Nov
13

Tuesday catch-up

It’s been a very very busy time.

First, I’m pretty darn excited to note my alma mater’s football team goes into it’s match with Notre Dame ranked 12th in the nation. As a long-suffering Syracuse alum, this is territory we haven’t seen in decades.

Perhaps we’ll see Chris LeStage’s LSU Tigers in a Bowl Game???

OK, on to work.

The National Work Comp and Disability Conference is fast approaching. You can get a discounted registration here.

A bit further out on the schedule is WCRI’s annual confab – which will be in Phoenix AZ next February 28 – March 1.  You can get the details here. DO NOT WAIT to register; this always fills up so don’t procrastinate.

Next, a best-in-class work comp safety program is the product of a “great team” led by a very experienced and very competent leader. Joe Molloy at Northwell Health is innovative, focused on the right things, and committed to partnering with service suppliers. Joe’s team has reduced lost work days at a giant healthcare system by a third.

More proof of the ongoing effort by health insurers to move the US to single payer…this insidious plan is bearing fruit as we just received new evidence of its effectiveness – Americans don’t like their health insurance.

According to a national survey by ACSI, consumers rank their satisfaction with health insurance as equal to airlines. “Health insurance satisfaction is flat after two years of gains, staying lowest in the Finance/Insurance sector” Ouch.

I find it increasingly likely we’ll have some form of single payer, perhaps Medicaid for all – within a decade.  Health insurers continue to piss off customers on a regular basis, can’t control health care cost increases, and are lousy at branding.

They do have gazillions of dollars which they will spend to kill MFA or any other version of single payer – and they are pretty darn good at the government lobbying thing.

That said, when things can no longer continue, they won’t.

What does this mean for you?

It’s not a question of “if” we end up with single payer, it’s a question of when.


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
30

Workers’ comp claim frequency – part 2

Two messages from colleagues about yesterday’s claim frequency post add important nuance and depth to the issue.

First, thanks to WCRI CEO John Ruser PhD for his note with more current information on recordable data.

These data are critical as they are the only source I know of that records the actual injury numbers, or counts of occupational injuries and illnesses. Almost all other sources document percentages based on premium dollars or FTEs. While those are useful, service providers really want to know the actual number.

Ruser [emphasis added]

BLS has data through 2016 on its website (the chart book is easiest to digest and can be found here: https://www.bls.gov/iif/osch0060.pdf)  The data show continued decline in OSHA-recordable rates through 2016, particularly among “other recordable cases.”  BLS will release updated non-fatal injury data through 2017 on November 8.

I agree with you that credible research on why rates are declining is lacking.  There simply aren’t good data to tease out the possible factors.  Interestingly, shifts in hours worked away from high hazard industries does not explain the long decline in rates.  The vast majority of industries are experiencing declines.  I documented this in a paper I wrote for the American Journal of Industrial Medicine. 

I’d emphasize John’s comment on high hazard industries. I’ve opined that fewer injuries in heavy manufacturing and construction were a likely contributor to the reductions in trend; thanks to John for correcting my error.

Next, from a former state workers’ comp director. [emphasis added]

as I look at chart provided in your blog today it took me back to the early days after the reform of XXXX. As can clearly be seen in the chart starting in 1992 the trend started down and has continued ever since.  A lot of risk managers and safety staff took a lot of credit for those numbers as proof that they were doing a good job. I remember at the time thinking boy this looks really good but surely there is another explanation other than the [legislated] reform and all that we were doing in safety and I was right. Even after the… emphasis on safety [was reduced]…the number continued to go down. As I look back I was just in the right place at the right time.  But when good things happen that can not be explained we tend to take credit for them

This expert’s view is well worth repeating, perhaps best said by Tacitus:

victory is claimed by all, failure to one alone

What does this mean for you?

Claim counts are dropping – and will continue to do so. There is little “white space”, so growth for claims service companies will come from taking business from competitors.


Oct
29

Workers’ comp claim counts are down…right?

A recently-released analysis of workers’ comp claim frequency tells us what we’ve known for years – the percentage of workers that gets hurt on the job has been and continues to drop.

Yet one major insurer indicates there are warning signs that frequency may be ticking back up, albeit in a tightly defined sector of the economy. More on that below.

There are many theories about why frequency has declined for decades – more automation, more emphasis on safety programs and loss control, less heavy industry here in the US, low investment in infrastructure leading to fewer jobs doing heavy construction. Many theories, but I have yet to see any credible research into exactly why frequency is declining.

This is one of those data points that is enormously important, yet it doesn’t get enough attention. So, here’s the skinny.

Claim frequency is a percentage  – the number of injuries compared to premium dollars or FTE workers. Therefore the number of work comp claims is driven by the denominator; if premium or employment goes up, that can offset a decline in the percentage of claims.

But employment is about maxed out, so any changes in the percentage of claims will closely mirror the actual number of claims.

Another way to track the number of claims is to compare it to Federal data on the actual number of occupational injuries and illnesses. The graph below shows that the actual number of claims per 100 workers…

You’ve already figured out that the graph ends in 2013…so what about the intervening years?  Fortunately NCCI provides ongoing research into just that here.  When you dig deeper, we learn that total frequency dropped almost one-fifth from 2011 to 2016, led by office and clerical job classes.

As we learned at AIS in May, NCCI estimated frequency declined another 6 percent in 2017; the average decline over the last two decades has been 3.7 percent.

But.

Last week the Hartford announced it is seeing early indications of an uptick in claims volume. Chairman and CEO Chris Swift said [emphasis added]:

“workers’ compensation 2018 frequency trends are elevated from expectation…

our frequency in small commercial and middle market has turned positive this year. Based on our business and economic analysis, we view this trend as broader than just our book of business.

Many businesses are struggling to find qualified employees and beginning to add more new workers to their payroll, generally increasing the risk of workplace injury versus what it would have been say a year or two ago.

Additionally, the tightening labor market produces more hours work for employee often resulting in fatigue and less training time compounding the risk of injury for the less experience workers.

Our uptick in frequency change has been moderate turning positive on a rolling 12-month basis. The actual frequency levels are now comparable to what we experienced in 2016 which is a very manageable shift in a book of business as large as ours.

The frequency increase is more pronounced among less tenured employees and it can be several times that of experienced workers.”

Notably, the Hartford attributed a 3.5% increase in Accident year combined ratio for its middle market business to this increase in frequency.

Couple of key points about this.

  1.  The Hartford is the largest national seller of work com policies to small employers, and thus has the broadest lens.
  2. As a major writer, it also has lots of dollars to invest in business analytics – so it knows more faster than many insurers do. This from Hartford President Dough Elliott:

we have now installed a new claim platform over our 5,000 desk throughout claim. And the ability to access what I’ll call structured data and to slice and dice and be on top of it and to look at your metrics and watch your trends is much advanced from where we were five years ago. And so we have monthly and weekly discussions but we’re sitting on top of trends that candidly five years ago were very manual in nature to try to get our arms around and they were slower than we’d like to them to be.

What does this mean for you?

  • This is not unexpected; we are close to max employment; small employers are desperate for workers and don’t have the time/expertise/resources to screen/train/protect those workers.
  • Time to look at your data – closely.
  • And likely time to dust off those underwriting, safety, and loss prevention manuals.

 


Oct
26

Tulips, winter, and value – the world of work comp services investments

Over the last decade I’ve worked with over 30 investment firms on perhaps 60 deals.  One question I almost always get is:

Would you buy this company?

And a related question:

What would you pay for this company?

For years I tried to answer those questions, factoring in the company’s service reputation; the uniqueness of it’s services and/or business model; experience of management; value delivered to it’s customers; and a bunch of other stuff.

I finally realized those criteria often had little to do with the “value” defined by most investment firms. And much more to do with Dutch Tulips.

To most private equity firms, “value” is what can they sell the company for in a few years. One would think the selling price would be driven in large part by those other criteria; in many cases, one would be wrong.

Recent valuations of some work comp service companies are – in my view – completely disconnected from the actual value inherent in these companies – actual value defined as the value they bring to their customers and the potential for those companies to grow and prosper.

In fact, what seems more important than actual value is the ability of the seller to craft a story about how the company is going to grow, it’s unique business model, it’s scalability and potential to be a platform to which other acquisitions can be added. This is typically future-forecasting, theoretical stuff based on assumptions thin enough to blow away in the slightest of headwinds.

But more often than not, enough potential investors buy into the story to create a bit of a feeding frenzy, until one agrees to pay way more than that company’s actual value.

I’m far from an investment expert – one look at my personal portfolio will prove that – and in no way am I saying the brilliant folks at private equity firms don’t know what they are doing.  Far from it – these people are doing exactly what they are supposed to do – make gobs of money for their investors.

What I am saying is these firms are rewarded when they sell the companies they bought for a lot more than they paid. That works out really well – if they can find someone to buy it at a hefty markup. At some point the next owner – or the one after that – finds out that the actual value of that company is far less than they thought.

It’s also known as the Greater Fool Theory, or the Dutch Tulip problem. You know the asset isn’t worth what you’re paying, but you’re sure you can find someone else who will pay more than you did.

What does this mean for you?

Beware of tulips. They flourish until winter comes. And winter ALWAYS comes.


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!

 


Oct
17

Who’s investing in work comp services now?

Several years ago it was smaller private equity firms who bought companies for $75 – $200 million, built them up, and sold them off. Then it was the bigger PE firms who put together a couple of these and hoped to sell them for more than they paid – and were mostly successful.

One of the first deals was way back ten years ago – and what’s transpired with that deal is emblematic of the evolution of the industry.

PMSI was sold by owner Amerisource Bergen after the PBM industry’s founding company just kind of melted away. HIG Capital picked it up for  about $50 million, and quickly brought in one of the most talented managers I’ve ever had the honor of knowing – Eileen Auen. Greatly aided by a major cash infusion, Eileen and her team turned the all-but-buried company around. HIG profited  handsomely when it was sold to Stone River and merged with Progressive Medical, a deal that was backed by Kelso.

The new company, renamed Helios, grew and was eventually sold to OptumRx, a division of giant health insurer UnitedHealthcare.

Optum is what is known as a “strategic” buyer. Strategics are investors that buy assets to add to its existing operation, ideally leveraging existing infrastructure, customers, systems, and suppliers. The result is infrastructure costs (and ideally supply costs) are reduced and revenues increased.

So, we have strategics such as Optum, Mitchell (see acquisitions of Pharmacy Benefit Managers), and Paradigm buying companies that somehow make the whole greater than the sum of the parts.

I’d note that some of these transactions seem a bit of a stretch, but, hey, I’m not the one who went to Harvard Business School, so what do I know.

The financial investors are the other entities still in the game.  Of late, it’s been the giants – Carlyle, Stone Point, KKR – investment firms with billions in ready cash, deep knowledge of the business, and the savvy needed to pick out management teams and business models that will flourish in what is a declining industry – workers’ comp.

We haven’t seen much activity on the small end of the deal world – except for Adva-net and a couple smaller transactions things have been pretty dull of late.  While there are a bunch of smaller companies in various geographic and/or service niches, there’s been precious little trading activity over the last couple of years (with a couple exceptions)

There’s one more investor type that’s getting more active these days – distressed asset investors. Their strategy is to find companies that aren’t doing well financially and buy them – sometimes out of bankruptcy or just before they tank.

I’d expect we’ll see more of the distressed asset folks making the rounds in Las Vegas in six weeks, finding out what’s up and who’s making it and who isn’t.

What does this mean for you?

The work comp service industry is getting awfully mature.

 


Oct
12

Friday catch-up

Another crazy busy week is coming to a close, and its time to catch up on what I missed, didn’t get to, or just figured out.

I know what you’re doing this weekend…you’re going to be poring over NASI’s annual report on workers’ compensation which just hit the virtual newsstand – and you need to get a (free) copy. For those unfamiliar with the report, it is the only comprehensive, national report that provides detailed, state-by-state financials on medical and indemnity spend by type of payer. Along with a treasure trove of other great info.

The big news – total work comp medical paid in 2016 dropped (!) 0.3% from the previous year. Work comp spent just over $31 billion on medical in 2016.

What’s driving the decrease? I say a big contributor is reduced spending on pharmacy, which I’ve been tracking for 15 years.

Notable – WorkCompCentral’s William Rabb teased out one major issue – the worker-unfriendly government in Michigan’s efforts to cut benefits for workers resulted in a 15% drop in benefit payments. Ouch.

Kudos to Accident Fund’s United Heartland for talking about the good work they do helping patients recover. I’ve had the honor of working with folks at AF and United Heartland in the past – they are good people focused on doing the right thing.

Work comp bill review and case management company Genex’ acquisition of Priority Care Services will cause a bit of disruption in the specialty services sector. Sources indicate PCS will be the “home” of specialty services in the Genex/Mitchell operation, with everything but IME and Pharmacy consolidated under PCS.  More on this later, as there are repercussions…

Healthcare costs are almost $20,000 per family. While premiums in the ACA marketplaces have stabilized, the reality is premiums would be significantly lower if the Administration hadn’t stopped making cost sharing payments and Sen. Marco Rubio R FL hadn’t cut off the funds needed to help start-up insurers compete with the big boys. Rubio’s action singlehandedly killed off several new insurers founded to offer competitive insurance…so much for the “free market”!

Last, this drives me NUTS – managers, execs, supervisors who use the “I” word all the time. There is no “I” dammit. There is only “we”.  This is not about you, your feelings, your work, your anything.  It is about everyone working towards the same goal, and when you say “I did this” or “My results were X” you denigrate the contributions of others, make them less likely to work to achieve future goals, and send a signal that you have a fragile ego that needs stoking.


Oct
9

My post last week about the (minor) impact of rideshare services on work comp elicited responses from a couple of transportation companies, as well as one anonymous reader who wanted to talk about OneCall’s program (more on that below).

Full disclosure – a few years ago I was among those asserting rideshare companies would disrupt work comp transportation. I’m a lot smarter now (well, perhaps not smarter, just able to see why I was wrong)

Jim Nygren of HOMELINK sent in a detailed comment, which led to a rather extensive back-and-forth email conversation (I disagreed with some of his assertions, and wanted to have a conversation instead of putting up the comment and responding). As readers know, I’m happy to get comments and corrections, but not enthusiastic about marketing masquerading as comments or contributions.

The Jim and Joe conversation was professional, courteous, and perhaps a bit frustrating for both parties. After wrestling with the specifics of our conversation, I decided to post it here.  I don’t have any business dealings with HOMELINK; I’ve heard mostly good things about the company, I do like that it is employee owned. I also appreciate the work that HOMELINK has done in an effort to use rideshare services; they’ve clearly spent a lot of time and resource on this.

Here’s the conversation (“Jim” denotes his statements, rest should be self-explanatory)

Jim – Appreciate your post and perspective as always.  There are some materially inaccurate comments/assumptions made that need to be addressed, my comments below.  The most important thing to know is Rideshare is NOT an exclusive option, if properly implemented it is a tool within a complete transportation solution.

Joe response to Jim comment – I never said or implied rideshare would be an “exclusive option”.

From the original post –

Here’s why I don’t think they’ll replace work comp-specific transportation companies.

This is not to say L/U (Lyft/Uber) won’t be part of the answer – I’m just suggesting that “part” may be pretty defined and not nearly as big as we may have thought a while back.

Jim – My comments come from the perspective of the company I work for, HOMELINK, which began offering Rideshare as a solution in 2015.  I look forward to your feedback.

(Jim then quoted text from my original post, with his comment below each quote; here I’ve denoted that text from my original post as “Joe’s original post”) –

Joe’s original post – The big one – being late for or missing an IME is really, really expensive – the payer has to pay the IME doc the $1000 – $2000 anyway, rescheduling an IME incurs more indemnity, attorney, and other expense, and it makes adjusters nuts. The same is true for PT or other medical treatment – although not quite as bad.
Jim’s comment –           Rideshare programs are a great solution for just this point.  The transparencies provided from real time monitoring of rides allows immediate rescheduling if an adverse issue arises.

Joe response to Jim comment – This may still lead to delays in getting the patient to the IME – unless L/U informs you with sufficient time to reschedule – which is likely much more than 5 minutes – I still don’t see how this solves the issue.

Joe’s original post –
WC patients don’t all have smartphones, so figuring out which patients can access L/U is a necessary first step
Jim’s comment –  The benefit of this program is the patient does not utilize commercial applications.  The coordination and monitoring of rides are done through the vendor, such as HOMELINK.

Joe’s original post –  L/U drivers wait a maximum of 5 minutes – this doesn’t work for patients
Jim’s comment –         Through HOMELINK’s processes, every patient is qualified before the coordination of the ride.  Patients with specific needs or limiting diagnoses are coordinated with transports meeting their exact needs.

Joe response to Jim comment – And L/U aren’t able to accommodate most of these patients, supporting my assertion.

Joe’s original post –
L/U drivers aren’t going to go up to the patient’s door and help them get into the vehicle
Jim’s comment –  As mentioned before, these patients would undergo our initial Rideshare assessment and coordinated with transports meeting their exact needs.

Joe response to Jim comment  – And L/U aren’t able to accommodate most of these patients, supporting my assertion.

Joe’s original post –
L/U drivers’ vehicles typically aren’t accessible for patients with limited physical ability
Jim’s comment –  This would be vetted in the assessment process as outlined above.

Joe response to Jim comment – And L/U aren’t able to accommodate most of these patients, supporting my assertion.

Joe’s original post –
Some WC patients aren’t native English speakers, and may require drivers to speak their language
Jim’s comment –  This would be vetted in the assessment process as outlined above.

Joe response to Jim comment – And L/U aren’t able to accommodate most of these patients, supporting my assertion.

Joe’s original post –
If you try to schedule a pickup for a time in the future, L/U typically don’t reach out to drivers until a few minutes before that pickup time – which may well not work for patients in remote areas
Jim’s comment –  Since HOMELINK coordinates the referral, these necessary communications all occur within our patient care teams.

Joe response to Jim comment – This doesn’t refute my core assertion – there’s still a 5 minute rule.

Joe’s original post –
which brings us to location – L/U work really well in metro areas, and not so much in more rural/suburban settings. So, schedulers may find L/U doesn’t have available drivers
•im’s comment –  Rideshare and traditional transportation are not mutually exclusive, Rideshare is a cost savings tool to be used by payers when the situation allows.  In this example, if Rideshare did not have adequate coverage a traditional transport would be coordinated.

Joe response to Jim comment – never said rideshare and traditional WC transport were “mutually exclusive” – far from it.

Joe’s original post –
you can’t talk to a person at L/U – ever. Many WC transportation services involve a three-way call between the scheduler, driver, and patient; this is just not going to happen with the ride-sharing services.
Jim’s comment –  Our relationship and developed workflows allow our patient care coordinates to have open communications with the driver.

Joe response to Jim comment  – This doesn’t refute my assumption – are these calls three way ?

Joe’s original post –
Finally, while the dollars are significant in WC, they really don’t amount to that much compared to other opportunities in Medicaid and Medicare. If you’re L/U, you’re going to focus on those payers and ignore WC.
Jim comment –  If you’re looking at Rideshare organizations making a direct play with WC you are correct.  However, relationships established in this space with companies such as HOMELINK have allowed for payers to capitalize on substantial savings.  We have shown comparative savings (Rideshare vs. traditional transportation) approaching up to 40%.  This is not an exclusive tool in a transportation portfolio, it is another innovative approach to improve patient experience and optimize savings.  Since our rollout in 2015, we have seen Rideshare utilization becoming a larger percentage of our partner’s transportation mix.

Joe response to Jim comment – I asked what percentage of rides are rideshare, Jim responded it is “in the double digits” but would not go beyond that.  Thus, it’s not possible to determine if this “savings” is meaningful or not.  “approaching up to” is marketing-speak – what is the actual percentage saved for what percentage of rides?

The net – HOMELINK is clearly trying to make the best possible use of rideshare, and kudos to the company for it’s efforts. Much of what they’ve done operationally is to deal with the very real challenges inherent in the L/U business model – a model that is NOT going to change to serve a very tiny market. I’m still waiting to see much of an impact – for reasons I note a couple of paragraphs below.

Re my correspondence with the anonymous commenter re OneCall; s/he made several assertions about OCCM’s use of rideshare. However, I emailed s/he back to ask how s/he knew this, and whether s/he is a OCCM person or customer, and never heard back. (note – the commenter is from Jacksonville, FL, which, perhaps coincidentally, is OCCM’s home town). I’m happy to hear from OCCM, as I noted in the post, or from OCCM’s transportation customers, but readers do need to know who you are to properly understand your statements.

Takeaway – Absent any credible data, it is not possible to quantify the impact of rideshare on work comp transportation. Therefore, we’re stuck with assumptions, albeit ones based on experience.

More important takeaway – There have been any number of “innovations” coming into work comp from outside the industry; models based on what works in group health or Medicare, or efforts to adapt technology and business processes to “fix” problems inherent in workers’ comp.

Most have not worked, or if they have, the impact has been minimal. There are a bunch of reasons for this:

  • Every state is different, thus vendors must adapt their tools/approaches/business models to fit 51 different sets of requirements.
  • Work comp is tiny and getting tinier – It accounts for 1.25% of total US medical spend, and claim counts continue to decline. Thus the payoff for the investment needed to adapt technology/programs/approaches can be vanishingly small  – or even negative – in states that have relatively low work comp spend.
  • But (most) vendors must be able to serve customers everywhere – so you are going to lose money in many states and hope you make your profits in the handful of big ones with a lot of comp exposure – California, New York, New Jersey, Texas, Pennsylvania, Illinois, etc.

What does this mean for you?

Innovation in comp will mostly come from inside comp.