Mar
3

Dr Glenn Pransky – one of work comp’s great ones

Recently I had the honor of meeting the nation’s foremost expert on disabilityGlenn Pransky M.D.  What a wonderful gentleman.

Glenn is the Director of Liberty Mutual’s Center for Disability Research; he is an occ med physician and has his Master’s in Occupational Health as well and has authored over a hundred articles, research papers, and book chapters.  That’s all quite impressive; what really struck me is how approachable, genuine, and open Glenn is. [my use of his first name is intentional, Glenn is completely without pretension or ego.]

His passion is disability; reducing its occurrence, mitigating its impact, improving the lives of those with physical limitations.  The research Glenn and colleagues have conducted includes seminal work on low back pain’s impact on disability; age and job tenure and their relationship to disability duration; the impact of pain on disability; the effect of supervisors’ leadership on return to work for workers with back ailments.

And that’s just what he did last year; if you want to fully grasp the depth and breadth of Glenn’s work, peruse this list.

He will be the first to note that there are a lot of co-workers at the Center and co-authors and fellow researchers that have also done yeoman work, and that’s true.  But Glenn’s contribution is second to none, and its clear that his leadership, focus, and keen intellect has had a wide, deep, and overwhelmingly positive impact.

Kudos to Liberty Mutual for its foresight in setting up the Center almost two decades ago, and for continuing to support its work.  The Center’s contribution to the betterment of America’s workers, in fact to all of us, has been significant indeed. [full disclosure – I was employed by Liberty for several years back in the 1990’s.]


Mar
2

Examworks released their Q4 and 2015 earnings report last week, while Clinical Solutions boss Ken Loffredo and several of his colleagues left the company rather abruptly, with Ken departing ten months before his contract was up.

First, key takeaways from the earnings call, followed by my take.

  1. organic growth in the US increased by 0.7%
    ManagedCareMatters – Given work comp claim (Exam’s core source of business) frequency continues to decline, that’s not surprising.
  2. Execs claim they’ve signed a “national account” and another will close later this year.
    MCM – From talking to investors, there’s a misconception about so-called “national accounts.  Namely, this just gives Exam a license to hunt; their field sales force still has to go out and beat the bushes to get adjusters to refer cases to Exam. Notably, I know of NO national payers that use ANY IME provider exclusively; most have several.
  3. Exam execs believe that they are killing off small mom-and-pop IME firms that can’t compete w Exam on price or service
    MCM – I’ve spoken with several IME firms of varying size; all claim to be competing effectively with Exam
  4. Exam claims it has 15% of the US IME business.
    MCM – Let’s dig into the math…

    1. 2015 US revenues were $511 million.
    2. Estimating the clinical solutions group business accounted for, say, $60 million of the $511 million, IME revenues totaled somewhere around $400 – $450 million.
    3. So, EXAM believes the US IME business totals between $2.7 – $3.0 billion
    4. That’s around twice as high as my best estimate, which is based on actual interviews with major payers. [happy to have you check my assumptions and math]
  5. “We estimate that only 20% of claims require IMEs.”
    MCM – Interested in hearing from folks in work comp or disability; what percentage of total claims have IMEs?
    UPDATE – from a former WC Insurer CEO:
    20%? 20% of what? There is no way we ever had that volume of total claims with an IME, ever. We would have been in perpetual litigation…to have 20% of all claims in a standard carrier go to IME … just seems crazy to me.”
  6. don’t expect many more acquisitions of IME firms
  7. document management firm ABI was acquired six weeks ago; execs seem to think they’ll be able to convince their IME customers to use ABI for “the vast majority of their claims”

Other observations

  • Net income from operations dropped by almost half from 2014 to 2015.
  • Pricing is a complex issue.  Often there is a “flat” price which gets inflated with add-ons such as rush fees, documentation prep fees, nurse review fees, complexity surcharges and the like.  Thus, unsophisticated buyers often think they are getting one price – and end up paying much more.
  • Not sure I understand management’s thinking re ABI; almost all P&C insurers currently use a document management firm; Xerox is a major player in this business and is the industry leader.  If Exam is intending to compete with Xerox for broad-based document management, that will be a big challenge.
  • Sources indicate the Clinical Solutions Group (acquired about 18 months ago) isn’t doing so well.  Those who follow the Medicare Set-Aside business aren’t surprised; Exam’s pricey acquisition of Gould and Lamb was seen as a head scratcher.  The ASN/MedAllocators purchase a few months later may have been an attempt to fix G&L by bringing in experienced management and complementary business lines. With the departure of Loffredo, chief lieutenant Kevin Mahoney, and others the future of Exam Clinical Solutions seems rather cloudy.

Perhaps the new ABI business will turn out better than the Clinical Solutions venture. And that’s no slam against Loffredo et al; my take is they were brought in to patch a very leaky ship while sailing it in a very competitive race.

It would have required a ton of resources to patch, bail, and sail, resources which weren’t made available.


Mar
1

WCRI’s John Ruser on today, tomorrow, and next year

Late last week I sat down with WCRI President/CEO John Ruser to get his views on his first few months at the helm, find out what’s on the agenda at the WCRI conference next week (if you haven’t registered, get your fingers over here), and learn about future areas of focus.

MCM – What has been the most eye-opening for you as you’ve moved from the Bureau of Labor Statistics to WCRI?

Ruser – First off, it is an honor to take the helm of such a well-regarded organization with such a diverse membership and to be working with such an intelligent and talented group of colleagues who are committed to publishing high-quality, credible and independent research. Along those lines, what has been most eye-opening has been the tremendous support for the research from all stakeholders in the workers’ compensation community. I’ve always knew WCRI was well-regarded, but when you are in the position I am in and interacting with people all across the country, you really understand how truly special WCRI is and how important the mission is to provide policymakers and other stakeholders with the data they need to make more informed decisions.

MCM – What has been the most fun?

Ruser – Working for BLS, you put out data and that is it. However, WCRI has so much interaction with the workers’ compensation community through their rigorous quality assurance process (i.e., reviewers, state advisory committees, etc.). The other thing that makes WCRI different is our mission, which is to be a catalyst for significant improvements in workers’ compensation systems. So that is what is fun, to see the research being used by the community it is seeking to help.

MCM – What will attendees learn at WCRI’s conference next week?

Ruser – A big area of interest this year is opt-out. We have two sessions on opt-out that will provide a deep dive from multiple viewpoints. In addition, researchers from the Dartmouth Atlas project and NCCI will join our staff to discuss interstate variation in medical treatments. The conference will also include the latest research on prescribing of opioids across the country, which is an issue that garners great attention in and outside the workers’ compensation community. We are hopeful that presentations on the issue lead to changes.

MCM – Do you see changes in the research focus of WCRI going forward?

Ruser – Over the next two years, I expect we will be doing a lot of work on treatment guidelines; their impact on outcomes, procedures, costs, and injured worker outcomes. We are also working on an update on injured worker outcomes with surveys of injured workers. Areas covered by the surveys include access to and satisfaction with medical care, return to work timing, and earnings loss. There has also been a lot of interest in our work on case-shifting, so we will be doing a study to see if there is evidence of case shifting due to high deductible health plans.

MCM – Can you give a bit more detail on treatment guidelines? What’s driving that focus?

Ruser – In discussions with our members and other stakeholders, treatment guidelines have risen to the top of the priority list. There is interest in learning what leads providers to use treatment guidelines and to what extent treatment guidelines affect outcomes. Utilization review (UR) and compliance issues affect the former. We want to better understand what kind of programs are out there and how are they being used, do treating physicians comply with guidelines?, are denied services paid?, what are providers’ views of these programs.

We have begun semi-structured interviews with physicians in Louisiana re guidelines, and have seen a wide range of responses. We are learning a lot about providers’ views and, at the same time, gaining experience and expertise in collecting, analyzing, and using information from free-form surveys.

I expect we will use what we’re learning about text mining in another area – triggers of claimant attorney involvement. This gives us an opportunity to explore using broad questions to collect unstructured data, and then code that data to provide information. There is tremendous opportunity to use less-structured information in our research.