HWR – The double edition

You get more for your money this fortnight!

The Senate Republicans’ release of their repeal-and-replace bill – plus our usual plethora of wisdom from health care experts, gives you a double-value today – the first in the history of HealthWonkReview!

Part One – Repeal-and-Replace

Let’s be real – Republican Senators’ bill is NOT an ACA replacement, rather it is best understood as a major reduction in Medicaid. For some, that’s all to the good; for others, not so much.

Here’s what you need to know.

(note I looked for other blog posts supporting the Senate bill – if you read any good ones please send them to me)

From Forbes, Avik Roy says

“the Senate bill will have far-reaching effects on American health care: for the better….if you simply kept [some tax credits from the House bill] in force, and tossed overboard the Paul Ryan flat tax credit, you’d solve all of these problems with the House bill. By making that change, the near-elderly working poor would be able to afford coverage, and the poverty trap would be eliminated. [emphasis added]

I wholeheartedly disagree with Roy’s premise. logic, and selective use of data to support his contention. He just doesn’t understand healthcare and the delivery thereof. His contention that eliminating coverage for 20 million Americans is “for the better” is patently absurd.

Andrew Sprung at xpostfactoid cut to the chase – his takeaway is the bill trades Medicaid coverage for high deductible private market coverage.  Andrew quotes Louisiana Republican Senator Cassidy…but notes Cassidy’s sentiment is misleading at best.

Right now, [low income people] might have a $6,000 deductible, which for someone who makes 150 percent of the federal poverty line might as well be $6 million. 


It’s true, as Cassidy avers, that an enrollee with an income of 150% FPL [federal poverty level] might have a $6,000 deductible, but most don’t…In any case, “most of those 20 million” who newly gained coverage did so through the Medicaid expansion and have zero deductible.

Ezra Klein made a similar point even more economically at Vox – “The Senate GOP health bill in one sentence: poor people pay more for worse insurance.”

Margot Sanger-Katz’ New York Times piece entitled G.O.P. Health Plan Is Really a Rollback of Medicaid reminds us of Kaiser Family Foundation reporting that Medicaid covers :

  • 20% of all Americans
  • almost half of all births, and
  • two-thirds of nursing home residents.

David Williams pushes things a bit further with his post, asking if we should consider Medicaid for all. David uses Nevada as a “template” for his assessment of the potential that  when – my words not his – the GOP destroys ACA – there will be an open revolt and we’ll end up with single payer – using Medicaid. 

Compelling case…

Timothy Jost and Sara Rosenbaum on Health Affairs Blog give us “Unpacking The Senate’s Take On ACA Repeal And Replace“; here are a few key quotes…

  • the Senate bill…entirely strikes the House bill and adopts a new bill with a new title.
  • the Senate bill is focused on changes to the Medicaid program.
  • parts of the Senate draft will be challenged under the Byrd rule. (they violate rules allowing passage without 60 votes)
  • the Senate bill would replace the House’s age-based premium tax credits (APTC) with tax credits based on age, income, and the actual cost of health insurance in particular markets.

Wrapping up our Medicaid – ACA – BCRA discussion, AHCA’s unkindest cuts is from healthinsurance.org; The premise:

The attention various AHCA provisions get is inversely proportionate to the damage they’ll do. and that the bill — and its likely Senate counterpart — should properly be called the Medicaid Dismemberment Act.

Nate Silver opines on the likelihood of BCRA’s passage – his considered opinion is: 

I’d guard both against interpretation that the bill will necessarily pass the Senate because it passed the House. At the same time, Ryan and House Republicans overcame some of the same obstacles — and if that precedent isn’t dispositive, it’s at least highly relevant.

Part Two –

UPDATE – apologies to Hank Stern, who contributed a post about the Defense Base Act, and a contractor’s…challenges when encountering the Act…DBA is kinda like workers comp without the unlimited benefits…

Healthcare in the occupational arena is often the  forgotten red-headed stepchild of the healthcare world, yet it is a significant issue for both the workers who sustain what can be life altering workplace injuries and employers who bear the full cost burden for medical care and wage replacement. At Workers’ Comp Insider, Tom Lynch offers a primer of best practices in his Eight Steps To Controlling Workers’ Compensation Costs part 1, part 2 and part 3.

Roy Poses provided a different perspective on health care, asking why people with no healthcare background are running health care delivery organizations.  

from Roy’s post…

I believe that managerialism in a health care context (leadership of health care organizations by people with only management training, and without any knowledge, understanding or experience in health care, based only on management dogma) is one of the major causes of health care dysfunction. Here is a great example of a managerialist hospital CEO who also seemed to demonstrate the Dunning-Kruger effect, that people who lack ability are likely unaware of this lack…To belabor the obvious, true health care reform requires health care leadership that understands health care and upholds its professional values.

An interesting post to juxtapose comes fromJason Shafrin, who asks “Does more spending improve outcomes?” 

number of studies have claimed that increasing health expenditures may result in no better, or even worse patient outcomes.  The Healthcare Economist revisits the topic looking at the case of neonatal ward spending and patient outcomes in the UK.

Are the exchanges failing? well, depends on who you ask…

Louise Norris has become one of the nation’s leading experts on ACA and exchange matters; she tells us Nevada has a unique approach to their MCO contracts, and the result is that all of their current exchange insurers filed plans for 2018, and two new insurers have also filed QHPs to be sold on the exchange in the fall.

Health Access California’s reports that while Congress considers cuts and caps to Medicaid, California is showing a stark contrast in investing in this core health care program, restoring benefits like dental and vision, and using tobacco tax money to increase provider rates.

CMS Meaningful Use Payments to Providers: Incentives or Sophie’s Choice?is what I love about HWR; really smart, intelligent, deep thinking about what really drives healthcare.

For healthcare providers who are caught in the Meaningful Use regulatory net by participating in the program, they were given a choice between installing an electronic health record system, attesting to meeting a list of nearly-impossible targets to get reimbursement for their multi-million dollar investments, or choosing not to participate which resulted in losing participation in government-funded programs and incentives. Most providers bit. They had no choice. And when it came time to collect the Meaningful Use incentive dollars, they attested to meeting at least the minimum requirements. Now, the government has bitten back asking for repayments of $729 million.

This is Neil Versel’s obituary of Larry Weed, who invented the problem-oriented medical record and the SOAP note, and had been advocating for the computerization of medicine and the inclusion of patients for at least 60 years. One of the leading change agents in healthcare, and one we would do well to think about as we try to drive change

Adam Fein’s entry focuses on the wonders of charity care, and providers thereof.  I did not know that “Pharmaceutical Manufacturers Operate the Biggest U.S. Charities…”

Dr Fein’s post says in part:

growth [of Patient Assistance Programs] is linked to pharmacy benefit designs that shift prescription costs to patients. Many insured patients face economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses. The programs are an imperfect, but necessary, fix to our imperfect drug channel system.

Finally, I wondered why the Senate Republicans were so secretive about their healthcare bill, and now we know.

From HealthAffairs blog, a trenchant piece reflecting on the ways the AHCA would harm efforts to address the opioid crisis includes this

Because of the ACA, an estimated 26 million people have health coverage through the marketplaces or Medicaid that includes substance use disorder (SUD) treatment and prevention…Repealing the ACA will remove coverage for SUD treatment and prevention from millions of Americans, leaving a gap in care when it is most needed.


Thanks for reading, and hope your weekend is splendiferous!

The Senate version of AHCA – What to watch for

Senate Republicans are set to release their revised American Health Care Act today – here’s what we know about their version, and what to watch for.

An excellent summary is here.

Medicaid – the biggest, most significant, and most important changes are to Medicaid.

74 million Americans are covered by Medicaid, and about 2/3rds of Medicaid funds go to elderly and disabled Americans.  Reportedly the Senate bill will:

  • eliminate Medicaid expansion funds over several years, and
  • significantly reduce future federal funding for Medicaid

As a result, more than 14 million low-income, disabled, and elderly Americans will lose coverage for nursing home care, rehabilitation, and all other healthcare services.

Individual and employer mandate

The mandate would be effectively repealed by eliminating enforcement. Today individuals and employers with more than 50 FTEs have to provide coverage or pay a penalty. Note – there has never been a requirement that employers with fewer than 50 workers provide insurance.

Insurance subsidies for lower-income Americans

The Senate version reportedly has preserved some of the current income-based subsidy provisions, unlike the House bill.

Pre-existing condition coverage

Cloudy would best describe what we know about the Senate bill’s approach to ensuring people with pre-existing conditions are covered. There just aren’t enough details, however even if pre-ex conditions must be covered, it appears insurers will be able to charge much higher premiums for those with pre-ex conditions, and/or exclude treatment for those conditions from their insurance policies.


There are mandatory benefits in ACA; these would be eliminated in the Senate version, so your insurance plan might not cover mental/behavioral health and addiction coverage, and/or coverage for different types of care such as physical therapy or hospital services. While this provision would likely reduce premiums, it reduces coverage as well.

Tax changes and the federal deficit

All ACA-related tax increases are repealed with the exception of the Cadillac tax on high-value insurance plan, a change that will substantially increase the federal deficit.

Unforeseen implications – job loss

There’s been far too little coverage of one of the most important impacts of AHCA – the loss of close to a million jobs if this is signed into law. While employment would increase over the very-near term, over the next few years it will drop as fewer people have insurance and thus can’t get care.

What does this mean for you?

Millions of Americans will lose their health insurance, smaller hospitals will close, and cost shifting will explode as providers try to stay in business.

I don’t see the bill – in it’s current form – passing. But we are close to ACA’s death than we were a few weeks ago.

Why are Senate Republicans hiding their health care bill?

OK, let’s set aside the partisanship to objectively consider that question.

Senate Republicans are writing a bill in secret that would:

  • change one-sixth of our economy,
  • cause at least 20 million Americans to lose health insurance,
  • eliminate thousands of jobs in healthcare, and 
  • significantly change the insurance many of the rest of us have.

Many Republican Senators have yet to see the bill. HHS Secretary Tom Price has not seen the bill. The President has not seen the bill. The Wall Street Journal is upset with the process. The Conservative Review reports Orrin Hatch (UT), the second-highest ranking Republican Senator hasn’t seen the bill.

Senate Majority Leader McConnell has crafted a process to repeal-and-replace ACA that:

  • eliminates Senate requirements for debate,
  • doesn’t allow members of his own party or any Senate committee to review the bill before it hits the floor, and
  • avoids an accurate assessment by the Congressional Budget Office.

When ACA was passed back in 2009, there was:

  • 25 days of open public debate on the floor of the Senate
  • 13 days of open committee hearings
  • consideration of hundreds of amendments
  • months of meetings of the Gang of Six – three Republican and three Democratic Senators

Then-Minority Leader McConnell had this to say about ACA’s passage in 2009:

“This massive piece of legislation that seeks to restructure one-sixth of our economy is being written behind closed doors, without input from anyone, in an effort to jam it past not only the Senate but the American people…”

What does this mean for you?

Are you OK with this?

Concentra’s telemedicine move – part 2

Here’s the rest of my interview with Keith Newton, Concentra CEO.  Part 1 is here.

MCM – How has the market reacted to the launch of telemedicine?

Newton – Early adopters are coming on board; like other new services in work comp, everyone wants it then there’s a bit of a lag after initial launch [as the more cautious wait to see what happens]. Most of big players – TPAs and insurers – are [looking at or considering] coming on board. It is much easier to adopt [internet-based medical “visits”] if it is as familiar as possible to all users. Adoption will be faster if there’s less disruption to the normal medical process.

MCM – How will Concentra charge for this service?

Newton – There will be no change to reimbursement, it is based on normal fees for office visits. Payers will see savings in efficiency and time savings for employer. [There may be] Other savings from lower ancillary costs from lower utilization.

MCM – Talk about licensure and regulatory compliance. There’s a lot of movement towards telemedicine in many states, and it seems a lot of confusion about what is allowed, what entity regulates TM, fees, etc.

Newton – There have been some licensure and certification challenges, we have 5 coordinators doing intake for 4 full-time MDs dedicated to this to begin; 2 in CA, 1 in MD, 1 in NV. One example is we have a Maryland physician driving to one of our Washington DC centers to do their Telemedicine work from there…[we’ve done] lots of regulatory compliance work.

State regulations aren’t keeping up with changes in telemedicine. We evaluated this on a state by state basis, every legislative branch has something going on with telemedicine.

MCM – Is this partially a defensive strategy to protect Concentra’s occ medicine business?

Newton – We’ve got to protect our turf a little bit…there could be some cannibalization of own practice, but ultimately we know 1 of 8 workers will access a Concentra practice for injury care – and telemedicine will enable us to add more of those visits without bricks and mortars expansion and the expense of that.

Our goal by the end of the year is 320+ centers and 100 dedicated worksites.

What does this mean for you?

I expect telemedicine is going to be the next big thing – and unlike a lot of the other fads we’ve seen in comp, it will have a major disruptive effect.




Concentra’s major move into telemedicine

The largest occupational medicine company in the nation is jumping into telemedicine.

CEO Keith Newton and I spoke last week about Concentra’s rollout of its telemedicine program, following up on our in-depth discussion a month ago about the company’s plans and strategy.

The first patient interactions began a couple weeks ago with a limited rollout, and so far, patient reaction has been quite positive.  According to Newton, one of the first patients said “I love it so much I’m going to tell all my coworkers about it”.

Concentra is employing third-party technology vendor American Well’s web application to allow patients to “visit” Concentra’s physicians via the internet.

Here’s part one of our conversation.

MCM – What is Concentra’s approach to telemedicine today?

Newton – Our initial approach is to use telemedicine for [some] injury care and follow up rechecks with existing patients.  We have identified specific types of cases where [we will employ] telemedicine initially. Patients will be triaged 24/7 to an injury coordinator, then to an MD for secondary triage, then care [if appropriate via telemedicine]. We are also going to do PT and specialist care. There are a number of considerations including onsite staffing, load balancing, and reducing patient wait times. 20% or so of patients could be seen via telemedicine…California is our first state, we are initially doing visits from 7am – 11 pm; we’ll will add longer hours and multiple states over time.

MCM – Describe the technology you are using.

Newton -We met with 10-15 technology companies working in telemedicine to learn as much as possible. We are using American Well for the connection only, all back-end applications are internal Concentra applications so we access their technology…it is not an integration but using their tech for the “visit” and using Concentra’s Allscripts and Occusource internal applications for documentation [and other functions].

MCM – How are telemedicine interactions different from office visits?

Newton – You need the right intake coordinators and physicians. In a bricks and mortar setting [normal live office visit] there is lots of activity going on in the clinic. When you are on video it is just you and the patient, the doctors have to engage and show focus on the patient, connect with them one-on-one, maintain eye contact.That puts the patient at ease. This may make for better and stronger patient – physician relations and connections via telemedicine. It could also make in-person visits more productive and satisfying for patients and providers as they adopt that behavior for live encounters as well.


MCM – Tell me about the process Concentra used to prepare to see patients via telemedicine.

Newton – Internally we did about a hundred “mock visits” to make it as seamless as possible to make sure patient experience was made as successful as possible. [We] used internal staff as testers to provide feedback, improve the process and service. There will be continuing evolution; there are new tools arriving every day, some of which may be useful for incorporation into the telemedicine process. Things will look different in a few months – for now, we are looking to make it as simple as possible for any stakeholder – the payer employer or patient.

Tomorrow we’ll get into more details…

What does this mean for you?

Telemedicine is going to be highly disruptive to care delivery models, and has broad implications for all stakeholders. 


Acquisitions in Work Comp – what’s (not) happening today and why

After a seemingly-unending flood of deals that stretched for several years, mergers and acquisition activity in the work comp services sector slowed a lot last year.

There was a brief flurry of activity after the election, a flurry that – with some exceptions – seems to have come to an end.

What’s going on?

Several things.

First, the workers’ comp industry is mature; service sectors have consolidated and there just isn’t a lot of “organic” growth – growth driven by an expanding industry. Software, artificial intelligence, drones – these are rapidly growing industries, where investors see opportunities for investments to generate huge returns.

That’s not to say there aren’t work comp companies growing by taking share from competitors, acquiring other companies, and expanding their service lines. Genex is one example; the company is buying up competitors and diversifying within a fairly narrow service sector.

Second, there are far fewer companies to acquire.  One example is the PBM (pharmacy benefit management) industry has really consolidated of late, with Optum and Express Scripts now the dominant companies in what used to be a highly fragmented industry. 13 years ago when CompPharma started there were perhaps a dozen PBMs with appreciable market share. Today, there are less than half that number.

The same has happened in bill review, utilization review, specialty services, and every other sector.

External factors not directly related to workers’ comp are also at work; perhaps none more important than the mindset of powerful people.

While CEOs are enthusiastic about potential business growth, their Boards are much more cautious.  Overall, US M&A activity came to a screeching halt after the election, dropping 40% since the peak in 2013. This is significant because corporate boards are populated by investors, bankers, former CEOs, and other luminaries tasked with the long-term success of their company, not short term headline-grabbing deals.

There are a couple of recent transactions in our space that make a lot of sense – PBM Express Scripts’ purchase of myMatrixx is one example. MItchell has been buying up smaller PBMs and other companies as it continues to pursue a sale of the company.  And investors are continuing to look for potential acquisitions; I hear from private equity firms looking for the next breakout service provider pretty much every week.

Countering the caution are a couple drivers that may not be as apparent to the casual observer.

There is a shipload of private equity money looking for deals, and PE firms need to use that money to buy companies. European funds are at an eight-year high and we aren’t far behind on this side of the pond.

Interest rates are still low; while they’ve trended up of late, compared to historical averages money is still cheap.

What’s the net?

Expect smaller deals to keep happening, but there’s much less enthusiasm for the mega-deals in workers’ comp services.

A return to the dark ages?

No OSHA administrator.

Rollback of regulations on exposure limits for beryllium and silica.

Eliminating the Chemical Safety Board.

These are just three examples of the Trump Administration’s apparent move to de-emphasize worker safety, and appear to be a harbinger of things to come. There’s no question the current regime is focused on business’ interests; what’s troubling is there appears to be no recognition that worker safety IS good business.

As a frequent and scathing critic of some of ProPublica’s past mis-reporting on workers’ comp, I do have to acknowledge they have done good work reporting on individual companies abusing workers, particularly undocumented immigrants. However, the ProPublicas of the world have been mostly silent on these alarming changes at the Federal level. These self-appointed watchdogs made hay two years ago using distortions and anecdote to pillory an entire industry; I would suggest that their reporting expertise would be well-employed if it focused on the potential long-term impact of the Trump Administration’s rollback in worker safety.

As a side note, WCRI’s just-published report on wage replacement for long term injured workers in Michigan brings some much-needed perspective to this key issue. If the feds are going to roll back safety enforcement, the burden is going to fall on individual states. That will require resources that many state legislators will be loathe to find in these days of tax revolts.

What does this mean for you?

Don’t buy cheap chicken.

The real fraud in workers’ comp

Is not the occasional worker cashing checks s/he shouldn’t, or bowling while fully disabled, or double dipping.  No, it’s:

  • employers going without insurance coverage so workers and taxpayers foot the bill,
  • providers scamming the system to make millions, and
  • a relative few applicant attorneys and their schemes to defraud employers and taxpayers.

Today’s WorkCompCentral has a terrific piece by Greg Jones highlighting this last scam. Jones has dug deep into “capping”, a California scheme to recruit allegedly injured workers for attorneys and their physician “partners”.  These fraudsters may have single-handedly generated hundreds of repetitive trauma cases in the LA County area…CWCI’s done masterful reporting on this issue, finding “a strong association between attorney involvement and regional variation in the Los Angeles Basin and the high cost of CT claims.”

Then there’s the incredibly creative providers that make millions from:

  • dispensing drugs to patients;
  • doing drug “tests” using their inhouse machines;
  • unholy alliances with compounding “pharmacies” or
  • compounding drugs in their own offices.

A new scam was also reported in this am’s WCC; a Florida doc (why is it always Florida and LA County?!) allegedly used telemedicine “visits” to prescribe compounds to work comp claimants.

These bad actors suck money out of taxpayers and employers and do NOTHING to help work comp patients.

Blood boiling yet? Well, it’s about to vaporize.

Bad as that is, the real fraud is employer misclassification and related schemes.

A seminal study indicates ten to twenty percent of employers misclassify workers as independent contractors.

As the gig economy expands, this is going to get worse – much worse. From the Economic Policy Institute:

  • Atlanta stagehands for concerts produced by Live Nation, a company listed on the New York Stock Exchange that has held shows for such artists as Maroon 5 and Billy Joel, have been misclassified as ICs by a staffing provider (Vail 2015; DePillis 2015).
  • An estimated one-third of construction workers in Southern states such as North Carolina and Texas have been misclassified (Ordonez and Locke 2014a). [emphasis added]
  • And roughly 20,000 employees of CrowdFlower Inc., a San Francisco–based startup that breaks down digital jobs such as data entry, are misclassified, alleges a case now moving through the courts (Weber and Silverman 2015)

This is particularly problematic in construction, but it isn’t limited to southern states. Payroll fraud cases have been reported in Massachusetts, Washington, and many other states.

Yet you wouldn’t know from the press – and press releases from insurers – that payroll fraud and other schemes are the real problem dwarfing the individual worker fraud problem.

That’s just too bad disappointing awful.

I’d encourage real journalists to concentrate a lot more on the real problem – employer fraud – and avoid the clickbait nickel-and-dime “fraud” allegedly perpetrated by individuals.

What does this mean for you?

Work comp insurers, the ones that are really screwing you are employers. Get with it.


Opioids are the largest killer of people under 50

62,000 moms, dads, kids, friends, uncles, aunts died from drug overdoses last year.

Thank you, opioid manufacturers.

Let’s be very clear – this would not be happening if the “legitimate” pill pushers hadn’t co-opted, bribed, lied, and sleazed, funded fake patient advocacy groups, paid hundreds of millions to lobbyists, all in the name of profit.

This is going to get a lot worse – and there is NO indication it’s going to get better.

Drug overdose deaths are skyrocketing in Maryland, Pennsylvania, Maine, and Florida. Researchers estimate Ohio’s death rate jumped by 25% last year.

The drugs users are taking are so powerful that Narcan – the “get out of jail free” injectable antidote – is becoming increasingly impotent. “E.M.S. crews are hitting them with 12, 13, 14 hits of Narcan with no effect,” said Mr. Burke, likening a shot of Narcan to “a squirt gun in a house fire.” (NYTimes)

More than two million of us are addicted, and over a quarter of us used prescription painkillers last year. That’s more than used tobacco.

States are suing opioid manufacturers in an attempt to recoup some of the billions of dollars this disaster is costing taxpayers, as well they should. But those efforts are happening at the same time the FDA is approving new “abuse deterrent” opioids.  FDA Commissioner Scott Gottlieb is focusing on opioids, which is a very good thing. And truth be told, today’s FDA has pretty limited ability to address the problem, in large part because drug manufacturers are going to make damn sure the FDA’s powers stay limited.

Over the last decade, opioid manufacturers spent close to a billion dollars on campaign contributions and lobbying against state laws limiting opioid prescribing. That’s eight times more than the NRA and the gun lobby.

Sounds like a lot of money, right?

Nope – according to Business Insider, in 2015 alone, Purdue, the manufacturer of Oxycontin, made $2.4 billion from opioid sales.

You may recall Oxycontin was marketed as “abuse deterrent”; Purdue told Business Insider last year “We support policies that align with the FDA and The White House’s view that opioids with abuse-deterrent properties are a public health priority.”

They are certainly a profit priority.

What does this mean for you?

You know someone who’s died, a family destroyed, lives ruined by opioids. There are more coming.





The ignorance of arrogance

“If we didn’t come up with the idea, it isn’t worth considering.”

“That can’t be a good idea, we didn’t think of it.”

“Why would we listen to anyone from outside our company; we’re the biggest/best/most experienced/industry leader.”

Those are just three of the statements I’ve heard from large work comp insurers over the last two decades – all  from insurers who’ve fallen far from their glory days of market dominance. They may seem ignorant, or dumb, or even kind of funny – but they were real.

Sitting comfortably in leather chairs behind their nice desks, the men who made these statements were completely secure in their belief that their company, their way of doing things, their mindset and culture were completely infallible.

How wrong they were. As easy as it is for us to see that now is how impossible it was for them to see reality then. 

The next five years are going to bring profound changes to workers’ compensation, changes which – by definition – will make many of today’s business practices obsolete. It isn’t hyperbole to say that unless you completely revamp the processes, systems, technology applications, and metrics you use today, you’re toast tomorrow.

We are seeing that with Liberty’s progressive de-emphasis of workers’ comp. With the increasing outsourcing of claims functions to TPAs. With the rapid growth of what were relatively small players just a few years ago.

And that’s just the beginning.

All these changes have been driven by lower work comp claims frequency – that’s not new news to anyone. But hidden behind this is another major driver – the continued inability of major insurers to understand the business they are in.

Work comp insurers are in the business of managing medical and disability. While many think that’s what they are doing, they aren’t. Their claims management approach, predicated on the disproven model of huge provider networks delivering discounted care and the medical model of disability, overseen by overworked and under-resourced claims adjusters reporting to executives steeped in claims who don’t understand medical issues at all, only seems to work as long as premiums stay high and frequency continues to decline.

Wrenching changes are coming to employment, job availability, workplace demographics, trade and safety nets, changes that the industry is completely unprepared for.

Not to worry; the powers-that-be will schedule meetings, draft memos, write white papers, and do re-org planning, most of which will be completely ineffective, except insofar as it makes the execs feel like they are doing something. They’ll get rid of managed care departments, expertise, programs because “those programs haven’t worked.”

Of course they haven’t, because they were either the wrong programs to start with (percentage of savings network models) or the execs didn’t force adoption of intelligent medical management on a recalcitrant claims culture.

I see this happening all around the industry, and it’s like watching Antarctica melt. By the time these worthies figure out it’s real, they’ll be floating towards the tropics on a rapidly-melting iceberg.

With no landfall in sight.