Tuesday catch up

Or, what happened while I was/we were in New Orleans at NWCDC

First up, a most excellent report by WCRI’s Olesya Fomenko and Te-Chun Liu on provider fee schedules in workers’ compensation.  Must-reading for investors, bill review entities, networks, and users thereof, the report details:

  • which states use what methodologies,
  • what changes have occurred over the last few years, and
  • trends and developments.

As there is a lot going on with Medicare’s fee schedules, this report provides a sound basis of understanding.

For all those investors, private equity people, and researchers – you can now get – for FREE – what you often pay me for.  Information on fee schedules in workers’ comp and the effects thereof is available here. From WCRI, of course!

Wait…did I just post that? Sometimes I’m such a dumbass.


The REAL fraud in work comp is not the odd worker cheating the system – it’s employers misclassifying workers, using labor brokers, under-reporting payroll – you name it.  Bruce Woods, formerly of AIA, brought this to the attention of AIA’s members about a year ago, and I thought of Bruce when I got this from Matt Capece about the millions in damages due to fraud in one state – New Jersey.

Health spending

US spending on health care is approaching 18% of GDP.  CMMS estimated 2015 spending hit $3.2 trillion, or $9,990 per person. The primary driver was “residual use and intensity”, geek-speak for what’s left after age, sex, population changes and inflation are accounted for. In other words, people are getting more services which, given over 40 million didn’t have health insurance until 1.1.2014, and just over half of those poor unfortunates now do, isn’t exactly shocking.

You can expect the folks most likely to lose their health insurance under Trump/Price will get every test, procedure, therapy, script, surgery, and treatment they can now, before the ACA is repealed.

Deflation in work comp medical spend

Workers comp medical expense is now just over 1 percent of total US medical spend. While non-work comp costs were up 5.8 percent last year, NCCI reported work comp medical DECREASED 1 percent last year.

Holy flipping unicorn, Batman. Until someone offers a better explanation, I’ll credit ACA’s reduction in the number of uninsured as the major driver.

Good people sometimes win

Congratulations to friend and colleague Danielle Lisenbey, CEO of Broadspire. Danielle was just named Claim Exec of the Year by the New York Claims Association.



Heading to New Orleans..

It’s the annual gathering of the work comp tribes time.  This year the National Work Comp and Disability Conference is in New Orleans, and I’m really looking forward to the great food, wonderful music, and Southern hospitality. As I’m sure many of you are.

I’m honored to be speaking twice – Thursday morning’s a discussion of chronic pain guidelines with Steven Feinberg MD.  Steve is compassionate, very knowledgeable, and highly experienced and I’ve learned much from him. Thursday afternoon is the Bloggers’ Panel; get there early as this session is always well-attended.  Any bets on how long before I get grief over the election results from Bob Wilson? (Bob was right and I was wrong in our predictions)

A couple years back I listed a few recommendations based on my far-too-many-years attending work comp conferences.

1.  Realize you can’t be everywhere and do everything. Prioritize.

2.  Leave time for last-minute meetings and the inevitable chance encounters with old friends and colleagues.

3.  Unless you have a photographic memory, use your smartphone to take voice notes from each meeting – right after you’re done.  Otherwise they’ll all run together and you’ll never remember what you committed to.

4.  Introduce yourself to a dozen people you’ve never met.  This business is all about relationships and networking, and no better place to do that than this conference.

5.  Wear comfortable shoes, get your exercise in, and be professional and polished.  It’s a long three days, and you’re always ‘on’.

6. Finally, what happens in New Orleans gets posted on Instagram.  Don’t be stupid. Like these guys. Alcohol is not your friend, and this is not spring break.

Travel pleasantly!

The future of Managed Care Matters

MCM has been up and running for more than a dozen years, over 3,000 posts, and multiple iterations. We average about 1400 visitors each day we post.

It’s time to review what we do and see what needs to change.

Not to worry (or cheer, depending on your view) It’s not going away.  Nope, we’re going to continue doing what we do – reporting what we think is important; calling out the bad actors; applauding the good folks; digging into the details; and challenging you, dear reader, to think more deeply.

This is more important now than ever.

The American health care system  – patients, providers, payers, suppliers, intermediaries – accounts for one out of every six dollars in our economy.  17 percent plus of our GDP. Almost three trillion dollars. Likely 20 million + jobs, many of them well-paid.

As we’ve seen with ACA, changing this “system” is wrenching indeed. It’s incredibly politically charged, stupidly expensive, delivers poor results for what we pay, brutally hard to explain, and stuffed with great reasons to not change. Oh, and there are more lobbyists focused on pharma, medical devices, insurance, providers and health systems than for everything else combined (I kinda guessed at that last one, but it’s likely true).

After the most bizarre and unpredictable election in memory, it’s now the Republicans’ turn.  Reforming 1/6th of the nation’s economy is challenging indeed, and we all hope they get it right, as there is so much at stake.

For my work comp readers, we’re used to being the flea on the tail of the elephant. When you buy just 1.25% of all the health care services in the country, you get used to being whipped around and having almost no ability to choose where you go.

Make no mistake, the “reform of health reform” will dramatically affect workers comp.

Here’s what’s happening at MCM.

  1. All comments will be moderated.  After a raft of nasty comments from a very few posters it’s no longer advisable to let comments go “live” without moderation.
  2. We’re adding a new category – Health reform’s impact on worker’s comp. You can see those categories on the right side of the home page, where all posts are neatly categorized. Just click on the one you want and voila!
  3. As always, courteous, intelligent, and fact-based disagreement is welcome. If you want to take issue with a post or specific content cite primary sources to back up your statements and claims. Unsupported rants will not be posted.
  4. Anonymous comments may or may not be posted.  You know who I am, it’s only fair I – and other readers – know who you are.

In January, we’re launching a periodic podcast which will focus on key issues, update you on deals and transactions, provide context on health reform, and answer your questions.  Will keep you updated on that – it’s been a long time in coming!




Getting serious about health reform, part one

Selling health insurance across state lines is one of the central planks of the GOP’s plan to replace ACA.  Intended to foster competition and reduce costs, the idea is the more insurers competing for customers, the lower the price and better the product. And by eliminating the requirement that insurers comply with state mandates, costs would be lower because some services, conditions, and treatments would not be covered

In addition to these issues there is one real example that should sharpen our thinking.

Today three states allow citizens to buy insurance offered by out-of-state insurers. Maine, Wyoming, and Georgia have all allowed this for over a year, yet no out-of-state insurers are offering plans in those states.

the question is why?

Folks advocating this idea base their view that selling coverage across state lines will reduce costs by eliminating mandated benefits, which some think would reduce costs 30-50 percent.

That view reflects a lack of understanding of the cost drivers in health insurance, the primary driver being – you guessed it – the cost of medical care.  While mandates do influence costs, the underlying cost of insurance is the cost of care. And health care just costs more in Portland Maine than it does in Boise Idaho

There’s another concern that hasn’t been broached, perhaps because it is politically charged. States have significany regulatory authority over benefit design and mandates. Allowing the sale of non-compliant insurance in a state may well be anathema to those strongly supporting state sovereignty.



C’mon, VA, do the right thing!

There are thousands of veterans waiting for the Veterans’ Administration to streamline disability evaluations.  While they wait, the VA dithers.

This has dragged on for more than a year, a year in which the GAO pummelled the VA for failing to comply with its own contracting standards when awarding contracts to a huge defense contractor – Lockheed Martin – that has almost NO experience in disability evaluations.

According to a piece in Politico earlier this year;

the GAO “citing “prejudicial errors” has directed the Department of Veteran Affairs to go back to the drawing board…the office “recommended that the VA reopen negotiations with the offerers, solicit, obtain, and evaluate revised proposals; and make new source selection decisions” [emphasis added]

Oh, and the VA “misled two of the protestors during the conduct of discussions or negotiations.  These errors led the VA to make source selection decisions…that were unreasonable…” [emphasis added].

One of the protesting bidders – Veterans Evaluation Services – published an ad in yesterday’s WSJ calling on Trump to fix this.  Here’s hoping this gets results.  (disclosure – I’ve done work for VES in the past)

And fast, because our veterans have been waiting for far too long.



The election’s impact on health care – experts opine

This is a special post-election edition of Health Wonk Review – we asked our contributors to share their thoughts about how the GOP’s sweep will affect health care, health reform, and the health care system.

I’d like to profusely thank our contributors.  For most, this was a totally unexpected result that no one i know (except Michael Moore, who I don’t “know”) predicted or even considered possible.  Our contributors have focused, dug in, and come up with some terrific insights into implications for health care.

Before we jump in, a couple key data points.

  1. Health care accounts for one-sixth of our GDP.  This is a HUGE, incredibly complex, deeply entrenched business.
  2. Unlike any other part of our economy, health care is unique because it profoundly affects us as individuals.
  3. ACA is MUCH bigger than the Exchanges; only 1 American out of 19 is covered via the Exchanges.

More on what ACA is and is not, and how it has been portrayed in the media from Daniel Dawes at healthinsurance.org.  If you’re up for more fact-checking, Daniel’s got you covered.

David Williams encourages Democrats to go ahead and allow Republicans to repeal ACA. Filibustering such a move, while possible, would delay the death by a thousand cuts from executive action and the budget reconciliation process. That being the case, let ’em at it.

David correctly notes that the GOP’s positions are often directly contradicted by (some of) Trump’s positions, and health care is no exception. He also breaks down the key “policy initiatives”, most of which won’t do anything to bend the cost curve. David concludes that once Trump figures out these initiatives aren’t going to solve the problem, he may well decide to go back to his earlier plans to adopt a Canadian-style system.

We welcome Matthew Holt back to HWR!  Somehow able to write a cogent post while watching election returns (when I was hiding under the covers), Matthew wonders how Trump is going to A) repeal “Obamacare” while ensuring everyone has access to high quality, affordable health care. The middle-aged white folks who supported him expecting he’d “fix” health care are going to be disappointed if he doesn’t deliver…

That, plus the fact that the entire health care system – payers, providers, IT, pharma – have spent six years working to adapt to ACA and there will be an awful mess if there’s a hard stop on Inauguration Day.

Bob Laszewski tells us the GOP does have a written plan, and it’s ready to go.  He also believes the Dems will work with the GOP to replace ACA because there are a lot of Democratic Senators up for election in 2018.

Thanks to Peggy Salvatore for her contribution; she notes that for many voters “Obamacare” may well have been a big reason they pulled the lever for “anyone else”. She also hopes Trump will assemble a team of experts to plan the new health care laws.

Brad Wright notes that while most may think ACA will be repealed, most also thought Clinton would be our next President.  The real question is what will happen to the 20 million + who have coverage due to ACA.

Tim Jost of Health Affairs reminds us that the simplistic statement “repeal Obamacare” is not going to happen.  Most Americans equate the Exchanges with “Obamacare”; ACA is much more than that.  An outright repeal would impact everything from pharmaceutical pricing to biosimilars to Medicare reimbursement to hospital financing; the entire system will grind to a halt if the “replacement” plan isn’t carefully thought out and well planned. 

Given Trump’s wildly inconsistent stances on health care and the low likelihood that the Ryan plan’s policies will do anything to bend the cost curve, I don’t see a solution coming that will make Trump voters happy. 

Thanks to Roy Poses for his post on how the current system is “rigged” to enable companies to sell useless stuff.  The FDA finally caught up with a company shilling its “beads” as a drug delivery tool, when it had been explicitly prohibited from doing just that. Perhaps we need MORE regulatory enforcement, not less.

TrumpCare – initial takes

Okay, time to dig into what this election means for health care.  I’m still working thru how this will affect workers’ comp; my first post next week will focus on that.

To my loyal readers, thanks for your patience while I diverted from health care and work comp and used MCM to discuss the election and its impact on me. For those friends and colleagues who thoughtfully and kindly contributed to the conversation, I deeply appreciate your insights and views. We may not agree and that’s fine as long as we seek to understand.

I’m really working to keep my inner snark under control here, so bear with me folks.

The biggest problem in crystal-balling about the election’s impact on health care is Trump has been all over the place.  He’s advocated for a Canadian-style system, vowed to repeal Obamacare, lauded single-payer, and gone off in other directions enough to convince me he doesn’t have any firm plan.

His party does have a “plan”, at least current Speaker Paul Ryan detailed one earlier this year.  It includes

  • Selling insurance across state lines (an air sandwich if ever there was one),
  • block grants for Medicaid;
  • no mandate but no coverage for pre-existing conditions without continuous coverage;
  • cap employer tax break for health insurance;
  • refundable tax credit for individual purchase of insurance;
  • end the Independent Payment Advisory Board.

Here’s the problem.  Nothing here will reduce the cost of health care. 

The voters who backed the GOP and Trump expect health care costs to come down, insurance to be cheaper, less complicated, and provide better coverage, and the whole system to function better/easier/faster with less hassle.

But mostly they want it to cost less.

These initiatives will not do that.

Reducing cost will require narrower networks (you can’t keep your doctor), lower benefits (what, this isn’t covered?!), price controls (anathema to conservatives) and/or tight utilization control (don’t get between me and my doctor).

Yes, forcing people to buy insurance and not covering pre-existing conditions if they don’t is going to make more people buy insurance and that’s good.  But it’s still unaffordable for many, and they will won’t sign up.

What does this mean for you?

It’s easy to criticize; now that Trump et al own this, they’re going to see just how hard it is to fix health care.



The optimist’s case for Trump

In an effort to get my head around Trump’s victory, I’ve spoken with several good friends with diametrically opposite political leanings, folks in the demographic that used to be called Northeast Republicans. The conversations have been long, heartfelt, passionate, and courteous. Here’s what I’ve learned.

The depth of disgust for the Obama years is deep.  One very knowledgeable colleague described economic growth under the President as “zero”.  While GDP growth has not been anywhere near as robust as one would like, it has averaged 2.1%. A detailed and dispassionate perspective is here. Job growth has been anemic indeed, labor force participation is low – but improving, while wages have improved markedly – if only recently. And, the last 8 years has also been a time of relatively low growth in world GDP, much lower than it was during the Reagan, GW Bush, and Clinton eras. Tough to grow a very mature economy when our buyers and sellers aren’t growing at all.

The discussions have been wide-ranging but all come back to this sense that the country is somehow on the “wrong track.”

Into this comes Donald Trump, a candidate with a chequered business career, well-documented behavioral issues that would disqualify him from being hired by most employers, is notoriously thin-skinned, and has policy positions that are, at the very least, confusing and ideologically inconsistent. And that’s leaving out the really ugly stuff.

Among his policy ideas/positions/stated plans:

  • building the wall – consistent with GOP orthodoxy
  • renegotiating NAFTA – not consistent
  • declaring China a currency manipulator – not consistent
  • raise the minimum wage – not consistent
  • ramp up fossil fuels – consistent
  • friendship with Putin – not consistent
  • spending a trillion dollars on infrastructure- not consistent
  • reduce taxes on the wealthy – consistent
  • repeal “Obamacare” – consistent
  • climate change is a hoax – consistent
  • add $10 trillion to the debt to accomplish varied goals – not consistent.

Point here is not to get into policy details, but rather to note Trump doesn’t toe the ideological line, rather he jumps back and forth with amazing rapidity.

When I ask my friends why they voted for Trump, it clearly isn’t about policy. Trump’s “policies” are decidedly NOT conservative. They say things like:

  • “I hope he surrounds himself with people smarter than him and listens to them”
  • “he didn’t mean those things, he just says crazy stuff”
  • “the legislature will do most of the policy setting work”
  • “he will get the best SecDef (Secretary of Defense) and he (Trump) will lead from ahead”

I don’t see it.  Trump won by ignoring all experts, by going his own way, by following his own genius. And that has brought him to the most powerful position on the planet. Why would he listen to anyone else?

If anything, these conversations have gotten me even more bewildered. Middle-aged successful intelligent professionals decided to vote for – and support – a candidate with many views directly contrary to theirs, with serious behavioral issues, and with a temperament they acknowledge is highly concerning instead of a pretty ordinary but highly experienced center-left politician with a long reputation for working well with Republicans.

The risk:reward thing is what stumps me.  Trump will have the nuclear codes.  He will have the “trade-war codes”. He has control over foreign policy. All areas with huge risks – some of them existential. Yet none concerning enough that my colleagues didn’t vote for him.

I very much hope my colleagues’ optimism is well-placed.

And very much fear it isn’t.


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.