Insight, analysis & opinion from Joe Paduda

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Dec
10

A random walk down work comp lane

Here, in no particular order, are a few of the more interesting goings-on in the work comp space these days.
Eileen Auen, CEO of PMSI, was named one of Business Insurance’s Women to Watch for 2010. I first met Eileen when she called me the day before she took the helm of PMSI to discuss a PMSI client situation. I was impressed then with her demeanor and openness, and over the last two years my respect has increased as I’ve watched PMSI regain much of the luster it lost before the arrival of Eileen and her team. They are once again a formidable competitor, due in large part to her leadership, and the desire and hard work of many long-time PMSI veterans.
Texas
The Texas ‘situation’ may be changed dramatically later today, as rumor has it the Attorney General is set to release his opinion on ‘involuntary networks’. The opinion has allegedly been sitting on the AG’s desk since before the Thanksgiving holiday.
The complexity of this situation is matched only by its importance to employers, insurers, PBMs, imaging networks and other ‘specialty managed care’ vendors – as of now, after 1/1/11, it will be illegal for a ‘network’ to take a discount unless it is part of an HCN.
To say this is critically important is bland understatement – about forty percent of the work comp medical dollar is for services managed by these entities, and their demise will raise workers comp costs – immediately and significantly.

California
Pat Sullivan’s WorkCompWire has the news that SCIF (California State Fund) is going thru some drastic changes – all intended to save $200 million. The moves include moving staff to other locations, reducing staff, and selling real estate.
It must be brutally difficult to manage a ‘carrier of last resort’. When the market hardens, business booms, requiring more staff, more computers, more everything. Then when the commercial carriers decide to get back in the market, premium volume declines, along with the need for those new employees, computers, offices, telephones. In the meantime, any politician can excoriate Fund management for understaffing and the associated service issues in a hard market, then turn around and lambast management for bloated payrolls and inefficiency when demand drops.
Reform
Finally, there’s been a bit more discussion about the impact of reform on workers comp. Friend and colleague Greg Krohm, Executive Director if IAIABC, has written an insightful piece about this, and SwissRe’s also provided their insights. Mark Walls’ Work Comp Analysis Group is also engaged.
It is good to see lots of discussion about this, as the more smart people we have focused on reform’s impact, the better prepared we’ll all be.


Joe Paduda is the principal of Health Strategy Associates

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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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