Insight, analysis & opinion from Joe Paduda


We are out of time.

The time to shut the country down is now. The infection rate just increased 5-fold in 4 days; if that continues, by Wednesday – 4 days from now – there will be 125,000 confirmed cases.

A week from tomorrow there will be 625,000.

Four days later 3 million of us will be infected.

By mid-April, 20 million will have tested positive for coronavirus, and hundreds of thousands will be dead.

Think that’s nuts?

If anything, the actual infection rate is higher than reported – because we still don’t have enough testing capacity.

We do not have the medical facilities, staff, or supplies to handle several million COVID-19 cases simultaneously.  Our government has failed catastrophically, leaving every medical provider from the VA to major hospitals to nursing homes desperately short of everything.

No cure, medication, or vaccine exists – and none will be here until this time next year at the earliest, there’s been lots of media from irresponsible blowhards.

The latest – chloroquine – has been touted as a “cure” despite a) extremely thin evidence that it is effective in humans; b) it can be fatal; and c: according to National Institute for Allergy and Infectious Diseases Director Anthony Fauci MD, None of the evidence has been collected through a controlled clinical trial, “so you really can’t make any definitive statement about it.”

This guy is NOT a medical doctor, he is NOT an “adviser” to Stanford University, the “research” was self-published and does not meet ANY standards for credibility.

All this is why we have to flatten the curve. If not, tens of millions more will be infected, the death rate will rapidly increase, and over a million will die.

If you detect more than a bit of anger here, you’re right. Two family members are nurses, both desperately struggling to prepare for the coming tsunami of cases. One is quarantined because there isn’t enough protective equipment, the other exhausted from days of overtime. And both know it will get a whole lot worse before it gets better – and that is terrifying.

The government won’t take responsibility, so we have to. Stop socializing. Go out only when you absolutely have to – and then act like everyone else has Ebola.

Wash your hands. Check on your neighbors, shop for those who are high-risk, call your family members and friends, and don’t panic.

It’s not all bad.  The response from regular people looking to do whatever they can to help out has been nothing short of wonderful. A local business here is using 3-D printing to manufacture face shields because there aren’t enough in emergency stocks (the owners are good friends).

And keep working at your regular job. It’s hard to focus…it’s also essential.



Why COVID-19 is different

An extremely experienced, knowledgeable, and successful executive who happens to be an attorney sent this yesterday – and with their permission, I’m sharing it with you.
It is particularly timely coming on the heels of yesterday’s webinar on the subject – and another piece in WorkCompCentral on applicant attorneys’ views.
From the executive:
I read this morning’s post with interest——if  WC insurers (erroneously) believe that they could arbitrarily deny those WC claims presented by workers who are (or will soon be) infected by COVID19 —those insurers will soon discover that the current pandemic situation and the related economic impact it is already bringing to our markets is REAL—and something that should be addressed with the greatest degree of care.
Here’s why:  If insurers haven’t yet understood….this pandemic is different.  This will change…everything.  And that includes the customary defenses and general traditional methodologies that WC insurers have used to deny or delay WC claims. 
The typical “within the course and scope of work” argument works in 95% of the claim scenarios where there may be a legitimate question of fact——it is not likely to work under situations created by a pandemic.  Service workers (such as those you listed in your post) have very little if any choice but to present themselves for work.
No show? No job.
So, the “social compact” between the employer and the employee changes—fundamentally.  If the worker must be at work — I’m thinking here of healthcare workers, (doctors, nurses, medical technologists, orderlies, nursing assistants, etc.) and they come in contact with an infected patient and become infected themselves——that contraction is in fact within the course and scope.
This pandemic is going to give us a new legal paradigm——the threshold for contact with an airborne pathogen is presenting a new qualifier.  The industry’s leaders are working from a very old, very tired circa 1980s-1990s mindset.  All the old arguments are completely useless.
There is something else for the insurers to think about—and this is what you were striking at in your blog:
If an insurer decides to “fight” the compensability issue——given the potential size of a class of workers that will be adversely affected—it may be a decision that will eventually lead to financial ruin for that insurer.
Yeah…this isn’t going to cut it any more.
Denial of the claims will surely lead to litigation.  With such a peculiarly large class of individuals involved (safe guess, in the hundreds of thousands before this is all over).  Inviting a wave of litigation will cost the insurer truckloads of defense costs (ALAE).  Those costs will lead to larger than necessary loss costs and settlements.  When the insurer eventually wakes up and sees the magnitude of the issue those attendant cost drivers will have already significantly adversely affected both the insurer’s loss ratios and reserves.
Those escalated costs will also negatively impact the loss experience of the policyholders—the employers.
Given enough backlash, policyholders will vote with their feet——rapidly.  The insurer will lose significant market share and revenue; lower revenue means less investment income.  Less investment income coupled with dramatically declining claim management performance and escalating loss payments……well… get the picture.
This is what is now known as “social inflation.”  The topic has been rising and gathering more attention in the industry—usually in other lines of business (more on that some other time).  We didn’t need a pandemic to figure out that there are certain types of losses—certain liability scenarios — that give rise to social backlash.  Other examples exist wherever we see egregious behavior by corporate ostriches:
  • the class action settlements in Monsanto’s Round-up claims——
  • Johnson & Johnson’s brazen defenses in the emerging talc powder class action claims…..coming on the tail of a cluster of very high punitive damage awards from juries in the initial individual claims.
What does this mean for you?
Hard charging defense—or denial of claims in WC just ain’t gonna cut it with this pandemic.  The world of risk has changed.  And COVID19 is here to prove just how much that change will impact the industry….and just about everything else.


Hey workers’ comp – stop the legal BS and do your part.

Yesterday’s WorkCompCentral featured an interview with an attorney discussing whether or not COVID-19 is a covered condition under North Carolina’s work comp regs.

Couldn’t figure out why the piece bothered me so much until I woke up this morning, where it had crystallized in my sleep-befogged brain.

The article was so BC (Before COVID-19). The world has fundamentally, dramatically, and permanently changed, and now is not the time to engage in academic and frankly dangerous discussion over what constitutes “occupational exposure to Novel Coronavirus.”

Because while this assuredly endless debate goes on, the US infection rate is doubling every 2.5 days, (it doubled overnight here in New York state) and workers will:

  • not get tested because they can’t afford it;
  • won’t stay home because they can’t afford to;
  • will therefore expose others to the virus, infecting more of us;
  • and won’t get treated, infecting even more people.

This is not the time to debate arcane points of law and precedent. This is the time for insurers, regulators, and employers to Do The Right Thing – which means treating COVID-19 infections as covered by workers’ comp for healthcare workers, first responders, hospitality staff, airline employees, and others who may have contracted the disease thru contact on the job.

Some insurers are saying they will investigate each case to determine whether a particular workers’ coronavirus/COVID-19 will be covered. Yeah, that was the right policy – before COVID-19 came along and may kill millions of Americans.

Today, it’s just nuts. Not only is it impossible, it’s irresponsible. The confirmed infection rate is growing logarithmically; unless these insurers hire a gazillion investigators they won’t finish these “investigations” for decades.  Meanwhile, those undiagnosed, untreated workers will infect others, and more people will die.

from Statista

Some states – California, Michigan, Pennsylvania among them – have moved quickly to address the issue albeit not always comprehensively. Other states must clearly and immediately ensure COVID-19 is a covered condition for broad categories of workers and jobs

Yes, following the law is important. Precedent is important. Principled debates are important. Advocating for your client is important.

Or rather, was important. 

Now, what is overwhelmingly more important is stopping the pandemic – and workers’ comp must do its part.

What does this mean for you?

Do NOT quibble, cite arcane legal theories or case law, hide behind legal opinions, or waste time discussing the legal niceties and complexities.

Just accept the claim and get the patient treated. You can afford it; insurers are flush with cash, have billions in surplus/excess reserves, and the vast majority of infected workers will recover at home at minimal cost.

And when this is over, you will know you did the right thing.


COVID-19 update – what’s the real death rate?

Quick take – we don’t know.

Before you read this – don’t freak.  Yes this is worse – much worse – than I thought, but panicking and reacting without thinking is NOT helpful.

First, the facts.

That’s because the number of cases is expanding rapidly but people don’t die immediately.  This from the Lancet, based on data from China (as with any early assessment the numbers are rough)

patients who die on any given day were infected much earlier, and thus the denominator of the mortality rate should be the total number of patients infected at the same time as those who died. [emphasis added]

The blue line is the more accurate figure and indicates a death rate of 5.7%.


  • Because of the lack of testing (especially early on in China and for far too long in the US), there are a lot of people with mild symptoms or no symptoms that are undiagnosed. Therefore, the denominator (the number on the bottom) is too low. This means the estimated death rate quoted above is likely too high.
  • Anecdotally, I’ve heard from healthcare workers that some patients dying of respiratory failure were not tested for coronavirus – thus these deaths aren’t counted as related to COVID-19.  Anecdote is NOT data…that said due to the lack of tests, I’m betting the actual number of deaths is higher than reported.

Okay, pretty scary stuff.

What’s scarier is doing stupid stuff – and there is nothing stupider than hoarding toilet paper.

Coronavirus will NOT destroy the supply chain – it will lead to disruptions and delays, but anytime people hoard stuff, that means they won’t need to buy it for a long time. So, while shelves may be empty today, when the supply chain catches up – which it will – there will be lots of pasta, rice, canned food, and yes, TP on those shelves.

What does this mean for you?

Let’s take a lesson from our friends in Italy; be kind and thoughtful, smile at everyone, say hello, and remember we are all in this together.

Oh, and do a lot of takeout and tip generously!


Covid-19 and workers’ comp

We are in the opening inning of the Covid-19 pandemic, so forecasting where this will end up is a fool’s game.

That said, we know and can confidently predict a couple things well worth considering.

Small business

A lot of small businesses will not survive. Retail, hospitality, restaurants, entertainment, sports-related venues and service providers, events centers are all empty or close to it. The many companies that support them, operate them, clean them, staff them, deliver services to them have little cash coming in. Unless they have major cash cushions or lots of untapped credit, these companies are in trouble.

Washington National Airport – think of baggage handlers, shops, cleaners, restaurants, drivers…

Current workers’ comp patients

Care delays – I’m hearing from a broad spectrum of healthcare providers that patients are not going to scheduled appointments or using related services. That’s not surprising; with guidance from many states to avoid non-essential travel and contact, people with medical issues are loathe to risk exposure to the coronavirus.

Over the near term, that bodes ill for the providers and the companies/services doing the scheduling and coordinating care.

Over the near term…

When things return to normal – which they will – there’s going to be a backlog of patients demanding appointments and medical care and transportation and imaging and therapy and surgery. So, the networks and providers will find themselves slammed with appointment requests.

The service companies’ challenge is to survive this big dip in demand – and the cash flow crunch that will inevitably follow – so they are ready when their services are needed. 

Increased disability duration

Those out of work due to an injury or illness may well be out of work longer than one might expect – especially if they are in energy production, airlines, services, retail, or hospitality. Their jobs may not be available until things get normal again, so we can expect disability duration, and associated indemnity costs, to increase over the near term.

More worrying is the current debt crisis – way too many families and businesses have way too much debt. They’ve been surviving on revolving credit that has been historically cheap. Mortgage interest levels are historically low, other consumer credit rates are as well, and lenders have thrown money at companies that never should have gotten thru their front doors.

(I wrote on this in detail back in October, here’s a quote:

The Feds are backing $7 trillion in mortgages, way more than they (us) did before the debt crisis of 2008. With taxpayers holding the bag, mortgage lenders have no reason to not give mortgages to people who can’t afford them to buy over-priced houses. The Feds then package those loans and sell them off to other investors.

In fact, fully half of new FHA mortgages consume more than half of the borrower’s monthly income.

Then there’s regular consumer debt; this from a post back in August of last year:

Consumer debt is really high right now, at 19% of income. When people lose their jobs, they default on their loans and credit card debt, cut back on purchases, and that will further harm retail, construction, durable goods (think washing machines and cars). It can take a long time for people to dig out of these holes, and when they finally do, they are very wary of spending – and absolutely hate debt.

As credit dries up – which will happen – folks with mortgages they can no longer afford and crushing credit card bills are going to do everything they can to keep the cash flowing.

That will likely translate into increased claim duration.

The good news is work comp insurers can afford this.  Insurers are flush with cash, have huge reserves, likely have benefited from the general increase in bond prices, and historically low combined ratios (claims plus admin expense divided by premiums)

What does this mean for you?

It is more important than ever to be clear-eyed and observe what’s going on outside workers’ comp. Because comp doesn’t affect the real world – the real world drives comp.


Covid-19 update and fact check

This is way worse than we thought even a week ago. The death rate remains much higher than the flu, while we continue to get confusing and contradictory messages from the White House.


  • In the US, the number of diagnoses has tripled over three days.
  • The death rate is just shy of 2 percent – about 20 times greater than the regular flu.
  • Italy remains the worst-affected country, with almost 25,000 confirmed cases and 1800 deaths – a death rate of 7.2 percent.
  • Contrary to what you may have heard, Italy’s population is NOT the oldest in Europe – Germany’s people are slightly older – and many other countries are almost as old as Italy.

What will protect us?

Not this…

  • face masks.  those regular face masks are useless. Unless the facemask is specifically designed to eliminate most airborne moisture – and you have been trained specifically in how to fit the mask – it won’t protect you.
  • Unless you are already ill – in which case those regular masks help limit others’ exposure.
  • A vaccine. There will NOT BE A VACCINE for at least a year.


Wash your hands. Use alcohol-infused wipes.

Stay home.

Avoid any close contact with anyone you do not KNOW.

Sorry, grandma…I didn’t mean to kill you.  For anyone younger than 30  or older than 60 reading this – forgive me for generalizing, but please stop doing stupid stuff. Going to St Patrick’s Day events, senior dance parties, concerts, beach parties, and bars won’t hurt you much (unless you are diabetic, asthmatic, have pulmonary issues, are obese, or have an immune deficiency (which you may find out the hard way) – but it will kill others who get Covid-19 from you.

Finally, what’s with this obsession with toilet paper? 

If this is the beginning of the zombie apocalypse – which it most definitely is not – I’m thinking we should be ensuring there’s enough nutrition to go into our bodies – if there isn’t, we will not have to worry about taking care of what exits our bodies.

Okay, after ten days of nothing but Covid-19 blog posts, we’re going back to our regularly-scheduled focus on healthcare, healthcare policy, and workers’ comp stuff.



Covid-19 update

Here’s where things sit today.

What we know:

  • Italy is getting hammered, especially the northern regions. The death rate is over 7%, healthcare facilities are overwhelmed, and there aren’t enough ventilators and oxygen to go around.
  • The number of reported cases in the US hasn’t increased much overnight – but that is likely due to complete failure by the government to get testing started quickly, and to develop an accurate test to begin with. And, yes, even now there aren’t enough test kitsthank goodness the Chinese are going to send us a half-million.
  • It looks like test kit availability will ramp up in the coming days – but we are weeks behind when actually needed them. Without testing, officials have no idea what’s actually happening, can’t allocate resources, make intelligent decisions about closures and travel bans.
  • Our healthcare “system” is uniquely problematic; there are north of 18 million who don’t have insurance, and among those who do, folks with high deductible plans will have to pay for treatment and many don’t have adequate funds to do so. The result – the disease will spread in part because victims can’t afford testing or treatment.
  • Social isolation and basic handwashing are the cure for the pandemic. 
  • My beloved Syracuse rowing teams won’t be racing this year; my heart goes out to the men and women who have trained like the champions they are for 8 months only to be sent home.  Same goes for every other athlete in every other sport at every other institution.

Please – be thoughtful, don’t travel or mix in with large groups, and don’t panic.

And, you now have time for an “at home date” with your significant other, hang with the kids, catch up on those home chores, read those books stacking up on your night stand, clean the windows, finish your taxes, and be forever grateful for important stuff.

Finally, I encourage you to read this – and thanks to reader Paul Meyer for the tip.


An Abundance of Caution

That – along with social distancing – is the phrase that will mark 2020.

So here’s where we are – typed as I wait to board a plane home.

This is from Johns Hopkins University; best site I’ve seen for current infection rates and locations.

What we know about Covid-19:

  • It is most dangerous for the elderly and those with underlying health conditions such as COPD, asthma, and other chronic conditions.
  • It is MUCH less dangerous for the rest of us.
  • The overall fatality rate appears to be between 1% and 2% – but may well be lower as we do NOT know how many of us are walking around with the disease and no symptoms
  • Most of the deaths in the US occurred in a nursing home in Washington state.
  • The epidemic appears to have peaked in parts of China, with fewer and fewer new cases appearing
  • Italy is hardest hit; the death rate appears to be about 8% – again that may be distorted due to inadequate testing.

What works

Social distancing – defined as staying a few feet away from others wherever and whenever possible.

Washing hands, covering coughs and sneezes, using sanitizers containing alcohol.

What we have to do

Be realistic. There’s a ton of happy talk out there about how this isn’t that bad, it’s a made-up crisis, and somehow all will be fine and it will disappear in April and a vaccine will be here shortly and .

That’s crap. A vaccine won’t be here for at least a year, hot and humid Singapore has a persistent outbreak, and Covid-19 is much deadlier than the flu.

But, Chill. This isn’t Ebola, SARs, or MERs. Yes it may be 10+ times worse than the flu, but it isn’t the black plague.

Tip service workers. Baristas, Lyft drivers, Uber Eats and Instacart workers, bartenders, maids are getting crushed financially. Help them out.

Be kind and thoughtful and nice.  We will get thru this, and we’ll be wiser for it.




Coronavirus/Covid-19 update

WCRI’s annual meeting was well attended…timing is everything. Many other events have been cancelled or postponed, especially those on the west coast – not to mention Italy, Iran, and Asia.

Here’s what we know about Covid-19 (the disease caused by the coronavirus) so far.

Those are the facts – here’s stuff that may be true, or is uncertain as of now.

  • the death rate for confirmed cases appears to be between 2% (apparent rate in China) and 1% (researchers speculating). Note the italics; it is possible, if not likely, that there are many more unconfirmed cases or untested patients that are not dying, thus the death rate may be significantly lower. Also, note that the death rate derived from the number above is significantly higher; that may well be due to lack of testing that would have identified many patients early on who did not die.
  • if these figures hold up, Covid-19 will be much deadlier than most other flu varieties which have a mortality rate of 0.1% – again much higher in vulnerable populations
  • the growth in the number of confirmed cases varies greatly by country – in general, it is doubling every week or so.

What does this mean for you?

Don’t over-react.  This isn’t Ebola or the Black Death – and may be significantly less deadly than the Spanish Flu of a century ago.

Travel isn’t a no-no.  I’m headed to Florida today  – so it’s not just happy talk from your loyal reporter.  And the WHO agrees.

What IS stupid/irresponsible/selfish is engaging with other people or being in public spaces if you feel ill.  A jackass did just that last week – he happens to work at Dartmouth Hitchcock, where our eldest daughter is also employed. Needless to say, he’s on the poop list.

Mostly, chill. 


WCRI Day two quick takes

Your faithful reporter braincramped and left his laptop charger at home, so most of the session coverage will come next week after I translate my scribbling to pixels.

for now, posting via smartphone

Friday’s quick takes

– Inpatient facility costs average about 17% of total medical costs

– the average increase in inpatient payments was 7.2%; WI, VA, and IA’s increases were significantly greater

– the percentage of claims that had inpatient costs declined from 2012 to 2017, driven mostly by a reduction in surgical cases

– great talk on reoperation and readmission rates for lumbar surgery patients from Rebecca Yang PhD; the total 30 day readmit/reop rate is about 18%; Strikes me as very high…oh and you are paying for the re-dos.

more to come Monday.



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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