Insight, analysis & opinion from Joe Paduda


COVID update

Two years (almost) to the day and we’re still talking about &^%$(*# COVID…

OK, here’s the latest.


73 million confirmed cases in the U.S.

876 thousand COVID-related deaths.

that’s 12 deaths per thousand cases.

that, dear reader, is a very high case mortality rate.

Here’s a comparison of death rates (NOT case mortality rates) for flu vs COVID.

Long-term impact

A study published in JAMA of one-year outcomes for patients who survived ICU treatment in Holland found:

  • 74.3% reported physical symptoms,
  • 26.2% reported mental symptoms, and
  • 16.2% reported cognitive symptoms.

More specifically, patients self-reported issues with fatigue, mental symptoms, depression, PTSD, anxiety, and indications of cognitive failure.

NCCI’s webinar on COVID’s impact on work comp is up for viewing here.  Highly recommended.

Vaccination data

Excellent ongoing reporting from the Kaiser Family Foundation; latest data is here.

Overall 73% of us are vaccinated

Couple head-slapping statistics…

Republicans used to be the rational party, or at least the party of rationality. That’s a stunning disparity.

Here’s why the unvaxxed are unvaxxed…

What does this mean for you?

Get vaccinated and boosted, and wear a mask. COVID doesn’t care about your political affiliations.



(Most) private insurers aren’t controlling costs

The prices private insurers have paid to hospitals and physicians have increased much faster than prices paid by Medicare and Medicaid.

And it’s not because providers are cost-shifting.

Those are the main takeaways from a just-released CBO report; here’s what CBO said (emphasis added):

  • commercial insurers pay much higher prices for hospitals’ and physicians’ services than Medicare FFS does.
  • In addition, the prices that commercial insurers pay hospitals are much higher than hospitals’ costs.
  • Paying higher prices to providers can have several effects.
    • First, it can increase insurers’ spending on claims, which may lead to higher premiums, greater cost-sharing requirements for patients...
    • Second, it can increase the federal government’s subsidies for health care .
    • And third, it can slow the growth of wages.
  • The share of providers’ patients who are covered by Medicare and Medicaid is not related to higher prices paid by commercial insurers. That finding suggests that providers do not raise the prices they negotiate with commercial insurers to offset lower prices paid by government programs (a concept known as cost shifting).

Ok, that said, these are findings based on national data…things are different market to market.

I’d note that price increases in workers’ comp correlates with states’ Medicaid expansion. That is, price inflation is generally much higher in states that did NOT expand medicaid.

More on that here.

What does that mean for you?

Private insurers aren’t doing their job very well.



Paul Carroll of Insurance Thought leadership penned (actually typed) a great piece on automakers’ rapidly growing focus on insurance.

Briefly, auto makers want to capture more – especially ongoing – revenue from the vehicles they sell. Way back when, they sold cars and spare parts to dealers – and that was it.

Then they got into financing; GMAC and other financial arms became huge moneymakers for the Big Three as loan originators and lease financiers.  We’ll leave aside the major mistakes the finance entities made (sub-prime loans, 2008, the Great Recession…) noting their foreign competitors were way less dumb.

Now, manufacturers are going all-in on insurance. There’s a bunch of reasons this makes sense; paraphrasing Paul and adding a couple of my thoughts:

  • manufacturers are building telematics into cars to monitor driving behavior (and other stuff) – essentially this really helps third-party auto insurers…at great cost to the manufacturers.
  • telematics can help manufacturers build safer/less risky cars, which they would then benefit from in the form of higher insurance profits – but only if the manufacturer is the insurer.
  • safer/less risky cars use fewer spare parts…which cuts into manufacturers’ revenues…which can be offset by profits from insurance.
  • buyers often finance their purchases at the dealer…so it’s pretty easy to package insurance with leases and sales.

GM, Ford, Toyota, Porsche, Tesla are all in the insurance business. Rivian (the upstart electric truck/SUV manufacturer) is also offering insurance (I have one on order). Most are offering to combine auto with home and other insurance.

Notably, Rivian is explicitly detailing it’s strategy…

Rivian Insurance integrates with our connected vehicle platform and suite of safety features to bring you tailored, data-driven coverage. We understand our vehicle, our technology and our repair costs better than anyone. Working as one team with Rivian Service and Parts helps us lower premiums and get you back on the road with quality repairs.

What does this mean for you?

If you’re an auto insurer, agent, or broker the time to plan is now.


COVID, Comp, Claims and Costs

Yesterday NCCI and several state bureaus and research organizations put on an excellent webinar on COVID’s’ impact on Workers’Compensation. The analysis covered 2020 data from 45 states. The full report is available here.

Quick takes

In 2020 about 80,000 COVID claims were accepted in the 45 states at an average cost of $7,800 per claim.

There’s a LOT of interstate variation, with COVID accounting for 1% of claims in Montana and 29% in Kentucky.  The high rate in KY was somewhat higher than rates in MN; in all other states except NJ COVID claims accounted around 15% or less of total claims. The high percentages appear to be due to presumption laws which were quite broad in Kentucky and Minnesota.

Median was 7.2%…

Aa a percentage of incurred loss, COVID accounted for about 1.7% of incurred losses in the median state. Again there was a wide range, from 0.2% (Alabama) to 12% (D.C.)

COVID claims are diabolically opposite from “regular” work comp claims in that 88% of COVID claims are lost time claims compared to about 2% for “regular” claims. COVID claims are also closing earlier than “regular” claims.

There were 13% fewer Non-COVID claims in 2020 than in 2019; recall there’s been a long-standing annual structural decline in claims of about 3.8%.

The net is non-COVID claims dropped three times more than expected…correlation is not causation, but in this case it’s darn close.

NCCI used polls for audience reaction; the first questions was how impactful COVID direct losses will be on the WC system moving forward.

The responses were puzzling at best.  Clearly COVID claims have NOT been costly – far from it. In 2020 COVID claims accounted for $630 million in incurred losses – just 1/50th of total incurred losses.

Yet almost half (!!!) of respondents said COVID direct losses would be at least moderately impactful.

That, dear reader, makes zero sense.

  • The math alone doesn’t support that belief, and workers’ comp folks are supposed to get math.
  • There hasn’t been any material change in presumption laws, so that can’t be it.
  • But there’s been far too much Chicken Little-ing about COVID.

My guess is that Chicken Little-ing has somehow convinced many that something that a) will be transitory and b) hasn’t been costly and c) is getting ever loss costly to treat will somehow become a far bigger problem than it is.

What does this mean for you?

C’mon people. Stop with the catastrophizing.

So, one really cool thing about the webinar – almost all of the presenters were women. Gotta love that.


Thursday catch-up

Between doing grandfatherly duties (hanging out with our granddaughter), business obligations and snow plowing, it’s been a busy week.

here’s what’s up.

COVID stuff

Yeah, like you, I was hoping this pandemic would be just an unpleasant memory by now. Far from it.

Omicron has substituted transmissibility for lethality, so far more of us will catch COVID, but far fewer of us will get very sick or die. BUT – and it’s a huge BUT, the net impact is more of us are getting sicker.

And the impact on healthcare facilities and the increasingly burnt-out people who work in those facilities is the worst it’s been since COVID arrived on our shores.

Another of those knock-on effects of COVID…hospitals can’t discharge patients because a) rehab facilities don’t have room, b) there aren’t enough home care providers to hep the patient recover at home. So, patients that COULD be discharged – thus freeing up beds for sicker people – aren’t.

Which leads to more stress on hospitals and hospital staff.

Side note – in case you missed it, the US has lost 10,000 ICU beds over the last year – because there aren’t enough healthcare workers to care for ICU patients.

Last week saw a new peak in hospital admits for patients with COVID… most troubling is the rapid rise in kids 4 and under that have been admitted.

There’s been a lot of discussion about patients admitted with COVID vs patients admitted due to COVID. This needs unpacking.

Lots of us have health issues, which are called “morbidities”…asthma, high blood pressure, obesity, diabetes and the like. Very broadly, the more you have, the worse it is, because one exacerbates the other(s).

COVID is in that while a patient may not have a bad case of Omicron, that patient’s immune system now has to deal with a respiratory (and perhaps other) problem(s) on top of being overweight, older, hypertensive and pre-diabetic.  The result is the patient is in the hospital longer, takes longer to recover, and full recovery is less certain.

About those “co-morbidities”…some irresponsible media types butchered CDC Director Rochelle Wolensky MD’s comments on COVID and co-morbidities. 

One such media type tweeted “CDC director admits over 75% of Covid deaths had at least 4 pathological conditions (comorbidities). Since the total death rate is 0.27% this means healthy people have a 0.0% death risk.”

That is NOT what Dr Wolensky said. She was referring to COVID deaths among vaccinated individuals – NOT all COVID deaths.

Her point was that vaccinations protect us from COVID, but people in very poor health are still vulnerable; most of the vaccinated people who died were in very poor health BEFORE they got COVID.

Sheesh. This isn’t that hard people…


Registration for CWCI’s annual meeting is now open here; March 8 is the date. As of now it is live and will be streamed as well. Walnut Creek is the location, and attendees will hear solid research on the impact of COVID plus a study on injured worker access to care.

Today NCCI and several state regulators are discussing the impact of COVID – you can register for the webinar here. You can download the team’s report here.

Lots of great information. presented in an accessible format.

What does this mean for you?

Don’t retweet unless you check the actual source information, because you may look like an idiot.




We are not “In This Together”

In a tiktok video circulating among healthcare workers a traveling nurse bluntly describes the very near future – no beds. For those blithely going on about their lives, ignorant of the impact of the anti-vaccine movement on our healthcare system and the people who take care of us, the video should be required viewing.

There is a direct connection between vaccine resistance and the dire state of our healthcare system, yet most resisters seem quite unconcerned about the effects of those decisions on their neighbors, family, friends, coworkers, and the healthcare system and healthcare workers.

Today, one out of five hospitals is critically under-staffed, the result of staff burnout, increasing frustration and intolerable working conditions. Over the last year the nation has lost more than 10,000 staffed ICU beds and almost 4 out of 5 of the remaining beds are occupied.

The combination of a flood of COVID patients and staff losses from resignation and COVID quarantine is exacerbating the staffing crisis and affecting non-COID patients. In almost half of all states, hospitals are postponing elective surgeries  – forcing patients to delay  hip replacements, cancer surgery, non-urgent cardiac bypass operations and other non-emergency care. Legally required to care for COVID patients regardless of their ability to pay, a growing number of hospitals have been forced to limit or forgo elective procedures. The longer this persists, the bigger the financial impact on facilities unable to bill private payers for lucrative services.

Here in New Hampshire’s Upper Valley hospital ICUs are nearing full capacity, National Guard troops are helping staff emergency rooms because ER nurses are needed in ICUs and CCUs. What used to be 12-hour shifts are now stretching beyond 13.

Nurses don’t have time to use the bathroom much less grab a bite to eat or get off their feet for a few minutes.

Staff nurses making $45 an hour are working alongside traveling nurses earning 3 times that. At some hospitals workers exposed to or testing positive for COVID are required to take PTO (personal time off) while in quarantine, a policy that infuriates the very people tasked with caring for us.

The explosive spread of COVID has led to more primary care physicians refusing to see patients in person, demanding patients go to Emergency Rooms for COVID tests, throat cultures, blood pressure tests, and other diagnostics. Staff are furious at this as it further overloads ERs and more people are needlessly exposed to COVID.

Of late, every day brings more bad news for staff. PPE supplies are tightening , the American Heart Association just released a policy change telling healthcare workers they don’t need PPE while doing CPR on COVID-positive patients and the CDC is telling healthcare workers exposed to COVID they need only isolate for 5 days.  A few facilities are asking nurses that tested positive for COVID to come to work anyway. Hardly the policies, practices, and statements that will engender loyalty and strengthen commitment among healthcare staff.

It’s not as if administrators have many other options. They are beyond swamped, scrambling to find enough people to fill the next shift, unable to plan much beyond that. With more and more nurses and other staff quitting, that task will just get harder and harder. That said, hospital administrators can and SHOULD be doing a lot more for front-line staff.

Retention bonuses, day-care assistance, hazardous duty pay are among the measures smart administrators should be taking.  Alas few are.

Health care is in crisis today in Alabama, Ohio, New York, Washington DC, Michigan, Georgia, and Rhode Island.  More southern states are about to enter crisis stage, overwhelmed with COVID patients most of whom are unvaccinated.

The reality is America is not “in this together”; far from it.

Our healthcare workers, our healthcare system and the mask-wearing vaccinated are on one side, desperately trying to protect all, care for grievously ill patients and save lives. The unvaccinated and their enablers are on the other, blithely ignoring the consequences of their decisions while demanding care when they fall ill.

While some groups have every right to be careful if not outright suspicious of vaccines (the Tuskegee tragedy’s fallout is still resonating), the vast majority of the anti-vax crowd’s claims are patently false and easily refuted. Some states are even paying unemployment benefits to vaccine refusers who’ve lost their jobs, rewarding behavior that is directly responsible for our collapsing healthcare system.

It’s not as if COVID is the only problem facing our healthcare system.  The mess that is information “sharing”, fee for service reimbursement, balkanized delivery systems, ineffective over- and under-regulation and the for-profit motive that drives most of US healthcare all contributed to the crisis. But COVID – and the politicization of vaccines and masks – is different.

With choice comes consequence, with freedom comes responsibility.

Unfortunately, that’s exactly what is missing – a willingness on the part of most vaccine refusers to take responsibility. What’s also missing is a willingness to hold refusers accountable. Pundits and politicians want us to be patient, to listen, to engage, educate, empathize and respect divergent opinions. For two years we have been doing just that, and while we have been listening and seeking to understand our healthcare system nears collapse.

We respect vaccine refusers’ right to make those decisions, and they must accept and take responsibility for their central role in the collapse of our healthcare system.

 Without that, we will never be in this together.



Predictions for workers comp in 2022, part 2

Last week the first five predictions about what happens in workers’ comp this year went up…today’s the second five.

6. With one or two exceptions, don’t expect much in the way of private equity investments.

There may be one or two large transactions, and a couple small ones, but outside of that, the bloom on the workers’ comp rose appears to be fading.

7. OneCall will be sold and/or split up. 

The BlackRock and KKR entities that are the current owners are not operators; they are debt owners. CEO Tom Warsop has squeezed out all the squeezable costs – and then some. Growth – defined as new business from new customers – is not happening. Add the overall drag on work comp services from the still-real drop-off in claims and claims services, and the reasons to hold on and hope are few indeed.

Plus, if interest rates increase – which is a distinct possibility – and if private equity interest in workers’ comp continues to diminish from it’s current modest level – also a distinct possibility – OCCM’s owners may well decide to sell soon rather than watch values decline.

8. COVID’s impact on costs and rates will prove to be minimal.

COVID claims are cheap, few are anywhere close to catastrophic cost levels, the effect of presumption laws and regulations is not much of an effect at all, and many employers – especially health systems – are forcing employees to use PTO rather than file for WC when they test positive/have symptoms.

Most research organizations and actuaries would do well to reflect how their early predictions were so…bad.

Helpful hint – two places to start; a) the tendency for WC “experts” to catastrophize and b) the almost-complete lack of understanding of healthcare drivers, costs, cost structures, reimbursement, and epidemiology.

9. There will be no big issues in workers’ comp. “Big” defined as important, needle-moving, disruptive, revolutionary.

No, medical marijuana is NOT a big issue – neither is COVID, or presumption, or the mid-term elections (there is ZERO interest in workers’ comp on the federal level) or remote work (does anyone seriously believe office workers tripping over toys will amount to any real dollars?)

Oh, and with rates at all time lows, frequency continuing to drop, and medical costs (with the exception of physical therapy and facilities) flat, coupled with ongoing supply chain and labor market issues, execs at big employers are (justifiably) completely uninterested in workers’ comp.

If the big girls and boys don’t see any issues, there aren’t any.

10. Here’s the kicker – the biggest long-term concern for workers’ comp is global warming...yet this is getting zero attention.

There’s going to be an inevitable increase in issues related to heat, flooding, fires, drought, tornados and hurricanes. This is getting more real every day yet remains all-but-ignored by pundits, policy-makers  and rate-makers.  We can expect more heat-related claims. Hurricanes, fires, and tornados will increase in number and severity; affecting logistics, labor, construction, and claims. The research is clear.

What does this mean for you?

As always, success favors the insightful, and failure plagues the ignorant.


2022 Predictions for workers’ comp

Once more I head out on a limb to prognosticate on the events and trends that will shape 2022.

  1. The soft market will continue.
    Carriers are still over-reserved, rates are still too high (see the opioid hangover), capital is still flowing into workers comp (gotta love that looooong tail), and employment growth may continue to be modest (low wage workers have discovered that working at crappy jobs isn’t always a have-to, especially when child care is unavailable and unaffordable).
    On the other side, wage growth will likely continue (thus partially mitigating the above drivers) as more employers finally figure out that people aren’t interested in crappy jobs for crappy wages.
    Caveat – towards the end of 2022 we may well see a bit of tightening as construction, infrastructure, green energy and other initiatives start up and get operational.
  2. TPAs will add more business, mostly from carriers.
    As work comp continues to shrink, insurers will ramp up efforts to shed assets and expenses to reduce their cost structure. By outsourcing claims, carriers are trading the high fixed costs of a claims infrastructure for the variable cost of a per-claim admin fee.
    The smarter carriers will negotiate hard so they don’t get screwed by medical management and other non-fixed fees…but many carriers aren’t that smart.
  3. Insurers will reduce staff, particularly in claims.
    Well, of course. see #2 above. However, TPAs will look to add claims staff, so experienced, well-trained claims folks will be highly sought-after.
  4. IF total medical costs go up – and I doubt they will  – the increase will be marginal.
    Yeah, I know there’s lots of press and punditry about work comp medical costs aka “severity” increasing – and most of it is flat out wrong.

    I’ve read far too many investment banker slide decks, “research” reports and surveys of work comp executives that talk about rising medical costs –  almost all are not based on data or solid research.
  5. That said, facility and therapy costs will go up.
    Mostly because a) medicare is increasing reimbursement for therapy which trickles down to work comp fee schedules, and b) some healthcare systems and for-profit entities (looking at you, HCA, especially in Florida) have figured out how to bust open the work comp piggy bank.

Monday – 5 more predictions.

What does this mean for you?

Work comp will just muddle along…


2021 Predictions – How’d I do, part 2

Yesterday we went through the first 5 of my predictions for 2021, today we’ll wrap up the second batch before I attempt to predict what 2022 brings.

6.  The workers’ comp insurance market will stay soft.

Here’s a few reasons why.

  • There’s hundreds of billions of capital floating around out there, looking for a home. Workers’ comp insurance has been a) quite profitable and b) is a great place to park dollars.
  • Claim counts continue to decline – while COVID is accelerating the decline, the structural drop is embedded in the business and is here for the long term. Next year there will be fewer claims, and the following year even fewer.
  • Medical inflation remains pretty low (while there are troubling indicators that costs will bump up, overall trend remains low historically)
  • There are lots of insurers fighting for a shrinking market, and it only takes a couple cutting prices to force others to join in.Verdict – True. Although this is really directly related to another prediction about rates, so if one was true, the other almost certainly had to be. Then again, if one was false, I’d be 0 for 2…

7. More layoffs and staff reductions will hit insurers and TPAs
See #6 above.  Fewer premium dollars = fewer administrative dollars; fewer claims = less need for staff. Layoffs hit several insurers last year and we can expect more to come.

Verdict – False. There are anecdotal stories about a few reductions here and there, but nothing big except…Reports indicated AIG “transferred” employees  – apparently primarily claims staff – to Gallagher Bassett as part of its move to offload fixed costs.

Where I really went wrong was predicting TPAs would have layoffs…Since TPAs’ biggest growth is coming from carriers offloading work to them, and if carriers are laying off staff, then the work has to go somewhere – and that “somewhere” is to TPAs. So, that was an unforced error.

8. Other than presumption and tele-services, there will be very few significant moves in WC regulation or legislation.

Between drastic reductions in state revenues due to sales and other tax receipts affecting staffing and state legislatures and governors all-consumed by COVID responses and budgetary issues there’s little oxygen left to fuel any material changes to work comp regs. While it would be great to see Florida’s legislature stop facilities raiding workers comp to make up revenue shortfalls, that’s highly unlikely.

Verdict – True. And there wasn’t much in the way of presumption or tele-services changes…no, a few states addressing medical marijuana is NOT significant.

9. OneCall will be sold and/or broken up

While the current debt load is a LOT less than it was under the previous owners and the current CEO is an improvement, the decline in claims hit One Call hard in 2020.   The first half of 2021 won’t be any better with employment numbers and claims counts likely reduced due to the pandemic.  On the plus side, there’s still lots of investor money looking for deals.

Net – I expect the company to change hands this year. Whether it is sold as one entity or broken up is TBD.

Verdict – False. That said, it’s just a matter of time…the bleeding has mostly stopped, but growth is anemic at best, service levels remain suspect, and financials have gotten better in large part due to lots of expensive staff exiting the company

10. Opioids and other dangerous drugs will get a lot more attention.

With COVID dominating everyone’s calendar, workload, thinking and energy, we all dropped the ball on managing opioids. That will change.

chart below is from The Economist.

With prescription volumes, MEDs, and duration likely up during 2020, expect payers to re-engage with prescribers, PBMs, and employers to get things moving in the right direction.

Verdict – False.  NIOSH published a timely report on opioid issues among construction workers but other than that – very little material action.

This is REALLY disappointing. I get that COVID was a lot to handle, but the opioid crisis got even worse last year with a record number of opioid-associated deaths. That, and the fact that long-term usage of opioids is likely the most significant contributor to claim duration and long-term claim cost should have insurers, employers, and TPAs focused on addressing chronic opioid usage.

The net – overall 5 True, 4 False, and 1 pending.

Gotta do better than that.


2021 predictions – How’d I do?

It’s time once again to see how I did on my 2021 predictions for workers’ comp.

Today we’ll dive into the first 5 and finish up with the last 5 tomorrow.

  1.  Total premiums will stay low.
    As employment, payroll, and injury rates all remain under pressure, total premiums will remain significantly lower than we’d expect in a non-COVID, non-recession environment. We are also on the tail end of the opioid cost bubble, with actuarial projections still over-compensating for what was rampant overuse of opioids.
    Unemployment will persist at least thru the first half of 2021 – and likely the first three-quarters – helping to keep premiums lower. There are some predictions that employment will ramp up towards the end of the year; let’s hope so.
    Implications abound.

    Verdict – True. Wages did increase significantly (Good news indeed for hospitality, leisure, construction, logistics, healthcare and retail workers!) but premiums and rates mostly dropped. Florida, California, and other states saw decreases, continuing a decade (or so) long decline in rates and premiums.
    Note – Actuary Mark Priven – and I – both believe rates are still too high.

  2. Facility costs will spike.

Hospitals are in dire financial straits, with 2021 bringing no respite from the cash crunch experienced by the entire industry when people avoided facilities, put off elective procedures, or weren’t able to get care due to facility restrictions.
As desperate financial managers look high and low for any and all revenue sources, you can bet your house they’ll be focused on workers’ comp. Payers have:

    • few effective price or utilization controls;
    • an often-lackadaisical approach to cost management;
    • bill review programs and processes hopelessly outclassed by sophisticated revenue maximization technology; and
    • management that doesn’t know that it doesn’t know;

thus payers are going to see facility costs – already the largest part of medical spend – jump.

Verdict – too early to tell. We won’t know until we get 2021 data, which will be sometime in mid-Q2 for most states. I’ll go out on a limb and double-down on my prediction; facility costs – as a percentage of total spend – have increased significantly in 2021

3. Consolidation
Seems I’ve been forecasting increased industry consolidation for years…it’s not a prediction but more acknowledgment of reality. Workers’ comp is a declining industry with shrinking claim counts and flat expenses – and that isn’t going to change.

COVID has accelerated the process dramatically; with claim counts down 15-20%, there are fewer claims to adjust, fewer services to medically manage, fewer bills to pay, fewer dollars to compete for.
Because there will be fewer revenue and premium dollars next year than this, more consolidation is inevitable.
I expect this to be most pronounced among medical management firms and TPAs, and the big to get bigger. Genex/Mitchell/Coventry, Sedgwick, Concentra are all likely consolidators. Not sure about Paradigm.

Verdict – True. Paradigm has bought HomeCareConnect; Enlyte (Mitchell/Genex/Coventry) acquired QualCare (and reports indicate Enlyte is for sale); and Sedgwick is buying up tangential businesses (JND Legal Administration, Temporary Accommodations, Managed Care Advisors, and several other firms).

4.  Drugs will re-emerge as a significant problem
After several years of declines in opioid prescription volumes, it looks like things headed in the wrong direction last year.
Prior Auth requirements were relaxed, refills extended, and states loosened restrictions on prescribing. Add to that patients weren’t able to get to their PT visits and surgeries were postponed. The result – I expect we’ll see drug costs in 2020 flattened out, and opioid usage actually increased (We will know a lot more in mid-late March when I complete my Survey of Drug Management in WC).
That was last year; as COVID is returning with a vengeance, expect to see continued increases in 2021.

Verdict – False. Drug costs continued to drop in 2020 and reports from multiple industry contacts indicate that continued into 2021.

5. COVID claims aren’t going to be costly.

Despite all the caterwauling we heard back in 2020, COVID costs have been minimal. That will not change. Yes there will be long-haulers, but those will be very few indeed. Yes there will be more claims, but most will cost just a few thousand dollars.

Verdict – True. All credible research and reporting indicates COVID claim costs have been pretty low. Not surprising to those who actually have a grasp of healthcare cost drivers and treatment expenses.
More on costs here, here, and here.

The Net – 3 True, 1 False, and 1 pending.

What does this mean for me?
I’ve got to relook at my thinking re drugs and drug costs. I know as much about drugs in workers comp as anyone, and I clearly got this one wrong.  

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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