Yelling into the void

I attended a New England Journal of Medicine webinar on value-based care yesterday…net is I heard a lot about “patient centric” care, “patient experience” and quality but precious little about functionality and patient-specific or patient-desired “outcomes.”

Except for a few tangential mentions by the Optum Medical Director, what patients actually want was not addressed at all.

This is a big miss.

Like so many other failing industries, healthcare is completely missing the point – which is delivering what the consumer wants. “Patient experience” is mostly was the office clean, the nurse nice, the floor quiet.

We are ignoring this at our peril…we are not asking what patients actually want from healthcare; NOT the processes and functions noted by one of the panelists but how patients define “healthy”, what they want to be able to do, what functionality is important to them, how they want to live their lives.

Healthcare is provider and process centric;  the entire industry has failed to address what consumers and employers want from healthcare.

Here’s hoping that healthcare figures this out faster than Detroit did.

What does this mean for you?

Healthplans and healthcare providers that figure this out will kick butt.



Medical inflation in work comp…

Isn’t a problem. In most states. Today.

That is the headline takeaway from WCRI’s presentation last week…

First a few key factors.

  • Drug spend is a much lower percentage of total medical today than it was a decade ago. I’m quite confident total drug spend in WC today is 40% lower than it was 15 years ago.
    • That equals a reduction of about $2 billion.
  • Facility costs continue to be the main driver of what inflation there is. Inpatient (IP) and outpatient (OP) hospital inflation averaged 2.5% annually from 2012 to 2022;
  • Facilities account for 53% of total medical spend – 26% of which is OP; 9% is ASCs (Ambulatory Surgical Centers)

The details…

the best way to think about medical spend is per claim…this accounts for changes in claim volume (which is driven by injury rate and total employment).

Leaving out COVID’s impact (see end note for details) medical costs have barely budged for more than a decade…up a paltry 2 percent per year. 

However…Facility costs are a big problem for all payers…exacerbated by massive consolidation in health systems which allows them to charge “facility fees” for services rendered in physicians offices and clinics. (what a scam…)

Work comp specifically…

National averages don’t mean much if you operate in states like Florida or Wisconsin, where poor controls on workers comp medical billing enable providers to hoover dollars out of employers’ and taxpayers’ pocket.

Of note, drug costs would likely be several hundred million dollars lower if it weren’t for the profiteers enabling physician dispensing.

What does this mean for you?

All costs are local…which means all cost management approaches must be as well.

COVID…medical costs for claims during COVID were down 10% – decreases in utilization and price drove this with utilization the main driver. Not surprising…during COVID no one wanted to go to any healthcare facility for anything not essential.

This was totally predictable...


Good news Friday…Build America, Buy America

You may not have heard of the Build America, Buy America Act…here’s why it is good news indeed for US manufacturing and construction – and employment.

BABA lays out requirements for US content in federally funded infrastructure projects, requirements that specify how much Made in the USA content is needed to qualify for Federal funding.  

BABA impacts at a minimum,

  • the structures, facilities, and equipment for roads, highways, and bridges;
  • public transportation;
  • dams, ports, harbors, and other maritime facilities;
  • intercity passenger and freight railroads;
  • freight and intermodal facilities; airports;
  • water systems, including drinking water and wastewater systems;
  • electrical transmission facilities and systems;
  • utilities;
  • broadband infrastructure; and buildings and real property; and
  • structures, facilities, and equipment that generate, transport, and distribute energy including EV charging.

All iron and steel must be produced in the US…all manufactured products must have at least 55% minimum Made in the USA content, all construction materials must be “produced in the US” AND manufacturing processes must take place within the US.

per capita funding

Building trades welcomed the new guidance, with Nevada, West Virginia, Mississippi,  Louisiana, Wyoming and Tennessee among the states that will benefit  from new hiring and vastly improved: 

  • roads,
  • bridges, 
  • wildfire protection, 
  • electricity transmission, and
  • broadband.

Check out your state’s funding here.

What does this mean for you?

Better roads, schools, broadband; more good jobs; and more workers’ comp premiums and claims. 


Scary stuff…COVID death details

A just-released study found striking differences in death rates from COVID based on political party affiliation.

The study reviewed “538,159 deaths in individuals aged 25 years and up in Florida and Ohio between March 2020 and December 2021…”

more from JAMA

“Between March 2020 and December 2021, excess death rates were 2.8 percentage points (15%) higher for Republican voters compared with Democratic voters…(Table)….political party affiliation became a substantial factor only after COVID-19 vaccines were available to all adults in the US.”

After April 1, 2021, when all adults were eligible for vaccines in Florida and Ohio, this gap widened…with excess deaths among Republican voters 43% higher than among Democratic voters.

(you can get a higher resolution view here)

What does this mean for you?

Take a step back and consider how it came to this. 



Good news Friday – and implications for workers’ comp

Inflation. Employment. Manufacturing jobs. Wages.

All are in waaaaay better shape than they were a couple years ago.

What’s downright weird is how gloomy many are…in the face of pretty good news on many fronts. So let’s start the weekend off with what’s REALLY going on…

Inflation dropped to 3% – a third of what it was in June of 2022…when it was 9% –  “we’ve made a lot of progress [reducing inflation] without much pain. And I think that’s what’s critical so far.” says Stephen Juneau, an economist at Bank of America Merrill Lynch.

Employment  – there are one and a half jobs open for each unemployed worker which a) means there is NO recession and b) employers are in better shape than they were 18 months ago when there were more than 2 jobs per unemployed worker.

US manufacturing is roaring of new factories is at an all-time high and companies are adding over 400,000 new manufacturing jobs this year.

Wages are also going up – adjusted for inflation annual median household income was up over $3,000 over the last three years.

What does this mean for you?

Things are going pretty darn well.

As for the implications for work comp…this from a post in August.

Hundreds of billions of dollars is flowing into infrastructure, investment that has already created ninety thousand jobs in:

  • construction,
  • transportation improvements,
  • highway, bridge and road maintenance and replacement, and
  • heavy industry.

And many more jobs are on the way. (check out where this is happening here).

These are very well-paid, high-frequency and high-severity jobs.

This means premiums will increase as will claims and claims costs. And this will continue for years.



Long COVID is real, “social inflation” is not.

Didn’t post this week…was in Chicago for the annual father-son trip to watch the Sox play the Cubs…very fun time!

While I was relaxing in the stands, shockingly the world continued turning…

WCRI’s report on long COVID’s impact on work comp was release, examining claims with an average of 18 months post-infection…my takeaways  include:

  • one out of 19 COVID claims developed long COVID
  • medical costs average less than $30k
  • temporary disability benefits run a bit above 20 weeks
  • Long COVID’s impact on workers’ comp is pretty minimal

Risk and Insurance weighed in on “social inflation”, a not-well-defined term insurance folks use to characterize their not-very-well-founded belief that society is driving up casualty claim costs.  VERY briefly, insurance execs complain that high jury awards to claimants are driving up insurance costs…however there’s precious little real research supporting that view. 

This from Ken Klein’s presentation to NAIC in 2022…

What does this mean for you?

Stop catastrophizing until you can prove something exists.

Start catastrophizing when the data is convincing. 




Survey of workers’ comp bill review – Fourth edition

Our fourth (!!) Survey of Workers’ Comp Bill Review is nearing completion…one of the good things about doing this every few  years is we can identify trends and the industry’s evolution.

This year we surveyed both executives and front-line staff. Shockingly, they didn’t always agree…

a few initial takeaways…(ratings are 1 – 5, with 5 being the best)

  • The Bill Review industry generally held its level of support from 2018. Overall average (all vendors grades from all respondents) was 3.2, just above, equal to 2018.
  • Despite respondents’ overall view not changing, there’s less differentiation among the major players; scores have compressed.
  • New entrants are making inroads
  • Customer service remains absolutely critical to a successful bill review relationship: considered the top reason a company would change bill review vendors and consistently ranked near the top for “most important bill review attribute”.
    • this is consistent across the dozens of surveys of all types HSA has done over the last 2+ decades…
  • There is a noticeable difference between executives and front line employees when evaluating customer service – front line average score 3.6 vs. 4.2 for executives.
  • Front line employees have different criteria for quality customer service than executives’…: front liners do not seem to care much about soft skill aspects of customer service but rather customization and timely updates while executives have a more traditional sense of customer service.
  • Automation is on most people’s minds – but it isn’t all positive. While nearly all talking about it want more automation (for TAT/auto-adjudication/quality reasons) some still need it to handle the basics better than it currently does.
  • E-billing, for largely the same reasons as automation, is getting more popular – especially among larger respondents and internally run bill review respondents.
  • Bill review vendors are seen as quite transparent – especially compared to 2018. 90% of respondents believed their bill review vendor to be transparent vs. just 52% in 2018. This is despite several complaints about how convoluted % of savings can be.
  • Flat rate pricing is rising in popularity while % of savings is not viewed favorably in most cases.

Cautionary note – these highlights are just that – highlights – and there’s often a lot of nuance underlying respondents’ views and perspectives. That will be described in the final report …a public version of the report will be available in a few weeks. (Respondents get a much more detailed version).

What does this mean for you?

Customer service.


RAND’s report on Alternative payment models in work comp…oh my…

RAND’s long-awaited research paper on Alternative Payment Models for California Workers’ Comp is out.

It is…underwhelming, incomplete, doesn’t focus on key metrics, did not include actual examples of APMs in WC (of which there are many), makes inappropriate comparisons, and…I could go on.

Yeah, I know it’s an initial study, but C’mon…

First, a couple intro notes…

    • in laypersons’ terms, Alternative Payment Models (APMs) are different payment schemes/methodologies used in an attempt to improve care/patient experience/save money.
    • APMs include pay for performance, bundled payments (e.g. flat fee for a surgical episode), per member per month flat fees, global payments and other models.
    • APMs are quite commonplace in Medicare/Medicaid, group health, and exchange healthplans and have been for years.
    • Broadly speaking, despite LOTS of different approaches, studies, methods and work, to date APMs’ impact on those metrics has been marginal.

OK…initial takes on RAND’s report. (note I haven’t thoroughly reviewed and analyzed all 95 pages, but wanted to get this out ASAP)


Most importantly, there have been numerous experiments AND long-standing programs with “alternative payment models” in California and other states…somehow RAND missed these. Yes RAND noted Ohio and Washington have done work on APMs, but RAND missed:

  • Carisk’s Pathways2Recovery Program (Carisk is an HSA client)
  • Paradigm’s HERO programs. – models include full risk transfer and episode of care payment for shoulder, back, knee and other diagnoses.
  • Medrisk has had an episode-based managed physical medicine reimbursement model in place for decades. (Medrisk is an HSA client)
    • other specialty network/service companies have had similar programs
  • and others I don’t have time to get into.

I note that these are very patient- and condition-specific and narrowly focused – similar to many group health/Medicare/Medicaid APMs…yet should have been included.

Inpatient vs outpatient

Across all payer types, care has been shifting from inpatient to outpatient settings. Unfortunately RAND spends a lot of time on inpatient APMs and nowhere near enough on the outpatient side. 


What is critically important in workers’ comp (and I argue SHOULD be across all payer types) is sustained and rapid return to functionality. There is precious little discussion of the central importance of this primary goal – and how it might/might not be affected by myriad different APM models/studies discussed in RAND’s report.


RAND relies extensively on comparing hospitals in the Hospital Value-Based Purchasing Program (HVBP) to critical access hospitals that are not in that program…without much discussion of the key differences between these facilities, differences that – I would argue – make comparisons sketchy at best.

One issue – poorer patients are more likely to get care at and represent larger percentage of the patient population at critical access facilities…that demographic also consistently rates patient experience lower than wealthier patients. Thus, comparing HVBP program patient experience data to critical access hospital data is difficult – at best.

Access to care

RAND makes a major point about “stakeholders” concerns about access to care. Actual real scientific research paints a different picture.

Let’s get real.

There’s a whole shipload of factors that RAND mentions (very briefly) that deserve a LOT more discussion.

One example – less than a penny of the US healthcare dollar is spent on workers comp medical. That, dear reader, makes it really hard to get the vast majority of health care providers to do ANYTHING.

What does this mean for you?

There are APM in WC…and a lot of history and knowledge and research and expertise around them. Much could have been learned if they were fully considered. 

For a lot less money.




Things you may have missed…

The recession…or lack thereof.

News this morning that our economy grew at 2.4%…further encouraging news as it appears we are heading for a soft landing (ie very limited or no recession).

Also, personal income growth grew nicely at 2.5%…

From NYT:

“If you’re looking for a working definition of ‘resilient,’ look no further than the American economy,” said Joseph Brusuelas, chief economist at RSM. “This is absolutely rock-solid.”

Good info on the impact of the soft landing from HBR here.

What does this mean?

A good economy = more good-paying jobs and better lives for many.

From the desk of GB’s Dr Gary Anderberg comes an excellent summary of global warming’s impact on specific jobs.  Gary is excerpting from a KFF research report published in January

“highlights” include:

  • We estimate there are over 65 million nonelderly adult workers in occupations at increased risk for climate-related health risks, accounting for over four in ten of nonelderly workers.
  • Among nonelderly adult workers, many people of color, noncitizen immigrants, and workers with lower educational attainment and income levels are disproportionately likely to be employed in jobs with increased climate-related risks.
  • Nonelderly workers in at-risk occupations are about twice as likely as their counterparts in less at-risk occupations to lack health insurance (16% vs. 7%)

And the temps just keep on rising...this summer will break all records for heat, deaths from heat, heat-related injuries…

and it’s only going to get worse.

What does this mean?

This global warming thing has real consequences – as in higher occupational injuries and illnesses.

Last – and most awful, “the greatest country in the world” – at least when comparing American kids dying by gunshot to other industrialized nations

from KFF

What does this mean for you?

More of us know of more families devastated by gun violence. 


Research on wearable tech – it’s the data too!

Two recently-published peer-reviewed studies give more insight into the utility and effectiveness of wearables/digital health.

Key takeaway – digital health will affect care management and patient recovery in ways we are just beginning to grasp. 

One study examined 864 patients’ use of Plethy’s Recupe program.

Top takeaway – The better a patient’s mood, the lower their pain level and the more they comply with their exercise programs. While correlation is not causation, the connection between mood and recovery is clear.

While this may be obvious, the real takeaway is wearable technology can be an early-warning system, giving care givers and other stakeholders (i.e. claims adjusters, care managers) real-time insight into their patients’ mood and pain level.

Instead of waiting for the practitioner’s notes, reading and interpreting those notes, and (hopefully) determining the patient’s mood and pain level, wearable tech can alert care givers and case managers to potential recovery-delaying issues and intervene before problems become entrenched.

Digital health – specifically a wearable sensor plus Recupe app – is also associated with strong adherence to a home exercise program, significant decreases in pain and improvements in range of motion. This descriptive study looked at total knee arthroplasty patients, finding “Recupe patients recovered to lower pain levels with fewer patient visits and health care utilization [than reported by other published information].”

What does this mean for you?

Taken together, these studies show digital health’s effects are broad indeed…the instant access to key data points can help stakeholders quickly respond to patients’ needs and issues.

note – Plethy is an HSA consulting client.