ACA Deathwatch: Further and further away

The hands of the Deathwatch Clock have been moving back for some time now, signaling that your reporter believes the chances for ACA repeal have steadily receded.

The reason is clear – killing ACA would be politically devastating for Republicans, especially Republicans in vulnerable election districts. Two months ago I predicted ACA would not be repealed due to the political cost; if anything I feel more strongly today.  Here’s why.

  1. The President has acknowledged healthcare is enormously complicated.  Who knew? of course, MCM’s faithful readers knew…
  2. Governors could not come up with any consensus on what a replacement plan would look like, components thereof, funding, or even how to treat Medicaid.
  3. There is no consensus between Republican Congresspeople or Senators, with the Senate’s key leadership expressing notable reluctance to repeal without an agreed-upon replacement plan ready for a vote.
  4. Democratic Senators are – so far – standing unified in their opposition to repeal/replace.  Without at least 8 Democrats, a replacement is a non-starter.

So, what’s going to happen?

Here, in order of likelihood, are my best guesses.  I reserve the right to change the order based on future developments – or the lack thereof.

  • Minor tweaking
    Republicans will futz around with the mandate, premium supports, Medicaid funding, and a few other less-important aspects, call it a huge improvement, and be done. Dems will support these changes, as they’ve been trying to get their R colleagues to do this for years.
  • Nothing
    Attempts to tweak ACA will come to naught as the House Freedom Caucus and arch-conservatives in the Senate will refuse to do anything until their party delivers on its campaign promises to “rip it out root and branch”.
  • Bigger tweaking
    Remember – ACA includes major changes to Medicare reimbursement, medicaid expansion, the individual mandate, a variety of taxes and fees, medical education funding, and on and on.  It does NOT lend itself to big tweaks, but some Republicans are hellbent on doing whatever they can that doesn’t require any Democrats to support it.  For example, use reconciliation rules to block grant or per-capita cap Medicaid

When will this occur?

Next year is looking more and more likely, however insurers selling via the Exchanges will need some assurances within a month if they are going to feel any degree of comfort in setting rates.

Those assurances are anathema to the Freedom Caucus, so we may see a fist fight between that faction and more centrist Republicans in the House.  The centrists will win that fight.

So, expect no practical changes to ACA thru the end of 2018.  There will be much window-dressing as Republicans seek to show voters that they delivered on their promises, but it will be just that – window-dressing.

What does this mean for you?

Likely no major changes till 1/1/2019 – if then.


Improving healthcare will hurt the economy

Healthcare employs 15.5 million full time workers – more than 1 out of every 9 jobs. That’s more workers than the manufacturing industry. By 2019, healthcare employment will surpass retail.

Over the next decade, 9 of the 12 fastest-growing occupations will be in healthcare – fully a quarter of total job growth.

While that’s good news for folks working in the healthcare industry, those jobs are funded by employers and taxpayers  – and those funds are not available to buy other goods or services. Some argue healthcare is “crowding out” economic expansion in other sectors thereby hurting overall economic growth.  Moreover, much of healthcare is inherently inefficient; extra cost does NOT equal extra benefit. The US’ healthcare efficiency rating by the Commonwealth Fund was a miserable 11th out of 11 countries.

That isn’t exactly “exceptional”.

This from “The Health Care Jobs Fallacy” authors Katherine Baicker, Ph.D., and Amitabh Chandra, Ph.D.:

Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck. Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments, and the U.S. government with less money to perform all other governmental functions — including paying teachers, scientists, and social workers.

By the same token, “controlling” health care costs will cut employment, and pharma stock prices, and margins for medical device firms, and bonuses at healthplans.

This is where things get interesting.

If efforts to control healthcare costs and increase efficiency actually bear fruit, those lost jobs, reduced profits and lower margins will hurt the economy. At some point, the entities that pay those costs are going to may put the dollars to work elsewhere, but that’s going to take some time.  And, the money saved may just be parked in cash accounts where it won’t do anyone much good.

So, if the healthcare sector of our economy gets more efficient, the US economy will suffer.

What does this mean for you?

Healthcare is a huge employment generator, and a very inefficient industry.  Fixing that inefficiency will reduce employment and economic growth.

One wonders how this will affect politics and politicians.


Work comp service companies – Don’t do this.

Call centers often use average call time (ACT, also known as Average Handling Time or AHT)) as a metric to measure customer service “efficiency”.

That is a really dumb idea. 

Especially in workers’ comp.  In fact, one could make a compelling argument that the lower the ACT, the worse the outcome – defined as customer loyalty and likelihood the customer will “buy” again.

In the real world outside of work comp, there are lots of ways customers can get answers to questions about products and services; YouTube, reddit, websites, and even Yelp are just a couple. In that “real world”, customers who call service centers have a specific question, which MAY lend itself to a pretty quick answer.  But it’s just as likely the customer has a complex question which does NOT lend itself to a quick answer…This from the article linked above:

AHT might have been a fine way to gauge performance on simple issues like address changes, balance inquiries, or delivery tracking, when throughput was the name of the game, it’s a terrible way to assess performance on complex issues that by definition take more time to handle. [emphasis added]

While YouTube et al do provide customers with helpful info, those “alternative customer service resources” don’t really exist in work comp.  The business just doesn’t lend itself to automation, because:

  • issues are often jurisdictionally-related and those regulations often change with minimal notice.  Moreover, many states are pretty small in terms of work comp claim totals, so it’s hard to justify allocating big business analyst/programming resources to automating answers about new state claim reporting requirements in Montana (no offense to my many esteemed colleagues in Big Sky Country)
  • answers may have significant downstream legal implications so nuance and opinions can matter a lot
  • patients rarely know much at all about workers’ comp and want to talk with someone who does.  The interaction is really more about listening and empathy than just providing correct answers.
  • Calming down an angry, confused, or upset customer takes time

More importantly, treating call center workers as machines who must produce X widgets (defined as handled calls) per hour isn’t likely to make those workers love their jobs, care about their customers, or want to stay at your company.

In fact, they’ll “perform” to expectations, working hard to get off the line as quickly as possible, regardless of whether the customer’s happy or not.

So, you’ll get what you want – “efficiency”.  And your customers will go elsewhere.

What does this mean for you?

Do you like it when a “customer service” rep hurries you off the line, can’t seem to understand or care about your problem, or even if they do, turfs you off to someone else or, heaven forbid, the company’s website?




The real experts opine on what’s going to happen with ACA – all collected in one place for your reading enjoyment.

Kudos to David Williams for hosting this fortnight’s edition; among the posts worth your consideration are:

As Julie would say, “Quelle Surprise!”


Who’s going to pay for the Opioid Crisis?

Insurers are loosening policy language to allow more treatment for opioid addiction. Treatment centers and providers are opening, expanding, and increasing services to meet growing demand. Workers’ comp requires treatment for those addicted or dependent on opioids, leading to higher costs for employers, insurers, and taxpayers. Medicaid will be saddled with much of the burden, as addicts often lose their jobs and have no other coverage – so we taxpayers will foot the bill.

We know who’s going to be writing the checks – ultimately you and me and our nations’ employers in the form of higher insurance premiums, higher taxes, and lower earnings for employers.

That’s wrong.  And not just-kinda-sorta-of-that’s-too-bad wrong, but ethically, morally, and maybe even legally wrong.

The purveyors of this poison have made billions by lying, deceiving, and killing our fellow citizens.  By crushing families, destroying towns, bankrupting businesses, ripping apart our social fabric.

And we’re left paying the bill in dollars, deaths, and soul-searing pain.

I have a modest proposal.  Make the pill-pushers pay. 

Congress should pass a bill, and the president should sign it, making the opioid industry pay for its sins. Treatment coverage, a flat amount for each person that died on their poison, and reimbursement for all past costs incurred by individuals, families, taxpayers, and employers.  Bankrupt the industry, take every penny the owners have, and use it to help those they’ve harmed.

Let’s call it the Corporate Opioid Responsibility Payment Service Establishment Act. CORPSE for short

What does this mean for you?

Make the bastards pay. 




ACA Deathwatch: Two Immutable Truths

Two immutable truths were behind much of ACA’s original construction. These same truths are giving Republicans seeking to repeal/replace major heartburn.

First, healthcare is the single largest part of America’s economy.  One out of every six (soon to be five) dollars flows thru the healthcare system.

“Controlling cost” really means someone is going to make less money. 

As most of you reading this get a big chunk of your income from healthcare, that’s a problem. For politicians trying to come up with a plan to reform the reform, solving healthcare means some very, very powerful entities are going to get screwed. 

The question is, which ones?

  • Hospitals are often the largest single employer in an area.
  • Pharma is hugely profitable and pharma workers are very well paid.
  • Medical device and equipment companies are similarly disposed and their employees similarly compensated (the largest employer in our town is WelchAllyn)
  • Healthcare professionals enjoy good incomes and generally good working conditions (full disclosure – our daughter and her husband are both ER RNs)
  • Healthplans have generally done well under ACA – remember the Exchanges are just a small part of their overall business.
  • Taxpayers, who don’t want to pay higher taxes

You can’t cut costs without cutting hospital revenues, reducing doctors’ incomes, lowering pharma prices, or slashing profits for device companies. (Healthplans are a bit of a separate issue as their gross income is based on underlying costs, so if healthcare costs go down, so do their revenues).

The power of the healthcare lobby is beyond measure; three years ago the industry spent over a half-billion dollars on lobbying in DC.  Pikers.  Last year,

So, which one of these incredibly well-funded and well-connected stakeholders is going to willingly give up a few tens of billions of dollars to keep your insurance costs and taxes down?

Put another way, are you personally ok with a lower paycheck?

Truth Two – Older people vote, younger people don’t.

(credit US election project)

If you’re trying to keep insurance costs low, you have to get more healthy people (i.e. younger people) into the pool to help pay costs for us older folks.  To get more people to buy insurance, you have to keep premiums low.  The best way to do that is by allowing a big premium disparity between older and younger folks.

Currently, ACA only allows insurers to charge old folks 3 times more than young ones. The result – insurance for younger people is higher than it would be if healthplans could split the population into, say, five “age bands” and charge older people 5 times more than the youngest. Sure, it’s likely a lot more young people would sign up if their premiums were lower – and they would be – about 15 percent lower.

But if they do, the oldest people – who are about 2.5 times more likely to vote than the youngest group – are going to be hopping mad. Estimates are premiums for the older group would jump 22%.

What do these Two Immutable Truths mean for you?

It could mean your income drops a lot, your taxes go up, your premiums go up or down, your stock portfolio suffers…

Net is, to “fix” healthcare someone’s ox is going to be gored.  And pissed-off oxen are scary indeed.


Frank Pennachio – one of work comp’s good people

Frank is a highly experienced work comp broker, consultant and educator who is as subtle as a tank.

A vocal and energetic advocate for his employer clients, he is nonetheless far from reluctant to challenge those clients to think creatively, differently, intelligently; to not just accept what carriers, TPAs brokers and vendors report but to dig down to see the real picture.

Because it’s what underlies those relationships that drives results for patients and employers.  The tangled web of financial deals based on percentage-of-savings charges; fee-splitting; vendor “rebates” and other pay-to-play vehicles can and does influence behavior and incentivize parties in ways that may not be in the patients’ or employers’ best interest.

Frank’s persistent and loud, to the point that some groups and on-line entities have banned him from their conversations.  While those groups are entirely within their rights to do so I’d suggest that all of us are far better off hearing from people like Frank than avoiding the conversation.  His intentions, values, and ethics are unquestioned.  His tireless advocacy for clients and stakeholders to do the right thing is unequivocal.

If you don’t like what you’re hearing, perhaps you should ask yourself why you’re uncomfortable with what he has to say.  While Frank’s irreverence and constant vocal challenging of the status quo has made him a pariah in certain work comp circles that is unfortunate indeed – because his message is dead on.

Sometimes the volume and stridency of the message can turn people off.  I get that.  I also get that many of us have been trying for years to highlight the counter-productive relationships that yield little benefit to the real stakeholders.  Sometimes you need to open the window and yell.

What does this mean for you?

The industry not only needs more Frank Pennachios, it also needs to realize that despite what you may think of the methods, the message is absolutely right. 


Employment’s effect on hypertension

Could hypertension be an occupational disease?

That’s the question addressed in an excellent article in HealthAffairs.

The short answer is there are many factors that contribute to or mitigate risk for hypertension, however the physical and psychological hazards associated with the worksite do correlate with hypertension risk.

Specifically, psychological demands such as how often one is required to work fast  and without errors are correlated with blood pressure while more freedom for workers to make independent decisions is associated with lower blood pressure.

The research looked at about 14,000 Alcoa blue-collar workers over a 16-year period and included surveys as well as medical billing data.  While other external factors are indeed important, the researchers concluded:

workplace environmental exposures may as a whole contribute substantially to hypertension among US blue-collar workers. We found evidence for this across multiple exposures in the categories of psychological hazards and the plant social environment.

Note that this study resulted from a partnership between a very large employer and researchers.  I’d hazard a guess that a study involving less paternalistic employers would show stronger correlations with greater impact.

What does this mean for you?

Employers have long known the worksite is a factor in employee health and productivity; this research clearly indicates hypertension could be characterized as an occupational disease specifically associated with employment.

Note – HealthAffairs has been doing really good work of late on workplace health and exposures.  Put their site on your reading list.


Work comp – the latest on back injury and treatment thereof

Back claims account for around a quarter of all workers’ comp claims.  They are also among the toughest to handle; what appears to be a simple strain at first report may end up a long-term, permanent disability claim.

Three recent studies on back pain, the treatment thereof, and how treatment varies from place to place are well worth your consideration.

Here’s the quick summary of each – followed by what it means for work comp patients, providers, and payers.

First up, a comprehensive study of management of nonspecific back pain treatment options will begin shortly, funded by the Patient-Centered Outcomes Research Institute (PCORI).

The Comparison of Surgical and Nonsurgical Options for Management of Chronic Nonspecific Low Back Pain will assess outcomes for patients receiving surgery (lumbar fusion) vs non-surgical treatment. This is a randomized control trial, so the results will be instructive indeed for work comp regulators, payers, and providers.

HOWEVER, a decade ago a very similar study was conducted which indicated similar outcomes for surgical and non-surgical patients – but this result was not deemed conclusive because lots of patients who were put in the “surgery” group chose not to have surgery and vice versa.

Implications for work comp – a valid study will greatly help regulators determine the approval process and standards for back surgery.

Whether or not you get back surgery appears to depend more on where you live than what your symptoms are.  That’s the conclusion from a recent Dartmouth analysis of Medicare data.  The other major takeaway –  – despite the lack of credible evidence that surgery produces better outcomes.

maps below are from Dartmouth Diffusion project.

Notice how surgery rates didn’t move much at all in New England, but dramatically increased in the southeast and Rocky Mountain regions.

If you want to know why, there’s this from the NYTimes article: “physician beliefs about the benefits of surgery were associated with surgical variations.”

Implications for work comp – Regulators, use NATIONAL guidelines, and don’t rely on local providers to drive your guideline selection.

Supporting this research is this – drugs don’t seem to help resolve back pain any quicker. A guideline was just released by the American College of Physicians advocating non-pharmaceutical approaches for treatment of back pain.

Implications for work comp – I’d be repeating myself…


ACA Deathwatch: Where are we today?

The net – we’re further away from repeal and replace than we were even a week ago.

The details

There’s been a good deal of understandable confusion about the fate of ACA; first it was going to be repealed on Day One of the new Administration, then January 27 was the day, now it’s either sometime late this year or early next. Or perhaps, not.

What’s indisputable is this;  undoing ACA and “replacing” it with legislation that will reduce costs, increase coverage options, and not leave anyone with coverage today uninsured is not possible – unless drastic cost-reduction measures are implemented, measures that are anathema to free-market Republicans.

Republicans sought to use the budget reconciliation process to undo much of ACA, figuring that would allow them to kill components such as the mandate that are particularly offensive to the GOP, while working on a replacement bill that might or might not be passed with a final “repeal” bill.  As reconciliation bills can’t be filibustered, the initial step in the repeal process passed easily.

But here’s the problem – the proverbial clock is ticking, and the longer this drags on, the less likely it is a Repeal/Replace bill will happen.  

First, insurers MUST have some idea what will happen in 2018 before they can come up with rates for coverage in the Exchanges. And they need to know this by May 3 – at the very latest.

Second, Governors need to know what’s going to happen with Medicaid. Seniors need to know what their Medicare Advantage costs will be.  Hospitals need to know what they will get paid for Medicare, Medicaid, and in DSH and other payments before they can set prices.

As has been well-documented here, there’s little consensus among Congressional Republicans on what a replacement would look like. And there are a bunch of other high-priority bills that are must-pass; tax reform, budget, spending and the like, all of which will take a lot of time off the legislative calendar.

And there’s this – Once a budget resolution for 2018 is passed, the current ACA reconciliation bill is null and void. While it’s possible Republicans delay the Fiscal Year 2018 resolution as they try to cobble together a replacement bill, this will greatly complicate the legislative process, likely hinder another key priority – tax reform, and as of today there’s no consensus even among Republicans on what “replacement” would look like.

While it’s theoretically possible Republicans pass another reconciliation bill for the FY 2018 budget year to further kick the ACA can down the road, it’s highly unlikely.

Lots more detail on this here.

What does this mean for you?

Yes, it’s certainly possible ACA will be repealed and replaced. Just a little less possible with each passing day.