Insight, analysis & opinion from Joe Paduda


Two COVID things

It’s been a blissful few months as COVIDF has retreated into the background, likely to remain with us forever but hopefully as a nuisance not the million+ killer it was for the last couple of years.

So, two new items.

First, in what can only be described as a huge waste of taxpayer money, a very large and very scientific study found ivermectin does not reduce COVID symptoms. 

Shocking, right?


  • double-blind, randomized, placebo-controlled platform trial
  • 1206 US adults with COVID-19
  • median time to sustained recovery was 11 days in the ivermectin group and 11 days in the placebo group.

Hucksters, charlatans, former US presidents and other of the willfully-ignorant will undoubtedly parse, lie, misstate, ignore, or otherwise continue to claim that a veterinary medicine for treating bacterial infections is actually a cure for a viral infection.

to quote a T-shirt recently spotted…

Lab leak, nefarious plot, or animal-to-human transmission?

Last week the new broke that the US Department of Energy thinks  – albeit with “low confidence” – that COVID leaked out of a Chinese lab.

This is sort of like saying “Tom Brady is going to sign with the Yankees as a pitcher…heard this from a guy I know who was on a plane sitting next to a woman who looked like a reporter and saw her writing that Brady’s heading to spring training in Tampa…”

This is NOT to disparage the scientists at DoE, rather to remedy what seems to be a serious lack of reading ability on the part of too many who can’t seem to grasp – or rather refuse to accept – that things are rarely black-and-white, or as friend and colleague Pier Rousmaniere notes in his signature line;

Doubt is not a pleasant condition, but certainty is absurd. – Voltaire

[Unless, of course, one has completed a rigorous 1200 person RDB – CT study]

Nine Federal intelligence agencies have completed their research on the “where did COVID come from?” question…Two of those concluded a likely lab leak, five said natural causes and two said they don’t know.

Given the really lousy record these state-of-the-art labs have when it come to keeping deadly viruses contained, it is certainly possible it leaked.

Reality is  – it is unlikely we will ever know – for certain.

What does this mean for you?

Read carefully before posting.


It’s WCRI Time!

It’s just a couple weeks before WCRI’s annual meeting…in Phoenix’ warm and sunny clime. Register here – and do it now as this always fills up.

Unlike other events, attendees are mostly senior management leaders and the like; lots of expertise and experience all in one place makes for a very productive couple of days…

I caught up with WCRI’s John Ruser PhD and Andrew Kenneally to get their take on some of the topics…

MCM – Dr Autor – The implementation of the Biden administration’s IRA, infrastructure, CHIPS and other legislation is ramping up; where does Dr Autor see the direct and indirect impacts of this legislation on workforce, employment, and compensation?
JR – Dr Autor is a great speaker, and has won prestigious awards including one of the top prizes in labor economics, the Sherwin Rosen award. He is going to take a longer-run view, discussing the evolution of work.  Dr Autor will be talking about how tech and AI will affect the future of work and the way work is done.  One question to be addressed: “is tech substituting for (replacing) or supplementing workers?”

MCM – The medical inflation topic is top of mind for many…what will Dr Fomenko and Dr Yang be addressing?
They will be building on work they’ve done in the past on the design of fee schedules and WCRI’s own price indices to show how inflation manifests itself and how system features can serve to control medical inflation. The focus will be on medical payments, provider prices and the impact of fee schedules.

MCM – Very happy to see climate change on the agenda; what drove WCRI’s decision to give this topic the stage?
JR – Clearly we are seeing the impacts of climate change in the form of stronger storms, hurricanes and rainfall, these and others are affecting workers comp. This session is a no brainer as the direct impacts are pretty obvious.

MCM – Physical Medicine is has been somewhat of a concern for payers as costs are trending slightly upward along with utilization. What are some of the drivers of this increase?
JR – Drs Wang and Mueller will look across states and at factors that are associated with the extended use of physical medicine beyond guideline “limits”. They will identify some factors that are associated with extended physical medicine; some obvious like severity and others less so – such as whether there are multiple providers of physical medicine services and issues around coordination of those services.

JR -Finally, we are really pleased at the mix of our own research and panel discussions with a diverse group of stakeholders (unions, providers and employers, regulators and insurers), all of whom bring deep expertise to the discussion.


Trigger warning…

I love reading CWCI’s Bulletins – even if they make me want to tear my hair out and scream.

The latest from the brilliant analysts in Oakland is an update on 3 unnecessary-and-wildly expensive-drugs-with-no-purpose-other-than-Hoovering-millions-out-of-employers-and-taxpayers’-pockets… these three drugs account for 2% of anti-inflammatory scripts and almost half of anti-inflammatory drug costs.

I wrote about fenoprofen calcium two years ago…

these meds aren’t wonder drugs that grow hair while curing low back pain and strengthening joints and rejuvenating shoulder cartilage…they are similar to aspirin, ibuprofen, and naproxen.

OK, here’s how the scheme works.

Neither drug [Fenoprofen calcium and Ketoprofen] is on the California workers comp drug fee schedule, so employers and taxpayers have to pay 83% of the “average wholesale price”. AWP is a number made up by the drugs’ manufacturers, and can be anything they want it to be.

So, some smart schemers figured out that they could make a shipload of money by a) jacking up the price of a drug that costs pennies to make, and b) convincing a few docs to prescribe it to workers’ comp patients.

The latest from CWCI shows that things have gotten worse...
  • Profiteers increased fenoprofen calcium’s reimbursement from $192 in 2016 to $1,479 five years later.
  • in four years, ketoprofen went from $107 – $1,073 –   a 1000% increase in four years.
  • another drug – etanercept – went from $1,930 in 2012 to $7,716 in 2021.

So…what are you going to do about this?  Wait, this is the first you’ve heard about it?  Well, THIS IS NOT NEW NEWS.

CWCI first reported this two years ago.

WCRI did the same months ago.

What does this mean for you?

You have a fiduciary duty to stop this.

If you have ignored this to date, you should be embarrassed, ashamed, humiliated and

  1. Get a report from your payer/PBM about your spend on these three drugs over each of the last three  years.
  2. Find out what’s been done – or attempted – to address this.
  3. If you – the payer – haven’t done your part, do not blame anyone else.
  4. Regardless…
    1. Identify the docs prescribing this stuff.
    2. Kick them out of your MPN.
    3. Require prior auth for these meds.
    4. Work with your PBM – it probably has an on-the-shelf plan – but do NOT just dump it on the PBM and tell it to fix the problem.
  5. Put a process in place to make sure you are on top of this stuff long before it hits some blog.

Oh, and the CWCI bulletin identifies a bunch of other drugs that are – at best – questionable.


Wildly off-topic # 14 – the Russian “offense”

Last time we talked tanks

This time we’ll focus on Russia’s winter offensive. If you don’t have time, just skip to the takeaways at the bottom of this post.

credit Institute for the Study of War; I highly recommend ISW’s briefings

Quick take – the offensive isn’t going well. While Russia is making advances, they are measured in meters not miles, and are coming at horrendous cost in dead, injured, and captured Russian troops. The Russians did capture Soledar and have make barely measurable progress around Bakhmut and a couple other places but none of those are – in any way – changing the reality on the ground.

Which is Russia is screwed.

As we discussed in WOT #10, you need troops and equipment to fight a war.

The Russians lost a huge amount of equipment last year – hundreds of tanks, armored fighting vehicles, cannons, trucks, trains – equipment it cannot readily replace, if at all. If you want to attack, as Russia is trying to do in its winter offensive, you really need armored vehicles to penetrate opponents’ lines and break out into less well-defended territory. Dug-in defenses  – usually several lines deep – are very, very hard to defeat unless you can blow a really big hole in them and exploit the opening with fast-moving vehicles.

So, in what is eerily reminiscent of World War One, Putin the Butcher is throwing thousands of untrained men at Ukraine’s front lines. (If you want a taste of that, I highly recommend the book and film “All Quiet on the Western Front“.) Trigger alert – it is really awful and disturbing, and the German general is a bald version of Putin the Butcher.

PtB’s tactics are pretty awful…

  • untrained ex-prisoners and recruits from Russia’s far east are forced to attack Ukrainians positions.
  • they are slaughtered – because they have no idea what they are doing, have minimal weapons and ammunition, and are going up against entrenched, battle-hardened and well-supplied Ukrainians, but
  • in so doing, the Ukrainians reveal their positions, which are then bombarded with rockets and artillery and attacked by much more capable Russian troops.

That is NOT to say Russia’s “real” soldiers are invulnerable. Reports from the front indicate Putin’s “elite” units lost dozens of armored vehicles and hundreds of soldiers over the last few days…equipment and men which Russia cannot afford to lose.

Putin the Butcher has a seemingly inexhaustible supply of poor young men but they are a very poor substitute for modern military vehicles and artillery.


While others much more knowledgeable than I see this war grinding on for years, I’m hard pressed to agree.


  • cannot replace most lost equipment,
  • is losing more and more of its irreplaceable, experienced and well-trained troops,
  • has not demonstrated its generals have any idea what to do,
  • is facing an increasingly better-equipped and far more motivated enemy, and
  • is losing the information and intel dimensions.

Like we saw late last spring, all is well until it is not, and then it goes really, really badly for Putin the Butcher.

all previous posts on this topic are here.


Budget facts

credit Prof Galloway

The budget hawks in DC are threatening to prevent us from borrowing money to pay our bills..if we don’t agree to some yet-to-be-defined and pretty massive spending cuts.

The total Federal budget for FY 2023 is $6.2 trillion.

About $3.7 billion is pretty much off limits. So, you may want to ask yourself, where are the cuts going to come from?

$1.5 trillion of our spending is for Medicare and Medicaid, and there are hundreds of billions more for the VA and other health programs. And the GOP recently said thy’d leave Medicare alone, and more states are expanding Medicaid (North Carolina appears to be next), so it’s hard to see where cuts would be deep enough to move the needle.

Defense cuts? Defense is $900 billion…Given China’s saber rattling, Russia’s belligerence, Iran’s new air force and movies towards nuclear arms, and the North Korean’s continued aggressive posture, that’s highly unlikely

Social Security? that’s $1.3 trillion, and the GOP has recently said they won’t cut it .(after saying they’d like to figure out how to privatize it…)

What does this mean for you?

Threatening cuts is really easy when you don’t tell anyone what you’re going to cut…because one person’s waste is another person’s income. 




Far too many work comp industry CEOs are dinosaurs.

Their refusal to adapt to today’s labor market will ensure they fail their investors/policyholders.

Two things triggered this post.

  1. an extensive conversation – or rather series of conversations – with the CEO of a very large payer whose workers are no longer required to work in office. When I asked about work from home, this eminently reasonable individual was mildly surprised, saying something like “of course we support WFH…there’s no reason for most of our folks to go to an office…they did just fine during COVID and like WFH so why change?” This person noted real estate and related costs would be reduced as would other expenses associated with an office-based work environment.
  2. A conversation with the estimable Bill Zachry, a person I am fortunate indeed to consider a good friend and mentor. Bill noted the challenges payers are experiencing finding and keeping adjusters.

It seems wildly obvious that WFH will help payers keep and find staff while lowering overall costs, significantly reducing ULAE (unallocated loss adjustment expense). Every payer C-suite has been on a cost-cutting rampage for several years in an effort to improve margins and adapt to declining frequency and shrinking rates.

In what can only be described as a logical fallacy, many payers are now “requiring” staff return to the office for more than an occasional day.

Good luck with that.

Most people do NOT have to work in an office, yet many CEOs refuse to accept that they – the Tyrannosaur Rexes of our time – cannot bend lesser beings to their will.

Sure, many workers are already back in the office, and some few prefer it. But most would much prefer not:

  • having to deal with child care emergencies by taking PTO;
  • commuting;
  • dealing with office politics;
  • wasting time at birthday parties, Monday morning “how was your weekend” chats, water cooler analyses of whatever sporting event, updates on officemates’ kids amazing (insert school/sports/music/theater/other), or the millions of other time wasters engrained in office-based work.

Shockingly, workers would much prefer to spend the 2 hours or so a day commuting with their family, or doing work, or exercising, or gardening or whatever.

And they’d rather save big bucks by ditching a car and its attendant insurance, license, tax, toll and maintenance costs; giving up the monthly commuting pass; not paying to park; having lunch at home and on and on.

To be sure there are arguments, some of them even reasonable, in favor of in-office work…yet the fact that most every organization survived COVID WFH is a rather compelling proof statement that WFH works.

What does this mean for you?

Mesozoic-era management will fail as will its proponents and the organizations they lead.


Workers’ comp > all other healthcare payers. Period.

and here’s why.

Work comp payers actually care about the patients recovery, return to functionality, ability, and productivity. Work comp HAS to…screwing up recovery = huge financial penalties in the form of claims that last forever, really costly settlements, and migraine-level headaches for all involved.

Whereas in group/individual health, Medicare and Medicaid (mostly), functionality is – at best, and then only rarely – an afterthought.

side note – if you think about it, how dumb is it that 99% of healthcare payers don’t really care whether the $4.2 trillion they spend on healthcare actually improves lives, helps patients stay active, supports functionality, and helps us live the lives we want to live?

answer – dumb as a box of rocks

WCRI’s latest in a never-ending stream of excellent research brought me back to this...researchers examined patient-reported functional outcomes after low-back pain, a far-too-common and sometimes really problematic diagnosis. [report is free to WCRI members and a nominal cost to non-members].

The research compared WC outcomes to those of other payers…and:

  • included patients covered by all types of payers,
  • totaled some 2.4 million patients (!),
  • covered almost 1.3 million PT/OT episodes of care, and
  • used patient-reported functional status specific to the low back pain issue (as captured by FOTO).

The researchers obviously put a LOT of thought into selecting the measure…they describe the process and rationale in detail in the report (ppg. 15 – 19).

credit WCRI

While it is important indeed to consider that workers’ comp patients’ reported functional improvements were not as high as some other payers – and we  need to understand why – that’s secondary to the fact that work comp’s primary focus – return to functionality – is way different from other payers’.

With extremely rare exceptions, no other payers focus on functionality, and almost none do across all patients with all conditions.

Kudos to Sebastian Negrusa, Vennela Thumula, Randall Lea, and Te-Chun Liu for their excellent work.

What does this mean for you?

Work comp gets beat up a lot…this is why – in one extremely important way -workers’ comp is superior to all other payers. 


After 10 days away from the keyboard – family vacation in Mexico and gravel bike race in California – it’s back at it.

shockingly the world kept turning while I was unplugged…

The estimable Charles Gaba has just updated his analysis of US healthcare coverage by payer. Charles’ work is the best I’ve encountered to date…he includes everything from Medicare and Medicaid to Exchange programs to Healthcare Sharing ministries (between 865,000 and 1.5 million, Indian Health Services (2.6 million)…

Here’s the all-in-one view…

Despite all  those gazillions of people with insurance, many hospitals are having real/awful/terrible financial problems. Hospitals’ average margin – according to Kaufman Hall – was -3.4% for the first 11 months of 2022.

That said, things steadily improved during the year…

In the tiny world that is workers’ comp, NCCI released its review of medical inflation…among non-hospital providers (docs, PTs, etc).

Thanks to the good work of Raji Chadarevian and David Colon, we know medical inflation among these providers was…minimal.

As in 1.5% per year over the last decade.

Final note. Facility costs are increasing.

Most payers are doing a really crappy job addressing this; their bill review partners/operations are woefully ill-equipped to ensure your dollars aren’t being Hoovered up by healthcare systems and hospitals.

And yes “most payers”includes you.

To date those increases have been matched by a $2 billion decline in drug spending – which, by the way, has also reduced claim durations (way lower opioid usage = way more claim resolutions).

Physician costs are pretty much flat, drug costs are way down, and facility costs are headed up…net is you need to PLEASE stop catastrophizing about “severity increases” and other nonsense.

If I read one more survey or interview or discussion of workers’ comp execs afraid of “rate inadequacy” or medical inflation or some other incredibly uninformed and wrong-headed and ignorant fear mongering I’m going to call them out publicly.

Just. Stop.



LWCC’s got it going on

I was fortunate indeed to attend Louisiana Workers’ Compensation Corporation’s annual provider meeting last week. Well attended, learned a lot, really enjoyed the people and the weather was really nice too.

I was blown away by their office building.

It was gorgeous…open, airy, beautifully appointed, welcoming, spacious, high ceilings and a terrific learning center and gym…it can only be wonderful to work in and it was a delight to experience.

But what really impresses me about LWCC is their people and culture – open and constantly learning, humble and very focused on doing the right thing. Unlike many other workers comp carriers, LWCC is about as far from arrogantly self-satisfied as it could be. I’ve seen way too many payers suffer from the “if it wasn’t invented here it didn’t need to be invented” syndrome, secure in the incontrovertible truth that they alone are the BEST.

They of course won’t listen or read this…why waste the time when you’re entirely sure you can’t learn anything from anyone? Especially not a single state carrier in a not-big state solely focused on a single line…

They might learn…if their customers take them down a notch or several, challenge them to compare their processes and outcomes using objective criteria, call them out on their arrogance.

It is clear that senior management really cares about LWCC’s people and are totally committed to doing the right thing. They listen hard and carefully, and respond to what they hear. And it shows; the passion and commitment to doing the right thing by every injured worker and every policyholder was front-and-center, evident in every LWCC person there.

They invest in marketing – which is really, really good. A cogent, really well-designed branding strategy designed to link LWCC to its home state, fresh and engaging graphics, a commitment to telling their stories, a leader who really understands marketing – which is NOT proposal writing, powerpoint editing, or letter writing. It is branding, content, design, strategy, pricing, research, community relations and more.

I don’t know of any other workers’ comp entity that does it as well.

What does this mean for you?

Most of the biggest payers in workers comp can learn a LOT from LWCC. 



CMS just reported US healthcare spending topped $4.3 trillion in 2021…almost $13,000 per person.

Meanwhile work comp medical spend for 2021 was likely around $32.5 billion…or 0.74% of US healthcare spend.

Government accounts for about 2/3 of total spend, among private employers Amazon has more health plan participants than any other company…

chart courtesy Mark Farrah and Associates

Old friends and colleagues Adam Fowler and Kevin Tribout’s latest edition of the Policy Guys podcast is up here. Honored to be part of the pod, especially with such distinguished hosts!

Off to Baton Rouge to get together with my friends at LWCC – looking forward to great food and better people.



Joe Paduda is the principal of Health Strategy Associates



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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