Insight, analysis & opinion from Joe Paduda


19 years ago

I wrote my first post on opioids and workers’ comp. Almost two decades later, the post – which was really an excerpt from a Workers’ Comp Insider blog post – is terrifyingly prescient.

Interesting item from Workers Comp Insider today:
There is an interesting convergence of issues concerning the pain killer, Oxycontin. Originally developed to combat cancer pain, Oxycontin has been aggressively marketed over the past three years by its manufacturer Purdue, to the point where the drug is now the pain-killer of preference for work related injuries. This drug is twice as powerful as morphine and, while not technically addicting, it can create withdrawal symptoms when a person stops taking it. According to a study by NCCI, Oxycontin is prescribed for pain in 69% of permanent partial disability cases. This same study also points out that 49% of these prescriptions go to people with back injuries. When you combine that with the next interesting piece of data – Oxycontin is almost always dispensed in 50 day supplies (100 tablets) — you have a potentially volatile mix.

Kudos to Tom Lynch and Julie Ferguson for their early warning.

Dr Steve Feinberg sent me a note re the CDC’s just-released update to opioid guidelines; there’s a lot to unpack here. A couple of key takeaways.

  • the guidelines were just that – guidelines. In far too many instances they were used to define hard limits, which was wildly inappropriate and completely inconsistent with CDC’s guidance.
  • this from Christopher Jones, acting head of the CDC’s National Center for Injury Prevention and Control and a co-author of the updated guidelines:
    • “The guideline recommendations are voluntary and meant to guide shared decision-making between a clinician and patient…It’s not meant to be implemented as absolute limits of policy or practice by clinicians, health systems, insurance companies, governmental entities.”

What does this mean for you?

Pay attention to early warning signs and don’t over-react.


Republicans planning to force Medicare cuts

House Republicans are planning to impose massive cuts to Medicare, raise Medicare’s eligibility age, and withhold payments to early retirees and retirees earning more than a certain limit.

News sources indicate the GOP will use the upcoming debt limit to try and force Medicare cuts, a reprise of earlier efforts supported by 175 House Republicans to slash Medicare spending. The effort is also gaining traction among Senate Republicans, with Senator Lindsey Graham planning to use the Republicans’ leverage in Congress to cut Social Security and Medicare.

Sen. Rick Scott’s 11 point plan goes a lot further; it would end Social Security and Medicare if Congress doesn’t take specific action to renew those programs every few years (see Scott responding to Fox News question at 1:09 of the video here.)

You may well recall that Scott was sued for Medicare fraud back when he ran Columbia/HCA. Columbia/HCA was ordered to pay the Feds $1.7 billion in fines and penalties.

What does this mean for you?

If you and/or your parents are on Medicare, this means a lot. 



Employee and customer trust = loyalty = success

with “success” defined as;

  • more revenue,
  • sticky customer relationships, and
  • more new business driven in large part by referrals from happy customers.

So, how do you measure “trust”?

Well,  you can use lengthy surveys, have long conversations, or track measures such as additional revenue, referrals, and added services.

All of which don’t tell you much about loyalty and are vulnerable to interpretation and confirmation bias.

Or you can take an objective, reproducible approach that can help you determine what really matters to customers, where you’re falling short and what you need to do going forward.

Why do this?

According to an analysis by the Economist, lost trust has financial consequences. Volkswagen, Wells Fargo, and six other corporations lost 30% of their value when they lost trust, at least in the short term.

From Harvard Business Review:

customers who trust a brand are 88% more likely to buy again, and 79% of employees who trust their employer are more motivated to work and less likely to leave…

Customers who give a brand high trust scores are three times more likely to stick with it through a mistake. Eighty-eight percent say they’re more likely to buy from that brand again, and 62% will buy almost exclusively from the brand.

The HBR piece outlines a pretty simple yet powerful way to assess trust and loyalty – which is built on a foundation of trust – and to identify specific factors that will affect customer and employee trust and loyalty.

Briefly, there are four components, each scored on a 7 point scale.

  • Humanity: The company/brand demonstrates empathy and kindness toward me and treats everyone fairly.
  • Transparency: The company/brand openly shares information, motives, and choices in straightforward and plain language.
  • Capability: The company/brand creates quality products, services, and/or experiences.
  • Reliability: The company/brand consistently and dependably delivers on its promises.

Different customers may give your organization the same net promoter score, but for different reasons. A brief survey can unpack key drivers and enable you to focus on specific areas that will improve employee and customer trust.

What does this mean for you?

Nothing is more important to business success than employee and customer trust.

The survey tool is here. Use it.


Complacency and arrogance – part 2

Last week’s post on Complacency and arrogance struck a chord with quite a few readers; some commented on on the post and/or LinkedIn while more chose instead to email me directly.

One question was raised by several of you; how does one guard against complacency and arrogance?

a few thoughts…

  1. survey your staff
    there’s an excellent piece in this morning’s Harvard Business Review on employee surveys. Key takeaways include:

    1. tell your staff you need and want their feedback/input/recommendations
    2. confirm that by a) let your staff know you value their input and appreciate their willingness to be honest; b) letting all know what you heard and what you plan to do about it; and c) show some self-awareness by letting them know you recognize one or more of your habits/tendencies that may be a challenge for them and want their perspective on how you can better work with them
    3. change what you do and how you do it based on staff feedback
  2. survey your customers
    1. ask what you can do better
    2. identify one thing they’d like you to do differently
    3. ask how you can make their interactions with your company easier/faster/more useful
  3. be self aware
    1. seek to better understand why you react/respond the way you do to criticism or disagreement. Are you defensive, aggressive, placid, dismissive, apologetic? Why? is it because you aren’t as self-confident as you’d like to be? Perhaps a bit over-confident and egotistic?
      The way you react speaks volumes about you – and will determine if your outreach is a success or another nail in your coffin.
  4. Don’t talk – listen.
    No one cares about you, your company, your story, your successes – and the more you blather on, the less they care.
    Until you’ve convinced the audience you understand their need/wants/problems/fears and can help solve them. Ask questions, and follow-up questions, and more questions. Listen hard. Repeat what they’ve told you “If I heard you correctly, you said XXX is limiting your ability to do YYY…Did I get this right? Ok…what have you tried to do to address that? What’s worked, what hasn’t, and why?
    for more on this – here’s a post from 11 (gulp) years ago…

OR, hey, just ignore doubters and staff and customers…

What does this mean for you?

If that little inside voice is bugging you, you’d best listen…and listen. hard. 


Complacency and arrogance

Reading your own press clippings.

Belittling competitors.

Overweening self-confidence.

All are all too common when companies are succeeding, growing and taking marketshare. Everything is going well and senior leadership is blissfully confident that it always will. Any hint of a shadow on the horizon is rapidly dismissed as insignificant, unimportant, and nothing to be concerned about. After all, everything we do is well thought-out, smart, and insightful, if not outright brilliant.

Internal dissent, contrasting opinions and concerns about troubling indicators are quickly dismissed. After all, things are going so well, those can’t be right. Nah…that negativity is just the product of jealousy…feeble efforts by detractors unable to compete in the marketplace or staff unable to grasp how smart the C-Suite is.

You gotta see the new product/service we developed…it’s a game-changer, a big leap forward, way better than our erstwhile competitors! How do we know? Well because we built it…and everything we touch turns to gold.

But wait, what about continuing to improve our core product, enhance our service, incrementally get better? That’s where most of our revenue comes from, what made us successful and built our stellar reputation…

Sure of course yeah let’s do that…but look at this shiny object!
this webinar! This industry award! This way-better-than-anyone-else-has product! This brochure that features a big picture of…me! This interview in (insert media outlet)!

This is all too common in the world of work comp services. As in sports, business, entertainment and politics, leaders that focus on themselves, their successes, their brilliance – and fail to focus on continuing to do what made them successful in the first place – will inevitably fail.

Success is not about you, your social media followers, your past successes, resume, or brilliant ideas.  It certainly isn’t about how much better you are than your competitors…or rather how much better YOU think you are.

Success is about nurturing customers, listening hard to them, seeking to understand what they want, why they want it, and how they want it. It’s about making damn sure the people who pay your bills – your customers – know you are 100% focused on them.

what does this mean for you?

1. if you are darn sure you’re really good and all is well…it isn’t.

2. It’s not about you  it’s about your customers.




Leaving Las Vegas

After 2 1/2 days of nonstop meetings, change encounters, and talks, it is a relief to be heading out.

What was notable

Loved the way the conference planners set up the sessions in “rooms” surrounding the exhibit hall. Exhibitor attendance has been…declining for some time, with exhibitors rightly bemoaning the lack of traffic.

This generated more traffic – as did locating lunches and beverage consumption opportunities.

Newbies – lots of tech-focused entities on the floor this year. I’m not sure they all entirely understood their value proposition, what drives workers’ comp buyers, and exactly how they fit it. But hey, great to have them and their cool stuff on the floor.

Coolest premium – myMatrixx’ charger. Now, I didn’t spend a lot of time trolling for freebies – but this was far and away the best I saw. (disclosure – mM is a consulting client)

Biggest disappointment

Attendance at the session on impact of climate change on workers’ comp.

Aren’t you paying attention?

Every day there is more news about floods, fires, droughts, blazing heat and devastating storms – all of which have direct and major import for work comp.

And more regulations about heat exposure, polluted air, and employee safety.

And more discussion of unforeseen impacts of climate-change driven weather – from flesh-eating bacteria in the swampy waters inundating Florida communities to new regulations addressing exposure to smoke-filled air in western states.

Two claims professionals all-too familiar with hurricanes, floods, and wind (Jill Leonard of LWCC) and fires, heat, and drought (Jeff Rush of California Joint Powers) spent a ton of time preparing to help you handle what is coming. They know all about preparation, planning, the impact on injured workers (where’s my check!!?), dealing with new “employers” that flood an area after a hurricane, and all the things you can only learn from decades of experience.

As Jeff noted, Mother Nature doesn’t care about your opinions on human-caused climate change.

But your boss sure will when the stuff hits the fan and you aren’t ready.



National Work Comp conference – go time…

The annual gathering of the work comp tribes begins tomorrow – here’s a few thoughts from a post a few years back.

1.  Realize you can’t be everywhere and do everything. Prioritize.

2.  Leave time for last-minute meetings and the inevitable chance encounters with old friends and colleagues.

3.  Unless you have a photographic memory, use your smartphone to take voice notes from each meeting – right after you’re done – or write down key points immediately.  Otherwise they’ll all run together and you’ll never remember what you committed to.

4.  Get the app for your Droid or iPhone –  you got an email with the info…It has the schedule, exhibit hall layout, local map, and a bunch of other handy information and tools.

5.  Introduce yourself to a dozen people you’ve never met.  This business is all about relationships and networking, and no better place to do that than this conference.

6.  Wear comfortable shoes, get your exercise in, and be professional and polished.  It’s a long three days, and you’re always ‘on’.

7. Remember what your mom told you in high school…nothing good ever happens after 10 o’clock. 

This year I’ll be (mostly moderating) two sessions – one on fraud with my good friend Bill Barbato of Change Healthcare and SA Jefferson Grace of the FBI’s Las Vegas office, and

another on the impact of climate change on workers’ comp with Jill Leonard of LWCC and Jeff Rush of California Joint Powers. Hope to see you there.

Stop by the AppliedVR booth – it’s 769 right across from the networking zone – I’ll be there a good bit.

Finally, in these day of YouTube, phone cameras, Twitter, Instachat and SnapGram, what you do is public knowledge.  That slick dance move or intense conversation with a private equity exec just might re-appear – to your dismay.

And beware white man’s overbite…


Defining health plan value – what’s really important

If your health plan could show it:

  • reduced the days kids stayed home from school due to illness;
  • helped members with mental health conditions maintain a high level of functionality and engagement;
  • reduced workdays lost due to illness;
  • sped recovery from illness and injury; and
  • helped amateur athletes avoid injury and recover quickly;

would that be important?

Heck yes.

So…why don’t healthplans do that?

It’s doable – if they stopped focusing on and worrying so much about star ratings and patient experience and net promoter scores – which research shows consumers don’t really pay attention to or care about

(conclusion – no.)

and focused on what consumers really care about – staying healthy and able to do the things we want to do:

  • play with our kids and grandkids
  • do chores around the home
  • do our sports
  • shovel our walks, rake leaves, coach youth sports
  • lift stuff and move it around
  • got to the bathroom without help
  • dress and undress without help
  • go for a walk
  • oh, and work.

What’s even more puzzling is why employers don’t demand health plans complete on the basis of delivering fully functional, engaged workers.

What does this mean for you?

The most important component of any organization is its workers.

No employers hold their health plans accountable for ensuring those workers can actually, you know, work.

And that is why our healthcare system is so dysfunctional, ineffective, and expensive.


How we measure “value” in healthcare is all wrong.

The most popular formula for calculating the “value” of healthcare is pretty simple…

If you want to get a bit deeper into details, there’s this…

It’s about the “quality” of the medical procedure (was it done right? was the patient re-admitted? was there a surgical error or infection), perhaps the appropriateness of that procedure, and the “patient experience” – measured…somehow.

Pretty much every formula, discussion, or description of the healthcare value equation is focused on “outcomes” defined as the result of a surgery or treatment (did the patient get better?) or avoidance of sickness or injury (did the patient stay “healthy”).

None – as in none – focus on what’s really important to you and me –

Did the healthcare we received maintain/improve our ability to function – to raise our kids, work, exercise, function in society, do things we like to/have to do.

Functionality is the only “value” metric that matters, yet pretty much no one in healthcare and no healthcare organization – except in workers’ comp – talks about functionality, measures their results based on functionality, reports member functionality, studies it or seeks to improve overall member functionality as a core goal (except for a few unique healthplans).

Further, employers, who pay hundreds of billions of dollars on healthcare insurance premiums don’t even think about the impact of that healthcare on employee functionality/productivity.


Procurement, CFOs, finance departments and management are constantly challenged to show a return on investment on any project, hire, new initiative, acquisition or investment.

But never when they are buying healthcare – which, after payroll, is the biggest single part of the budget for most service companies and a major cost for every type of employer – public, private, not-for-profit.

Nope, it’s the thickness of the provider directory, whether or not some health system is in that directory, perhaps some “quality” rating, plus the biggie – cost.

What does this mean for you?

We are buying healthcare all wrong.


The problem with primary care?

It doesn’t generate profits for the medical-industrial complex.

From a societal perspective primary care is wildly undervalued – and wildly under-appreciated – because primary care doesn’t make money for anyone, especially primary care providers.

Which makes no sense on every front but the profit one. If everyone had good primary care,

  • they’d be healthier,
  • their health risks would be identified early and a plan developed to address them,
  • they’d have a provider who treats them as a whole person, who understands that we are a bunch of tightly-interrelated organ systems that have to be considered as a whole, not as individual organs,
  • they’d understand non-physical issues can be just as impactful as physical ones,
  • there’d be a lot less need for specialists, and
  • healthcare costs would likely be a lot lower.

Healthier people don’t need as many medications, devices, treatments, injections, therapies, surgeries, rehab, inpatient beds or surgical centers as unhealthy people.

And that’s where the money is.

Kaiser Permanente has generally excellent primary care – yet it can’t/hasn’t been able to translate that excellence into a sustainable competitive advantage.

I believe that’s because KP – and pretty much everyone else – is thinking about the “value” of healthcare the wrong way.

Tomorrow – how we define value today – and why that is wrong.

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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