May
5

Will work comp injuries increase?

WorkCompWire arrived yesterday with the news that new employees get injured much more often than their more-experienced colleagues.

The Travelers provided the research, which confirmed  – and added more detail – to what we already (sort of) knew – about a third of injuries happen to workers with a year or less on the job.

This makes sense; newer workers are less experienced, have had less training, are likely younger and don’t know what they don’t know.

Not surprisingly the incidence rate varies by industry…again from the umbrella people…

Couple additional observations.

  • Construction is a higher-severity industry, making newer workers even more susceptible to longer-term claims.
  • Hospitality, construction, and transportation are higher-turnover industries, making it more likely the entire workforce is less experienced – and more of the workers are in their first year than in other sectors.

And here are related issues that deserve your attention:

  • there’s a lot more turnover in employment than “normal” these days – which means more workers will be in that dangerous first year.
  • construction is ramping up with billions in spending on governmental and private projects.
  • logistics/transportation is under severe stress due to the ongoing supply chain problems

What does this mean for you?

All these factors suggest injuries may bump up later in 2022 and into 2023.

Kudos to the Travelers for the work; this is helpful indeed.


May
3

I’m back…

From a 5 day bike-packing trip from Pittsburgh to D.C. Great to get off the grid and out in the woods/mud/gravel/wind. Really…

So, next week is NCCI’s annual confab.  Looking forward to seeing old friends and colleagues and hearing the latest from Raji Chadarevian and Sean Cooper on medical drivers, Donna Glenn’s State of the Industry report, Roger Ferguson’s discussion of the financial scars left by COVID, and the ever-entertaining and informative Bob Hartwig.

Also on the agenda is Katie Williamson’s assessment of catastrophes’ impact on workers comp. As a long-time believer in anthropomorphic climate change, I’m looking forward to Ms Williamson’s comments (which will cover much more than weather and climate).

Also just out from our friends in Florida is a discussion of Medicare fee schedule changes and attendant impact on workers’ compensation. While pretty deep into the nerd zone, this is one of those “I wish I’d known this ahead of time” things you may reflect back on when wondering why costs changed/prices shifted/utilization bounced up.

Couple quick hits…

Some states are directly tied to CMS so when CMS changes, WC Fee Schedules quickly follow suit. However, other states are indirectly tied, use part of CMS’ methodology, or factor CMS in to their calculations.

Pic courtesy NCCI

Facility rates will also increase – by around 2.5%. No surprise there – although one can expect higher inflation in Florida because…well, it’s Florida.

Congratulations to Carisk’s Alana Letourneau MD MBA on being named a 2022 Rising Insurance Star Executives 35 Under 35 Award winner. I’ve worked with Dr Letourneau in the past; she is insightful, deeply committed to her work, practical and an excellent communicator.

While I was gliding along the C&O canal last week, WCRI was publishing Karen Rothkin’s annual guide to workers’ compensation laws and regulations.  Free to members and well worth the investment for non-members.

Ok, back to catching up on work stuff.

 


Apr
19

Quick updates

Quick as in this won’t take up much of your time, and “‘quick” as in how fast NCCI has published useful data.

NCCI’s Medical Indicators and Trends dashboard has been updated to include data up to September 2021…you can access it here. Kudos to NCCI for the timely updates; the fresher the data, the more actionable it is.

Couple key takeaways.

First, those darn facilities.

Ambulatory Surgery Centers (ASCs) and outpatient hospital care…

First, note that hospitals’ outpatient facilities account for almost one-fifth of all work comp medical payments…

while ASCs account for one-fourteenth of medical spend.

A big part of that differential is the cost of surgery…which cost about 70% more in hospital outpatient facilities than in ASCs.

Before anyone jumps to any conclusions, its critical to understand the nuance here…

The Florida WC fee schedule is very much slanted to benefit hospitals at the expense of everyone else (physicians in the Sunshine state have been screwed by the Three Member panel for years, while hospitals have been treated like royalty).

Second, ASCs do not handle complex cases and patients with significant health problems/co-morbidities…these patients must be treated at faciliteis that have access to emergent care resources incase something goes pretty wrong during or after surgery. So, case-mix is different.

More…

COVID’s impact continues…active claim counts were down an average of 13% from 2019 to 2020

And speaking of the guest who refuses to leave, this came across my virtual desk from a colleague who attended last week’s RIMS meeting…

I know of several folks who tested positive post-RIMS; if you went, please get tested.

Finally, Washington Labor and Industry is looking for physicians in various occupational medicine and related specialty positions…

Washington has been a leader in evidence-based policy related to injured worker care for injured and ill workers. There is no private workers’ compensation insurance in WA, as such, we are essentially a single payer system for work related injuries and illnesses.  We look at the workers compensation health care delivery system as a public health opportunity to prevent the disability that often results from injuries in the workers’ compensation system.
The work life balance opportunity is fantastic, and the salary range ($179-235,000) is very competitive for a public service physician position.

What does this mean for you?

Quick access to actionable data is great; actually acting is even better.


Apr
6

Quick catch up

Watching our granddaughter this morning which precludes lengthy opining or research.

MedRisk is expanding

The leading physical management company in work comp added two well-respected and quite talented execs.  Sri Sridharan will join MedRisk’s C-Suite as Chief Client Officer. I’ve known Sri for more than a decade; he has one of the sharpest minds I’ve ever come across.  As Chief Client Officer he will head up account management and analytics. functions that fit him quite well

Daad McGovern will join MedRisk in the newly created position of Senior Vice President of International Operations…the company is expanding internationally and Daad will lead those efforts.

Employment is booming.

As in growing by more than 400,000 a month for the last year (well, 11 months to be totally precise).

From NYTimes

The economy has recovered more than 90 percent of the 22 million jobs lost at the peak of the pandemic’s lockdowns in the spring of 2020…

the share of adults who were working or actively looking for work rose to 62.4 percent, just a percentage point below the level on the eve of the pandemic. Among people in their prime working years, those ages 25 to 54, the return has been even stronger. [emphasis added]

That being reality, why are Americans so grumpy?

There’s concern about inflation – although wage increases are almost keeping up with those costs.

Then there’s the complaining about gas prices…which, btw, are due almost entirely to the economy recovering from COVID and Putin’s war on Ukraine.

C’mon people, we can all pay more for gas to keep tightening the screws on that genocidal murdering bastard. Think of it as our contribution to the Ukrainians…

Construction workers are among the most vulnerable to economic problems – with wage theft a major driver.

39 percent of all construction worker families rely on at least one public assistance to make ends me compared to 31 percent of all working families.  The cost to federal and state taxpayers is $28 billion.  The authors of the report attributed this high degree of reliance on low wages, wage theft and other abusive and illegal employment practices in the construction industry.

This results in taxpayers – me and you – paying more to help these people because they aren’t paid a living wage.

RTW

Solid piece from NCCI on return to work…based on interviews with several “insurance professionals”. Not surprisingly, the key factor was employer buy-in and support.  That means real, persistent commitment – which might be a big help in these days of labor shortages.

Ivermectin

Well, the final word is in – Ivermectin isn’t useful for helping patients with COVID.

For anyone who’s been following the issue, that comes as a stunning non-surprise. The study results published in JAMA are incontrovertible:

Treatment with ivermectin did not result in a lower incidence of medical admission to a hospital due to progression of Covid-19 or of prolonged emergency department observation among outpatients with an early diagnosis of Covid-19. [emphasis added]

What does this all mean for you?

Higher wages and more employment = higher work comp premiums

Science always wins.


Apr
4

Facility costs…more bad news

Here’s two things which will likely increase facility costs.

Becker’s reported last week that so far this year hospital and health system margins (with some very notable exceptions) are pretty crappy – down almost 12 percent month over month in February, and a whopping 42% below February 2020 (jsut before COVID).

My bet is significantly higher staffing costs are a major contributor; the giant Henry Ford system said labor costs were up 8% in February over the same month in 2021; Providence’s increase was even higher at 10%.

Couple that with a steep drop-off in health insurance coverage as COVID-related medicaid coverage ends, and you can expect facility costs to jump.

That’s because we’re going to see a lot more uninsureds seeking care at hospitals.

Medicaid is likely the single largest payer today, with about one out of every four of us covered by Medicaid.

The problem will be especially acute in states that have not expanded Medicaid – if your members/insureds/injured workers are in the orange states, you’ve already been paying a hidden tax to help pay for uninsured care delivered by hospitals.

Since states can pretty much determine who gets Medicaid, the problem is even worse in places like Mississippi that have long restricted Medicaid coverage to a very thin slice of the poor.

If you make more than 27% of the federal poverty level, you’re too rich to get Medicaid in Mississippi – which is both the poorest and sickest state in the nation.  (kudos to Louise Norris for her intel on the issue)

What does this mean for you?

Success favors the prepared. If you think you’ve got an answer to this you’re likely wrong. 


Mar
25

WCRI #4 – Provider consolidation’s impact on workers’ comp

Is Not Good.

that’s the primary takeaway from Bogdan Savych PhD’s presentation at WCRI’s annual conference– and a lot of other work I’ve done on the topic.

Consolidation eliminates competition – although I’d posit there’s little true competition in health care services. [I’ve written a LOT about  consolidation and the impact thereof]

There’s solid evidence that consolidation actually leads to increased prices and some research indicating it leads to decreased quality.

So how has healthcare evolved – well, primary care docs shifted from mostly solo practice to employment by health systems or group practices. Note this data is from 2018; consolidation has accelerated since then.

Of course, like everything else in healthcare, it’s local…orthopedic practices in Wisconsin are much more likely to be owned by health systems than those in Delaware.

Dr Savych’s research hit on a critical issue – exactly how many workers’ comp patients do primary care docs see? – the answer is most see almost none – with just one out of every ten physicians seeing more than 10 WC patients per year. Of course orthos see more – but still not many; only about a third see more than 10 claimants per year.

There are a whole host of issues with this which we’ll get into in a future post. For now, the net is researchers have to identify the specific physician responsible for the care of and outcomes for specific patients – which is fiendishly difficult especially when that physician moves from a group practice to employment by a health system. Provider identification is the main challenge – but by no means the only one.

Case mix adjusting – the art of comparing patients with similar diagnoses (often primary, secondary, and tertiary) over time – is as or almost as hard to get consistently right.

All that said, Dr Savych noted that cost increases are due more to a shift in the volume and type of procedures than higher prices for individual services.

The initial takeaway (there’s a LOT more research and analysis to do) is vertical integration (physician practices absorbed but health systems) leads to docs providing more expensive services.

What does this mean for you?

Consolidation raises work comp medical costs.

The best way to think about this is on a state-specific basis; understand where there’s more consolidation and watch the type of services delivered to your patients like a hawk.


Mar
21

Future of the Workplace post COVID – WCRI #3

My posting service sends out posts at 10 am eastern, so I decided to hold off on flooding your inbox with reportage from WCRI’s annual confab and spread things out.

Today we’re reporting on a panel discussion re the future of the workplace post-COVID (let’s HOPE we are “post” COVID)…[Ed note – these are paraphrases; corrections welcomed and apologies for errors]

Denise Algire, director of risk initiatives and national medical director for Albertsons Companies (and a good friend); Dr. Craig Ross, regional medical director for Liberty Mutual; and Dan Allen, executive director for the Construction Industry Service Corporation, a non-profit labor management association were the panelists.

Dan Allen – The vaccine requirements have been very well received by workers in construction – strong educational outreach, not a “hammer”, rather focused on getting the word out – safety is the imperative – healthcare demands all workers are vaccinated, so workforce depends on being being safe and being vaccinated to work in healthcare and many academic projects.

Construction workers are essential workers and are often right next to each other, so separating by 6′ is tough – collaboration is the key.

Denise Algire – Albertson’s relied on education and empowerment – did not have a vaccine requirement unless required by the state.

Long Covid –

Dr Ross – post acute symptom covid is considered a disability, so think carefully about how you approach this. There are 200 different symptoms in 20 different body systems…no consensus regarding diagnostic criteria or treatment for for Post COVID conditions (PCC). A recent study published in Nature compared post covid patients to a control group – one key finding was an increased risk for CV (cardiac) complications – most significant was myocarditis – 5x greater incidence in covid patients. [I think this is the link.]

Dan Allen – be ready to work with employees struggling with long COVID, there’s a very long list of potential symptoms/conditions…the key question is how do you address those? Employers must work with occ medicine specialists to better understand these symptoms and potential impact thereof.  mental health resources-  take frequent breaks – listen to understand where the patients are coming from – not as straightforward as our tupical WC claim.

Dan – there’s no WFH (work from home) in construction which leads to more risk of getting exposed on the job – to address this, construction sites have implemented scattered job site times; come early, come late hand washing stations, and mask regulations increased that safety.

Denise – grocery workers were essential workers as well – Albertsons’ put together a clinical team, realized no one size fits all – key is listen to employees and balance that with collaboration – looking at teaming and ensuring folks working on stuff together are at the office at the same time – going forward work  will be a hybrid approach –

Also – we need to keep re-assessing as COVID persists as the situaiton changes  – and may likely continue to change

Craig Ross DO – business needs to continue to invest in safety and safe workers

Dan – safety and health care critical – union training on these issues is paid for out of each worker’s hourly pay – “right to work” states kill apprentice and other training programs which strongly advocate for safety…Construction results in over 20% of workplace deaths in the US in an industry with <6% of workers.

The construction work force is aging and unless you train them well you’ll get more injuries. The great resignation started before the pandemic – don’t overwork and overexert the workers you do have.

Craig – going forward we will likely see increased repetitive trauma due to WFH  – calls for increased employee assistance.

Any changes in claim composition?

Dr Ross – claims composition didn’t change except more severe injuries – more severe multiple body part claims…there wasn’t a delay in care, telemedicine ramped up early and seems to be used in specific situations especially mental health. There have been very few vaccination claims to date; and multiple studies suggest it reduces risk of long covid.

Dan – suicide rates in construction are highest of any other industry – 53 workers/100k…why – big macho thing – injured workers don’t report injuries – working on mental health days, collaboration w businesses – have a foreman who talk to workers – let them know you care about them – talk to the workers so they can share issues.

Addressing the use of opiates and finding alternatives has been a big help – sometimes there’s a little bridge from using opiates as treatment to patients using them to address stress. Hope is we’ve learned from COVID and you’ll see safer workers and safer worksites, suicide presentation, calisthenics before work…there’s dollars for training in the infrastructure bill for minorities to help them get introduced to careers in construction.

Misclassification is a huge issue for insurers, workers, and builders – “cheat to compete” – they take advantage of immigrants – put em into jobs, unskilled, untrained, misclassified workers,  cheap untrained unsafe labor means legitimate contractor loses that job  construction is substandard and project has problems.

What does this mean for you?

Behavioral health was my big takeaway...be open, let workers know they are not alone and you’re open to listening, that there is no stigma.

As one who’s dealt with panic attacks for 25 years, I completely agree – yeah I get them, yeah they suck, and yeah you’ll get through this and we are here for you.


Mar
16

WCRI kicks off…

It is SO GREAT to see faces, shake hands, smile and see it returned, reconnect with colleagues and friends after a looooong two years.

Scroll to the bottom for impacts on P&C and work comp…

Gallagher Bassett’s Russ Pass opened the conference – full disclosure I’m a big Russ Pass fan; he’s incredibly thoughtful, measured, and knowledgeable, and WCRI is lucky indeed to have Russ as Chair.

Dr. Bob Hartwig dove into the impacts of COVID on the work comp line….I had several cups of coffee so felt almost ready to keep up with the estimable Dr. Hartwig.

Inflation

is at a 40 year high, started by supply chain issues, then exacerbated by fiscal/monetary policy, wage increases and now Russia’s war on Ukraine and the impact on energy prices. Inflation is driven by price increases in energy, food, vehicles and “core goods” — NOT from services including medical care.

Oil is going up and down – the China Shenzhen shutdown has cut prices quite a bit as demand falls (that’s my take, not Dr Hartwig’s). We are also a LOT less vulnerable to oil prices now as cars are twice as efficient as they were in 1980.

Hartwig noted that as bad as things are today – they really aren’t that bad.  As one who graduated college into high inflation and high unemployment, I heartily agree.

Dr Hartwig noted there’s a 20-25% chance that we enter a recession within the next year…although others think the chances are higher than that.  that would have a MAJOR impact on workers’ comp, as employment would drop and we might well see attendant claiming-related behavior.

Hartwig also noted that reserve adequacy might suffer if inflation stays high for a some time.  Not sure I see that – WC is WAY over-reserved today so there’s plenty of dollars in the kitty to make up for inflationary pressures.

Part of the driver of the current labor issue is a lot of people have been in and out of the workforce due to illness. That said, about half of businesses are having a tough time filling jobs…as only 82.2% of those in their prime working years in the workforce that’s likely a much bigger driver. Dr Hartwig opined that problems with childcare and fear of contracting COVID along with unemployment benefits are major contributors.

Wages went up over the last year, with average hourly wages up 10.6% from 2/2021 to 2/2022.  That’s a lot, especially compared to recent increases which were mostly in the 2 – 3% range for the last decade or so. (Ed note – I’m really encouraged by this – great to see folks in lower wage industries like hospitality get big boosts in their income – well deserved!)

More info…

  • Non-farm payroll is back to where it would have been if COVID never happened – that is remarkable/historic/great,
  • the “quits rate” seems to have leveled off,
  • more of us are retiring – especially the 65 – 74 year olds,
  • and more than half of the 55+ are now retired…(what’s wrong with the rest of us??)
    • that’s the first time this has ever happened – says Dr H.
  • one of the biggest drivers of economic growth is…population growth. As we aren’t making babies like we used to, and for unfathomable reasons are severely limiting immigration – that’s a drag on the economy.

Impacts on P&C

COVID cut premium growth in half – BUT that was still much higher than COVID’s impact on th overall economy.

Work comp saw a 10% decline in premiums in 2020 (not including state funds) – by far the biggest decrease in P&C.

P&C investment yields were 2.6%, the lowest level in 60 years. As interest rates edge up, investment yields will increase.

The overall work comp combined ratio is projected to be 90 in 2021 after an 87 in the previous year. That, dear reader, is super-profitable compared to the line’s historical returns.


Mar
15

CWCI – what’s happening in California – part 1

The brainiacs at CWCI presented the results of their latest research last week…video is here.

I’m a big fan of CWCI’s work because:

  • it is super timely – much more so than any other research organization
  • it covers almost all California claims
  • CWCI’s researchers are very insightful and
  • they explain the implications clearly and concisely.

Top takeaways…

COVID is one persistent bugger…the repeated peaks are driven by variants – reminding us that viruses evolve, adapt, and persist.

The major jump in January 2022 was driven by Omicron…January numbers were 13% higher than the previous peak – remember Delta?

That said, and yet another reminder – to date COVID claims have NOT been a major cost driver – far from it, and that’s primarily because COVID claims either A) didn’t incur any payments or B) didn’t incur significant medical spend..

[According to  CWCI’s Rena David, The majority of the “no medical or indemnity claims” may well be mostly those that were reported by the employer when there was a possibility a worker had COVID exposure but either the claim didn’t go forward or there wasn’t a positive test.]

While median costs for LT COVID claims with medical expenses were modest – and a lot lower than non-COVID claim costs, the gap narrowed considerably for claims at or about the 90th percentile for LT claims with medical expense.

BUT COVID claims were still less expensive for non-COVID claims – as if we needed more proof that COVID claims will not break the bank.

What does this mean for you?

As goes California, so goes the rest of us – just a little later.


Mar
14

Are we there yet?

Last week’s CWCI conference was – as usual – stuffed with useful information you can’t find anywhere else.

We’ll start off with this – Mark Schniepp PhD’s discussion of the state of the economy. Interesting takeaways indeed…

First up, consumer sentiment is not great – despite a booming jobs market, rising wages, low consumer debt and strong household finances including a solid savings rate, folks seem concerned about inflation. (note these data don’t account for the Russian war on Ukraine).

Second, jobs. There’s a giant number – as in a record – of job openings. This is pushing wages up – which I’d argue is a good thing, as the middle class’ wage increases have long lagged income increases among the super-rich. The lack of child care is a major factor – Dr Schniepp noted:

“among prime-age workers – those without children have fully returned to the workforce.”

I’m quite sure you, dear reader, know families that are constantly stressed by the lack of child care and the impact that has on work.

As one who graduated college at the height of the inflation back in 1980, when mortgage rates were in the teens and inflation wasn’t much lower, I get the concern about inflation.

That said, jobs were scarce indeed back then. So, compared to the early eighties, people are doing quite well, but IMO people are paying way too much attention to things like gas prices.

Gas accounts for just one out of every fifty dollars of personal spending…demonstrating once again that people are NOT rational.

The Russian War on Ukraine will likely drive some costs higher although we Americans are much less vulnerable than folks in Africa which rely on Ukrainian wheat and other grains.

Dr Schneipp does NOT expect inflation to persist, and noted that most key economic indicators are rising, consumer demand is strong, corporate profits are really high and business investment is surging.

The net…

We are not rational beings. The economy is doing quite well, you are probably doing pretty well (unless you can’t find child care), higher gas prices REALLY don’t affect you, and…you don’t live in Ukraine.

More to come tomorrow…