The optimist’s case for Trump

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

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

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

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

Among his policy ideas/positions/stated plans:

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

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

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

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

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

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

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

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

And very much fear it isn’t.


That’s the only word that describes my reaction to the election.  Kudos to Bob Wilson, who bet me months ago this would happen – he was right, and I was very wrong.  I owe you a drink; make mine a triple.

I’ve heard from many of like and opposite political mind today, and will be the first to admit I cannot get my head around what happened.  It’s not so much that the professionals got everything completely wrong. No, it’s that we elected a person who, according to many members of his own party is totally unqualified to be president in so many ways.

After reading JD Vance’s Hillbilly Elegy, I’m beginning to understand the large swath of the population that is pissed off, feeling left behind and abandoned.  I also absolutely get that we Democrats are partially or perhaps largely to blame.  I don’t buy some of their complaints, but that’s irrelevant; they feel aggrieved.

So they voted to “drain the swamp”, to change Washington. Interesting thing about change; it can be good, or it can be bad.  In this instance, it may well be really, really bad. To get an idea, of what we can look forward to, take a look at the disastrous Kansas Experiment.

There will be huge repercussions for the healthcare industry.  Rand Paul has promised to put an ACA Repeal bill on Trump’s desk week one.  We’ll see if that gets thru the filibuster, but even if it doesn’t there’s much Trump can do administratively to alter ACA.  

Now’s not the time to get into this in detail; I’ll be hosting a special post-election Health Wonk Review Friday that will dig deep into the issue. For now, I’ll leave you, dear reader, with a message I sent to our three wonderful, smart, caring, adult kids.

Ok family. We have today to feel miserable and angry and disgusted. Tomorrow we get to work on fixing it. 74 years ago your 19-year-old grandfather flew through fighters and flak above Germany to save our country. It’s our job now. I had become complacent and lazy about preserving what we are so lucky to have. I see that very clearly, now that the consequences of that inaction are so apparent. It’s on us.


Thanks, Jimmy.

(Edited to correct my error, Jimmy Morales is a woman.  MY apologies to Ms Morales for mis-identifying her.)

This morning’s WorkCompCentral brings us a report that Miami Beach’s City Manager is rejecting two police officers’ work comp claims for coverage due to Zika infections.

Reportedly the officers work in Zika-infected areas, but the mosquito has not been found where they live.

City Manager Jimmy Morales refuses to cover these cases, saying:

“He/she must show that the exposure/bite took place while on duty and identify the specific infected mosquito,”

To be fair to Ms Morales, she claims that the two officers have yet to comply with requirements to submit full medical documentation.  If that is the case, then they need to do so. HOWEVER her “requirement” that the officers bring the the specific infected mosquitoes isn’t just ludicrous, it also makes her – and her city – out to be heartless, uncaring bureaucrats.

If Ms Morales wants to perpetuate the meme that workers’ comp folks are heartless, penny-pinching, claim-denying, conniving, scheming bastards,s he’s nailing it. I don’t think that’s Ms Morales’ intention, and I’m hoping she mistakenly relied on a legal interpretation in a misguided attempt to stick to the “letter of the law.”

Ms Morales has not only damaged her relationship with his City’s police force, she’s also provided system detractors with yet another iconic example of how work comp is grossly unfair. And she’s done this in Florida, where the workers’ comp system is already on shaky ground.

Thanks, Jimmy. 

What does this mean for you?

People, please think before you act. You can’t unring the bell, take back what you said, or in this case claim you were misquoted.


Friday catch-up; CorVel, deals, & drugs

Good morning all.  Out in SoCal for the CompLaude event; looking forward to two days of great discussion about the good things in workers’ comp.

More evidence that WC medical trend is flattening

WCRI released it’s Indiana CompScope report earlier this week. Headline is medical trend flattened in 2014, with the change to facility reimbursement a likely contributor.

You can order it here.


The TPA/managed care company released its Q2 earnings report yesterday; revenues inched up 3%, while earnings per share were down almost 16 percent. 

EBITDA dropped from 14.8% to 8.8%.

According to the company, TPA revenues were up 13%, but:

“…staffing and adjusting to the new laws for time management resulted in recruiting expenses and legal fees. The Company is also experiencing extended sales cycles due to the economic uncertainty in the healthcare marketplace caused by the election and the evolving conditions under the Affordable Care Act.”

CorVel is primarily a work comp player. I don’t know why ACA would effect CorVel’s work comp business; I can speculate that the soft work comp market (except in California) is not helping TPAs grow top line or earnings.  While CorVel’s 13% increase in TPA revenues is exemplary, one has to wonder if they are buying business. The precipitous margin decline indicates pricing is indeed an issue.

You can read the earnings call transcript here.  Suffice it to say there’s a lot of talk about structural issues extending sales cycles and blame placed on external factors.

This means – CorVel still hasn’t figured out how to effectively compete in the TPA business.


Mitchell just announced they completed two acquisitions. Specialty bill review firm Qmedtrix and work comp PBM IPS were added to the portfolio. IPS joins CogentWorks, CompToday, AutoRx and Jordan Reses under Mitchell’s Pharmacy Solutions business; Brian Anderson will continue to lead that (congratulations Brian).

Qmedtrix will become part of Mitchell’s SmartPrice Solutions; that business includes FairPay Solutions and National Health Quest.  Looks like the individual names will go away as Mitchell rebrands the offering under the SmartPrice name.

This means – more consolidation in the work comp PBM business, and a more viable PBM offering for Mitchell

Work comp drugs

Today’s WorkCompCentral has a great piece by Elaine Goodman about the reduction in opioids enjoyed by Optum’s work comp payer customers. According to Optum:

  • the percentage of patients using opioids dropped by almost 5%
  • average morphine equivalents decreased 4.7%
  • the number of scripts per claim dropped 1.7%

Optum isn’t the only PBM delivering results; Coventry and Express Scripts helped their payer customers reduce the use of compounds by almost a third. 

And, continuing a six-year trend of reductions in drug spend, Optum data indicates drug costs per claims fell another 4.6% in the first seven months of this year compared to last.

This means – PBMs continue to deliver for work comp patients and payers.

Cubs Win! Implications for health care…

Brad Wright is a master blogger, and a terrific writer as well. He’s put together a synopsis of all you need to know about health care heading into next week’s election; complete with graphs, charts, and data, while somehow tying it all to the Cubs’ historical World Series victory.

As a White Sox fan, I’m happy if for no other reason then those Cub fans will finally feel the joy we did in 2005!

What’s really happening in workers’ comp

Injury rates are plummeting, insurance premium rates are flat or dropping, medical costs are down as well.

This morning Todd Foster of WorkCompCentral reports big rate decreases in Louisiana and Texas and a slight decrease in Georgia.  This comes on the heels of drops in most other southern states, some well into the double digits.

Out of 36 states reviewed by NCCI, all but four will get rate decreases.

In Texas, a drop in energy service employment is one factor; this is a high-severity, high-frequency industry (injuries are worse and occur more often than in other industries).

Another article in WCC reported that American Financial’s work comp results improved due to “prior year loss development” improvements.  In English – claims costs for last year came in lower than they predicted.

Injury rates are continuing to decrease every year. Medical costs are flat or down slightly.  And, while wages are slightly higher, employers’ and taxpayers’ workers’ comp premiums are lower.

Make no mistake, this is good news for the three constituencies that matter – workers, employers, and taxpayers. Fewer workers are suffering the trauma and uncertainty of injuries. System costs are dropping for everyone.

There are a couple of things that could will change this.

If Congress and the next President (whoever that is) can work together (yes, I believe in the Easter Bunny too), there will be a massive investment in infrastructure in the near future.  We’re talking hundreds of billions of much-needed spending on bridges, roads, rail, the energy grid, clean energy, broadband.  With interest rates still right around zero, now is the time to finally fix stuff our legislators have avoided for decades over fear of political repercussion.

This work will take years, and as it is high-risk for workers, undoubtedly lead to more injuries.

Longer term, we can look to what’s happened in manufacturing to forecast employment trends in other sectors.


The US is the second largest manufacturer in the world – despite the decline in jobs in that sector, output is just slightly lower than China’s.  Despite what any politician says, those “lost” jobs are NOT coming back. What’s happened in manufacturing will be felt in every other business and industry, from hospitality to transportation to health care.

What does this mean for you?

Workers’ comp is driven by macro factors. 


Halloween catch up

Off to New Orleans for client meetings; should be interesting spending Halloween evening downtown.

A couple tems of note that deserve mention.

Over the weekend 178 GOP and 1 Dem representative called on CMS to stop with all the value-based stuff. Claiming the agency is overstepping its bounds, a letter signed by these worthies evidently wants Medicare to return to fee for service.

In a word, this is dumb. FFS is a big reason health care costs are out of control while quality is spotty at best. Fiscal prudence would seem to demand rapid adoption of value-based care. I know taxpayers will be far better served when more care is based on what actually works, not on what providers can bill for.

CompPharma’s annual Survey of Prescription Drug Management in Workers Comp will be out tomorrow at Big news is respondents’ drug costs dropped 8.7% in 2015. Opioids are still the biggest concern and compounds the top emerging issue.

Finally it looks like occupational injuries declined yet again; the Department of Labor reported the injury rate dropped from 3.2/100 to 3.0.

That is good news indeed – especially for those workers who didn’t get hurt.

Hope your week is most excellent.

Note- sorry about no URL links; posting from my phone which makes that really complicated.

myMatrixx exits the ancillary benefits business

PBM (and CompPharma member) myMatrixx is exiting the ancillary benefits market, turning their DME and home healthcare business over to long-time partner VGM HOMELINK.

According to the press release, myMatrixx will: “move the myMatrixx ancillary business to HOMELINK in an effort to allow both companies to focus on their core business. As a result, HOMELINK will begin servicing all myMatrixx ancillary business…”

This is in process now.  HOMELINK’s Jim Nygren told me his company’s new direct clients:

“will have the option to use our electronic portal or contact us using phone, email and fax.  Our systems has been in place and used by our clients for many years.  As an example of our focus on service, HOMELINK has a live individual answer every call.”

Expect the company to move to firm up its presence in the workers’ comp space.  HOMELINK has had a long standing relationship with Healthesystems that enables a few very large payers to access their services via Healthe’s Ancillary Benefit Management service; it will be selling direct as well in the future. To do that, Nygren said they will be

“doubling sales staff and investing in multiple national marketing campaigns…[this is our] First venture into anything other than organic growth. We will be more aggressive in sales and marketing, building on our relationship with existing clients and growing business through new ones.” 

A myMatrixx transaction had been rumored for some months, but only recently had it become known that the Tampa-based PBM was just looking to spin off the ancillary business. Sources indicate the ancillary business’ annual revenues are somewhat less than $10 million; earnings are said to have been marginal.

A couple general observations.

  1. The ancillary benefits business – durable medical equipment, home health in particular – is fundamentally different from pharmacy.  Pharmacy is the most standardized and automated type of care in the workers’ comp sector.  Compared to pharmacy, DME and HHC are decidedly not standardized or automated.
  2. While some work comp service companies are looking to be one-stop shops, others are focusing on doing one (or perhaps two) thing(s) really well. Both strategies can work – if the overarching guide is customer service. However the one-stop shop strategy is a LOT more difficult to implement and even harder to maintain.  A screw-up in one area almost inevitably taints the entire brand…

What does this mean for you?

Focus is a very, very good thing.

ACA: the real story

OK folks, deep breath here. Let’s take a minute and discuss what’s really going on with the ACA.

ACA – or the more-commonly-used-but-nonetheless-inaccurate-title Obamacare ≠ the Exchanges. I don’t know why pundits, pols, and regular people don’t understand this.

Let’s remember that enrollment in the exchanges and individual plans amounts to about 6% of all insureds in the United States.


Six percent.

Second, remember that the ACA includes a lot more than just the exchanges.

Elimination of pre-existing condition clause, guaranteed issue, coverage of dependents to age 26, Medicaid expansion, changes in Medicare reimbursement all have much more impact on the overall industry and population than the exchanges.

It’s clear that rates in the exchanges are going up a lot. This is because there are not enough young people and healthy people buying coverage on the individual market to offset the expense of us older folks.  And, it’s because the big commercial plans aren’t very good at individual coverage.

As the penalties for failure to obtain coverage increase, we can expect more people to enroll in health insurance. But for now, rates are going up significantly.

That said, I can say from personal experience that our rates are going up less than one dollar for a platinum plan in upstate New York. We are enrolled in a very narrow network with no out of network coverage.

The big commercial plans, United healthcare, Aetna, Wellpoint are all experiencing significant losses in the exchanges. However the plans that are more locally focused and have more expertise in Medicaid and other individual markets are doing well.

Therein lies a lesson. The big commercial plans are very skilled and very experienced in dealing with employer plans. However their expertise is not in the individual market which is why they are getting crushed.

Let’s not forget the ACA is based on private insurers competing. The competitive market is working. As the plans that can’t compete are exiting Exchange markets others are earning more business. This will, over the long term, help control cost and deliver better care to individuals on the exchanges. And, it will make these individual market winners better able to compete for employer business as their cost of care is going to be lower.

Finally, unlike most major federal legislation, there has been no effort on the part of the opposing party to fix the problems with the original legislation.

Hopefully this will be remedied under a new administration.

What does this mean for you?

Progress is painful. But reforming our health care system is absolutely necessary.

OneCall cuts back

Last week One Call Care Management conducted another round of layoffs, with most coming from field sales. I’ve heard a few operations folks were also let go.

Word is the field force reduction is driven by two factors.  First, former CEO Joe Delaney hired approximately 20 reps with NO workers’ comp experience earlier this year in what has been characterized as an “experiment”.  Evidently, the experimental stage is over – these reps are gone.

Second, after keeping the sales staff aligned with products and services (one for DME, another for imaging, a third for PT…), OCCM decided this wasn’t working.  Going forward, reps will be assigned to specific customers/prospects, and will have to be up to speed on all OCCM products.

Sources indicate that out of 118 reps, 38 will be terminated.  It appears some will get with severance and non-competes will be enforced, however I’ve been told OCCM will consider letting terminated reps out of their non-competes on a case-by-case basis.

That would be the right thing to do.

Interestingly, OCCM made the layoff and change in focus while the head of field sales position is open – as it has been for some time.  I’m not sure how this transition from seller-of-one-service to seller-of-all-services is going to progress without someone in charge over the long term. This kind of change isn’t simple, requires ongoing training and evaluation, as well as coordination with the service delivery folks to ensure the inevitable glitches and misunderstandings are handled quickly.

For a company with more than 3000 employees, a reduction of slightly more than one percent isn’t a big deal, and may actually make sense, IF those reps are really capable of “repping” all OCCM products and services.  And if they are treated equitably and given the opportunity to work in the industry.

Going forward, I’d expect we’ll see additional consolidation at OCCM. The company has multiple domestic call centers, and as OCCM off-shores various functions (clinical, scheduling, A/R) the need for US-based staff will likely decrease.

What does this mean for you?

Hopefully new opportunities for the newly-unemployed.