May
15

NCCI AIS 2019 – Quick Takes

This year’s Annual Issues Symposium was the best I’ve attended – and I’ve been to 20 or so.

The hotel and conference center were excellent – great service, everything was right on site, food was very good, all around best conference site experience in memory.

The opening day’s content was rich and mostly very well done. Kathy Antonello’s discussion of results continues to improve. I would have liked a bit deeper dive into cost drivers, but that’s a very minor quibble; you can’t cover everything in an hour. Graphic presentation was helpful, and Kathy is clearly comfortable on stage and enjoys presenting.

For me, after Kathy’s State of the Line the highlight was the discussion of AI and human decision making. Jim Guszcza of Deloitte was brilliant, laying out a compelling case for the joint use of both AI and humans in decision making.

A discussion of TRIA renewal was – I’m sure – of keen interest to many, but the speaker’s impact suffered a bit as he read his talk.  David Priebe of Guy Carpenter is clearly expert in all things TRIA and knows his stuff.

Moments into David Deitz’ physician panel, the hotel lost power and all went dark.  Staff responded quickly, using social media to keep all of us informed – they handled the unexpected with aplomb.

The physician panel is up there somewhere…

When things got started, I had the sense the blackout was a metaphor for payers’ views of treating providers – there’s little visibility into what docs have to deal with when serving work comp patients.

In fact, the physicians had pointed comments about the problems docs face trying to do the right thing, many of which are caused by well-intentioned but ultimately dumb “requirements”. Takeaway – if we want good care, we need to make sure the people delivering it like to work with us. We have a long way to go to make the occ docs who care for our patients true partners.

Barry Lipton quickly ran thru three research foci, I particularly liked Barry’s insights into ways work comp and group health are different.

Alas I won’t be attending the second day; the boy’s annual mountain bike trip conflicted.  It’s off to Moab, Utah, for four days of back-to-boyhood.

What does this mean for you?

This is a must go. Sign up early so you don’t get locked out of 2020.


May
6

It’s work comp pharmacy week at MCM

And to kick it off, here are quick facts about work comp pharmacy…

Total workers’ comp drug spend was about $4 billion last year.  Others will argue it’s much higher, after 15 years of digging into the data I’m quite comfortable that figure is accurate.

That’s about 13% of total work comp medical spend  of $31 billion (using NASI’s industry-standard report as the source).

Work comp drug spend has been steadily – and significantly – decreasing for the last eight+ years; my best estimate is drug costs are down about $1.1 billion since 2010.

This remarkable drop has been driven by dramatic decreases in opioid usage and fee schedule changes; PBM consolidation has also been a driver as PBM pricing has declined over the last several years.

Today there are two major WC PBMs, two mid-tier ones, and a host of much smaller companies with little market share.

In 2017, opioid spend declined to less than a quarter of total drug costs, driven by a 30% drop over the previous two years. The even-better news is patients not taking opioids also don’t need to take drugs to mitigate the side effects; insomnia, depression, constipation, erectile dysfunction, etc. And, the knock-on effects on claim duration and settlements are positive indeed.

You can download CompPharma’s latest PBM in WC report here,  all of our 15 surveys are available here.

Tomorrow we’ll dig into pricing and what’s real – and what isn’t – in the media’s coverage of drug pricing.


Apr
23

Gallagher Bassett’s using data to improve care for work comp patients

What passes for predictive modeling today is like Google maps, except the app tells you when to turn a half-hour after you’ve passed the intersection.

Adjuster finding out a claimant had spinal surgery 6 weeks ago…

By the time adjusters figure out a claim has gone off the tracks, it’s often too late to do anything but increase reserves. That’s because there’s no real-time monitoring, no way to clearly and definitively identify when – exactly – that happens.

A promising approach is in the works at Gallagher Bassett.

Building off research conducted by Johns Hopkins, GB has developed a tool that enables real-time monitoring of medical services delivered to its claimants. Using a proprietary platform, alerts are sent when patients’ quality of care is headed in the wrong direction.

The trigger is inappropriate medical treatments. GB matches medical bill data with evidence-based treatment guidelines, with each service, procedure, or medication individually assessed. As the number of inappropriate treatments increases, alarm bells ring.

Of course, that doesn’t mean all treatment that is non-compliant is inappropriate. However, much is, and there’s a clear – and quite strong – correlation between bad medical care and lousy claim outcomes.

Those are clinical words and hide the real import of GB’s approach. Getting claims back on track means patients get better faster, AND the risk of bad outcomes from inappropriate surgeries, injections, drugs, and tests decreases.

What does this mean for you?

There’s lots of data out there – and far too little smart use of data. This is promising indeed.

 

 

 


Apr
12

Research Roundup

in which I attempt to summarize recent research into workers’ comp and medical management and describe what it means for you.

Thanks to Elaine Goodman of WorkCompCentral, we learned this morning that folks who consumed marijuana during recovery from an injury were likely to use more opioids  – for much longer – than individuals who did not use marijuana.

Implication – This calls into question the idea that marijuana use reduces opioid use.

California’s WC Insurance Rating Bureau reported premium rates declined again in 2018 – they are now down 24 percent over the last four years. The combined ratio is at a very solid 91 – BUT that’s a big jump from 2017’s 85.

Big driver – “Pharmaceutical costs per claim decreased by 69 percent from 2012 to 2017”

Implications –

  • California reforms continue to reduce costs, but the it’s getting late at the party…
  • Drug costs are dropping big time.

Predictions are the number of retail stores, and the jobs in those stores – are continuing to drop. 75,000 more stores will close by 2026 – that’s seven years from now. Sears, Payless Shoes, Gymboree, ToysRUs, RadioShack, GNC are among those closing stores.

Implication – fewer jobs, lots of empty storefronts, distressed malls mean less retail construction – and lower employment in retail.

Healthcare costs for working families  “rose 27.7 percent from 2010 to 2016…while median household income rose 19.8 percent…” There’s a lot of variation among states. The percentages in the map indicate premiums as a percentage of family income.

Implication – Voting families are finding healthcare is increasingly unaffordable, ergo more focus on healthcare in the election.

Need to know what states’ work comp UR guidelines are? WCRI’s State Policies on Treatment Guidelines and UM‘s got you covered.

If I missed something – and I’m sure I did – please provide a BRIEF summary and a link in the comments section.

And happy April to all!


Nov
30

Bill Review Survey, Takeaway #3

Our last Bill Review Survey was in 2012; things have changed a lot since then – and mostly for the better.

Overall Industry rating

Six years ago we asked the 24 respondents to rate their overall impression of vendors on our standard 1 – 5 scale: the result as reported in 2012:

In what might be best described as a wake-up call for vendors and application providers, there were no ratings higher than a 3.4, with the average a 3.07 on the 1-5 scale (among respondents who knew of the specific vendor).

Put another way, the people who use BR services view BR providers as generally mediocre/adequate/acceptable.

Today, the average rating was just under 3.3, a small but significant improvement.

However, there were significant shifts for individual companies.

In 2012 the three top vendors – Medata, Mitchell, and StrataCare were all in a statistical dead heat, with Xerox/ACS rated a full point lower. (Xerox/ACS bought Stratacare, converted most/all of its users to the Strataware platform, and now operates under the Conduent brand.)

No longer.

This year, we asked the 30 respondents to provide ratings of ten bill review vendors on four different metrics;

  • overall perception
  • handling the basics of bill review
  • customer service and implementation
  • innovation and forward thinking

(All respondents did not give ratings for all categories or companies; the findings below are averages across those respondents who gave a rating for that specific company).

Mitchell (3.75) and Medata (3.71) were in a statistical dead heat for top honors in Handling the basics.

For Customer service and implementation, Medata (3.94) was the clear leader with Mitchell second (3.54).

Medata held serve for Innovation (3.91) and Mitchell (3.5) again took second place honors.

Here’s where it gets interesting. Medata and Mitchell were essentially tied for Overall perception by respondents who rated them.

But across ALL respondents, Medata’s Overall perception rating was 3.4, with Mitchell at 3.08. While Medata has the lowest market share of the top three application providers, it was tied for highest name recognition among our 30 respondents, and thus garnered the top spot in Overall perception amongst ALL respondents.

Here’s where we link back to last week’s posts on the critical importance of customer service;  the data shows Customer Service has the highest statistical correlation with overall perception.

Note – Corvel shared the top spot in name recognition, but got the lowest rating for customer service – and was essentially tied for the lowest score for Overall perception.

What does this mean for you?

Customer service wins.

Note – I’ve received several anonymous comments/emails lately.  I’d remind commenters that anonymous comments on MCM posts are ignored, as are comments with fictitious email addresses.

You know who I am. I and my readers need to know who you are.

 

 

 

 

 


Nov
28

Bill Review Survey – Takeaway #2

One of the more intriguing findings from our third Survey of Bill Review in Work Comp and Auto pertains to data analytics.

Multiple questions probed into respondents’ utilization of data analytics. The questions ranged from the state of their data management program through the relationship between the future of BR and data analytics. In our 2012 Survey, numerous respondents stressed the importance of data analytics, data quality, data management, etc. But despite that emphasis six years ago, respondents seemed to have made little progress employing data analytics packages and integrating data analytics into BR and vice versa.

From the Survey Report (to be released in early December):

A surprisingly low number of organizations have invested significant resources into data analytics.  Only a handful of respondents report that their organization has acquired, sorted, and leveraged data sufficiently enough to begin building predictive modeling or provider profiles.

That’s not to say payers haven’t built data warehouses or aren’t developing analytics capabilities. In fact, “Every large and medium sized respondent said their organization aggregated and transferred bill review data to a data warehouse for analysis.” Rather, most are still in that data modeling development and construction phase; using that data to build models, profiles, and gain deeper understanding is still a ways off.

More narrowly, half of respondents who process their own bills internally tied a data analytics package to their BR product (a more limited approach than combining BR data with data from other sources such as pharmacy, claims, medical management, first notice, and external data sources) while only 6% of those who outsource bill processing used a data package with their BR.

This dichotomy isn’t surprising as external users are generally much smaller organizations.

To get even more specific, fewer than 20% of respondents mentioned building predictive models and in most cases respondents said data was compartmentalized and only used for particular departments such as finance.

We asked what was the greatest unmet opportunity in bill review; Only 10% of respondents specifically noted the importance of data analytics going forward. And, just 20% of respondents said that a higher level of data analytics would be the future of BR.

Considering the value added that accurate data analytics can provide on virtually all BR functions – not to mention the entire claims function, loss ratios, and financial results – and that a vast majority of respondents are not fully linking BR and data analytics, these results indicate significant opportunity.

Thanks to the 30 professionals who participated in the Survey, we have a clear picture of where the industry is today, and what they are looking for from vendors/partners tomorrow.

The respondents hail from all around the country, from insurers, state funds, TPAs, and large employers. Very large to very small, from national in scope to a single-state focus, these experts gave freely of their time and expertise and for that we are grateful indeed.

What does this mean for you?

The opportunity is clear.

Note – I’ve received several anonymous comments/emails lately.  I’d remind commenters that anonymous comments on MCM posts are ignored, as are comments with fictitious email addresses.

You know who I am. I and my readers need to know who you are.

 

 


Nov
9

Work comp claim counts – part 4

Two important data points hit the news this week, both worthy of your attention.

First, BLS data indicates private industry employers reported 47,000 fewer occupational injuries and illnesses in 2017 compared to the previous year, a decrease of about 1.7 percent.

The rate, or frequency of total reportable cases declined by 0.1 cases per 100 FTE. As we’ve reported in the past, BLS data does not precisely mirror work comp claims – but it’s very close.

(Note this does NOT include public sector employer data)

So, occupational injuries and illnesses, along with work comp claims frequency, both dropped last year.

Next, insurer CNA CEO Dino Robusto said this in CNA’s earnings call:

we’ve been seeing negative sort of mid single-digit frequency trends over the past several quarters, which is less negative than a year ago. Now, while we’ve seen some pockets, where frequency has increased, the negative frequency trend overall is still favorable to our long run trend assumptions, because we did not lower our long run frequency assumptions despite the actual frequency consistently more negative than our assumption. [emphasis added]

(thanks to SeekingAlpha for the transcript)

Recall the Hartford has seen an uptick in claims frequency of late, one their CEO opined is not unique to his company.

I checked on other major workers’ comp insurers, including the Travelers, and  AIG and did not find anything useful pertaining to frequency or claim counts.

So, what does this mean for you?

Watch your claim frequency carefully, especially in geographic areas and business sectors where hiring is very tough. It could be you’ll see an uptick in claims, due probably to compromises in hiring due to the tight labor market.


Oct
31

Workers’ comp claims, OSHA reportables, and why both are dropping

Well, some posts get a life of their own, and so it is with this discussion of claims frequency and claims counts. After much discussion with colleagues and several back-and-forth emails with WCRI CEO John Ruser PhD about the correlation of OSHA recordable data and work comp claims and why both are declining, I decided the best way to get this to you, dear reader, is via an interview. So, read on.

MCM – I believe that you were responsible for the BLS OSHA-recordable injury data for years. What are a couple key points readers should know about the OSHA-recordable reports?

Dr Ruser – Yes, I was BLS Assistant Commissioner for Occupational Safety and Health Statistics for over 5 years and was a researcher of the BLS OSHA data for many years before that.

While there has been some controversy about the completeness of reporting in the OSHA recordkeeping system (see below), the BLS OSHA-recordable injury rate data are extremely valuable for several reasons.  They are very detailed by State, by industry, by establishment size and by worker characteristics, so that are an important benchmarking tool for risk managers and others seeking to compare their company’s injury rates against their peers.  From the perspective of focusing injury risk reduction efforts, they are important in identifying those groups of workers at higher risk of injury and they are used by OSHA to identify high-risk industries for inspections.  And, with their long relatively-consistent time series and detail, they are a valuable tool for researchers seeking to understand factors that contribute to workplace injuries.

MCM – Where does BLS get the data for the OSHA-recordable reports?

Dr Ruser – BLS’s estimates of OSHA-recordable injuries are based on a very large annual survey of about a quarter-million establishments (that is, specific locations of a company or organization) called the Survey of Occupational Injuries and Illnesses (SOII).  The SOII contains employer-reported data drawn from the OSHA logs that establishments keep throughout the year.  SOII covers non-fatal occupational injuries and those illnesses that can be directly linked to a workplace.  A separate BLS program, the Census of Fatal Occupational Injuries, uses multiple data sources, such as death certificates, OSHA reports and many other sources, to track workplace deaths due to injury.

MCM – there’s been questions about the decline in reportables over the years. Can you comment on these questions?

Dr Ruser – Some skeptics of the declines in the BLS OSHA-recordable injury rates attribute these declines to changes in OSHA-recordkeeping rules and practices or tightening in WC compensability rules, meaning the declines in injury rates are at least in part an artifact of reporting.  External research supported by BLS and other non-BLS-supported research does suggest that the number of injuries captured in SOII undercounts the true number of OSHA-recordable injuries.  (BLS has a very complete webpage on SOII data quality research that you can access here: https://www.bls.gov/iif/soii-bibliography.htm)

But, while the numbers (levels) of injuries and claims may be undercounted, the issue for the observed declines (trends) in injuries (and WC claims) is whether underreporting has grown.  There is little direct research on this.  A study by Washington State comparing SOII data to WC claims found that during the first five years of the study period (2002 – 2006), underreporting decreased, while it increased from 2007 to 2011.  Importantly, the Washington State researchers concluded that the total estimated actual number of SOII-eligible WC time loss injuries decreased over the ten year span, meaning there were real declines in injuries (and some underreporting too).

The Washington State study was excellent, but it focused on one state and a relatively short time span, which included a great recession during the second half of the study period when underreporting was identified.   Another approach to validating the time trends is to compare to other data that should not be susceptible to the concerns raised about reporting.

MCM – what analyses did you do to explore that issue?

Dr Ruser – I compared the SOII data with data from other sources.  First, I looked at how the US injury rate for 3 or more days away from work tracks with the NCCI indemnity claiming rate.  The declines in these two data series track extremely closely.  So, while the OSHA recordkeeping system is technically independent of workers’ compensation, the BLS injury data and the NCCI claims data are telling the same story and the BLS data can be used to try to identify factors associated with the decline in the NCCI WC claiming rate.

Regarding whether the BLS injury rate decline is real, I created an index of the OSHA-recordable case rate for cases with 3 or more days away from work and lined it up with a similar index for 15 EU countries for injuries with 4 or more days away from work (the series most comparable to the US data).  The chart that is attached shows how similar the trends are in the US and in the EU.  The index was set to 100 for injury rate values in 1998 and the other values in the chart are injury rates relative to 1998.  As of 2014, the US injury rate was 54 percent of its value in 1998, while the EU injury rate in 2014 was 49 percent of its value in 1998.

MCM – what does this mean (for our readers)?:

Dr Ruser- The remarkably similar trends in the US and EU data suggest that we need to look beyond US-specific explanations (such as OSHA-recordkeeping rules or WC compensability rules) to understand what is responsible for the long-run aggregate declines in injury rates and WC claims rates.  While there may be some changes in reporting at least over part of the past quarter century, the good news, I believe, is that there has been a remarkable improvement in safety and this improvement is seen in most industries and in many developed countries.


Oct
19

Research (and other important stuff) Roundup

It’s that time again – WCRI has released it’s latest series of CompScope reports, the most detailed and thorough review of all things work comp medical in 18 key states. If you are an investment analyst, industry tracker, or involved in planning for a TPA, state fund, insurer or large employer, get yourself over to WCRI and get those reports!

If you want to understand what Medicare for All really is, how it might work, and what it means to you, read KFF’s summary review. There are 8 (!) proposals now making the rounds, and I’m betting your healthcare will come from some version of universal coverage within the decade.

Excellent piece by Roberto Ceniceros on premium fraud and its impact on employers and insurers. I’ve got to give credit once more to Matt Capece of the United Brotherhood of Carpenters – he’s been a major force exposing premium and payroll fraud all across the country. For his efforts, IAIABC gave Matt its Samuel Gompers Award. And kudos to Roberto for his in-depth reporting on a critical issue.

NCCI continues to up its game, making research accessible and relevant. Medical marijuana, opioid legislation, air ambulance regs – it’s all here.

Our penultimate piece is a bit more intel on rideshare and rural America – well worth a read if you’re involved in this narrow-but-deep slice of the work comp services world.

Finally, as it’s election season we need to hold those political candidates accountable: Andrew Sprung’s dissection of candidate Bob Hugin’s dissembling on the dismantling of the ACA is just what voters should be asking.

And, from the “coolest/dumbest thing I’ve seen all week” is this. Wondering if this is the answer to speedy ridesharing on the Russian steppes. Who wouldn’t want a jet engine in their Uber?

Hat tip to the Drive!

 


Sep
28

Research Roundup – Friday edition

So, hard as it is to believe, there was some non-Supreme Court hearing stuff going on this week.

I know…I missed most of it too.

So, here’s some of the most important research we all missed while overloading incoming web servers watching yesterday’s hearing.

Drugs, Opioids, and profiteering physicians

The fine folks at WCRI continue to do lots of stuff so we don’t have to. Two things stand out this week; a compendium of every state’s work-comp pharmacy-related regulations, and a webinar on the effectiveness – or lack thereof – of regulations designed to address the should-almost-never-be-allowed practice of physicians dispensing drugs for profit.

Out in the real world, we learn that in many cases it’s harder to get access to drugs to deal with Opioid Use Disorder than to get the opioids that cause OUD. 

14% of plans do not cover buprenorphine/naloxone, a preferred medication for OUD maintenance treatment. Only 11% of plans cover implantable buprenorphine and 26% cover injectable naltrexone, both of which may facilitate adherence for patients with OUD. Seventy-three percent of plans cover at least one abuse-deterrent opioid pain medication, while 100% of plans cover at least one short-acting opioid pain medication.

Hey P&T committees, get with the times!

Making sense of data

myMatrixx’ Cliff Beliveau has an excellent piece on using data visualization to help explain complex issues. Well worth a read.

Dumb things companies do

Roberto Ceniceros’ column on Lockton’s denied-claim research has been on my desktop for weeks. I’ve read it twice, and you should too. Net is this – denying claims is often a really bad idea.

Finally, from the professor who teaches what may be the only most important class in business school comes an eye-opening look into how work is bad for you. The logic and rationale is not what you may think. Here’s just one excerpt, which I would label Companies are not smart:

Companies do not act on the basis of the best evidence. They merge even though much research shows that mergers destroy value. They use forced-curve ranking systems for performance reviews even though extensive evidence documents the harmful effects. There is no reason to believe they would behave any differently with respect to their human capital.

Evidence shows work hours are negatively related to productivity, that giving people more autonomy leads to higher motivation, and that layoffs often harm performance, including profits. So in making employees sick, employers have created a lose-lose situation.

Enjoy the first weekend of fall.