Aug
28

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.

Implications

  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.

Jul
10

Friday funday!

Ok, it’s been another terrific week…although my definition of “terrific” has changed a lot since January.

This being Friday, it’s time to lighten things up.

Today seems like…yesterday.

Therefore, it is time to look for a present for that special friend…

Some states are going back into lockdown, which is too bad cause you’re going to miss out on stuff like this.

SPORTS!

With worries about football season, baseball scheduled to play just 60 games, and the NBA playing in a bubble, it’s time to expand our horizons and consider other sports.

Baseball may not be it for this young player…

Looks like the SEC was practicing social distancing before we knew it was a thing.

This just in from Chicago…

That “other” football has to change too.

From an Eagles fan…

Finally, as a recovering Catholic, this brought back lots of memories.


Jun
26

Masks and IWP gets hammered.

So, who knew masks could be so dangerous?

In our continued effort to keep us all honest about “science” and “research”, I have to weigh in on a recent piece wherein some folks seem to be concerned about mask wearing’s impact on a person’s health. The Risk & Insurance piece noted:

A study (italics added) conducted by PN Medical, and as reported in The New York Times, found that extended mask wearing could lead to improper breathing, which could result in possible negative side effects such as anxiety, headaches, increased heart rate, dizziness and fatigue.

This wasn’t a “study”; it was a “small investigative trial”. Details are here.

The person who described it is not a clinician.

There’s no information on how many subjects were involved, if there were any controls, the demographics of the test subjects, the methodology used, how the multi-site “trial” was conducted to ensure consistency, weather conditions, temperature and humidity, time of day, and the many other factors that could influence a person’s post-mask behavior and physiology.

The story goes on to describe all the bad stuff that “might” happen, all of which are assumptions based on assumptions based on what is most definitely not credible research.

Further, the story is based on another reporter’s failure to accurately describe the “small investigative trial;” a New York Times reporter at that.

It is entirely possible that masks cause some issues…but they’ve been in use for decades and this is the first report I’ve seen that there is any concern.

We need to do better, folks.

IWP gets hammered by Massachusetts’ Attorney General

Finally, IWP Pharmacy, long the bane of many adjusters, agreed to a Consent Decree that requires major changes at the Massachusetts-based mail order pharmacy. Mass AG Maura Healey announced that IWP will pay an $11 million settlement and make major changes to resolve:

allegations that it failed to implement adequate safeguards against unlawful and dangerous dispensing, resulting in the shipment of thousands of potentially illegitimate controlled substance prescriptions across the country.

In perhaps the most stunning example of spin I’ve yet seen, IWP’s statement doesn’t even mention the settlement… in a post entitled “IWP Expands Compliance Program” the multiple changes to staffing, operations, compliance, and sales were characterized as:

steps…developed in collaboration with the Attorney General of Massachusetts, as part of a recent review they undertook of past business practices.

The AG’s statement read in part:

“Injured Workers Pharmacy created an illegal operation that put dispensing speed and volume over patient and public safety…They dispensed thousands of prescriptions for dangerous drugs, including opioids like fentanyl, with a shocking lack of regard for whether those prescriptions were legitimate.”

What does this mean for you?

Question reporting and go to the primary source.

Check your files for IWP patients.


Jun
24

COVID catch-up

Apologies for the dearth of posts; vacation and slammed with client work.

Went bike-packing last week in the wilds of Pennsylvania and Maryland – had a great time off the grid, camping out, solving world problems around the fire at night.

Alas the world just created more…

Here’s a quick update on what I missed.

the great re-opening…or, what scares the bejesus out of me.

About 25 million people that can’t work remotely are at high risk if they contract COVID19. So, they a) have to go to work, b) many take public transportation, and c) are at high risk due to pre-ex conditions and poor health. This does not bode well for states experiencing increases in COVID19 cases.

Many states appear to have decided the healthcare implications of opening up outweigh the economic and societal costs of staying closed.

Florida is one such state:

This from JHU’s site.

Here’s a snapshot of positive tests, go here to get data on your state. The graphs show case counts from January thru yesterday; the greener the background the steeper the decline, the redder the steeper the increase.

Hospitals in seven states are in danger of being overwhelmed with new COVID-19 cases as fatalities increased yesterday for the first time since June 7. 33 states and territories have a higher rolling average of cases yesterday than they did last week.

Meanwhile the Federal government is scaling back its support for testing in 5 states.

Employment, payroll, and workers’ comp

As I noted in an earlier post, the biggest impact on workers’ comp will not come from COVID19 itself, but rather the dramatic drop in employment, business failures, and payroll.

According to NCCI, job losses peaked a couple months ago and employment has recovered somewhat…however there is wiiiiiiide variation across states, with some states as low as 8% unemployment and others up to 20%.

Remember the PPP dollars run out in a week, and when those $$ disappear, employers who had to keep workers on payroll to qualify for PPP won”t have to keep them “employed.” So, watch the unemployment numbers for early July closely.

Insiders are expecting a big increase in the number of corporate bankruptcies driven by way too much debt, changing buyer tastes, and of course COVID19. My take is COVID19 will accelerate the jump in bankruptcies, but the underlying drivers are the root cause; lots of debt works great…until it doesn’t.

The term for companies that are having big problems covering their interest expense is “Zombie”, signifying an entity that is dead but still stumbling around. About one out of five publicly-traded companies earns this sobriquet.

What does this mean for you?

Stay tuned to reports on unemployment and payroll changes in July. If the numbers aren’t good, the implications are broad and deep.


Jun
11

COVID is whacking work comp…Let’s play this out.

If survey respondents’ estimates of claim count reductions are accurate, we’re looking at about 20% fewer work comp claims in 2020 than last year.

So, what does that mean?

That’s about 1.2 million fewer claims. We can expect a greater percentage of those filed will be lost time; in tough economic times, workers tend to not file claims for minor issues.

Insurers, State Funds, and TPAs

Profit margins for insurers and funds will be higher because there are fewer claims; yes revenues will be lower, but combined ratios will actually improve. But, while margins will be up, dollars of profit will be stable or, more likely, somewhat less.

I’d expect insurers to hunker down and hold on to as much cash as possible. Expect a big push to reduce Unallocated Loss Adjustment Expenses; think fewer dollars for IT projects and the like.

Execs will be looking for ways to reduce allocated expenses and claim costs. Here are a few that may get traction.

  • Pharmacy – with PBM pricing declining over the last few years, payers that have not gone to market recently would be advised to make sure they are paying market-competitive pricing.
  • Facility costs – hospitals and health systems are looking for pennies in the couch cushions; with margins on WC higher than any other payer, rest assured insurers are the center of attention. Few bill review entities have all the tools necessary to keep hospitals’ sticky fingers out of payers’ wallets – make sure yours does.
  • Offload variable costs by offloading claims to TPAs – with volumes dropping its better to pay-as-you-go than have a building, equipment, staff, and all the necessary support soaking up overhead dollars.

Service companies

Companies with very good customer relations and high service standards will win.  While staff reductions are inevitable as case loads drop, service companies that manage those reductions wisely and humanely will reap benefits as the workers still employed will show their loyalty by going above and beyond for customers.

On the product side, many vendors are figuring out ways to help employers get safely back to work, prevent workplace infections, and facilitate medical access for patients with injuries. On-site employee assistance, testing access, cleaning services, scheduling support are all in play as is stress management and support for families dealing with illness.

Tele-services are a big part of this; big winners will be those that make the leap from using tele-as just a face-to-face visit to something more substantive, more diagnostic, more useful. There’s lots of creativity at work here…dare I say it innovation may actually become acceptable!

Expect more consolidation as private equity and venture capital owned firms (and others with solid cash reserves) try to buy out competitors, get their customers on board, and do it all on the cheap.

What does this mean for you?

Chaos brings opportunity – especially for those who remember this business is about helping people who are hurt get better. 

 

 


Jun
5

Friday funday

It’s been a not-fun week – but far better here in rural America than a lot of other places…Here’s a few of the better memes I came across.

Science marches on!

For those who remember old movies…and why our kids are VERY thankful they are out of the house…

Here in upstate New York, barber shops and salons are open (Yay!) but getting an appointment is impossible (NOOO!)

My vote for best use of humor in a pandemic goes to…

This is just a bit too close to home…

Trekkies have weighed in…

EVERYONE is figuring out how to make their stuff relevant in these troubled times…

You can always rely on SNL to make the most of adversity…love in a time of COVID.

What does this mean for you?

There is life after pandemics – for some of us…

 

 


May
21

Hospitals and medical practices are losing billions.

And that has big implications for private insurance and workers’ comp.

An insightful piece by Milbank Fund President Chris Koller details the carnage (Chris and I serve on Commonwealth Care Alliance’s Board of Directors).

Total healthcare spending in March was more than 5% lower than the same month in 2019.

From Altarum’s report:

This decline was led by the two largest spending categories: hospital spending, which showed an 8.7% decline, and spending on physician and clinical services, which declined by a huge 19.3%, year over year.

In late April, outpatient office visits were down more than 60%. Visit counts have rebounded in the last few weeks, but are still quite low – especially for surgical and orthopedic specialties.  (From the Commonwealth Foundation)

The financial impact on healthcare providers is devastating.  To date, big health systems have already lost about $400 million – each.

80% of New York doctors have lost more than half of their income, and providers in other states haven’t fared much better. Not surprisingly the ones hardest hit are those that do procedures – especially surgery. While primary care docs and behavioral specialists have been able to switch some patient visits to tele-services, that isn’t possible for proceduralists.

Implications.

  • Some practices will not survive. New practices, those without strong referral sources, and those with high debt are most at risk.
  • Provider consolidation will ramp up and the number of smaller practices will shrink as the big get bigger – and more powerful. Big practices and healthcare systems are getting more than their share of relief dollars, and are better equipped to make it through months of financial losses. They’ll be snapping up physician practices for pennies on the dollar.
  • Near term, proceduralists are going to favor profitable payers as they open up. Expect provider billing and collection practices to get a lot more aggressive.

Workers’ comp bill review systems, logic, and rules are woefully inadequate and payers using those systems will suffer the consequences.

Private insurers are significantly better off due to much more sophisticated systems…but over the longer term they can expect provider groups will push hard for increased reimbursement.

What does this mean for you?

Workers’ comp payers and private insurers are making a lot of money these days. That will not last.

They would be well-advised to invest now in reimbursement systems, expertise, and tools.

 

 


May
12

Now, about those drug rebates…

Drug rebate dollars account for a big chunk of brand drug costs – more than 40% in some cases. While list prices for brand drugs have been rising rapidly, net prices – the prices actually paid to the manufacturer – have not.

That’s mostly because manufacturers have been paying rebates to employers, insurers, and others in the drug distribution system.

This from Adam Fein PhD of Drug Channels:

A drug’s net price equals the actual revenues that a manufacturer earns from a drug. The net price equals the list price minus rebates as well as such other reductions as distribution fees, product returns, chargeback discounts to hospitals, price reductions from the 340B Drug Pricing Program, and other purchase discounts.

AARP is one of those making bank off rebates, along with lots of healthplans and insurers.

Workers’ comp

The picture’s a bit different in workers’ comp, for several reasons. Rebate payments tend to be lower because:

  • fewer brand drugs are dispensed to work comp patients
  • far fewer speciality drugs – the really expensive ones – are dispensed to work comp patients
  • the brand drugs dispensed to work comp patients typically don’t have big rebates.

But – there’s always a but – rebates must be considered when evaluating your drug spend. If you are an insurer or self-insured employer, a few things to consider:

  • ask your PBM how rebate payments affect your current pricing, and how.
  • if you’re pricing a new PBM, ask if you’re going to get the rebates paid directly to you, or if rebates are included in a calculation of your drug price
  • find out if you are getting ALL the rebate payments, or other entities in the supply chain are getting a cut. [that’s not necessarily a bad thing, but you do want to know where your dollars are going – because they are your dollars]
    • the big PBMs have more buying power, so you’re more likely to get more of the rebate dollars if you’re working with one of the big players

What does this mean for you?

These are your dollars. You need to ask the hard questions to be sure you’re getting the right answers. 


May
1

Friday Funday

Another week in physical isolation – no business trips, lots of zooming, plenty of dog walks.

Suzie’s not stressing…

She’s doing the Vulcan mind-meld with brother Louie…

And the pups let Deb borrow the dog grooming tools to clean me up a bit (yes I still have two ears)

Some folks are seeing the bright side…

And others are making the best of it.

Have a sports-free weekend!


Apr
24

Funday Friday

This drug may work, then it won’t…testing is ramping up, then it isn’t…we’re going to open up!…then we’re not.

I’m as frustrated and tired of this mess as you are. So, time to bring some joy into the world…

You think you have it rough?

This is Suzie, one of our two Newfoundlands, exhausted after a tough morning cleaning dishes.

And here she is trying to wake my wonderful bride…Deb’s not having it.

Finally, for my friends and colleagues in Florida, California, and other points south – rejoice – you aren’t  here in New York’s Finger Lakes…this was yesterday.

But don’t lose hope…there’s this…