Hey legislators…don’t do stupid stuff

Four months into the COVID pandemic, early data show workers’ comp insurers are doing the right thing.

Two data sources support this assertion – CWCI’s just-released analysis of 1,077 California claims and a dozen conversations I’ve had with insurers, large self-insured employers, and service providers over the last two days.

First, CWCI.

CWCI’s researchers and statisticians analyzed 1,077 COVID-19 claims from 28 insurer and self-insured CWCI members. Notably, these are claims filed before April 30, a week before the governor’s Order granted the disputable presumption.

Key findings:

  • Only 35% of the COVID-19 claims were denied
  • 7 out of 10 workers whose claims were denied tested negative for the virus
  • Other denials were due to:
    • the employee had not been exposed at work,
    • no diagnosis or symptoms of COVID-19,
    • the employee had been working at home, or
    • refused to take a COVID-19 test.

Next, I’m in the midst of a second national survey of payers and service providers about their experience with COVID-19. (details on the first survey are here.)

Key preliminary findings (based on a dozen completed surveys):

  • most payers have developed COVID-specific intake processes, trained staff to handle COVID claims, and set specific policies and procedures to address COVID.
  • so far, payers have accepted about 15% of COVID-19 claims
  • the range is about 10% to 25% of COVID claims filed
  • where possible, insurers surveyed are “paying without prejudice” on claims filed but not yet accepted or denied. That is, insurers are paying medical bills even if they don’t know if the patient has COVID-19.
  • Several very large self-insured employers are providing two weeks’ leave with pay to workers who fear they’ve been exposed at work, regardless of test results

What we know so far.

  1. Some percentage of filed claims are still under review, so the acceptance rate will increase.
  2. Employees who think they may have been exposed at work are filing claims, even if they are asymptomatic.

Based on what we know today, workers’ comp insurers, state funds, and self-insured employers are doing the right thing.

Despite that, several states are contemplating bills or executive action to make workers’ comp the default payer for COVID19.

California’s SB1159 is the poster child; from CWCI – “By including all types of employment without regard to the level of risk actually posted, the presumptions greatly expand the nature and scope traditionally encompassed by presumptions of compensability in California.

More specifically, the bill makes workers’ comp responsible for COVID-19 diagnoses even among workers deemed “low risk” for contracting the disease at work by OSHA. That is, workers with “minimal occupational contact with co-workers or the public.”

COVID-19 is a relatively small occupational issue, but a huge societal one.

Yes, workers who contract the disease through work should be covered by workers’ comp – and all the evidence to date indicates that’s happening.

But work comp should NOT be the piggy bank for any and all COVID claims – which is precisely what SB1159 and similar actions in other states would do.

What’s driving this is our totally dysfunctional healthcare system, one that relies on private insurers, employers, and employees to generate much of the revenue and all of the profits. Hospitals, health systems, medical practices and other providers are in desperate financial shape; it will get worse over the next few months.

Dumping the responsibility for a societal pandemic on a tiny industry that pays less than 1 percent of total US medical costs is not only irresponsible, it also won’t work. Workers’ comp insurers, excess insurers, employers, and governmental entities don’t have the financial resources, skills, staff, or capability to manage and pay for the care of hundreds of thousands of patients, while also covering their lost wages.

This is society’s problem. It’s time governors, state legislators, Congress and the President do their job. Take responsibility – just like the workers’ comp industry has.

What does this mean for you?

Workers’ comp payers – keep doing what you’re doing.



Watch those facility costs…

As the coronavirus continues its relentless march, hospitals and health systems are getting crushed. With elective procedures banned in many states, the profitable patients hospitals relied on to generate profits have disappeared. Meanwhile, expenses related to preparing for COVID19 patients have gone thru the roof and so no signs of abating.

Florida is especially hard hit:

A new report by the national consulting firm Crowe shows Florida health systems have suffered nearly a 50% drop in patient volume in March and April.

Hospital owner UHS just withdrew its financial guidance, with management citing concern over the “financial uncertainty caused by the coronavirus disease.” The announcement followed similar moves by  hospital giant HCA, and Maryland’s hospitals are projecting a billion dollar revenue shortfall for the second quarter. Hospitals in Colorado are facing an even larger reduction in revenues and Michigan hospitals are laying off workers, 

“Patient volumes at our acute care hospitals and our behavioral health care facilities were significantly reduced during the second half of March as various COVID-19 policies were implemented by our facilities and federal and state governments. These significant reductions to patient volumes experienced at our facilities have continued into April, 2020.”

The billions sent to hospitals under the CARES Act is no panacea; on average the funds cover less than a week’s revenue.


More than a dozen rural hospitals  in the South closed last year.  We can expect more in 2020.

Hospitals and healthcare systems are drastically ramping up their “revenue maximization” efforts. Workers’ comp payers, long seen as hugely profitable, now have an even bigger and brighter target on their chests.

What does this mean for you?

Watch those facility costs. 



COVID catch-up

In  less than 4 months, COVID19 has killed more of us than died in the Vietnam war’s 11 years. Some have stated this is a “great success story.”

Healthcare providers may not see this as such a great success, as COVID is crushing healthcare financials.

Research suggests almost 13 million workers have lost their health insurance due to the repercussions of COVID19. Multiplying that by 2 approximates the total number of employees plus dependents that lost coverage – 26 million.

Many will seek Medicaid coverage, but eligibility varies widely (and wildly) by state. People who don’t have coverage and contract the disease and need facility care should have their bills covered by the Feds – either at Medicare rates or via Medicaid.  Either way, reimbursement is likely half or less what their private insurer would have paid.

Anthem just informed us they expect the percentage of people covered by governmental healthcare plans to increase. The $100 billion+ health insurer saw its financial results for Q1 improve; my guess is the drop in elective procedures was a big factor.

All of this to say that COVID appears to be accelerating a trend towards a public option for health benefits – or perhaps a much bigger role for governmental programs in health insurance.

Hospital financials are getting hammered as elective procedures are way down, and many folks with all kinds of ailments are staying away for fear of coronavirus exposure. (chart from Kaufman Hall)

With receivables drying up to dust, facilities are going to redouble their efforts to collect every nickel they can from everyone they can.

Workers’ comp payers – you are hereby warned.

Willis Towers Watson has been publishing their perspectives on all things COVID19, from the impact on the LGBTQ community to a helpful discussion of paying premiums when cash is tight.

An early piece focused on employers’ considerations re workers’ comp liability for COVID19 claims. One item in particular stuck out – large employers with excess coverage should read their current communicable disease coverage details very carefully.  Friend and colleague Karen Caterino was kind enough to paraphrase for me:

For large employers purchasing excess, a multi-claimant disease incident carries the possibility of creating catastrophic financial loss.  If the transmission of a covered communicable disease is a series of incidents versus a single accident, the difference in retained loss could be significant.  A majority of work comp deductible agreements include a provision stating that the deductible applies per employee for occupational disease.  Some insurers are likely to suggest the statute requires they follow the assumption that occupational disease, by its very nature, is a series of occurrences for multiple claimant losses.

This is especially important for supermarket chains, who by now should know that paid sick leave may be the most effective risk management tool to prevent employee and patron exposure. There are many stories like this one detailing how quick, thoughtful action kept food coming while drastically reducing employee exposure.

NCCI has a helpful compendium of states‘ COVID19-related legislative and regulatory initiatives along with COVID19 FAQs.

And yes, surgical masks are quite effective at reducing viral transmission; thanks to Glenn Pransky MD for tipping me off to this research.

Finally, this is a terrific summary of what we know and don’t about how COVID19 affects the human body. It’s long, very well-written, and perfect for a lunch-time read. Spoiler alert – a lot of treatment these days is based not on extensive research but on what docs think works based on prior experience and communication with other clinicians.

From the physician author:

In the absence of data from randomized, prospective trials, we search for answers on colleagues’ Twitter accounts, in interviews with Chinese or Italian physicians, and in our patients’ charts.

What does this mean for you?

Wear a mask, and physically isolate, because we can’t take much more of this “success.”


Single Payer’s impact on jobs

Reality is, switching to a government-run and administered healthcare system would crush the economy – because millions would lose their jobs.

There are 22 million jobs in the US healthcare and related industries (that includes mine, one of our daughters, and her husband – they are nurses – our other daughter is in the tech business and one of her clients is a large health system; our son is also in tech and his company services medical practices.)

The private health insurance industry alone employs north of a million people. (data on this is spotty; UnitedHealthcare has 300,000, Cigna, Molina, Centene, Aetna and Anthem combined have over 180,000; there are dozens of other healthplans, PBMs, TPAs, and ancillary service providers.

On the provider side, there are over 700,000 management jobs (average salary is $86,000) and several million administrative jobs.

Many large hospitals and healthcare systems need several hundred workers just to handle billing and collections; these jobs would go away under a single payer system.

Let’s add all the college and grad school institutions that employ tens of thousands to educate people on healthcare administration, and the support infrastructure – IT companies, paper form printers, App developers, pundits and commentators, real estate occupied by insurers…you get the idea. The health care industry is at least a fifth of our economy.

If we switched to a true single payer system, millions of administrative, support, and related jobs would disappear. Remember what happened to manufacturing in the rust belt? That happened over 50 years; this would affect a much bigger share of the economy over a much shorter time.

The result would be an economic collapse that would surpass the Great Depression and devastate the economy.

Lest you think this is hyperbole, Taiwan employs a grand total of 300 people to administer a single payer healthcare system for a population of 24 million.

Using Taiwan as a basis, we’d only need 4,125 people to administer a universal single payer system.

All of the people administering Taiwan’s health system work in this one building.

What does this mean for you?

Believing government administered Single Payer can happen anytime soon requires magical thinking.


Single Payer is…what?

(We are reprising several posts about Single Payer; Bernie Sanders’ current status as the sorta-front-runner in the Dem race has folks wondering what this is all about) You’re going to hear a lot about Single Payer over the next few months – mostly from people who a) have an opinion about it BUT b) don’t even know what “Single Payer” is.
Before you get sucked into that discussion/argument, here’s a primer. “Single Payer” – by definition – is government-financed and government-managed health insurance. Beyond that, pretty much every country with Single Payer is unique, each with its own nuances. For example,
  • most don’t have government-employed healthcare providers; in many single payer systems, physicians, therapists, hospitals and other providers are private.
    • The UK is an exception; providers are (mostly) employed by the government
  • many are not government-operated; in many systems private insurers contract with the government to handle administration of health insurance – similar to our Medicare
    • Again the UK is an exception
  • the government sets pricing/reimbursement policy and actual prices – similar to our Medicare
  • funding comes from some combination of employee, employer, and other taxes; in some countries, insureds pay some form of premiums – similar to our Medicare
  • it covers everyone
  • there is little to no paperwork for patients/consumers; all that is handled by the administrative agency
  • there are minimal or no deductibles, copays, or co-insurance requirements
  • people can buy into supplemental insurance through private insurers
What does this mean for you? You are now more knowledgeable than most everyone else about Single Payer.


Single Payer – what’s the real scoop?

(this is an update of a post from last year; given all the attention, it’s timely) It’s the worst kind of government over-reach.

It’s an easy solution to a huge problem that will cost nothing.

And everything in between. Between now and Election Day you are going to hear a lot about Medicare for All and Single Payer, and most of it will be utter nonsense.

Proponents of Single Payer/Medicare for All say it will reduce overall costs and ensure everyone in America has great healthcare; At the other end of the spectrum, it’s fiercest opponents say it will bankrupt the country while giving bureaucrats control over your family’s healthcare.

Reality is, since there is no actual agreed-upon “Medicare for All” or Single Payer legislation, each of us sees what we want to see – MFA as the Holy Grail or a Total Disaster.

Let’s take a step back and think about how voters are affected by the core problem – or rather problems, with healthcare and health insurance.

The focus on voters is critical here – most are covered by employer-based health insurance, and most of the rest are covered by Medicare. For the non-elderly:

  • Health insurance is stupid expensive.
  • For many of us, deductibles are so high “insurance” just protects you from catastrophic injuries or illnesses.
  • Insurance companies control the doctors and hospitals you can use and the care you get.
  • The paperwork is mindboggling, confusing, and adds billions in unnecessary cost.

For workers, healthcare “costs” are a combination of insurance premiums and cost-sharing payments – mostly deductibles and copayments. (While about 75% of premiums are paid by employers, economists argue that most of those premium dollars would be paid in cash wages if health insurance wasn’t provided.)

Today family health insurance premiums are more than $20,000 a year.

Over the last two decades, healthcare costs have eaten up wage increases – one of the main reasons families aren’t getting ahead.

For those who actually have to use their health insurance, it’s worse. Deductibles are so high that many families can’t afford them.


Add this all up, and you understand why healthcare was the top issue for most voters in the mid-terms.

Voters like simple answers to complex questions – and for many, some form of Single Payer sounds great.

The takeaway – voters want healthcare solved and they don’t care much about the details.


What about your pre-existing conditions?

Let’s get real folks.

“Virtually every American has someone with an existing health condition in their family at any given time” 

Dan Mendelson, CEO, Avalere

The Texas lawsuit filed by Republican Attorneys General and supported by the Trump Administration would end the ACA, aka Obamacare.

In so doing, it would end protections for those with pre-existing conditions.

Make no mistake, if Trump et al win the suit and you have to change health insurance plans, you are at real risk of losing coverage  – or having to pay so much you can’t afford it.

Despite President Trump’s assertions, there is No Republican plan to assure those with hypertension, diabetes, a history of heart disease, cancer, anxiety disorder, or any other health condition will be able to afford health insurance.

Not sure if you have a pre-ex?  Here’s a list.

What does this mean for you?

For some, this election is a matter of life and death.


The Healthcare Election

Healthcare is the central issue in the 2020 election.

If Republicans are able to keep healthcare out of the conversation, they win. If Democrats make healthcare THE issue, they win – with one big caveat.

Insurers and hospitals are making record profits, while a family of four has to spend $21,000 before they get any coverage.

Healthcare is unaffordable for middle-income families without subsidies or employer support. In many areas, the cheapest bronze plan is around $13,000 and comes with an $8000 deductible. Before mom dad and the kids get any benefit other than preventive care, they’re out $21,000.

Rural Americans are more likely to have high-deductible plans. And, even if the premiums are subsidized, there’s still their monthly cost plus an $8,000 deductible.

That is, if they can find a provider when they need care.

121 rural hospitals have closed over the last 10 years – 44 in the past three years. with the biggest impact in states in the south and central US where the combination of under-insured patients and no Medicaid expansion has left many small facilities on the brink of bankruptcy – while dozens more have closed.

Meanwhile, back in DC…

There’s been zero meaningful progress on drug prices, an issue of particular concern to seniors. Likewise, all the talk about surprise medical bills has yielded exactly no solutions, as hospital lobbyists have successfully quashed meaningful reforms.

Millions of us have pre-existing conditions; we risk losing coverage – and paying much more – if the Trump-supported Texas lawsuit to overturn Obamacare is successful.

While consumers are getting hammered, hospitals, health systems, and health insurers are raking in the billions.  Near-record profits for insurers, and very strong margins for pharma device manufacturers and hospitals stand in stark contrast to flat wages for most Americans.

Here’s the caveat. Sure, Republicans have no solution to the healthcare coverage and cost crisis. But Americans – at least the ones who vote – don’t want Single Payer.

What does this mean for you?

If Democrats stay focused on healthcare reform and avoid Single Payer, they win.

If not, they lose.


Bloomberg’s betting on healthcare

Mike Bloomberg may be our next President.

If his long-shot bid works, healthcare will be the issue that wins it for him.

I know, Bloomberg??? Riiiiiiiiight…

Up until a week or so ago, I didn’t think the guy had a shot. Here’s why I’ve changed my thinking.

Bloomberg is relentlessly focusing on healthcare – which is THE biggest issue for voters.

He is hitting voters where they are most vulnerable;  fear is the most powerful motivator – and there’s nothing scarier than our screwed up healthcare system. Bloomberg’s massive TV and social media campaign is very effectively messaging around our fear of losing healthcare, fear of bankruptcy due to high bills, fear of no coverage for pre-existing conditions, fear of dying penniless and in pain.

But it issues aren’t important unless you get your messaging right and get it out there.

So far Bloomberg has spent a quarter-billion dollars on his campaign.

That is – literally – nothing to him. The guy is is worth $60.5 billion dollars. He’s the 14th richest person in the world. He can, and will spend whatever it takes.  He could buy every ad in the SuperBowl and have more money in his bank account the next day just collecting interest on his billions.

He will far outspend ALL his Democratic rivals put together.

Oh, and Bloomberg is very, very smart about this internet thing. His digital strategy helped Democrats win both houses in Virginia.  He’s putting together a digital campaign that far outpaces what the Democrats are doing – and will likely be much more sophisticated and effective than Trump’s.

Back to healthcare.  If you’ve seen any of his ads – and I’m betting you’ve seen a lot of them – they focus on protecting your healthcare, reducing your healthcare costs, controlling surprise medical bills, and reducing drug costs.

Not much in the way of an actual plan, but very good messaging.

When you dig deeper you learn he supports a Medicare-based public option – you can buy into a government plan if you don’t like any of the other options – but he’s no Single Payer guy.

What does this mean for you?

Don’t discount Bloomberg. 



Private health insurance has failed.

If you had “government” health insurance for the last decade, your costs would be 20 – 25% lower today.

That’s because private insurers have not controlled spending nearly as well as Medicare and Medicaid have.  This from KFN via Axios.

Doesn’t matter what your economic or political ideology is – that’s a fact.

You and your insurance company pay your doctors and hospital more than twice what Medicare does. Yes, the Feds can exert pricing power – but why can’t United Healthcare, or Aetna, or Blue Cross?

Those healthcare giants should be able to negotiate better deals with providers; they have massive buying power and millions of members to leverage. They should be able to use that power to give you lower insurance costs – but they can’t.

Those private insurers are (theoretically) more nimble, smarter, better run, and more efficient than the government. And they have hundreds of billions of healthcare dollars to leverage.

Yet they’ve failed to outperform a bunch of bureaucrats.

I won’t dive into the “whys” today, because that would take away from the over-arching truth – government has been much more effective than private insurers.

What does this mean for you?

Cutting your health insurance costs by a quarter = more dollars you could have spent on other stuff.

note – happy to hear other thoughts; please use citations to back up any assertions.