Insight, analysis & opinion from Joe Paduda

May
3

Good news Friday…much safer cities and a world-leading economy!

There’s a ton of good stuff happening…we’ll start with the economy.

The US economy is boomingwe now account for more than a quarter of the world’s production.

Over the last three years:

  • 15.2 million new jobs were created
    • 768,000 are manufacturing jobs
  • more people are in the labor force than during the previous 4 years
  • the unemployment rate has been lower than any time in the previous four years
  • the S&P stock index is up by 33% – a massive increase in wealth for retirement plans and IRAs

Crime

Jeez, to hear some pundits you’d think cities are burning down, people are getting shot on every street corner, and no one is safe…

That, dear reader, is utter nonsense.

Reality

The net – Streets are much safer and so are homes

Environment

You’d expect the booming economy would be pumping more greenhouse gases into our air…the VERY good news is carbon dioxide production actually dropped while the economy boomed.

What does this mean for you?

A booming economy, fatter retirement accounts, lower crime, and less carbon emissions = lots to be happy about!

 


May
1

Cost Doesn’t Equal Quality

In the ever-changing world of healthcare economics, one thing is becoming more of a norm – high hospital costs. Crazy facility fees coupled with hospital/health system consolidation are leading to higher prices for payers.

Facility fees, viewed by some as the latest gimmick to generate additional revenue for hospitals, help hospital costs to account for upwards of 40% of countrywide workers comp medical expenses.

Making matters worse is hospital/health system consolidation.  Consolidation often leads to higher prices – The Federal Trade Commission’s Director of the Bureau of Economics said that some consolidated hospitals have raised prices as much as 50%. Consolidation/M&A took a bit of a pause during COVID but has reemerged and is expected to keep going due to financial pressures and desire to gobble up market share.

Workers’ comp is already vulnerable due to its inability to rival group health’s scale along with unfavorable regulatory dynamics…

As the smallest payer in healthcare, it is critical for WC payers to make sure they are utilizing high quality facilities with reasonable costs.

Consider the following example:

In Jacksonville, Fl:

Two facilities. 21 minutes apart, same side of the city center, but different profiles. The Mayo Clinic – widely regarded as one of the best hospital systems in the world vs. an HCA hospital – Florida Memorial Hospital.

According to Health Strategy Associates’ proprietary Facility Assessment Tool ©, the Mayo Clinic scores the same on Patient Safety, but much higher on Clinical Outcomes, Person Satisfaction, and Efficiency all while being SIGNIFICANTLY less expensive than nearby Florida Memorial Hospital.

*Higher the grade the better*

Using data provided by CMS and state entities and HSA’s proprietary algorithm to best reflect the medical treatment of worker’s comp injuries, the Tool enables adjusters and case managers to ensure patients avoid poor quality facilities and employers pay a fair price for excellent care.

For a demonstration of the Facility Assessment Tool, email JStithATHealthStrategyAssocDOTcom.


Apr
30

Walmart is shutting down its healthcare centers…which means…what?

Three things.

First, healthcare is a very complicated and complex business, nothing like Walmart’s core business 

Walmart’s culture, ethos, business practices, priorities, and people built a multi-gazillion dollar consumer business by TBH, beating the crap out of vendors to deliver really low prices.

That is diabolically different from building a service-oriented, one-at-a-time, people-based interaction around a very complex need – healthcare.

So, yeah, healthcare is about as different from Walmart’s core culture as you cold possible get. 

Walmart’s failure comes after Haven Healthcare, the joint venture of giants Amazon, Berkshire Hathaway and JP Morgan went belly-up early in 2021.

Haven CEO Atul Gawande MD lacked the intimate, deep knowledge of healthcare infrastructure, reimbursement, regulations and management required to be successful. A brilliant writer, insightful analyst, and highly visible public figure, Gawande didn’t have the management chops. He also didn’t give up his other jobs and had no experience as CEO of a start-up.

Many who think they know healthcare – don’t.

Then there’s commitment. Gawande was committed to Haven – and frankly the three founding companies were as well – like the chicken is committed to breakfast.

If you want to take on something as daunting as reforming healthcare, you’d best be committed to the task like the the pig is committed to breakfast.

Second, reimbursement.

Despite a partnership with giant UnitedHealthcare, Walmart Health was unable to attract enough customers paying enough for care at its 51 centers. This MAY have been due – at least in part – to the venture’s focus on Medicare Advantage members…

This from UHG’s announcement back in 2021:

(the partnership will launch in) 2023 with 15 Walmart Health locations in Florida and Georgia and expand into new geographies over time, ultimately serving hundreds of thousands of Medicare beneficiaries in value-based arrangements through multiple Medicare Advantage [MA] plans. [italics added]

MA has been having a rough time of late which may have factored into a non-produdctive partnership…As the payor, UHG would want WH to agree to low reimbursement rates…as the provider, WH wanted high reimbursement…

Third, providers.

Primary care providers are expensive, rare, and thus have a lot of bargaining power. Oh, and you can’t have a business without them.

Which – to return to the lede, runs directly counter to Walmart’s…everything.

What does this mean for you?

Fixing healthcare requires understanding healthcare.

 

 


Apr
29

Hospital goings on…

Couple things you need to track…

First, hospital mergers and acquisitions soared in the first three months of 2024.  From Fierce Healthcare…

Among the quarter’s 20 deals, four were “mega mergers” in which the smaller party had annual revenues exceeding $1 billion, per the report. This pushed total transacted revenue “near historically high levels” at $12 billion…

Kaufman Hall’s report is here.

Some of the big for-profit chains sold off lower-performing facilities; a few big not-for-profit system mergers were announced.

Unsurprisingly financials drove a lot of these deals; a lot of hospitals are on shaky financial ground while most of the big for-profits are making bank. Some not-for-profits’ numbers are improving although the sector as a whole is still struggling.

Meanwhile, giant for-profit HCA reported a big jump in earnings.

From Reuters:

HCA posted quarterly revenue of $17.34 billion, beating estimates of $16.78 billion and reported an adjusted profit of $5.36 per share for the reported quarter. Analysts on average had expected a profit of $5.01 per share, according to LSEG data.

What does this mean for you?

Facility costs are going up because not-for-profits (in general) are struggling, while for-profits (in general) are jacking up revenues. 


Apr
26

There’s a LOT of good news today

The House finally approved a massive aid bill for Ukraine – and the aid is already flowing – hallelujah.

Several encouraging takeaways…

  • It was bipartisan, with strong support from both parties (who’da thought??)
  • It passed despite strong opposition from the Republican Presidential candidate
  • It includes long-range missiles that Ukraine can use to demolish Russian air defenses, oil infrastructure, shipping, bridges and railroads

Long range ATACMS

Here’s why this is so incredibly important…

Health insurance coverage

is benefiting more Americans than ever, thanks to expansion of the Affordable Care Act. Another major driver is the increase in insurance subsidies for lower-income folks.

This means more moms and dads, kids, and families have access to health care.

The addition of dental care is the cherry on top; new regs allow states to add that coverage.

Work comp

WCRI’s just released in-depth analyses in its CompScope series…this year they’ve added details on COVID’s impact in 17 states.

Work comp rates for employers continue to dropIVANS reported a drop of 0.9% for the first quarter of this year. (Hat tip to R&I for the news)

California is slamming work comp fraudsters, (sub req) with the latest conviction resulting in a 54+ year prison sentence for a scheming fraudster. The Golden State’s been ramping up its prosecution of these dirtbags...here’s hoping these massive penalties discourage others from stealing from employers and taxpayers. Kudos to WorkCompCentral for a comprehensive update on recent convictions.

What does this mean for you?

A safer America comes from a diminished Russia.

More insured Americans = healthier families.

More crooks in jail = hopefully less future fraud.


Apr
23

Dumbest law/regulation of the month – A tie!

Congratulations to Florida and Texas for passing new laws barring local governments from protecting workers from heat-related injuries!

This at a time when global warming is leading to record heat waves with temperatures hitting – and staying at – record highs for days on end.

Last week WorkCompCentral informed us that Florida is about to join Texas in prohibiting local governments from instituting heat protections from workers. This from a state with record high temperatures last summer…

Florida’s move is especially egregious; Florida does not have its own occupational health regulations but relies on OSHA and Federal regulations. But, the Feds continue to drag their feet on national protections for workers exposed to excessive heat…so the new law effectively prohibits ANY protections from heat-related injuries. 

Politicians in Florida and Texas are doing their best to kill more workers. That is NOT hyperbole…and is especially hypocritical because Florida passed legislation protecting student athletes from heat.

credit WaPo

But hey, in the air-conditioned offices in Tallahassee, with the brocade curtains drawn, one doesn’t see the workers outside the windows mowing lawns and doing landscaping.

Colorado, Oregon, and Washington have rules for outdoor workers.

Minnesota and Oregon also have indoor heat standards.

A committee in California’s State Senate passed a bill doing just that two weeks ago; hopefully that bill will be signed into law.

What does this mean for you?

More deaths, more heat injuries, higher premiums, and more devastated families.

Here’s hoping the industry’s “thought leaders” weigh in on this travesty. 


Apr
19

Good news Friday…Springsteen.

Bruce Springsteen and the E Street Band have long been a favorite…last night I got to see them perform – and wow did they perform – at the JMA Dome in Syracuse.

The energy this 74 year old rocker has is amazing…of the 17 musicians on the stage, he was the only one that never took a break. Bruce is going through what a lot of us are – confronting mortality, watching friends pass, grieving and trying to push through….and in his music shares both his pain while treasuring the memories.

Oh, and there’s a shipload of flat out great rock & roll, incredible interactions with the audience (gave his harmonica to a 10 year old who was playing along with him), and Nils Lofgren on guitar is phenomenal – as is Little Stevie..

If you ever get the chance, you gotta see Bruce and the Band…here’s the tour info.

What does this mean for you?

Bring joy to your life.


Apr
12

Good news Friday – protecting workers and an improving economy

Lots of good stuff to start your weekend…

First a California Senate Committee passed a bill to protect workers from heat-related injuries. SB1299 establishes a presumption that:

a heat-related injury that develops within a specified timeframe after working outdoors for an employer in the agriculture industry that fails to comply with heat illness prevention standards, as defined, arose out of and came in the course of employment.

Kudos to the Committee – this type of legislation is sorely needed – and should be promoted enthusiastically by anyone and everyone concerned about protecting workers.

And shame on the California Chamber of Commerce and APCA for their objections. The bill is clearly intended to encourage employers to comply with existing heat-related standards…yet these opponents are quibbling over minor definitional issues when they should be pushing their members hard to do the right thing.

More details on heat injuries here.

Hat tip to Workcompcentral.

Inflation – or not.

Wholesale prices edged up 2/10ths of a percent last month, significantly less than expected.

Reminder – retail price increases are closely related to increasing corporate profits. It is very clear indeed that big food is a major driver of consumer inflation.

Employment

Filings for unemployment benefits were also lower than expected, yet more evidence of a very solid jobs market.

 

 


Apr
10

What’s driving inflation?

There’s increasing evidence that higher corporate profits are driving inflation.

From the Hill:

Adjusted profits after taxes hit a record high of $2.8 trillion, beating the record of $2.7 trillion in the third quarter of 2022. Profits increased 3.9 percent on the quarter, above expectations of around 3.3 percent. [emphasis added]

This news preceded today’s announcement that inflation ticked up 0.4% in March, a number higher than expected. Annualized the rate is 3.5%, higher than wanted but much lower than this time last year.

Consumer goods prices have gone up much more than other goods and services, with prices for packaged foods and drinks noticeably higher.

So…corporate profits AND consumable prices are increasing, with both higher than expected.

The good news is wages are still trending higher than inflation, despite the profiteering of big corporations. 

What does this mean for you?

Wages are up – which means consumers are holding their own, but increases will affect WC premiums and indemnity expenses.

 

 

 


Apr
9

Consolidation among health systems and hospitals continues apace, and with it comes higher costs, more utilization, and longer disability durations.  Get the details from WCRI’s much-watch webinar on the impact of vertical provider integration on prices, medical utilization and outcomes.

It’s on Thursday May 2 at 2 pm eastern.

You can access the written report (free for members) here.

Another major factor that will greatly affect a state’s health, outcomes and costs is Medicaid expansion. A thorough yet simple discussion of implications of one state’s refusal to expand Medicaid is here.

The benefits of Medicaid expansion are broad, deep, and impactful.

Among the findings

  • A 2020 national study found that expansion was associated with a significant 3.6% decrease in all-cause mortality,
  • Two studies found significant declines in maternal mortality
  • expansion is associated with improvements in access to care and outcomes related to substance use disorder (SUD) as well as other mental health care.
  • hospitals in non-metropolitan areas and small hospitals experienced improved profit margins
  • Analyses find effects of expansion on numerous economic outcomes, including state budget savings, revenue gains, and overall economic growth
  • rural hospitals experienced particularly substantial improvements in financial performance following expansion

KFF on Texas’ uninsured population [note Texas is just one of 10 states yet to expand Medicaid]…

(a) significant proportion of adults in the coverage gap are employed unless they are elderly or disabled. The most common jobs among adults in the coverage gap are construction laborer, cashier, cook, waiter, house cleaner, retail salesperson, and janitor. These workers usually do not have access to employer-based health insurance and cannot afford plans on the federal insurance exchange. [emphasis added]

Crossover

Most of the non-expansion states:

  • have major problems with rural hospital cutbacks and closures
  • have significantly worse health outcomes
  • have healthcare access challenges

What does this mean for you?

Pay attention to the real drivers of healthcare outcomes and costs – they have more impact on duration and ultimate costs than anything else.

 


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

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