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Predictions for work comp in 2013 – how did I do?

It’s that time of year – I get to revisit my predictions for 2013, an often-humbling experience for someone who spends far too much time out on the bleeding edge. So, here goes.

  1. Vendor consolidation – I said “we ain’t seen nothing yet…Expect several of the larger players to join forces/be acquired/become platform companies that PE firms use to build large, diverse providers.
    A resounding yes.  First OneCall’s string of deals, KKR’s acquisition of Mitchell, then the blockbuster OneCall/Align move, then Progressive/PMSI, with at least one more big one in progress today.
  2. Higher medical costs driven by facilities.
    Yes – especially in California as health system consolidation continues. We are also seeing it in other states as physician practices are bought up by hospitals, who can then bill for facility fees on top of physician charges.  Many payers are seeing double-digit trend rates.
  3. Continued ignorance of opioids’ impact on long-term costs and outcomes, coupled with inaction by most payers.
    I’d give this a partial yes.  The opioid survey we just completed revealed that many payers are actively involved in opioid management, although those programs are typically disjointed and not integrated.  However, very few payers, if any, have estimated the long term cost of opioids.  Most don’t separate out claimants prescribed opioids from those that aren’t, lumping all claimants with the same diagnosis together.  Once they start separating out (for example) back claims with and without opioids, there will be an “oh crap” moment followed by a lot of finger-pointing.
  4. Aetna will keep – and grow – their workers’ comp service business

    Well, it isn’t growing, but they are keeping it.  Aetna has been the bridesmaid on a couple of deals, as they are looking to expand via acquisition as well as incremental sales.  And no, the departures of Rob Gelb and David Young do NOT mean mother Aetna wants to dump the business.

  5. Physician dispensing of repackaged drugs – we’ll see higher prices in some states and much more physician dispensing in many.

    Oh heck yes.  WCRI’s latest reports indicate costs are up, and so is volume in many states.  My best guess is the industry – employers, taxpayers, insurers – are paying over a billion dollars more than necessary due to the plundering profiteers in the physician dispensing business.Okay, that was the first five.  Five more tomorrow – hopefully I’ll break even…

Joe Paduda is the principal of Health Strategy Associates



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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