Sep
29

One Call’s credit rating – nerd alert

Fielded several calls and emails yesterday re the Moody’s credit review of One Call…while always (ok, mostly) happy to talk, rather than answering the same questions multiple times I’ll lay my thoughts out here.

These are in no particular order…

A colleague noted the possibility of a recession might affect One Call’s credit worthiness as a recession would affect employment – thus reducing claims.

Well, not exactly..

I’ve written extensively on how economic ups and downs impact workers’ comp; posts are here. Here’s a quick summary..

At the early stage of a recession, employees who get hurt are less likely to file a workers’ comp claim. While we don’t know why that happens, research suggests it’s because workers are concerned their bosses will eliminate their job while they are out on disability, and they’ll have no job to return to.

graph courtesy NCCI

As the recession deepens, frequency tends to bump up as employees realize their jobs are in real jeopardy.  Claims increase as a result, and it is tougher to find re-employment opportunities for workers ready to resume some level of work. This extends to part-time or other limited duty work that is essential to recovery and return to full duty. So, duration increases too.

In the final stages, as the economy recovers frequency appears to accelerate. Employers put older, less-safe equipment back on line, require workers to put in big overtime hours, hire temps who have minimal training on safety, and the pace of work picks up speed. The result – more injuries.

***If we are in a “recession” it’s a pretty weird one; employment continues to grow, employers are hiring anyone and everyone who applies, and there are more job listings than potential workers to fill them…not exactly what one expects in a recession***

Another suggested the current owners can “just give One Call more money” thereby alleviating cash flow worries.

That’s a possibility – but I’d suggest a pretty unlikely one.

The current owners took over One Call when it was on the brink of bankruptcy; if OC had gone down that route it would have made it less likely OC’s bondholders/lenders would recover all their funds. In my admittedly limited experience, credit investors are much less likely to send more cash to assets that are struggling than private equity investors. And PE firms aren’t exactly enthusiastic about bailouts.

One insightful question focused on whether OC has debt with variable interest rates; those of us with fixed rate mortgages are protected from rate increases while our friends and neighbors with variable rate mortgages are seeing pretty significant increases in their monthly payments.

nerd alert…

OC has several different debt vehicles/types/forms

The First Lien (think of this as your house mortgage) of $700M is Libor+550 Floor <.75 which means that when Libor moves so does their interest payments. Libor moves when the Fed moves so, away you go.

For example in the beginning of the year OC would have been paying the Floor and for September about 2.52%. With the recent Fed increase, that will be going up to over 3%.

Note that One Call may have bought financial instruments that protected it (either in whole or in part) from interest rate changes – these are known as hedges.

[if memory serves One Call also has to pay down principle every quarter to the tune of around $2.1 million; that’s pretty small potatoes for a $1 billion+ enterprise]

Finally word is One Call had recently been awarded new business from a large payer, and this would certainly benefit the company going forward.

This is definitely good news for OC and congratulations are due to the C-suite and sales team (as well as the behind the scene folks involved).

That said, work comp payers are notoriously risk-averse; its too early to tell if Moody’s announcement will give the new customer pause.

What does this mean for you?

This stuff is complicated and one has to be careful making assumptions (I continue to learn to question mine!)

note – if I got anything wrong or you have another view please comment below.


Sep
13

Wildly off-topic #9 – Russia’s military collapse

After seven months of brutal, grinding war, Russia’s military is nearing collapse.

The net – Russia is in deep trouble, so deep that its collapse may well lead to regime change. 

Ukraine has retaken over a thousand square miles of its territory in the past few days.  In the process it has captured hundreds of vehicles, Russian locomotives and rolling stock (freight cars etc), thousands of Russian soldiers, and untold quantities of ammunition and supplies.

First minutes after the liberation of Vovchansk by the Ukrainian defenders; Russian flag comes down, Ukrainian goes up.

you gotta watch this video of a Ukrainian farmer…he’s complaining there are dozens of abandoned Russian tanks but he doesn’t get to keep any…:(

You won’t find much support for that prediction (Russian military collapse) in your usual news feeds, but hear me out. (my past discussion of Russia’s invasion of Ukraine is here)

  1. Russia is running out of troops and there are reports it will NOT/cannot send any more to Ukraine.
    1. very scary thought – Putin may threaten to use tactical nuclear weapons
  2. Russia’s vaunted military turned out to be a paper tiger due to:
    1. lack of maintenance,
    2. poor training,
    3. very low morale,
    4. awful supply situation,
    5. terrible lack of communication security
  3. Western support (except for Germany, which has been pretty damn unhelpful) and commitment to suffering through energy cutoffs has been critical to Ukrainian successes.
  4. US and other NATO nations are undoubtedly sharing intelligence from intercepted Russian signals, intelligence that ensures the Ukrainians know what Russia will do before their field officers do.
  5. Even if Russia goes to a full-scale mobilization to dramatically increase the size of its military, that won’t work because:
    1. it won’t happen in time to stop the ongoing destruction of its forces in Ukraine
    2. there aren’t enough experienced, veteran, capable officers and soldiers to train up the new recruits
    3. there isn’t equipment, vehicles, ammunition supplies, and a logistical infrastructure and capability to supply new troops and no ability to build/buy/manufacture and transport everything they need to fight.

The net – Russia is in deep trouble, so deep that its collapse may well lead to regime change. Meanwhile, Putin is celebrating the biggest Ferris Wheel in Europe…which promptly broke down a day after Putin’s speech.

Metaphor, anyone?

What does this mean for you?

Hang in there.  Ukraine deserves your support.


Sep
9

If only Florida was like California

If only Florida (‘s commitment to patient safety and responsible prescribing and good workers’ comp medical care) was like California.

But…no.

The Sunshine State’s work comp regulators and legislators don’t seem to care about patient safety or employer/taxpayer costs – at least not when it comes to drugs.

 

If they did, payers wouldn’t have to:

  • pay an upcharge for physician-dispensed drugs,
  • argue that physicians aren’t pharmacists (yes, really),
  • argue that drugs dispensed by physicians should be evaluated for patient safety

Kudos to myMatrixx for weighing in on this and attempting to get insurers and employers involved. Alas if history is any indication, the vast majority of insurers won’t.

Neither will most employers.

I get workers’ comp premiums will continue to decline, leaving fewer and fewer dollars for administrative tasks, like, you know, government affairs.

I get workers’ comp is hugely profitable.

I also get that this will change – and when it does those insurers will be looking for nickels in the couch cushions – nickels (and dimes and dollars) they ignored when things were going great.

Right now, payers and employers need to weigh in and tell Florida regulators that Physicians are NOT pharmacies – and therefore patients don’t get to pick a physician to be their pharmacy.

This is a major patient safety issue; physician-dispensed drugs aren’t subject to many of the electronic edits that pharmacy-dispensed drugs are.

So, physicians are almost certainly giving patients drugs that:

  • duplicate patients’ other scripts
  • conflict with patients’ other scripts
  • aren’t appropriate for that patient.

What does this mean for you.

Fight your own battles. I’m not going to do it for you.

From a post way back in 2014…

There is NO reason, no rationale, no logic behind docs dispensing drugs to workers comp claimants.  

Proponents claim it is better care, leading to speedier recovery and lower costs.

We long suspected the opposite is true; that is, claimants getting drugs from docs get more treatment, incur higher medical costs, are out of work longer and run up bigger claim costs than claimants with the exact same injury who don’t get pills from their physicians.

Thanks to CWCI, we know that’s the real impact of doc dispensing.

Now, we know even more – we know that dispensing docs prescribe more opioids for longer times, thereby increasing the risk of addiction and drug diversion and overdoses and death.  Thanks to a research paper authored by Johns Hopkins University Medical School and Accident Fund, there’s clear and convincing proof that doc dispensing is a highly risky, very dangerous, and very expensive proposition.

Here is the money quote:

“we found 39% higher medical costs, 27% higher indemnity costs, and 34% higher frequency of lost-time days associated with physician-dispensed versus pharmacy-dispensed medication. We found even more striking differences related to physician-dispensed opioids versus pharmacy dispensed opioids. The effect was nearly doubled and revealed 78% higher medical costs, 57% higher indemnity costs, and 85% higher frequency of lost-time days associated with physician-dispensed versus pharmacy-dispensed medication. [emphasis added]


Sep
7

Work Comp Pharmacy Week – #2

Yesterday we kicked off Workers’ comp pharmacy week with a quick review of WCRI’s latest research.

Today we’ll focus on our annual Survey of Pharmacy Benefit Management in Workers’ Compensation. We’ve been doing this for (gulp!) 19 years, and I’m (belatedly) ready to begin the 2022 Survey. Past public versions of the Survey are available here; there’s no cost and no registration necessary.

Respondents receive a more detailed version to reflect their contribution to the effort.

Top takeaways from last year’s report included:

  • Total work comp drug spend for 2020 was about $3 billion, or about 10% of total medical spend.
    • The percentage decrease from 2019 to 2020 was 12.3%
  • That’s down from $4.8 billion a decade ago.
  • Opioid spend declined 19.3% from 2019 to 2020; Opioids accounted for 17% of total drug spend across all respondents.
  • Pharmacy management remains important despite these decreases, primarily due to respondents’ view that drugs have a disproportionate influence on claim outcomes and disability duration.

Over the next few days we’ll be reaching out to past participants; if you are a payer and would like to participate in the Survey (and get the detailed report) please leave a comment below with your contact information (it won’t be published).

All responses are confidential, are only used in the aggregate or are de-identified to protect confidentiality.

 


Sep
1

Wildly off-topic #8 – Ukraine attacks

After more than six months of war that some were thinking was going to enter a stalemate, Ukraine flipped the tables on Russia.  Ukrainian forces are driving Russians back in multiple areas, although this is a hard slog.

Ukraine has several distinct advantages in this war.

  1.  Russians don’t really know why they are in Ukraine. Ukrainians know why they are fighting.  The ones on the front lines certainly do and pretty much every other Ukrainian does as well.  Their homes have been attacked, children murdered, and their economy wrecked by a madman. The will to fight is critically important.
  2. The west’s support of Ukraine has enabled it to hold Russia off while building the capacity to defeat the invasion.  We’ve spent billions – thanks to you, American, British, Dutch, Danish, Swedish, Norwegian, French, Polish, Italian, Pakistani, Czech and other tax payers. This has been an investment worth every penny, as the West’s total commitment has shown other would-be territory grabbers (looking at you China) that far from being the “decadent west” we are guarantors of peoples’ right to self determine their government. (sure we get this wrong far too often, but on balance we’re mostly on the right side.)
  3. Russia’s kleptocracy (a state ruled by thieves) has ensured their armed forces have crappy, outdated, and poorly maintained equipment. Sure they have far more cannons and tanks and planes and rockets – but a lot of those don’t work, are worn out or hopelessly obsolete – or their soldiers don’t know how to use them effectively.
  4. Russia’s army has a fundamental flaw – they can’t get the food fuel ammunition and spare parts to where it’s needed. (posted  on this way back in March with lots of details)
    If anything it has gotten worse. The HIMARS rocket systems and other really good artillery we’ve sent Ukraine are destroying ammunition and fuel dumps, blowing up communications centers, and killing dozens of high-ranking colonels and generals, de-capitating Russia’s army just when it is being attacked.

That’s enough of the cheerleading.

The awful truth is Ukraines’ military is losing hundreds of soldiers each week – far less than Russian losses, but devastating nonetheless. I cannot imagine how painful this is to each and every family that’s lost members due to Russian aggression; killed in an apartment building bored by the Russians, blown up by mines near a school, dead in combat or crushed in a shopping mall hit by Russian rockets.

What does this mean for you?

I’m very proud of what we Americans have done and are doing to support Ukraine.

You should be too.

Yes fuel and food prices are higher – make no mistake, that’s due to Putin’s invasion of Ukraine.  


Aug
22

Why expanding medicaid is a no-brainer

A dozen states have yet to expand Medicaid, a decision that has led to untold suffering for millions without healthcare.

This has also led to:

(I’ve written about this a lot.)

it looks like things might be evolving; Georgia is making progress, Expansion is on the ballot in South Dakota and there have been referenda in several Republican-led states.

Reality is states that expanded Medicaid saw significant positives; healthier people, improved economies, greater Federal financial support, and major job growth.

What does this mean for you?

Poorer folks need Medicaid, and there’s a ton of data showing why every state should do this.

Work comp folkshere’s how this affects you.


Aug
18

WCRI’s Primer on Behavioral Health Care in Workers’ Comp

is one of the most important papers WCRI  has published in recent memory.

Authors Vennela Thumula PharmD and Sebastian Negrusa PhD have produced a comprehensive analysis of the subject, one every work comp manager, claims exec, regulator clinician and risk manager should have within easy reach.

Among the topics addressed are:

  • How do you define behavioral health in the context of workers’ compensation?
  • What are psychosocial factors and can they be a barrier to recovery following a work-related injury?
  • How important is early screening for psychosocial factors and other mental health conditions?
  • What non-medical and medical interventions exist to help those with behavioral health problems?

I’m working my way through the study; it has reinforced my belief that mental health/behavioral health issues/concerns are likely the primary barrier to recovery.

Chief among these are psychosocial factors that may impede recovery;

      • poor recovery expectations
      • fear of pain\catastrophizing
      • perceived injustice
      • pessimism
      • general fearfulness
      • job dissatisfaction
      • lack of family/social support systems

Friend and colleague Bill Zachry has long noted that Adverse Childhood Events can be a key obstacle to recovery  – in fact research indicates victims of abuse are more likely to be disabled during adulthood.

The paper also provides state-by-state details on coverage of mental stress and psychotherapy issues and the status of BH specialists as treating medical providers.

I’d be remiss if I didn’t note Carisk’s David Vittoria has been a persistent voice advocating for increased focus on BH issues. (Carisk is an HSA consulting client)

The study is free for WCRI members; there’s a nominal cost for non-members. Get yours here.

What does this mean for you?

Read this paper.


Aug
1

Just the facts, ma’am…

Today we’re doing a very quick recap of stuff we learned over the last couple of weeks…no opinion here (yeah that was really hard for me…)

Extra credit for identifying the man in the picture…

But first, for those of us perennially mad at ourselves because, well, we screw up and aren’t perfect, read this. Short take – perfectionism…

“…makes for a thin life, lived for what it isn’t rather than what it is. If you’re forever trying to make your life what you want it to be, you’re not really living the life you have.”

Drug prices

Make for great politics…even when all the caterwauling is wrong. The issue is what we – the consumer – pay is NOT what insurers, PBMs, and other payers pay.

That’s due to the “gross-to-net bubble”, a term popularized by the estimable Adam Fein Ph.D.

When rebates and discounts were factored in, brand-name drug prices declined—or grew slowly—in 2021.

So…you getting those rebate checks?

COVID’s origins

Remember the theory that COVID came from a Chinese lab? It is looking increasingly sketchy.

comprehensive, detailed, and multi-factor analysis by scientists from four continents found

the emergence of SARS-CoV-2 occurred via the live wildlife trade in China, and show that the Huanan market was the epicenter of the COVID-19 pandemic.

The peer-reviewed research published in the journal Science covered molecular epidemiology and spatial and environmental analyses.

Investors and physician practices

Private equity investment in physician practices varies a lot by specialty and region. Quick takes…

  • about 5% of physicians were in private equity-acquired practices
  • The highest percentage was in D.C. (18.2%)
  • More than one in ten docs in AZ, CT, FL, MD, and FL were in PE-acquired practices

The researchers wrote…

“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration may be associated with reduced physician competition, which could lead to increased prices, [emphasis added]

An interactive map and the research report are here.

Gun violence

Gun makers earned over 1 Billion (with a B) dollars from sales of military-style assault weapons over the last decade. A report to Congress found:

  • gun makers marketed to young men by claiming their weapons will put them “at the top of the testosterone food chain”…
  • the weapons were described as an “apex predator”
  • some ads for these weapons “mimic first-person shooter video games popular with children.”

source here

The AR-15 is the most common of these weapons…the NRA named it “American’s Rifle” back in 2016. (and here I always thought it was Davy Crockett’s flintlock rifle…)

(disclosure – I hunt and have several rifles – none are semi-auto like the AR-15)

Workers’ comp physician fee schedules

…are all over the place…Louise Esola at Business Insurance reported on a recent WCRI analysis that found:

About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state…

The study – authored by Olesya Fomenko and Te-Chun Liu and up to date as of this spring – is here. (sorry for misspelling of Dr Fomenko’s  name in  earlier version…darn spellcheck!)

Clearly politics trumps policy…unless someone can tell us why it makes sense for Florida to pay docs below Medicare, while paying hospitals many times Medicare… I’ll stick to politics, campaign contributions, lazy legislators and hand-cuffed or ineffective regulators as the main driver of work comp fee schedules. (oops opinion inserted into post…just can’t stop myself)

Happy August!


Jul
26

Wildly off topic #7, do our part.

Time to check in on how our Ukrainian friends are doing…

Last time we focused on strategy vs tactics…today we’ll cover why the Russians continue to do stupid stuff while the Ukrainians take full advantage of technology.

How who follow this closely know that the Russians are relying almost entirely on massive artillery barrages to level towns, cities, and villages before trying to push troops in. That was working, and Ukrainian forces were hard-pressed to withstand the bombardment.

From the Kyiv Independent: “artillery dominance compensates for the weak performance of Russia’s infantry.” 

That was then.

It’s quite different now, mostly because A) NATO countries have sent hundreds of artillery tubes (think cannons) and dozens of rocket systems to Ukraine and B) Russian logistics are awful.

A – These NATO weapons are much more accurate and have greater range than most of the stuff the Russians are using.

This allows the Ukrainians to shoot from further away, reducing the risk from Russian “counter-battery fire” (radar can identify where the outgoing shells and rockets are coming from so the enemy can shoot back). The new weapons systems are also much more mobile; our HIMARS rocket systems can shoot and be gone in 2 minutes. (thank you American taxpayers!)

Since mid-June, Ukrainian artillery has become increasingly lethal and extremely effective. This from the Kyiv Independent.

On June 15, a massive explosion occurred near the city of Khrustalniy (formerly Krasniy Luch) in occupied Luhansk Oblast. Explosions continued for days. According to satellite images, the blasts created a destruction zone spanning some 500 meters around the epicenter. The site was one of Russia’s largest ammunition depots

July 2, Ukraine’s military published a video showing an enormous explosion at another large depot in the city of Popasna…Two days later, another devastating blast destroyed a large depot in the city of Snizhne. Three more depots were also hit in Donetsk.

Which leads us to B – Russian logistics.

Faithful readers will know Russian logistics – in English the process of supplying troops with fuel, munitions, water, spare parts, and equipment – is awful. They don’t use forklifts to move heavy stuff, but rely on manpower. They don’t have pallets, but rely on manpower. They don’t have enough trucks, so they rely on trains.

That’s why the Ukrainians have been able to destroy thousands of tons of Russian artillery shells and other munitions; the Russians move those munitions to giant storage depots, where people offload the shells and trucks transport the shells to the artillery locations.

It’s pretty easy to identify where trains are off-loading, and even easier to use a few artillery rounds to set off giant, days-long fireworks shows.

 

reportedly a large Russian ammo depot; actual video is here.

So, the Russians move the depots further from the front lines  – out of range of most artillery.

Enter HIMARS – which has a range of almost 50 miles with current rockets – can hit pretty much any target inside Ukraine.

From Igal Levin, a Ukraine-born Israeli defense expert.

“…if all those forwarded bases, depots, repair facilities, all of the logistics chains are destroyed — [Russians] will have to deal with the need to bring supplies from beyond the Ural Mountains, then be thinking how to store and distribute them, how to bring munitions to artillery.”

The takeaway.

Russia has a far larger army, exponentially more artillery weapons, and enough artillery rounds in storage to fight for decades.

They also have a wildly corrupt economy, where kleptocrats stole billions of rubles intended to feed, clothe, and equip soldiers.

Ukraine has a much smaller military – and had a history of corruption, albeit one that pales in comparison to Russia’s. Their troops – men and women – are way more motivated, fighting for their families and  land, and increasingly well-supplied.

They are also very well led by commanders who have years of experience fighting the Russians in Crimea and the Donbas and are taking full advantage of Russia’s limitations and NATO largesse.

What do we need to do.

Keep the faith, people.  Russia’s invasion of Ukraine is a major contributor to inflation, driving up fuel and food costs around the world. Yes this sucks, but our sacrifices are nothing compared to what Ukrainians are doing every minute of every day.

This too shall pass. When it does Putin and Russia will be far less dangerous, food and fuel prices will be much lower, and the world will be a way better place.

If you can, please help Ukrainians suffering from hunger, homelessness, injury and disease by donating to Care.


Jun
29

Mob rule.

How could anyone think a riot would overturn an election and keep an unelected person in office?

That more than two centuries of carefully nurtured democracy could be trashed in a few hours?

18 months ago we watched in stunned disbelief as our Capitol was attacked, police officers were brutalized and beaten, and bizarre characters wandered the halls, stole mementos and put their feet up on desks, ascended to the podium and eerily called for the heads of the Speaker of the House and Vice President.

For me, yesterday’s January 6 hearing made the insanity of it all stunningly clear. The testimony of a very young staffer crystallized how far we’d gone off track, and why.

Cassidy Hutchinson’s placid, calm recounting stood in stark contrast to the events she was describing, none more jarring than her description of then-President Trump’s furious and frantic effort to get his Secret Service detail to open up the Capitol, remove magnetic detectors and thereby allow his “wonderful people” to bring guns, knives, automatic weapons, pistols, bear spray, and spears to wreak mayhem on Congress’ certification of the 2020 election.

Trump’s megalomania, narcissism and bloody-minded pursuit of power at any price was on full display yesterday. Hutchinson’s recounting of agents describing Trump as irate because the agent wouldn’t drive him to the Capitol so he could “let his people in” says it all.

Five police officers died as a result of the insurrection.

Dozens more may well have been killed if the Secret Service had bowed to Trump’s  insane demands.

For what?

What made Trump think that he could stay in office, prevent Biden from assuming the Presidency, reject the will of the American people?

How could Trump possibly think he could stay in office?  That a bunch of weirdos, military fetishists, tinfoil-hat-wearing simpletons and assorted other nutjobs could turn the United States into a banana republic, one where a strongman could keep power because a few thousand criminally-stupid idiots wanted him to?

Did Trump actually think our entire government, our military, our law enforcement and security and intelligence operations, all of us would stand by and let him stay in the White House? Because a moron wearing a buffalo headdress says so?

Hutchinson’s testimony made it clear Trump is completely detached from reality.

Trump wants power at any price – up to and including killing police officers, destroying our Capitol, and ending the United States of America as we know it.

What does this mean for us?

We are each individually responsible. Ensuring our kids and grandkids live in a free country is up to each of us.