborer, cashier, cook, waiter, house cleaner, retail salesperson, and janitor. These workers usually do not have access to employer-based health insurance and cannot afford plans on the federal insurance exchange. [emphasis added]

Crossover

Most of the non-expansion states:

  • have major problems with rural hospital cutbacks and closures
  • have significantly worse health outcomes
  • have healthcare access challenges

What does this mean for you?

Pay attention to the real drivers of healthcare outcomes and costs – they have more impact on duration and ultimate costs than anything else.

 


Apr
5

Another April snowstorm here in New Hampshire…weather is getting weirder by the week.

Not to worry  – we are keeping the just-arrived birds well fed!

Jobs…

WOW. This just in from BLS

Total nonfarm payroll employment rose by 303,000 in March, and the unemployment rate changed
little at 3.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred 
in health care, government, and construction.
March's growth was significantly higher than the average monthly
gain of 231,000 over the prior 12 months.

Payroll company ADP predicted booming private sector job growth with an estimated 184,000 new jobs created last month – a big jump over the forecasted growth of 148,000 jobs.

Construction, financial services, and manufacturing sectors saw significant job growth.

Women’s NCAA tournament

Is breaking every record in sight…ticket prices for the semis are more than twice that for the men’s, viewership is off the charts, and everyone with a pulse knows who Caitlin Clark is.

Gotta love the increasing exposure for women’s sports – this will have incalculable impact on girls for generations to come.

Medicare – is NOT about to go bankrupt.

It is highly likely Medicare funding will be more than sufficient to its pay bills for decades to come. Merril Goozner provides a summary of funding’s vagaries, concluding government policy changes and economic ups and downs bounce around, but nonetheless the Trust Fund survives.

Junk fees..

Cost Americans billions as big finance companies hoover dollars out of our pockets.

Good news – efforts to drastically reduce credit card payment late fees got a big boost when a financial industry challenge to those limits was moved to a court much more likely to protect consumers.

Medicare drug prices

About 60 million folks are covered by Medicare – including your author.

Government action is helping reduce drug costs…the cost of insulin for diabetics on Medicare is limited to $35 per month, a huge drop…

From PBS…

The three major manufacturers we’re talking about, Sanofi, Novo Nordisk, and Eli Lilly, who cap their co-pays at $35, make up more than 90 percent of the insulin market. And the Medicare provisions in the Inflation Reduction Act mean that now about 1.7 million Medicare beneficiaries stand to benefit from that $35 monthly co-pay cap on their insulin. [emphasis added]

But wait…there’s more!

  • prescription costs of certain drugs for Medicare recipients is going to be capped at $3,300 annually.
  • In September the new list prices of 10 major drugs are going to be made public. That was made possible by the Inflation Reduction Act’s provision allowing Medicare to negotiate drug prices with manufacturers. Those prices go into effect in 2026
  • The annual cap on prescription costs will drop to $2,000.

The net – Medicare recipients will save big bucks.

 


Apr
3

For those I caught with my April Fool’s post…I hope you took it in the spirit in which it was intended…

Okay, back to reality (oh no….)

Hospital closures and cutbacks

Another hospital in a non-Medicaid expansion state is closing its ER and shuttering its inpatient care facility. The facility was acquired by a competitor a mile away a few years back…if this goes like most acquisitions folks around Anniston Alabama will likely have poorer outcomes and pay higher prices…

Ignore the corporate happy speak from the owners…this is the same stuff every exec that buys a rival hospital says.

Oh, and here’s research showing the link between Medicaid expansion and hospital closures.

Consolidators are doing just fine…the CEO of CHS just “earned” $8.3 million in pay and perks.

Obamacare…aka the ACA.

Remember way back when folks got all worked up about the ACA, how it was going to kill off old folks, destroy the “best healthcare system in the world”, cost millions of jobs and bankrupt thousands of small employers…and lots of people hated it?

News flash – Americans like it.  A lot.

That’s because:

  • Pre-existing conditions are covered.
  • Kids can be covered under the parent(s)’ insurance till they are 26.
  • 45 million Americans get insurance thru Obamacare and/or benefit from its provisions.
  • Provisions ensure adequate benefits for mental health, emergency care, maternity and child care and seven other key healthcare needs.
  • People who actually had Obamacare plans realized it saved lives.

Oh, and since people with health insurance are healthier than those without, if they’re hurt on the job, they recover faster and employers don’t have to pay to treat co-morbidities. 

We’re going to dive deep into the ACA in a coming week…stay tuned for more facts.

Change Healthcare cyber attack

It isn’t over. Owner United Healthcare recently stated patient data had been stolen by hackers.

This is a much bigger story – with much wider implications – than many think.

What does this mean for you?

More stuff affects you and your business than you may think. 


Apr
1

“AI-djusters” are becoming a reality.

It’s happening sooner than expected…a new entrant into the workers’ comp insurance business (following other P&C lines by companies including Omnius) is pursuing regulatory approval for and licensure of an “AIdjuster”.

Notably this goes far beyond current thinking, described in a recent Risk and Insurance piece as:

By reducing administrative workloads, AI can give claims adjusters more time to spend with injured workers.

This is replacing adjusters with technology, technology that will:

  • interact (both verbally and electronically) with providers, injured workers, and employers;
  • constantly evaluate those interactions to identify red flags or barriers to progress;
  • better estimate future costs, duration, reserves, and return to functionality;
  • leverage provider data to identify potential abuse or overuse;
  • constantly update the worker’s profile and compare it to job requirements (from past job to transitional jobs to potential new employment)

There’s a raft of complications with one of the most obvious being state requirements for human licensure. I spoke with the company’s Chief Claims Officer, Aprille Pfuehle PhD. Dr Pfuehle noted:

There’s a raft of complications with one of the most obvious being state requirements for human licensure. This can easily be addressed by having a human adjuster “oversee” the AIdjuster’s work…We are also working on logic to insert a human adjuster into claims issues based on our algorithm’s determination that a human intervention is optimal…

While it seems pretty sudden, reality is many industry stakeholders have been working towards this for some time.

But…Color me skeptical...there is so much nuance to the job, experience is critical, human interaction essential, and empathy critical…that and AI is still awfully new, risky, and more than a bit weird.

Yet…the factors driving the “AIdjuster” may outweigh those needs. When I asked how they were expecting widespread adoption, Dr. Pfuehle seemed quite confident, alluding to the staffing challenges facing insurers and TPAs;

  • an aging workforce;
  • lack of training;
  • a talent war accelerating turnover;
  • lots of other opportunities for potential new hires;
  • a difficult, trying, and sometimes quite frustrating work environment; and
  • increasing labor costs while premiums are shrinking.

Pfuehle also opined that the P&C industry’s chronic under-investment in IT all-but ensured their venture would succeed, stating:

They just don’t have the financial or talent resources to do what has to be done (building AI capabilities)…our solution eliminates the need for massive investment with an uncertain result, while allowing insurers to greatly improve their financials by eliminating much of their administrative costs...

The implications are broad indeed; In conversations with claim execs,  the adjuster shortage is one of the factors driving insurers to outsource claims to TPAs…lack of training is another major obstacle, rising labor costs yet another and both contribute to a lack of consistency in claims handling.

That and WC profits are desperately needed to fund losses in most other lines...and thus can’t be invested in tech.

What does this mean for you?

What’s fantasy today is reality tomorrow.


Mar
29

Good news…Friday!

First, it’s…Friday – reason enough to celebrate!

Second, the baseball season opened this week…although my beloved White Sox lost to Detroit, the Sox had very good pitching and defense. Yeah, they won’t be good this year but at least they’ll catch the ball…

Third, women’s NCAA hoops has been really fun. Watching Caitlin Clark – wow. That plus how much she inspires girls is making for the best championship in forever.

Fourth, the US economy is doing very well, with new data showing production increased more last month than previously reported, AND

business and household income jumped almost 5% in the last quarter of 2023 while core inflation dropped…

From Barron’s

Finally, in another win for consumers the Biden Administration’s effort to force a cap of $8 on late fees for credit card payments is making progress. That would be a big help for those who miss a deadline…the AVERAGE late fee is $30.

From Accountable USA

CFPB identified late fees as “the most significant fee assessed to cardholders in both dollar amount and frequency” and a major contributor to the more than $1 trillion in outstanding credit card debt in 2022.

What does this mean for you?

Things are getting better. Well, not including the White Sox’ chances of a winning season…


Joe Paduda is the principal of Health Strategy Associates

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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.

 

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