The jobs boom

Gas prices are up, there are concerns about inflation, and some shortages continue – that’s the bad news.

The good news is the hiring boom that’s been going on for over a year shows no signs of abating, AND wage increases seem to have moderated a bit – which may be good news on the inflation front.

As a result, unemployment is down to 3.8% – a great number by any standard.

From the New York Times:

Job openings are near a record high. Layoffs are at a new low. And hiring has remained strong in the ebb and flow of successive waves of the pandemic — employers have added at least 400,000 jobs every month since May, the longest such streak on record. [emphasis added]

The economy is moving in the right direction; things are looking solid for a robust 2022 indeed.

What does this mean for you?

More workers = more health insurance and workers’ comp premium dollars.


The death of office work.

Ok, that was a bit clickbait-ey…

but just a bit

Lately I’ve had several conversations with work comp and health plan executives that lead me to believe office work is changed forever  A recent survey of workers by Grant Thornton concluded:

  • 40% will look for another job if forced to return to the office full time
  • 56% are looking forward to returning to the office
  • 51% would give up a salary increase for more flexibility in when and where they work
  • 34% believe their manager is the most stressful part of the day

Here’s the key takeaway…

It “appears the requirement to be in the office full-time is a driving factor that is motivating record resignation. According to the survey, 79% of survey respondents say they want flexibility in when and where they work…”

And this isn’t unique to the US.  Employers in India look likely to adopt a hybrid work model.

Tech and telecoms are already embracing the new model, and I’d bet the rest of us aren’t far behind. For work comp this isn’t anything new as many payers already have long had adjusters and case managers WFH (working from home). Full-service insurer Strategic Comp’s always had field-based adjusters; the carrier’s excellent performance adds serious weight to the argument for remote work.

Then there is quality of life.

You’re an adjuster for a major payer in California. Your commute is over an hour, traffic is awful, you have kids at home, and childcare is darn near impossible to find. You’ve been working remotely for over a year. Your performance is solid, your finances are in the best shape they’ve been in years, and the thought of getting back in the car and listening to the Morning Zoo makes you break out in a cold sweat.

oh, and your employer is desperately short of adjusters and case managers and can’t afford to lose you.

What does this mean for you?

Don’t invest in commercial office buildings.



COVID’s impact on workers’ comp…focus on the facts

Could COVID have a “very alarming potential outcome that could have a huge impact on workers’ comp” due to claims for neurological and psychiatric issues? That’s a concern raised by Mark Walls in tweet that was noted in a recent article in

Before we opine on Mark’s fears, let’s look at the science. I know, you just want the takeaways, but you have to eat your veggies before you get dessert.

A few days back the Lancet published a study assessing the neurological and psychiatric “outcomes” of about 236 thousand US COVID survivors. Here are the key findings.

  • there was a statistical correlation between COVID-19 and higher frequency of neurological and psychiatric diagnoses (the Brits used “outcomes”, but for we Americans, in this instance the analogous word is diagnoses)
  • these diagnoses were more common in patients who had required hospitalisation, and more common still in those who had required ICU admission or had developed encephalopathy

The researchers compared the increased frequency of those diagnoses in COVID survivors to increases in a similar set patients with non-COVID respiratory diseases including flu.

OK, here are some key considerations.

First, these patients are in the US; many of them may not have had regular healthcare prior to contracting COVID, and the neuro/psych conditions may have been present but not diagnosed pre-COVID. While the researchers attempted to control for this by comparing the group to a similar demographic of patients with respiratory infections, it is indeed possible – if not likely – the post-COVID patients had much more thorough medical care during and after COVID than the control group.

Interpretation – The more care, the higher the likelihood of a diagnosis.

Takeaway – The more you look for something the more likely it is you’ll find it.

Second, the older the patient group, the higher the correlation – and the less likely the patient was employed (note I did NOT say “risk” as the study did NOT show that a COVID diagnosis caused the neuro/psych diagnosis.) The average patient that was hospitalized or in the ICU was about 15 years older than non-hospitalized patients (58 vs 43).

Interpretation – COVID hits older people much harder than younger folks; the older the person, the less likely they are working.

Takeaway – the higher the correlation, the less likely the patient is employed, so the lower the potential for a workers’ comp claim.

Third, patients who already had neuro/psych diagnoses may have had that condition exacerbated by COVID. The research showed that a patient that had a stroke before COVID, was more likely to have another one than a COVID patient that had not had a stroke before COVID.

This is especially true for the most severe neuro/psych diagnoses…see “any” vs “first”

Takeaway – very tough to blame an ostensibly work-caused disease for a second stroke or encephalitis event.

Fourth – the most common post-COVID diagnoses were anxiety disorders (occurring in 17% of patients), mood disorders (14%), substance misuse disorders (7%), and insomnia (5%).

But here, the differences between the COVID and control populations were minimal (HR is Hazard Risk – the risk that a member of that population will have that event occur)

Takeaway – very tough to blame an ostensibly work-caused disease for a mood/anxiety/psychotic disorder, especially when the control group’s incidence rate is so close to COVID survivors’.

Fifth – Mark makes the point that outcomes for workers’ comp patients are worse than under group health for similar conditions – he goes on to say costs are higher too – and this may well be the case with COVID. Couple thoughts…

The definition of “outcome” in comp vs group health is pretty different and highly subjective; in comp we care about functionality – group health doesn’t. If you are worried about functionality, you will pay more for more care to improve the patient’s functionality. Ergo…more dollars spent.

There are any number of other reasons costs are higher in work comp – but I’d argue – vehemently – the primary reason is this – compared to other payers, WC does a generally crappy job managing medical. I work in both comp and group/Medicaid/Medicare, and the sophistication of medical management in group, managed Medicaid and Medicare is far superior to comp.

As in a graduate student vs a junior high student.

Takeaway – Lower quality healthcare = poorer outcomes at higher cost.

Finally, Mark says “we’ve never had a global pandemic where the government has mandated it be covered under workers’ compensation.”

Well…we still don’t.

I’m not sure which – if any – government(s) have broadly  “mandated COVID be covered under workers’ compensation”. Sure some states have passed presumption laws or had executive orders re presumption – but those are few, far between, rarely cover all workers – and typically come with a rebuttable presumption.

  • Only California and Wyoming cover all workers with a rebuttable presumption
  • Several states (NJ VT IL) cover “essential workers” – with varying definitions thereof
  • MN UT WI only cover first responders and healthcare workers

An excellent and up-to-date resource on state laws is provided by the good people at NCCI…

I’m struggling to see how the science and current state mandates will cause anything like a “huge” impact on workers comp.

  • The people with the most “risk” are older and less likely to have contracted the disease at work.
  • The study did not show a causal link but a statistical correlation – and correlation is not causation.
  • There have been relatively few COVID claims accepted by work comp.
  • Only two states have passed broad presumption laws.

To his credit, later in the article Mark notes “when you see a study like this, it makes you pause.”

I agree. Pause, read the study, then step back and think it through. And avoid hyperbole. 

What does this mean for you?

There’s a lot of fear out there about COVID – much of it more FOTU [Fear of the Unknown] than fact-based. Focus on the facts, and don’t react until and unless you know the details.

Side note – I opined on a related story 14 months ago…




Are health insurers profiting while providers suffer?

Well, yes – but it’s not intentional.

Most medical practices have seen a sharp drop in patient visits – and revenues – due to patient concern over COVID19 exposure. Hospitals have also suffered, as have ancillary providers, and many are on the brink of financial collapse.

Rural and safety-net providers are especially vulnerable, as many were on very shaky ground before COVID19.

Primary care providers are in the worst shape, as their patients often don’t have serious health needs that need to be addressed immediately. And primary care providers have the lowest pay as well. Research indicates that PCPs will lose about $15 billion this year.

Meanwhile, health insurers’ finances have never been better.

The connection is clear – insured people are not getting care, so insurers don’t have to pay their bills.

For months, healthcare providers have called on insurers to help them out by prepaying for care, paying billed charges, authorizing all treatment requests, providing loans, or otherwise funding providers. Much of this is nonsensical; authorizing all treatment requests would certainly lead to widespread abuse, over-treatment, and poor outcomes. Paying billed charges is nuts; NO ONE pays billed charges, which can be 10-30 times higher than average reimbursement.

What’s clear is COVID has likely created a significant one-time profit bump for healthplans, as a lot of foregone care will not be “made up” as practices gradually return to normal. While insurers should carefully assess their reserves, it is highly likely their “excess profits” won’t all be needed to pay for future COVID19 costs.

So, what to do?

Prepaying care may be a viable option. Healthplans would mine their data to determine what they paid a practice in the recent past, figure out how many members are using that practice, and sign a contract with the practice to ensure the plan’s interests are protected.

That’s just a short-term solution to a problem with roots that far predate the pandemic.

Reality is primary care is still under-valued, fee for service creates huge administrative friction and incentivizes over-treatment, and health care prices are unsustainably high.

What does this mean for you?

COVID will accelerate systemic changes that are desperately needed. There will be lots of pain for some stakeholders – primarily specialists and facilities.


Hospitals and medical practices are losing billions.

And that has big implications for private insurance and workers’ comp.

An insightful piece by Milbank Fund President Chris Koller details the carnage (Chris and I serve on Commonwealth Care Alliance’s Board of Directors).

Total healthcare spending in March was more than 5% lower than the same month in 2019.

From Altarum’s report:

This decline was led by the two largest spending categories: hospital spending, which showed an 8.7% decline, and spending on physician and clinical services, which declined by a huge 19.3%, year over year.

In late April, outpatient office visits were down more than 60%. Visit counts have rebounded in the last few weeks, but are still quite low – especially for surgical and orthopedic specialties.  (From the Commonwealth Foundation)

The financial impact on healthcare providers is devastating.  To date, big health systems have already lost about $400 million – each.

80% of New York doctors have lost more than half of their income, and providers in other states haven’t fared much better. Not surprisingly the ones hardest hit are those that do procedures – especially surgery. While primary care docs and behavioral specialists have been able to switch some patient visits to tele-services, that isn’t possible for proceduralists.


  • Some practices will not survive. New practices, those without strong referral sources, and those with high debt are most at risk.
  • Provider consolidation will ramp up and the number of smaller practices will shrink as the big get bigger – and more powerful. Big practices and healthcare systems are getting more than their share of relief dollars, and are better equipped to make it through months of financial losses. They’ll be snapping up physician practices for pennies on the dollar.
  • Near term, proceduralists are going to favor profitable payers as they open up. Expect provider billing and collection practices to get a lot more aggressive.

Workers’ comp bill review systems, logic, and rules are woefully inadequate and payers using those systems will suffer the consequences.

Private insurers are significantly better off due to much more sophisticated systems…but over the longer term they can expect provider groups will push hard for increased reimbursement.

What does this mean for you?

Workers’ comp payers and private insurers are making a lot of money these days. That will not last.

They would be well-advised to invest now in reimbursement systems, expertise, and tools.




Private health insurance has failed.

If you had “government” health insurance for the last decade, your costs would be 20 – 25% lower today.

That’s because private insurers have not controlled spending nearly as well as Medicare and Medicaid have.  This from KFN via Axios.

Doesn’t matter what your economic or political ideology is – that’s a fact.

You and your insurance company pay your doctors and hospital more than twice what Medicare does. Yes, the Feds can exert pricing power – but why can’t United Healthcare, or Aetna, or Blue Cross?

Those healthcare giants should be able to negotiate better deals with providers; they have massive buying power and millions of members to leverage. They should be able to use that power to give you lower insurance costs – but they can’t.

Those private insurers are (theoretically) more nimble, smarter, better run, and more efficient than the government. And they have hundreds of billions of healthcare dollars to leverage.

Yet they’ve failed to outperform a bunch of bureaucrats.

I won’t dive into the “whys” today, because that would take away from the over-arching truth – government has been much more effective than private insurers.

What does this mean for you?

Cutting your health insurance costs by a quarter = more dollars you could have spent on other stuff.

note – happy to hear other thoughts; please use citations to back up any assertions.


What I missed when I was busy working last week…

Workers’ comp

HomeCareConnect launched a new service last week intended to smooth the transition for patients moving from acute care facilities to a skilled rehab facility.  HCC folks have credentialed and contracted some 15,000 providers; combining these providers with HCC’s in-house care coordination staff should help adjusters and case managers manage the complex needs of these patients.

The folks at the California State Comp Insurance Fund produced a pretty campy – and pretty useful – video training series about data security.  Not often a CEO allows her/himself to be the object lesson for training…

The fine folk at WCRI have a free webinar Thursday, Jan. 30, 2020, at 1:00 p.m. ET reviewing Pennsylvania’s workers’ comp systemRegister here…And do it now, as there’s a 500 viewer limit.

Friend and colleague Dwight Robertson MD penned an excellent piece on opioid management.  Dwight, who is the Medical Director for Employers’ Insurance, has found that three tactics can make a big difference; get on those opioid claims much sooner, have a direct conversation with the prescriber about the opioid plan, and focus on alternative approaches to pain management.

A quick read and quite topical.

Group health

Private insurers’ facility payments differ wildly; comparing them to Medicare indicates inpatient costs are roughly 2.4x Medicare, while outpatient is even higher at 2.9x.

The pic below is from an interactive tool that enables you to see what your state looks like. Spoiler alert – Orlando’s Florida Hospital gets more than 3x Medicare…

Here’s my Capt. Obvious moment – your healthcare insurer is paying more than twice what Medicare is – which means huge profits for your hospital.

And that’s why your insurance premiums, deductibles, and out of pocket costs are so high.

What does this mean for you?

Good stuff happening in workers’ comp, while hospitals are the biggest reason your health insurance premiums, deductibles and out of pocket payments are zooming



A wake-up call for the insurance industry

We are stuck in a self-destructive cycle, namely an industry-wide culture that rejects true innovation that leads to a huge talent deficit that prevents innovation.

With few exceptions, there is little in the way of innovation, effective marketing, risk-taking, creativity and substantive investment in systems and technology in the insurance industry. That will be the death of many insurers and healthplans.

As a result, we can’t get enough brilliant, impactful people to work in our business because our culture is anathema to most of them.

So, there’s no innovation.

The most important part of any organization is its people. Yet our industry’s talent deficit is as wide and deep as the Marianas Trench. Sure, there are some very smart folks doing great work – in healthplans, State Funds, private insurers, TPAs, and service companies.

They are the exception, not the rule.

Don’t agree?

How many of your brilliant college classmates chose a career in insurance? In your career, you were blown away by someone’s acumen, insight, brilliance, thinking how many times? How many execs in this business came out of top business or other schools?

Why is this?

I’d suggest it is the very nature of our industry; it isn’t dynamic, doesn’t reward innovation, hates self-reflection, abhors risk-taking, and doesn’t invest near enough in people or technology.

Proof statements, courtesy of The Economist 

  • No insurer ranks among the world’s top 1,000 public companies for R&D investment – yet dozens of insurers are in that top 1000.
  • On average insurers allocate 3.6% of revenue to IT —about half as much as banks.
  • In a study of 500 innovation topics across 250 firms, many insurers are working on the same narrow set of ideas.
  • Many property insurers, whose fortunes rely on forecasting climate-induced losses, are still learning how to use weather information.

Tough to recruit talent to an industry that – for Pete’s sake, invests half what banks do in IT…

  • Or for a property insurer that hasn’t figured out weather is kinda important?
  • Where all your competitors define “innovation” as doing the same stuff you do?
  • That probably spends more on janitorial services than R&D? (Ok, that may be a bit of an exaggeration.)

Many of the big primary insurers in today’s market will be overtaken by the Apples, Amazons, Googles, Beazleys, Trupos, and Slices tomorrow. The names you know are brilliant innovators and have billions upon billions of cash to invest. The names you don’t know have figured out and are diving into markets that the traditional, stodgy, glacially-fast insurers can’t even conceive of – reputational risk, very short-term insurance for specific items, disability coverage for gig workers, and a host of other opportunities.

Oh, and they are doing it without all the paperwork, hassle and nonsense that keeps insurance admin expenses at 20% of premiums while frustrating the bejezus out of potential customers. (having just spent hours on the phone fixing a problem with flood insurance, count me as one)

And no, with rare exceptions health insurers aren’t any better. With structural inflation that guarantees annual growth of 5-8% and an employer customer that has to provide workers with health insurance, plus governmental contracts that pay on a percentage of paid medical, and record profits across the entire industry, there’s every reason to NOT control costs.

Those record profits may well continue till a Cat 5 storm hits the Jersey shore and/or a deep recession hits and/or investment portfolios are crunched by macro factors.

In the meantime, Jeff Bezos will be looking for places to plow some of his hundreds of billions.

Tomorrow – what to do about this.

What does this mean for you?

Critical self-reflection is really hard, and really necessary. This industry is ripe for disruption and it will happen. The question is, what will you – and your company – do?




Here’s what happened last week…

People who enroll in exchange programs in red states pay 3.2 percent more for their health insurance than folks in purple or blue states.  Research indicates it is because fewer folks in red states sign up for coverage – and these are likely the healthier people.

Families pay about a third of their healthcare costs, with employers picking up most of the rest.

In part that may be because healthcare now costs more than a new car…Yet one more straw on that poor camel’s back…

Yet another indicator that the healthcare market continues to rapidly consolidate came last week with news that Tufts and Harvard Pilgrim look to be merging.

A you-should-definitely-read-this piece from Harvard Business Review reminds us that variations in data should be considered thru the lens of statistics, not emotion or intuition. An excerpt:

Sorting out variation provides needed context, points to opportunity, and helps managers maintain their cool when something goes wrong. Managers should learn how to measure variation, understand what it tells them about their business, decompose it, and, when necessary, reduce it.

WCRI’s Vennela Thumula PharmD will be discussing Interstate variations in opioid dispensing in a webinar on September 12.  Dr Thumula is one of the nation’s leading experts on workers’ comp opioids and well worth your listen. Register here.

Great piece from HealthAffairs on evidence-based treatment guidelines.  There’s a lot of nonsense and BS out there – especially in workers’ comp guidelines – and this article provides a solid foundation to understand what’s real and what isn’t. Here’s the central message…

There are two core issues that lead to a host of problems. First, there is a lack of centralized authority to coordinate, vet, approve, and catalog guidelines. Second, there is an absence of a universal methodology to create guidelines—every professional organization promulgating guidelines today generally decides freely which, if any, framework they will use to construct guidelines.

Finally, if you want to understand how to incentivize physicians – and improve your ability to work with them, read this.

take time to develop relationships with physicians. I need to develop trust. I need to convey the why. And then, once we do that, you can begin to move into the how and the what. And then physicians are ready to look at the dashboards to help you move them forward.



Media coverage of Amazon/Berkshire/JPMorgan misses the point.

The coverage of the JPMorgan/Amazon/Berkshire Hathaway healthcare initiative has been universal, breathless, and mostly superficial.

Scoffers, “experts” are gleefully predicting this attempt to do something really different will fail miserably, victim of ignorance and hubris. While there are no guarantees, these naysayers ignore:

  • the three CEOS and their staff are brilliant, powerful, have almost unlimited resources, and are very, very cognizant of the difficulties they face. These are as far from idealistic newbies as one could get.
  • the “competition” is pretty lousy, hasn’t delivered, and their incentives are NOT aligned with employers’. If the big healthplan companies could have figured this out on their own, you wouldn’t be reading this.  It’s not like A/B/J are taking on Apple, Salesforce, or the old GE.
  • the financial incentives are overwhelming; healthcare costs are over $24,000 per family and heading inexorably higher. Unless these companies reduce and reverse this trend, they’ll have a lot less cash for future investments.

Many are also talking about “initiatives” that are little more than tweaks around the edges; things like:

  • publishing prices and outcomes for specific providers aka “transparency”
    My view – research clearly demonstrates consumers don’t pay attention to this information, so there’s no point
  • using technology to monitor health conditions and prompt treatment/compliance
    My view – lots of other companies are already doing this, and this is by no means transformational
  • use buying power to negotiate prices
    My view – it’s about a lot more than price, it’s about value.

Here’s a few things A/B/J may end up doing.

  1. Own their own healthcare delivery assets.
    My view – Insourcing primary care, tying it all together with technology, and owning a centralized best-of-breed tertiary care delivery center would allow for vastly better care, lower patient hassle, and cost control.
  2. Buy healthcare on the basis of employee productivity
    My view – Healthcare is perhaps the only purchase organizations make where there is no consideration of value – of what they get for their dollars. To the Bezos’, Dimons, and Buffets of the world, this is nonsensical at best. They will push for value-based care, defined as employee productivity.
  3. Build their own generic drug manufacturer
    My view – No-brainer.
  4. Allow employees to go to any primary care provider they want, but require them to go to Centers of Excellence for treatment of conditions that are high cost with high outcome variability.
    My view – No brainer.

I’d also expect many more large employers will join the coalition, for the simple reason that they have no other choice.

What does this mean for you?

Do not discount this.