Loyal readers know I hold myself accountable…if I call out others, I need to do the same for my own errors and misjudgments.

also – I dumped my Twitter account and moved to Threads – joe_paduda is the handle.

so here’s the second half of my predictions for work comp in 2023 (first 5 are here)

6. The growing impact of global warming will force changes in risk assessment, management and mitigation; technology adoption; and claims.
The predicted (heat injuries, wildfires, hurricane intensity, sea level rise) and unforeseen (atmospheric river-driven flooding, landslides, and destruction and others) changes in climate and weather will lead to more and different injuries and illnesses, higher risks for fire fighters and public safety workers, and unpredictable problems related to polluted storm water runoff, water-borne disease and perhaps invasive species.
Yup. See reports of heat-related injuries in Texas, including this tragedy that led to a lawsuit. Much more to come…(he said with no joy)

And an excellent analysis by the brainiacs at Milliman...

credit the Guardian

7. Payers and perhaps regulators will make significant efforts to address rising facility costs.
As for-profit healthcare systems look to pad record profits and not-for-profits seek to survive, payers will be looking for better cost control answers than simply doing more of the same stuff they’ve been doing for the last two decades. Network discounts (NOT THE SAME AS SAVINGS) are declining as facilities wise up to most payers’ lackadaisical/ineffective attempts at employee direction and unsophisticated contracting strategies.
Smarter payers will deploy multiple payment integrity layers  – both pre- and post-payment. All should demand more – much more – from their bill review vendors/technology suppliers, all of whom have long refused to entertain the thought that they could do better – much better.

Inconclusive…some evidence but not anything indicating a trend…

8. Premiums will increase – mostly late in the year.
As infrastructure, green energy, re-shoring of chip manufacturing and EV incentives ramp up in the fall so will employment. While there’s disagreement among economists (yeah, who woulda thought??) expect big hiring in categories from archeologists and bridge builders to wireless broadband construction workers.  Manufacturing, heavy construction, trades, logistics will all be hiring…as these tend to be higher frequency (more claims than average) and higher severity (claims are more severe and costly) this means higher premiums and more claims.

Good news indeed for my friends in Cincinnati!

Too early to tell.

Oh, and mark me down for one who does not see a significant recession in our near future.  I know, I’m no economist (who disagree a lot about this) but hiring is too strong, these major investments are on the horizon, and inflation is coming under control  – all indications that a “soft landing” is more likely than not.

Somewhat inconclusive, although more economists are following my lead (ouch! sprained my elbow patting myself on the back!)

9. SB1127 – aka the CAFE Act (California Attorney Full Employment Act) will cause heartburn and consternation among Golden State employers and tax payers.
SB1127 shortens the time period for employers to determine the compensability of claims, a change which will lead to – among other problems – more initial denials and less time for injured workers to receive medical care while their employer researches the claim. Further, AB1127 appears to allow for penalties of up to $50,000 for claims that are “unreasonably rejected” by the employer – but the bill a) doesn’t define what constitutes an “unreasonable rejection” and b) doesn’t exclude claims that are already closed.

Expect attorneys to look for the Golden Ticket case – one that they think will establish precedence – and pursue it like a starving person at a Vegas buffet (or Cafe’).

Too early to tell

There’s good news too…I don’t see much else on the regulatory horizon that is cause for concern.

10. More consolidation among payers and service providers.

Yup. Enlyte bought Anthems workers’ comp network, accuro Solutions acquired Spashlight, Bardavon is looking for someone to buy them before it’s too late, and there are at least two other “processes” in process. 

Time to check in and see how well/poorly my predictions for 2023 are panning out…

1.  The soft market continues…
   And it won’t harden in 2023. Medical costs remain very much under control (with  an exception), rates continue to drop, employment remains very strong (essential for return-to-work) and there’s lots of payers fighting for market share.
   So far so good…this is a done deal.
2. Medical spend is NOT a problem – and will NOT be in 2023.
   With a couple notable exceptions – to be covered in a future post – medical inflation will remain under control. In part this is driven by much lower drug spend and more specifically the continued decline in opioid spend. The latter has a big impact on claim closure and total medical spend.
   Yep. Done deal #2
3. Behavioral health and its various iterations will gain a lot of traction.
   More State Funds, carriers and TPAs will adopt BH programs, more patients will benefit, and more dollars will be spent. There’s a growing recognition that medical issues aren’t hindering “recovery” near as much as psycho-social ones. This is great/wonderful/long-needed and will really benefit patients and payers alike. Kudos to early adopters, and LETS GO to you laggards!
   No conclusive evidence one way or the other…
4. One Call will be sold. 
   I keep forecasting this…and one day I’ll be right.  It has to be this year. CEO Jay Krueger and colleagues have OCCM on a better track, but structural problems (i.e. declining claim volume) and internalization of One Call-type services by Sedgwick and others make the future…less than promising. Couple that with recent ratings actions by Moody’s and S&P and it’s time to do the deal.
   Not yet…but increasingly likely.
5. New technology will make its impact felt.
   Wearables, chatbots (I HATE THEM), and Virtual Reality-driven care are three ways tech platforms/systems/things will significantly ramp up in ’23. Expect several large/mid-tier payers to adopt new tech in a major way – aka not just a small pilot.
   Structural issues with health care (try to find a LCSW or Psych-trained counselor), lack of trained adjusters, and frustration with rising rehab expenses are all contributors.
   Ramping up is happening…albeit from a pretty low starting point.  Expect more to come in coming months

Monday – the rest of 2023 projections…

Sorry to end the week on a bad note – kudos to Texas’ Department of Workers’ Comp for highlighting workplace mass shootings in their just-concluded annual conference. The presentation is here.

The Lone Star state is all too familiar with these awful events [subscription required]…the most recent saw 23 killed and 22 others injured when a racist gunman opened fire in a Walmart store in El Paso.

It isn’t just Texas; we’ve had more than one mass shooting every day during the first three months of this year, with more than 600 victims.

California’s State Fund insured the Borderline Bar & Grill back in 2018; the State Fund’s handling of the awful situation provides a blueprint for all insurers…you would be well-advised to study up on that.

Compassion, creative engagement, empathy and doing the right thing no matter what were the basis of the State Fund’s response.

Until some measure of sanity emerges from Congress, the work comp industry will have to rely on improving the way it handles these disasters.

What does this mean for you?

Once again, work comp is left to handle society’s failings.