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Monday catch-up

Here’s what happened last week.

First, the election.  A thorough butt-kicking to be sure.

Now, we will see if the two very distinct wings of the Republican party can work together.  With almost all of the moderate Dems losing their elections, projected majority leader McConnell will have to figure out how to keep his fractious caucus together while adding a few liberal Democrats if he is to have any hope of getting the 66 votes needed to overrule any Presidential vetoes.

This will be entertaining.

Reform implementation

Rates for most 2015 plans on the Exchanges are not going up much, and in some areas are dropping.  Average premiums are going down in 6 states, rising by 5% or less in 10, and increasing by >5% in only 2.

Obviously this somewhat discredits the warnings of rate shock, but we’ll have to wait for the expiration of the “3Rs” (which reduce insurers’ risks) before we’ll see fully market-based rates. has released a web app for shoppers to quickly compare plans and benefits – without the registration requirement.  Should have been out earlier, but better late than never.

BTW, an excellent piece in The Economist provides objective insight into the goods, bads, and uglies of PPACA – along with solid recommendations on how it can be improved.

Hospitals are going to be screaming.  Even louder.  A research piece in HealthAffairs details the impact of Medicaid non-expansion on hospitals in poor financial shape. Briefly, PPACA ended subsidies for those hospitals, anticipating they’d benefit from higher Medicaid enrollment.  As an example, DSH payments to struggling hospitals in Texas will decline about 52% in 2018.

State officials determine what hospitals get how much money, so the lobbying will be intense.  Facilities without strong relationships with state governments may well not survive.

Methinks more cost-shifting may be in the offing.

Workers’ comp

In WorkCompCentral last week Greg Jones’ article on the California State Fund provides a brief summary of the huge changes at the State Compensation Insurance Fund over the last few years; premiums and employment have both dropped by about half, operations have been dramatically streamlined, and a new rating program developed that makes the State Fund a viable competitor in good times as well as bad.  There’s much work to be done, but credit should go to former CEO Tom Rowe and his colleagues for these notable accomplishments.

A great piece in Insurance Journal by Safety National’s Mark Walls on that bane of our existence – physician dispensing in work comp. The conclusion:

There is overwhelming evidence to support that physician dispensing increases costs, lengthens disability, and produces poor outcomes for injured workers. It’s time to end physician dispensing in workers’ compensation.

In yet another deal, Apax/Genex bought case management firm MHayes. Congratulations to owners Melinda Hayes and Helen Froehlich; they built a pretty solid company with an interesting affiliate approach.  With revenues in the $15 million range and an EBITDA likely a bit more than 10%, this isn’t one of the bigger deals done by Apax on their way to building an ever-larger behemoth.  However, it does remove a competitor that was successfully competing with Genex and had service niches (that may prove valuable.

Perhaps MHayes will help Genex resolve their long-standing billing issues.

It’s the last week before many lucky souls head to Las Vegas for the gathering of the work comp tribe.  Shameless plug – I’m moderating a session on Private Equity and Workers’ Comp; Thursday at 10:45, principals from three of the leading private equity firms will be giving their insights into:

  • the impact of outside investors on comp,
  • the reasons this is such a hot investment opportunity,
  • what investors look for, and
  • what we can expect in the future.

We’ll have a lot of time for Q&A too.


3 thoughts on “Monday catch-up”

  1. Speaking purely as an American, I object to the baseless criticism of the Republican election wave. If you are a Dem (as apparently you are), that’s fine. If you are going to be objective in your newsletter, you should avoid impugning American election results with sour-grapes editorializing. This is no place for political speculation. Stop and think, “How many subscribers are you offending?”. Just sayin’ …

    1. Mike – thanks for the comment.

      I’m not sure what you object to nor do I see any “sour-grapes editorializing”. Frankly I don’t read the post as a “baseless criticism of the Republican election wave.”; far from it. The Dems suffered a major loss – which I described as a “butt kicking”. My description of the GOP’s caucus as “fractious” is demonstrably true.

      If you could be more specific as to how the post was as you described I’d be most appreciative.

      Finally, I am objective in my blog, and have been for 10 years; you’ve only been a subscriber for 3 months so don’t have that history (altho it is clear as all 3000 past posts are still on line). While I am objective, I also have strong opinions based on facts, data, and logic. And as this is my blog, I don’t hesitate to voice them.

      That has offended some, and so be it. If I worried about offending subscribers I would be doing them a disservice; my subscribers are intelligent, objective, and don’t mind being challenged.

      If you want to unsubscribe, that is within your rights.

  2. Joe,

    As I have just returned from the border area of Texas/Mexico, the GOP should reconsider the payments to hospitals in Texas. The one I saw Friday in Reynosa is not someplace that people on the northern side of the border, nor on the southern side should go to. Also, the dental clinics I saw were not up to US standards by any stretch of the imagination. That said, my presentation went well with those interested in hearing it. Those who don’t speak English or are not Americans, chose to stand in the back and talk while I was speaking. but overall, they were very nice and friendly to us and gave us some nice gifts to take back…spiced olive oils and some office-related gifts like a coffee cup, pen, flash drive.

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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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