It’s different now

When did you last:

  • buy a newspaper or book
  • use a real camera
  • plug in your Garmin and stick it on the windshield
  • shop in a mall, or
  • use your home phone?

That cellphone you are reading this on? It’s replaced entire industries – landline phones, books, newspapers, white noise machines, handheld recorders, calculators, radios, bank visits, cameras, video cameras, stereos, maps and satellite navigation devices, paper tickets, even desktop computers.

Your Lyft/Uber account? For many, it’s replaced a personal vehicle.

That box on your front step? It’s taken out thousands of local retail establishments and hundreds of malls.

These are just three of the all-but-invisible ways technology has radically changed our world – and your business – over the last decade.

It is well worth stopping to consider this when planning for the future. Here are a few takeaways.

Construction is affected by much lower retail construction coupled with a very recent spike in home ownership. After years when millennials chose to live in small apartments, group homes, or with relatives, it looks like getting your own place is back.

Maybe they can convert malls to apartment complexes?

The net – lower commercial construction will be balanced out by more residential building.

Manufacturing employment is growing much more slowly than manufacturing output, driven by the Administration’s tariffs, the “cellphone effect”, and accelerating use of robotics and sister technologies.

We may have reached peak auto manufacturing, with significant structural implications for the auto industry and its entire supply chain and service infrastructure.

What does this mean for you?

Is your business model prepared for the future? 


BernieCare – No; Single Payer 2.0 – Yes.

I don’t see how BernieCare makes it to the serious consideration stage – much less becomes reality. Not because it isn’t a way better healthcare answer than the mess we have today. It just isn’t do-able.

When we do finally ditch the completely unsustainable, inefficient, and idiotic “healthcare system” we have today, I’m convinced it will have most of these components.

  1. This won’t be “Single Payer” as commonly defined, rather it will be a tightly managed, measured, and defined health insurance product administered by various governmental and non-governmental entities.
  2. Everyone will be enrolled.
  3. These will be both not-for-profit and for-profit entities competing in defined markets. Similar to Medicare Advantage, ACA Individual Exchange, Managed Medicaid and other current programs, these entities will bid for programs on a multi-year basis.
  4. Certain populations will be defined separately and bidders will have to demonstrate expertise and capabilities unique to each population. Medicare/Medicaid dual-eligibles will be the most significant of these defined populations.
  5. Winning bidders will have to comply with most of the current ACA requirements such as no medical underwriting, a standardized benefit plan, significantly reduced member cost-sharing, open access to providers.
  6. There will be one universal reimbursement mechanism – likely based on Medicare’s MS-DRGs for facilities and Physician Fee Schedule for other providers. This will be an “all payer, all product” fee schedule, meaning it covers all types of care – including auto, workers’ comp, liability, etc.

Potential variables

  1. This may take the form of Medicaid for All – albeit using a different name (the point made by Dr Jake Lazarovic in a previous post.) I don’t see using Medicare as the basis. Medicaid involves partial state funding – key to get states involved in funding the program. Medicaid also provides a relatively seamless program across all services including long term care, unlike Medicare which separates facility, physician, supplemental, and prescription services into distinct service lines – and doesn’t include long term care beyond relative brief rehab stays. To say these separate programs are confusing and irrational is to be kind indeed.
  2. Employers may be able to provide financial support for their workers, or decide to give their workers higher wages in lieu of a healthcare benefit plan.

However, it’s either this, or BernieCare. And BernieCare is death to insurers and many other stakeholders, while Single Payer 2.0 will be the best of the alternatives.

Next week – yes, this is affordable, and YES, the healthcare industry is going to go berserk.

What does this mean for you?

Massive changes are coming. Survival favors the prepared; extinction is the fate of the willfully ignorant and ideologically blind.


Why BernieCare won’t happen

Sure, there’s lots to like about it – no paperwork, see any doctor you want, no cost for any services, covers nursing home and long term care, dental, vision, you name it.

It will cost a good bit more – at least initially, but over a decade we’d actually spend a couple trillion dollars less than if we stick with the current clustermess. Despite the initial sticker shock, as voters get increasingly scared and frustrated by the crappy “health system” we have today, the balance may well tip towards BernieCare.

Except it won’t, and here’s why.

Infrastructure – There is no current wholly-government infrastructure in place that would be a platform to handle BernieCare. Much of Medicare and Medicaid is administered by private or not-for-profit organizations. It would take years and tens of billions to build that infrastructure. Sure it may well be more cost-effective than using private entities, but I just don’t see us collectively agreeing to spend the sums needed to make it happen.

Impact on employment – BernieCare would essentially eliminate 99% of private insurance. The 540,000 people employed in that business would no longer have a business to employ them. I don’t see Congress voting to vaporize over a half million jobs; and that’s only to start. As things got more automated, many more admin roles would be eliminated.

Big money’s control over politicians – Citizen’s United killed the last faint hopes we could keep dirty dark money out of politics. Fact is, healthcare is by far the biggest political contributor, led by big pharma. Add in device manufacturers, healthplans, physician groups and health systems – all in healthcare collectively pumped about $650 million in cash into political coffers last year alone.

Recall what makes our healthcare so damn expensive is that for-profit entities are heavily involved in healthcare services, devices, drugs, and everything else – BernieCare would crush their profits if not eliminate them altogether.

If you think the healthcare industry contributes a lot now, wait to see what happens if BernieCare gets just a bit of traction.

What does this mean for you?

If we were starting from scratch, BernieCare is by far the best model. We aren’t, so it won’t get off the ground.

That’s not to say some form of MFA/Single Payer isn’t viable. More on that in a future post.


Single Payer – time to get real

So, what would the most expensive version of Single Payer cost? Eliminating all deductibles, copays, coinsurance, premiums for Bernie Sanders’ super-duper Rolls Royce plan would run about $32,000 for a family (a gross simplification to be sure).

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.) 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.

The private health insurance industry alone employs 540,000 workers.

If we switched to a true single payer system, millions of administrative jobs would disappear.  Remember what happened to manufacturing in the rust belt? That happened over 30 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.


How much are you really paying for healthcare?

Recent posts have focused on defining Medicare for All/Single Payer and the problem both are intended to solve – healthcare prices in the US are the problem.

Today, we’ll figure out what you really pay for healthcare.

That’s pretty darn important because we’ll need to compare what we pay now to what we’d pay for any MFA or other model.

First, it’s insurance costs, deductibles, and copays. For a family of 4 with one person in poor health, the total is about $7850 this year.

Then there’s the $1400 in state and federal tax payments that go to fund healthcare – you know, that FICA thing, plus state and federal taxes that pay for Medicaid, plus VA funding, Tricare, Indian Health Services, and lots of other programs I don’t know about.

Next, your employer’s insurance and tax costs – which total $13,050 in health insurance premiums and $750 in Medicare payroll taxes.

The total? $23,500 for a family of four.

You may be…surprised to learn $5,700 goes to administrative expenses. All that paperwork, utilization review, billing and reimbursement stuff costs serious money.

What does this mean for you?

US health costs twice as much as in many other countries – that have the same or better outcomes.

What would you do with another $11,750 in cash?


One Call is shrinking

Reports from multiple sources indicate OCCM has just announced a significant “reduction in force” – i.e. a staff layoff. While this is by no means OCCM’s first staff reduction, initial indications are it is not a small one.

Internal sources indicate the Parsippany NJ office is the one most affected. Staff there do scheduling and care management functions, interact with adjusters, case managers, claimants and providers. Unconfirmed reports indicate work is being off-shored to the Philippines; One Call has previously offshored other functions.

I have reached out to OCCM multiple times and once again they are unresponsive.

Sigh. Free consulting advice – Management should stop obsessing on how I know this stuff before it is public and focus on running their business instead. Oh, and get a lot smarter about damage control.

I would hazard a guess that this is the next step in a series of cost saving measures, underway in an apparent effort to reduce expenses and cash outlays. While the offshoring will almost certainly have a positive effect on operating costs, it remains to be seen whether customers, used to talking with domestic service staff, will accept the change.

And therein lies the rub.

In work comp services it is all about customer service. Adjusters and case managers can be demanding – as they have every right to be. They want to talk with people who thoroughly understand their business, know the rules and regulations in their states, are highly trained, have all the necessary information at their fingertips, and have local knowledge.

They don’t want to call one person for billing and another for network details, a third for an update on the patient’s condition, and yet another for prior auth. And they want that person to communicate crisply.

This may all be solved when OCCM’s new Polaris IT application is fully developed and rolled out. Talking to a very large customer earlier this week, I heard the latest news is it will go live for them “this summer.”


It is possible that adjusters and case managers will find their needs met by the new IT system and a staff half a world away. It is also highly likely those front-end clients will miss the people who worked with them over the years on multiple cases, understood their needs and requirements, and worked to meet them.

I’m reminded of the time I called a hotel chain for a room in Austin TX. The customer service rep, a gentlemen located on another continent, apologized as no rooms were available in their Austin hotel, but proceeded to book me in their Dallas property. He could not seem to grasp that this was not a viable option.

These are tough times for the folks losing their jobs, and I hope they can find good, stable, rewarding and fulfilling jobs soon.


WCRI – Employers’ ideas around work comp

At yesterday’s final session, Publix, Home Depot, and Starbucks work comp leaders had some pretty interesting recommendations around workers comp.

  • Starbucks understands their partners (what they call their workers) don’t do much snail mail, and are much more likely to communicate via smartphones. They’ve done a lot to deliver as many communications and payments to electronic means as possible.
  • Partners tend to trust nurses, so Starbucks uses nurse case managers to help partners deal with the emotional issues as much as the actual medical management (my words, not Ms Olson’s)
  • Publix is working hard to identify the best physicians; as a Florida-centric company, the big grocery chain is often able to direct care – and it does so assiduously. Home Depot also assesses providers.
  • Publix, Starbucks and Home Depot alike have a broad demographic of workers – from kids under 18 to octogenarians. This requires flexible approaches to return to work and a willingness to be creative and thoughtful about accommodations. Sounds obvious – this is a ton of work and very effective.
  • Publix’ Marc Salm is quite concerned about increasing costs due to litigation, which appear to be driven at least in part by “jumper claims” that hit well above six figures within 24 months. To say Marc is passionate about this doesn’t adequately convey how strongly he obviously feels.
  • Noreen Olson of Starbucks noted that she approaches this from a “how do we want this partner to be when this is over” – this is a paraphrase, but the essence is there. She focuses on the ultimate outcome from that individual’s perspective – a view that should be considered at all points of the “claim process.”
  • Home Depot’s Dawn Goree has a similar philosophy – when you pick up the phone, think about how you are going to come across to the person on the other end of the line…trust is critical and it can’t be about dollars and cents.
  • Starbucks does not do “post offer testing” as it has a young workforce and wouldn’t have any employees if it did (Love Ms Olson’s honesty)

What does this mean for you?

A fun, entertaining, and very worthwhile session that reminds us our job is about helping people who’ve been hurt.


WCRI – deductibles and claims!

I showed up late to WCRI’s annual meeting, and thanks to American Airlines missed three great sessions – two dealt with opioids and one was a deep dive into coordinating medical and RTW services. Grrrrr…

Ok, whining is now over.

For those seeking intel on those early sessions – I’ll link to posts on those when I find them.

A session I’ve been looking forward to – nerd bomb alert – is a discussion of the relationship between group health deductibles/copays and coinsurance and claim classification.

This study follows two others that looked at capitated vs non capitated plans and provider reimbursement impacts on claim classification – aka shifting claims to work comp.

So, is there a correlation between higher deductibles and a greater propensity by patients to file work comp claims?

It appears high deductibles are correlated with higher rate of work comp claim filing for patients – especially for patients with soft tissue injuries, but the impact isn’t great. More specifically, the data indicates a 1.4% increase in filing associated with high deductibles – when WCRI looked at claims over an eleven-year period; this is much more likely in states where workers can pick their initial treating provider.

In fact there was little correlation between high deductibles and increased WC claiming in employer-choice states.

However, it appears that much of that increase has occurred more recently, as deductibles have grown significantly. with soft-tissue injuries

The entire research report is here – there’s a fee for non-WCRI members.

The finding is somewhat complicated by earlier research that found a significant percentage of workers that actually had occupational injuries didn’t file them under work comp

There’s no question deductibles have grown by leaps and bounds of late – the average is now over $1500 – and 4 out of 5 plans have deductibles. (deductibles are a lousy idea for lots of good reasons – mostly they don’t work).

So, what does this mean for you?

Two things – we all know WC claims frequency has been declining for decades, but the “increase” in WC filing offset about 20% of that decline.

And, we do NOT know if those claims were actually occupationally-related. It could be that claims are just getting filed more accurately of late.


Medicare for All – the three versions

There is no consensus about what MFA is – and that makes it really easy for supporters and opponents to convince the uninformed it is great or awful.

They do that by picking out whatever they think you’ll love/hate – even if it has nothing to do with MFA. Then, they yell about that at maximum volume in an effort to convince you that the whole thing is terrific/awful.

Before we decide if MFA is worse than the stomach flu or better than a teenager that actually listens to mom and dad, let’s spend two minutes understanding what MFA is.

There are three general “versions”, each coming in multiple variations and with different tweaks. The basic differences are:

  • who is covered
  • what types of healthcare are included
  • is there a role for private insurers
  • what mechanism/payer system is used.

Notably, many of the proposals aren’t exactly precise on where the dollars to pay for all this will come from.

There’s the Bernie Sanders version which is basically – every kind of healthcare service anyone could think of for free for everyone – provided only by the government, with no private insurance allowed. Another even richer version is to be announced today – which is even more generous – and hyper-expensive.

My take – completely unrealistic for several excellent reasons which I’ll get into in a future post.

Then there’s Medicare for some – which would allow older folks to “buy in” to current versions of Medicare, while leaving employer-based insurance alone. A similar proposal, known as the “Public Option” was part of the ACA until the Democrats took it out in an unsuccessful effort to get Republican support for ACA legislation

My take – this makes more sense for multiple reasons; again we’ll dive into this next week.

Some – including your author – have pitched Medicaid for some or all. To me this is more viable as it heavily involves states, wouldn’t affect federal taxes nearly as much as Medicare for All, and uses an already-existing program that is much simpler than Medicare.

What does this mean for you?

A gentle reminder – yes, there are issues with all of these. But what is the alternative? Our current system is a mess and is getting worse by the day. If you object, what’s a better solution?

What does this mean for you?

Change is coming – make darn sure you understand what it means for you.


What is “Medicare for All”?

MFA/M4A uses Medicare as the health insurance mechanism for people younger than 65. Some advocates are pitching “Medicare for Some” wherein folks older than 50 or 55 would be able to “buy-in” to Medicare (which covers everyone over 65 today).

Here are some of the reasons supporters like MFA:

  • Overall healthcare costs would be lower, reducing expenses for employers, individuals, and taxpayers over time.
  • Current beneficiaries really like Medicare – more than insureds like private insurance
  • It relies on an existing system and infrastructure that exist today and are familiar to all stakeholders
  • Administrative expenses are much lower than employer-sponsored and individual insurance
  • Price controls are universal and apply to almost all types of providers
  • Cost increases – on a per-capita basis – are lower than in commercial health insurance
  • Pretty much all doctors and hospitals accept Medicare
  • Commercial insurers are very active in Medicare, offering plans that provide added benefits for little to no additional cost (however there are usually limits on providers patients can use (known as Medicare Advantage plans)
  • Those who like “traditional” Medicare can buy supplemental benefits from private insurers to cover services, deductibles, copays and other costs not covered by Medicare (Medicare Supplement plans)

Opponents cite:

  • It would be wildly expensive and require massive new taxes, with annual cost estimates ranging from $1.4 to $2.8 trillion (although one major opponent concedes total US healthcare costs would be $2 trillion less a decade into MFA)
  • Medicare reimbursement is too low, forcing providers to upcharge other payers to make up for lost revenue. If Medicare is the only insurance carrier, then providers will be in dire financial straits.
  • People covered by employer-funded health insurance are leery of losing those plans.
  • MFA would severely limit or restrict “choice” of health plans and coverage options
  • The notion of “government-run” healthcare scares some, but most don’t even know Medicare IS a “government-run” program.

My take

There’s no question Medicare is less expensive than group/individual health insurance – and costs will increase more slowly. Private insurers are heavily invested in the business, so they can handle the admin piece. Yes, taxes would go up, but employers’ costs would likely drop considerably. Patient hassles would greatly diminish.

Oh, and given what a pain in the butt commercial insurers can be when it comes to out of area coverage, deductibles, annual premium increases, covered v non-covered services and everything else they do to make our lives miserable, I’d be way happier with Medicare for me and my wonderful bride.