ACA Deathwatch: Healthcare and Snow storms

Happy Monday!  Up here in the northeast we’re still digging out from a major snowstorm that’s a long way from being over.

I’ll make a lousy analogy; that’s pretty much what’s happening in DC.  For local governments, getting the snow off the streets is the political test that ensures mayors another term, or ends their political career.

Healthcare is the national equivalent, with a rather important difference.  Unlike snow removal, healthcare is devilishly complicated.  It’s not just coordination of more plows, salt, drivers, and tow trucks.

Premium subsidies are one example.  About $9 billion goes towards helping poorer folks pay their deductibles, copays, and other costs.  Back when Republicans were in the opposition, they sued the Obama Administration to block those payments. If the suit were to succeed today, insurers would suddenly find themselves forced to:

  • come up with the $9 billion out of their own pockets or
  • terminate coverage for millions of members.

Not surprisingly, Republicans have apparently decided to keep paying the premium subsidies for the time being.

Kicking-the-can-down-the-road doesn’t do anything other than prolong the inevitable, which, stated simply, is this: Congressional Republicans are stuck.  It’s not possible to ensure poorer folks keep their coverage while reducing costs and de-regulating the health insurance markets.

Pre-election promises that voters can “Have their cake, Eat it too, and Not get fat” are coming up against the hard reality that healthcare is really complicated; and insurance companies, pharma, doctors, and healthcare systems are in business to make profits.

For insurers to be profitable, they have to:

  • enroll lots of people by charging premiums low enough to
  • get enough healthy people to join so they can pay for sick peoples’ care, yet
  • set premiums high enough to pay pharma and healthcare providers so those industries make a profit;

Without premium subsidies, lots of lower-income people can’t afford insurance, insurance companies can’t afford to insure those people, and more and more healthy people will drop coverage. Republicans’ apparent decision to maintain premium support will keep things calm for now.  The individual market looks pretty stable – rate increases have stabilized and enrollment, despite Republicans’ efforts to hinder sign-ups, is adequate.

Eventually the healthcare “snow” is going to pile up deep enough that Congress is going to have to start plowing.

Either that, or this…

What does this mean for you?

Don’t expect much REAL progress on healthcare legislation in the next month or two.  Or maybe even longer.

Got your shovel ready?



HealthWonkReview takes on Alternative Facts!

Steve Anderson’s HWR edition is one of the best I’ve read – Steve digs into alternative facts about ACA repeal, health care delivery, conflicts-of-interest, and work comp claims.

I’d emphasize a couple posts –

Charles Gaba’s got a great “app” for figuring out how many folks in YOUR Congressional district would lose coverage if ACA is repealed.

Louise Norris’ review of Trump’s executive order on ACA does what no one else could – explain what the order can, and cannot, do.

Steve – YOU THE MAN!


It’s not just ACA; the new Administration’s changes to OSHA, the Department of Labor, immigration policy, trade, and myriad other programs and policies will significantly affect workers’ comp.

This is the first of an occasional look at these “Other Effects”.

Farm workers

California’s produce growers are concerned that most of their field workers will be deported, potentially leaving billions of dollars rotting in their fields.  While others argue that farmers should not be employing undocumented workers, the farmers, most of whom appear to have voted for Trump, disagree:

“If you only have legal labor, certain parts of this industry and this region will not exist,” said Harold McClarty, a fourth-generation farmer in Kingsburg whose operation grows, packs and ships peaches, plums and grapes throughout the country. “If we sent all these people back, it would be a total disaster.”

Implication – if deportations begin, farmers will have to scramble to find legal residents to replace the 70% of current workers who are undocumented.  Labor costs will go up, and so will workers’ comp premiums.  Expect claims to rise as well, as the field work is very strenuous physical labor which most new workers will be unaccustomed to.

Of course, it’s illegal for those farmers to employ undocumented workers in the first place, so their lobbying efforts – intended to convince the President to not do what he said he would do – amount to asking the Administration to not enforce laws currently on the books requiring farmers to comply with the E-Verify program.

What does this mean for you?

The President is doing what he said he would, surprising some of his supporters and delighting others.


Drones cutting occupational accidents

One of the most dangerous jobs in America is power line maintenance.

Over 330 people were killed last year due to falls and electrocution while working on power lines, thousands more were injured. Now one energy company is employing sophisticated drones to monitor power lines, allowing workers to trade the sometimes-scary task of climbing way up a swaying tower in possibly lousy weather to check out a junction for a ground-based drone control and monitoring job.

According to an AES exec; 

“We find that using drones, we can reduce the number of hazardous hours that it takes to do certain types of maintenance. And we can also enhance the efficiency of the business.”

And AES is not just focused on aerial drones to reduce occupational risks.  It recently announced a program seeking unmanned methods of evaluating energy production and transmission equipment.  The risk here is intense heat; when something goes awry it often takes considerable time for the site to cool down enough for a human to enter and figure out what’s happened.  AES is looking for ways to use “unmanned technology” to get in quickly, assess the problem, and fix it.

measure is the company working with AES; they’re deep into multiple ways to use drones in heavy industry. For example…

  • shipboard workers using drones to check on container stability, possible fuel leaks, wiring and hoses
  • firefighters using drones heat-mapping capabilities to identify hotspots, vulnerable areas, trapped people
  • tower workers using drones to keep nesting birds at bay

What does this mean for you?

Fewer accidents, lower risks for workers, reduced worker’s comp premiums. 

And this is just the start.


Four questions for WCRI’s Dr John Ruser

I (virtually) sat down with WCRI CEO John Ruser PhD last week to catch up on his first year at the Institute and get a preview of next month’s WCRI Conference. (Registration is here)

MCM – Talk about the last year and WCRI’s accomplishments.

Dr Ruser – We are working to maintain and build on the momentum Rick [Victor, former CEO] created – a rigorous approach to our research agenda, addressing a series of issues in workers’ compensation. One we are focused on is the worker outcome surveys. This can add considerable value to the industry; it addresses access to care, satisfaction with care, Return to Work, Return to Functionality, and earning history post-injury.

We are excited about what’s coming up. We want to provide information in a more readily accessible fashion. We will be launching a new website; the current one is functional but it’s time to refresh. We will go live soon with a site that is visually appealing; the new website allows us to experiment with a blog and video and provides more readily accessible content that is easier to search.

MCM – Can you expand on that [making information more accessible]?

Dr Ruser – Our work is very scholarly; it is hard to digest sometimes, so we are focusing on producing new products to reach a broader set of stakeholders that aren’t researchers. These will be written in layman’s terms that are more approachable.

MCM – The annual conference is set – what are you most looking forward to?

Dr Ruser – The theme is Persistent Challenges and New Opportunities: Using Research to Accelerate the Dialogue. There have been lots of challenges and questioning of workers’ comp over the last few years. Is workers’ comp fulfilling its obligation to injured workers? We will address some of those issues, as well as discuss what the election means for healthcare in general, labor regulations and workers’ comp. We’ve invited veteran politicians and other experts to talk about what they see down the road.

We’ve been talking about opioids for years. Are we making progress, defined as reducing new pts and reducing duration? Our people have looked at this and we see lots of variation across states, but in many states there have been fairly dramatic declines in opioid dispensing (pharmacy and physician) even back in 2014.

We will also be focusing on alternatives to opioids, a variety of solutions to control pain aside from opioids – excited about this – research on marijuana and pain and biochemistry of that. Apart from sharing our latest opioid research, we will have a panel that talks about about a variety of different approaches, including mindfulness, and we have some policymakers will discuss medical marijuana and complexities involved [in dealing with marijuana].

There is a session on grand bargain and we are really excited about it.  Among the speakers are Dr. David Michaels now at GWU, who was behind record keeping changes and is the former head of OSHA is there, Northeastern’s Prof. Emily Spieler, Dr. David Deitz, and former AIA Workers’ Compensation executive Bruce Wood.

MCM – What’s been the biggest surprise in your first year?

Ruser – [The] amount of support and respect that WCRI gets from the industry and our broad base of stakeholders, the recognition of the value and independence of our work, [we are] filling a void, [stakeholders have been] very supportive in general. Some disagree, but when they do they are respectful due to WCRI’s reputation.


Managing medical in Auto insurance – quick primer

Of late there’s been a resurgence of interest in managing the medical component of auto liability claims.  This happens every few years as insurers, entrepreneurs, and regulators look for ways to reduce costs and premiums.

The quick take – there’s not much opportunity here, and it doesn’t look like that’s going to change.

The details

With the exception of Michigan, which has no limit on medical benefits, almost all states have low minimum coverage requirements, often $5,000 – $10,000.  Some states – NJ, ND, MN, NY – have somewhat higher limits, and other state limits – e.g. UT – are lower.

If there’s an accident with bodily injury in a low-limit state, claims adjusters tend to set the reserve at the limit and do very little to “manage” the medical expense.  There are several reasons for this.

First, once the patient is transported to an ER, the bills pile up rapidly – diagnostics, specialists, medications, facility fees. (Mitchell’s latest report provides interesting detail on cost drivers; link opens pdf)

Second, most states don’t have fee schedules for auto medical care, so providers charge at or close to chargemaster rates – which are much higher than those for commercial health patients.

Third, this all happens before the auto insurance company is notified of and has accepted the claim.

Fourth, with rare exceptions, the insurer can’t direct the injured party to a specific provider or panel of providers.  Without that direction, providers are loath to offer any preferential pricing or other accommodations to the insurer or insured.

That’s not to say auto insurers don’t employ any medical management techniques. Independent Medical Exams, utilization review, medical bill audit, and nurse case management are tools that are occasionally used by payers seeking to ensure the care provided is appropriate.

Going forward, I don’t expect this to change.  While costs are up in some states, in my view that’s a temporary phenomenon.  Much more significant will be a massive reduction in injuries that is sure to follow widespread adoption of automated driving aids.

What does this mean for you?

Outside of Michigan and a couple other states, there’s not a lot of opportunity here.


ACA Deathwatch: Whoa, there, cowboy!

The news from the White House is the “replacement” isn’t going to appear until the end of this year – or perhaps sometime in 2018.

That’s a very good thing.

For those that have been following our ACA Deathwatch, that is no surprise.  In fact it’s a good thing, as the plans proffered by Ryan, HHS-Secretary-designee Price, and various other Republicans are short on details, conflict with Republican Governors’ wishes, and would result in major disruption to health insurance markets and imperil the Medicare Trust Fund.

There is no consensus among Republicans around key aspects of a replacement plan or the timing thereof. The White House’ latest announcement is at odds both with previous statements that the replacement bill would be released right after Tom Price’s confirmation as HHS Secretary, Speaker Ryan’s commitment to introduce a bill in March and Majority Leader McConnell’s promised timetable.

Here are the key problems facing the Repeal-and-Replace crowd.

  • ACA is NOT a bunch of totally separate and stand-alone laws, regulations, fees, taxes, policy requirements, and standards. The fees, taxes, and reimbursement changes provide funding for Medicaid expansion, Seniors’ drug costs, premium support, technology, guideline development, and hundreds of other initiatives, many close to the heart of really powerful constituencies.
    Republican leaders who once hooted at the length and complexity of the ACA bill are now learning that fixing healthcare is, shockingly, really complicated.
  • Republican Governors are quite concerned that a replacement will drastically cut funding they rely on for Medicaid, community health centers, public health, and other budget-critical programs. They expanded Medicaid based on a promise that the Feds would pay almost all of that cost; none of the plans currently under discussion live up to that promise.
  • AARP is marshalling its very large and very vocal membership to complain about higher premiums for the 50-64 year old group that would result from changing age bands and reductions to Medicaid that would hurt dual-eligibles.
  • Budget hawks are stuck because repealing ACA – or even just the taxes that are part of ACA – would lead to Medicare insolvency as early as this year.
  • Most troubling of all – loss aversion.  Now that people have coverage, they will be furious if Republicans don’t deliver on their oft-stated promises to reduce costs, preserve coverage, and expand choice.  And no, the attempts by politicians to wordsmith their way out of this commitment by talking about “healthcare access” and “access to insurance” will NOT placate voters who lose coverage.

This last is the key.

The political cost to Republicans of failing to deliver on an impossible campaign promise will be high indeed.  For now, they are going to push the deadline out as far as possible, perhaps pass a repeal-in-name-only bill, then wait till after the mid-term elections – or even the next presidential election – before doing anything serious.

What does this mean for you?

Republicans won’t pass and sign a true repeal bill for months.





ACA Deathwatch – quick update

After a few days of wonderful California weather and Golden State hospitality its back to work.

There’s been so much coming out of DC on all manner of topics healthcare has been somewhat under-covered.  No worries – I got this.

Quick take is Senate Republicans are no closer to a repeal today than they were a month ago. In fact, the “repeal clock” has moved backwards over that time as key Senate Rs have realized repeal is fraught with political landmines.

This bubbled up publicly when Sen Alexander, Chair of Senate HELP Committee and Sen Hatch got into a disagreement over Hatch’s push to repeal the tax provisions of ACA now, then work on a replacement later.

Hatch’s move would have effectively forced many insurers to drop their insureds’ coverage this year, as without premium support low-income insureds would have no funds to cover their share of the premiums deductibles, etc. Insurers would be faced with the need to either a) come up with the money themselves or b) drop out of coverage leaving insureds without coverage.

Alexander’s position was strengthened yesterday by multiple announcements from big insurers about likely withdrawals from the individual markets, as well as news that both the Senate and the House have scaled back plans to do a big bill to repeal and replace ACA.

What does this mean for you?

ACA Repeal is NOT a done deal.