Friday catch-up

Lots happened this week – here’s the big stuff.

COVID’s impact on work comp

WCRI is hosting a free webinar on the delivery of medical care and RTW during the pandemic.  Hosted by WCRI CEO John Ruser PhD and Randy Lea MD, the webinar will also include Mark Herbert MD, an infectious disease specialist.

Sign up here for the September 24 event, it kicks off at 2 pm eastern.

Drug prices

No, payers’ drug costs are not dramatically higher. In fact, net costs after rebates and other payments are flat to lower.  That’s one of the key findings from Adam Fein PhD’s analysis of the top PBM’s results. Kudos to Express Scripts, CVS, and Prime Therapeutics for publishing true cost data; one only wishes all PBMs did the same.

Ever wonder where all those new drugs come from?

Well, pat yourself on the back – because you, dear taxpayer, funded most of the initial R&D behind new drug development. Here’s the takeaway:

every new drug approved by the Food and Drug Administration (FDA) for the decade from 2010-2019 was associated with basic science funded by the NIH.

The IAIABC’s annual meeting kicks off next week; registration is still open here. Lots will be covered, including a discussion of COVID claims, presumption, fee schedule improvements, and of course EDI.

David Dubrof is PBM myMatrixx’ new Chief Sales Officer. I’ve known David for 20+ years; he is one of the very few “A” players in work comp services sales and a consummate professional. (myMatrixx is an HSA consulting client). David is all in on myMatrixx’ industry-leading push for price transparency.

How’s that budget process going?

Imagine trying to set up a curriculum for an unknown number of students with an unknown level of education. Or meal planning for an unknown group with different dietary requirements that are also unknown.

Well, that’s budgeting 2021. Never has that been so…fraught/uninformed/scary/pointless as it is today. If you need a break from trying desperately to figure out how to justify/rationalize your 2021 forecast and budget, read this.  It’s an excellent discussion of budgeting in a time of huge uncertainty.

Family is coming in this weekend to celebrate our new granddaughter’s arrival – have to say this is much-needed these days; the nastiness and bad news is getting to be a bit much.

Hope your weekend is filled with joy.


Will the FDA keep your family safe?

Would you let your kids/parents/grandparents be injected with a COVID19 vaccine “approved” by the FDA?

The same FDA that lied about treating COVID with blood plasma and hydroxychloroquine?

How about the blood plasma scam? FDA chief Stephen Hahn flat out lied in public, claiming it “saved” 35% of COVID patients. Now the NIH has weighed in, refuting Hahn’s lies.

Now Trump et al want the FDA to issue an Emergency Use Authorization for a vaccine – something that has NEVER been done before, because it is incredibly dangerous.

Remember hydroxychloroquine? Touted as a miracle drug by the President, his Administration and allies, we know it is far more dangerous than helpful. And we knew that when the FDA gave it conditional use approval (that was later revoked).

Fox News on the FDA’s screw up…

Both were touted as solutions to COVID19 – and both claims were proven to be flat out wrong.

Now we have that same FDA telling states to prepare for a vaccine that will be ready in early November. The Centers for Disease Control is also involved.

The Administration is turning the FDA – once the world’s leading scientific authority on drug approval, research, and guidance – into a political machine. Lesser known is that the FDA’s oversight of pharma and food safety has plummeted under Trump.

Without full vetting of a vaccine, we do not know if it will hurt us more than help.

If this was happening under a Hilary Clinton administration I’d be screaming bloody murder.

What does this mean for you?

Elections have consequences. 




Another whirlwind week is just about over, and with it the summer of 2020.

Here’s important/interesting news that came across my virtual desktop this week.

COVID and Comp

More data on workers’ comp COVID19 claims is coming in; Virginia’s Workers’ Comp Commission has published data; key takeaway is to date, only 8.3% of COVID19 claims reported have resulted in benefit payments. That will certainly increase as claims develop.

More info on state COVID reporting is here – you can watch a recorded webinar on the subject here – Mark Priven and I dive into data from California and Florida and discuss the implications thereof.

Meanwhile, employment took another hit as last week more than a million Americans filed for unemployment. This continues a five-month run of claims at or above the million mark. 14 million of us are still without jobs.

COVID19’s impact on health insurance coverage

Several million people have lost their health insurance due to COVID19-related job losses.  We don’t know the specific number – and it is certainly increasing – but it is likely between 3 and 12 million. (download the report for details).

Another perspective is here.

Most of those folks are lower-income workers and many are minorities; some may be eligible for Medicaid however states that did NOT expand Medicaid such as Texas and Florida will see an increase in uninsured care costs.

Congratulations to myMatrixx and new Chief Sales Officer David Dubrof; David is one of the very few “A” players in work comp services sales; myMatrixx will benefit greatly from his sales leadership. David and his colleagues are equally fortunate; payers have consistently rated myMatrixx the top workers’ comp PBM. (myMatrixx is a client)

NCCI published a report on the impact of fee schedule changes on outpatient facility costs.  Good to see this rapidly-rising cost driver getting attention.


  1. Fewer jobs = lower payroll = lower work comp premiums
  2. Things are tough and getting tougher for lower-wage workers, which are disproportionally people of color.
  3. More uninsured = more need for facilities to get $$ from those who are insured.


Lies, Damn lies, and Statistics – the Blood Plasma debacle

Sunday President Trump, HHS Secretary Alex Azar and FDA Commissioner Dr Stephen Hahn said the use of blood plasma had reduced COVID19 deaths by 35%.

Trump said it was a “tremendous” number.

Azar said:

“We saw about a 35 percent better survival in the patients who benefited most from the treatment, which were patients under 80 who were not on artificial respiration…I don’t want you to gloss over this number…We dream in drug development of something like a 35% mortality reduction. This is a major advance in the treatment of patients.”

Hahn said

“a 35 percent improvement in survival is a pretty substantial clinical benefit. What that means is — and if the data continue to pan out — 100 people who are sick with covid-19, 35 would have been saved because of the administration of plasma.”

This is not “stretching the truth”, or over-generalizing, or taking something out of context.  It is total bullshit.

A REAL FDA scientist – whose name was redacted from an FDA memo, was a LOT less enthusiastic, writing the study data:

 “support the conclusion that [convalescent plasma] to treat hospitalized patients with COVID-19 meets the ‘may be effective’ criteria for issuance of an EUA. [emphasis added; EUA = emergency use authorization, which allows use of a treatment before it goes thru the entire approval process]

There is no basis or source for the 35% figure; it appears to have been derived from a very small group of patients treated at the Mayo Clinic.

Note the emphasis on “appears”; that statistic was NOT in the Mayo Clinic’s 31 page report;

  • nor was it in a memo authored by FDA scientists,
  • nor was it in the FDA’s letter authorizing use of blood plasma on an emergency basis to treat COVID19,
  • Nor could it have been credibly derived from the actual study report.
  • Nor did one of the principal study authors have any idea where the 35% figure came from.

If anything, it looks like Azar, Hahn, and President Trump cherry-picked data by only looking at results from a very select and very small subset of a subset of patients; those:

  • less than 80 years old;
  • not on a ventilator; that
  • received plasma within 3 days of diagnosis, and
  • received plasma with high levels of antibodies.

But wait, you say, that’s still good news!


Here’s what the study actually found as reported by the NYTimes:

among the larger group of more than 35,000 patients, when plasma was given within three day of diagnosis, the death rate was about 22 percent, compared with 27 percent when it was given four or more days after diagnosis.

Hahn later corrected his statement – but only after an official FDA spokesperson perpetuated the fraud…

I get we all want to find a cure, and a vaccine, and we want this long global nightmare to end. We want the dying to stop, the suffering to end, the pain to go away, life to return. But our only hope is rigorous, robust, careful and thorough science.

Not political grandstanding, not abuse of a vitally important Federal Agency, not outright lying. We’ve been down this path before, and it didn’t turn out well.  Remember hydroxychloroquine?

Does it appear blood plasma from patients that have recovered from COVID19 may be beneficial? Yes. Is it likely it will help some patients? Well, there’s some evidence it may help some patients.

Is it a universal cure?

Highly unlikely.

What does this mean for you?

Science matters. Dig deep, ask hard questions, and don’t believe the headlines until you do your homework.



YAY! More COVID claims data!

During yesterday’s webinar on COVID19’s impact on workers’ compensation, Mark Priven and I asked the 260+ attendees to share any data they have on COVID and comp.

[As soon as we have a link to a recording of the webinar, I’ll post it.]

William Rabb of WorkCompCentral provided a summary of the presentation [subscription required] this morning, and added helpful commentary from NCCI’s Jeff Eddinger. (NCCI just updated their guide to COVID presumption laws and regulations – get it here.)

Jeff Kadison of Practical Actuarial Solutions forwarded a detailed study put out by New York’s Insurance Rating Board. Lots of detail on costs, counts, and a discussion of potential impact.  A few key takeaways:

Using the CDC’s models, NYCIRB came up with the following estimates:

  • note 97.8% of infected workers will not require hospitalization (this is an estimate)
  • for those that do need hospital care:
    • estimated COVID19 non-ICU hospitalization cost range of $20,129 to $29,948
    • depending on clinical severity, estimated COVID19 ICU costs with ventilator support range from $47,458 to $192,250
    • for claims that may have long-term health issues, the NYCIRB estimated the average incurred medical to be approximately $200,000. (note this is just an estimate)

Brandon Miller, CEO of MWCIA was kind enough to send an excellent report prepared by Minnesota’s Department of Labor and Industry’s Brian Zaidman.

Unlike California and Florida, Minnesota’s claim counts didn’t drop much over the first half of 2020, although a third of MN claims are COVID19-related. The implication is fewer non-COVID19 claims have been filed in Minnesota than one would have expected.

Similar to the Golden State, Minnesota is a “presumption state” which may well be leading to more COVID claims filed. (California’s is by regulation, Minnesota by law.)


COVID-specific claims

Peter Strauss, Executive Director of the Montana Self Insurers’ Association also helped out, sending a presentation delivered 10 days ago by the state’s Department of Labor & Industry.

Unlike Minnesota, Montana’s data is remarkably consistent with what we’ve seen from Florida and California. Overall claim counts’ are down sharply, while COVID claims are relatively rare. Of course, Montana is built for social distancing; the state has a very low population density.


What does this mean for you?

Based on the very limited research we have, it certainly appears COVID19 cases aren’t going to be that expensive.

And please forward any credible research on the claim counts, claim costs, and COVID claims in the comment field below.


COVID treatment costs

We are getting more data on what insurers pay for COVID treatment, data that will help business folks better plan for the future.

AHIP’s June analysis provides a range of estimates based on different infection rates; the chart below reflects an assumed infection rate of 20%. (the methodology and database are robust and pretty complete, see appendices for details)

Note the “cost per utilizer” data which indicate average commercial insurance costs of:

  • $25,000 per non-ICU hospital admission
  • $81,000 per ICU hospital admission
  • $1,500 per outpatient hospital admission
  • $750 for all other medical treatment costs

Patient cost-sharing could add another 8% or so to total costs, however as most insurers have waived cost-sharing requirements,  in most cases that 8% would be added to insurers’ costs.

There are other sources for cost estimations including FAIR Health and the Kaiser Family Foundation. An extensive discussion of their methodologies is here, KFF uses pneumonia with significant complications as a proxy for COVID19, while FAIR Health’s numbers are based on actual COVID19 treatment costs. (I discussed FAIR Health’s findings in depth back in July.)

Other research is here.

For those interested in the percentage of those infected who are hospitalized, a chart from the above link is below.

Costs for treatment of workers’ comp patients may well be higher, however this will vary greatly depending on the state, fee schedule limits (if there is a fee schedule) and network arrangements.

What does this mean for you?

All available data indicates medical treatment for COVID is not that costly. Yes there are some cases that require long-term, extensive ICU care with ventilator assistance, but they are relatively few.


California agriculture, COVID19, and workers comp claims

Here’s what’s puzzling me about agricultural workers, COVID infections, and workers’ comp.

  • Few agricultural workers have filed WC claims for COVID.
  • COVID infections are much more prevalent among Latinx than any other ethnic group.
  • News reports indicate workers infected with COVID have spread the virus to family and co-workers
  • Infection rates in the ag heartland in the Central Valley are much higher than in population-dense urban centers.

Here’s the data.

Latinx people are much more likely to contract COVID19 than any other ethnic group – more than twice as likely as White people.

Agriculture employs a lot of Latinx folks; average monthly employment was 422,000 in 2019 (downloadable files).

About 45% of ag workers nationally are Latinx. [if you have data specific to California please share]

So far this year, only 0.2% of California’s agricultural workers have filed a work comp claim for COVID19.

While news reports allege some employers are failing to implement adequate COVID19 safety protections, there’s another side to this, one that requires serious consideration.

This from a colleague (edited to preserve confidentiality):

I can attest to the Latino population being hit extra hard.  The reasons are fairly simple.

Number 1 reason:   The work ethic demonstrated by our workforce is hurting them and their co-workers.  The Mexican culture has long had excellent work ethic.  Their mantra is always, “I have to work.  I have to work.  I HAVE to work.”  They often do not safeguard their own health as a result.  Many when told they are positive respond with, “Well yeah.  I knew.  I haven’t felt good for a week.”  Which means that they’ve been spreading the virus daily.

Another factor for Ag workers is the common practice of transporting workers by vans or small buses.  Probably the worst thing they can do.

We found out most of them refused to comply with wearing a mask.  They’d have them on in front of the supervisor, but as soon as the vehicle left the yard, most all of them would take the masks off.

The third problem is the comorbidity factor of diabetes.  Their diets frequently lead to diabetes.  Every one of our fatalities had instant blood sugar levels of 700+.  Each of the deaths were investigated, and without exception, we found that there had been a diabetes dx years before but they had failed to comply.  Most of the diabetes dx’s were for men who refused to ignore or rethink the macho feelings of being able to drink beer and eat as many carbs as they want along with refusing to take meds.

Of course this does not apply to the entire Latinx population.  But it is sadly true of more than half and probably true of at least 75%.

What does this mean for you?

  1. Don’t be surprised if we see a significant increase in workers’ comp claims from agricultural workers.
  2. Cultural norms and biases MUST be considered, factored into, and made part of any and all prevention solutions.
  3. There are NO simple answers, and all of us are part of the problem – and can be part of the solution.

REMINDER – sign up for Pandemic, Premiums, and Profit: Is it the Sky That’s Falling…or the Floor? a free webinar on COVID19’s impact on workers’ compensation here. Mark Priven of Bickmore Actuarial and I will be weighing in this Thursday at 1 pm Eastern, 10 am Pacific.


Claim counts, COVID, and (premature) conclusions

We know a LOT about how COVID and the COVID economy are affecting workers’ comp – and that’s what Mark Priven and I will dive into next week as we discuss “Pandemic, Premiums and Profits: Is It the Sky That’s Falling … or the Floor?” .

The free webinar (register here) is happening August 20 at 10 am Pacific, 1 pm Eastern. (attendance is limited, so sign up now to make sure you get a spot).

Mark is Vice President and Principal of Bickmore Actuarial, a highly regarded Actuary, and a very insightful analyst of all things workers’ comp. I’m honored to be on the virtual dais with Mark.

What triggered our decision to work together was a shared concern that there’s been way too much discussion about the potential, theoretical, possible, hypothetical costs of COVID itself – and (with one major exception) no discussion, analysis, projections, or discussion of the huge drop in workers’ comp claims – and the effects of that drop..

Frankly, prognostications about the damage COVID could do to profits just don’t stand up to scrutiny.  How an industry with a combined ratio of 85 and investment income of 11% will go from a 26% profit margin to a loss when COVID claims are not that common and all evidence indicates they aren’t that expensive is…puzzling.

One can – and some do – argue that we don’t have data on claim counts yet – and therefore it’s premature to discuss the impact.

But you can’t have it both ways – we know little about COVID, so making assumptions or statements about how the disease will affect workers’ comp is equally presumptuous.

Fact is we are fast approaching budget season for employers, insurers, TPAs, and service companies – and it is incumbent on those with data and expertise to share that information.

So, sign up, send us your questions, and Mark and I will do our best.

What does this mean for you?

Sign up here.


COVID is crushing work comp claim counts.

Thank you, CWCI. Due to it’s diligence and foresight, we now know:

  • through June 30 there were 14,487 COVID claims reported to California’s DWC;
  • this amounts to 6.3% of all confirmed COVID cases (data from JHU);
  • the vast majority of COVID claims reported have been accepted;
  • and perhaps the most important data point…

Total claims (COVID and non-COVID) dropped 28.8% from the first half of 2019 to the first half of 2020. (note this is corrected from my original 36.4%)

Kudos to the fine folk at CWCI; they have produced the first data-based report on all things COVID. It is quite user-friendly, highly credible, and interactive, allowing users to analyze California-specific on COVID and non-COVID claims.  The tool enables comparison by industry, body part, nature and cause of injury, class code and region for claims (both filed claims and accepted claims) with dates of injury from 1/1/2020 to 6/30/2020.

The tool also allows users to compare actual claim counts for the same time period in 2019 to current and projected counts for 2020.

Claim counts, dear readers, is WAAAAAY more important than the rather minor financial impact COVID claims have had on workers’ comp. As I’ve reported previously, work comp COVID claims to date are not expensive; despite the prognostications of others, it is unlikely indeed COVID’s costs will have any material impact on work comp financials.

What WILL have an impact – and a very positive one – is the massive drop in total claim counts we’ve seen so far this year.

grey – 2019; green – 2020

Yeah, I know, this is California-specific, and only for half a year, and not fully developed, and all that stuff. I also know a 36% drop in total claim counts is the biggest thing to hit the workers’ comp industry in…forever. 

What does this mean to you?



COVID update – vaccines, denier death, and prognostications

Lots of news COVID-related this week…

Three vaccines seem to be the most promising; all are entering Phase 3 trials with tens of thousands of test subjects involved.  Moderna and Pfizer look to be the furthest along, with AstraZenica/Oxford University’s vaccine also showing some promise.

Before we pop the champagne, remember…

  • trials are just that – they are used to assess safety, effectiveness (how much protection the vaccine provides) durability (how long the vaccine provides immunity)
  • the history of vaccine development is not exactly encouraging, and
  • once a vaccine is proven, we’ll need tens of millions of needles, syringes, vials, and a delivery system to ensure it all gets to the people who need it most.

There’s another problem with these trials – too few people of color are involved – far too few. That’s really troubling, as Black and Latinx people are suffering much more than Caucasians.

So, keep doing smart stuff until you get vaccinated. Fortunately, more of us are now accepting that masks make a big difference.

The death of former GOP Presidential candidate Herman Cain from coronavirus and the infection of Texas Rep. Louie Gohmert (R) may be changing minds; these two gentlemen dismissed the news about COVID19 and refused to wear masks.

Mr Cain is wearing the red tag.

Meanwhile, I’ve been engaging with NCCI and experts from the Insurance Information Institute in an effort to better understand the financial impact of COVID on workers’ comp. Stay tuned for more; key takeaway so far is that NCCI and III are focused on potential costs of COVID itself; they have not done any work assessing the impact of the sharp decline in claims.

There’s also a lot of talk about how bad COVID may be for profitability, a position I’m still struggling with.

What does this mean for you?

Wear a mask.