Nov
9

Shock

That’s the only word that describes my reaction to the election.  Kudos to Bob Wilson, who bet me months ago this would happen – he was right, and I was very wrong.  I owe you a drink; make mine a triple.

I’ve heard from many of like and opposite political mind today, and will be the first to admit I cannot get my head around what happened.  It’s not so much that the professionals got everything completely wrong. No, it’s that we elected a person who, according to many members of his own party is totally unqualified to be president in so many ways.

After reading JD Vance’s Hillbilly Elegy, I’m beginning to understand the large swath of the population that is pissed off, feeling left behind and abandoned.  I also absolutely get that we Democrats are partially or perhaps largely to blame.  I don’t buy some of their complaints, but that’s irrelevant; they feel aggrieved.

So they voted to “drain the swamp”, to change Washington. Interesting thing about change; it can be good, or it can be bad.  In this instance, it may well be really, really bad. To get an idea, of what we can look forward to, take a look at the disastrous Kansas Experiment.

There will be huge repercussions for the healthcare industry.  Rand Paul has promised to put an ACA Repeal bill on Trump’s desk week one.  We’ll see if that gets thru the filibuster, but even if it doesn’t there’s much Trump can do administratively to alter ACA.  

Now’s not the time to get into this in detail; I’ll be hosting a special post-election Health Wonk Review Friday that will dig deep into the issue. For now, I’ll leave you, dear reader, with a message I sent to our three wonderful, smart, caring, adult kids.

Ok family. We have today to feel miserable and angry and disgusted. Tomorrow we get to work on fixing it. 74 years ago your 19-year-old grandfather flew through fighters and flak above Germany to save our country. It’s our job now. I had become complacent and lazy about preserving what we are so lucky to have. I see that very clearly, now that the consequences of that inaction are so apparent. It’s on us.

 


Nov
7

Thanks, Jimmy.

(Edited to correct my error, Jimmy Morales is a woman.  MY apologies to Ms Morales for mis-identifying her.)

This morning’s WorkCompCentral brings us a report that Miami Beach’s City Manager is rejecting two police officers’ work comp claims for coverage due to Zika infections.

Reportedly the officers work in Zika-infected areas, but the mosquito has not been found where they live.

City Manager Jimmy Morales refuses to cover these cases, saying:

“He/she must show that the exposure/bite took place while on duty and identify the specific infected mosquito,”

To be fair to Ms Morales, she claims that the two officers have yet to comply with requirements to submit full medical documentation.  If that is the case, then they need to do so. HOWEVER her “requirement” that the officers bring the the specific infected mosquitoes isn’t just ludicrous, it also makes her – and her city – out to be heartless, uncaring bureaucrats.

If Ms Morales wants to perpetuate the meme that workers’ comp folks are heartless, penny-pinching, claim-denying, conniving, scheming bastards,s he’s nailing it. I don’t think that’s Ms Morales’ intention, and I’m hoping she mistakenly relied on a legal interpretation in a misguided attempt to stick to the “letter of the law.”

Ms Morales has not only damaged her relationship with his City’s police force, she’s also provided system detractors with yet another iconic example of how work comp is grossly unfair. And she’s done this in Florida, where the workers’ comp system is already on shaky ground.

Thanks, Jimmy. 

What does this mean for you?

People, please think before you act. You can’t unring the bell, take back what you said, or in this case claim you were misquoted.

 


Nov
4

Friday catch-up; CorVel, deals, & drugs

Good morning all.  Out in SoCal for the CompLaude event; looking forward to two days of great discussion about the good things in workers’ comp.

More evidence that WC medical trend is flattening

WCRI released it’s Indiana CompScope report earlier this week. Headline is medical trend flattened in 2014, with the change to facility reimbursement a likely contributor.

You can order it here.

CorVel

The TPA/managed care company released its Q2 earnings report yesterday; revenues inched up 3%, while earnings per share were down almost 16 percent. 

EBITDA dropped from 14.8% to 8.8%.

According to the company, TPA revenues were up 13%, but:

“…staffing and adjusting to the new laws for time management resulted in recruiting expenses and legal fees. The Company is also experiencing extended sales cycles due to the economic uncertainty in the healthcare marketplace caused by the election and the evolving conditions under the Affordable Care Act.”

CorVel is primarily a work comp player. I don’t know why ACA would effect CorVel’s work comp business; I can speculate that the soft work comp market (except in California) is not helping TPAs grow top line or earnings.  While CorVel’s 13% increase in TPA revenues is exemplary, one has to wonder if they are buying business. The precipitous margin decline indicates pricing is indeed an issue.

You can read the earnings call transcript here.  Suffice it to say there’s a lot of talk about structural issues extending sales cycles and blame placed on external factors.

This means – CorVel still hasn’t figured out how to effectively compete in the TPA business.

Deals…

Mitchell just announced they completed two acquisitions. Specialty bill review firm Qmedtrix and work comp PBM IPS were added to the portfolio. IPS joins CogentWorks, CompToday, AutoRx and Jordan Reses under Mitchell’s Pharmacy Solutions business; Brian Anderson will continue to lead that (congratulations Brian).

Qmedtrix will become part of Mitchell’s SmartPrice Solutions; that business includes FairPay Solutions and National Health Quest.  Looks like the individual names will go away as Mitchell rebrands the offering under the SmartPrice name.

This means – more consolidation in the work comp PBM business, and a more viable PBM offering for Mitchell

Work comp drugs

Today’s WorkCompCentral has a great piece by Elaine Goodman about the reduction in opioids enjoyed by Optum’s work comp payer customers. According to Optum:

  • the percentage of patients using opioids dropped by almost 5%
  • average morphine equivalents decreased 4.7%
  • the number of scripts per claim dropped 1.7%

Optum isn’t the only PBM delivering results; Coventry and Express Scripts helped their payer customers reduce the use of compounds by almost a third. 

And, continuing a six-year trend of reductions in drug spend, Optum data indicates drug costs per claims fell another 4.6% in the first seven months of this year compared to last.

This means – PBMs continue to deliver for work comp patients and payers.


Nov
3

Cubs Win! Implications for health care…

Brad Wright is a master blogger, and a terrific writer as well. He’s put together a synopsis of all you need to know about health care heading into next week’s election; complete with graphs, charts, and data, while somehow tying it all to the Cubs’ historical World Series victory.

As a White Sox fan, I’m happy if for no other reason then those Cub fans will finally feel the joy we did in 2005!


Nov
3

What’s really happening in workers’ comp

Injury rates are plummeting, insurance premium rates are flat or dropping, medical costs are down as well.

This morning Todd Foster of WorkCompCentral reports big rate decreases in Louisiana and Texas and a slight decrease in Georgia.  This comes on the heels of drops in most other southern states, some well into the double digits.

Out of 36 states reviewed by NCCI, all but four will get rate decreases.

In Texas, a drop in energy service employment is one factor; this is a high-severity, high-frequency industry (injuries are worse and occur more often than in other industries).

Another article in WCC reported that American Financial’s work comp results improved due to “prior year loss development” improvements.  In English – claims costs for last year came in lower than they predicted.

Injury rates are continuing to decrease every year. Medical costs are flat or down slightly.  And, while wages are slightly higher, employers’ and taxpayers’ workers’ comp premiums are lower.

Make no mistake, this is good news for the three constituencies that matter – workers, employers, and taxpayers. Fewer workers are suffering the trauma and uncertainty of injuries. System costs are dropping for everyone.

There are a couple of things that could will change this.

If Congress and the next President (whoever that is) can work together (yes, I believe in the Easter Bunny too), there will be a massive investment in infrastructure in the near future.  We’re talking hundreds of billions of much-needed spending on bridges, roads, rail, the energy grid, clean energy, broadband.  With interest rates still right around zero, now is the time to finally fix stuff our legislators have avoided for decades over fear of political repercussion.

This work will take years, and as it is high-risk for workers, undoubtedly lead to more injuries.

Longer term, we can look to what’s happened in manufacturing to forecast employment trends in other sectors.

chart2

The US is the second largest manufacturer in the world – despite the decline in jobs in that sector, output is just slightly lower than China’s.  Despite what any politician says, those “lost” jobs are NOT coming back. What’s happened in manufacturing will be felt in every other business and industry, from hospitality to transportation to health care.

What does this mean for you?

Workers’ comp is driven by macro factors.