Monthly Archives: August 2015

Update on Affordable Care Act’s Impact on Workers’ Comp

Recently, members of the workers’ compensation industry met in Orlando, Florida at the 2015 Workers’ Compensation Education Conference.

At the conference, David North, President and CEO of Sedgwick, and Richard Victor, Executive Director of the Workers’ Compensation Research Institute (WCRI), spoke about the impact the ACA is having on workers’ compensation, and how it will impact it in the future.

As reported last week in Safety National’s article, four of the top five group health care providers have been involved in mergers and acquisitions this year, and anything that has had such a significant impact on healthcare, will also impact workers’ comp.

The speakers outlined five phases that workers’ compensation will go through to evolve and adapt to the ACA.

These are the five phases:

  1. Awareness – developing an understanding of the ACA and its potential impact
  2. Research – investigating the potential impact (where the industry is now)
  3. Strategy – developing strategies to address ACA impact
  4. Execution – implementing the strategies
  5. Analysis – reviewing the strategies implemented and make adjustments

As previously written about in other posts, one of the biggest concerns for the workers’ comp industry is that the ACA will lead to cost shifting. And a big driver of cost shifting, according to North and Victor, is Accountable Care Organizations (ACOs).

How cost shifting to workers’ comp will occur is that physicians will have a financial incentive to push treatment to workers’ comp because the ACO will be paid a flat rate per employee, and therefore, the physician will not receive any additional compensation for treating the patient under group health.

The WCRI researched this and found that in states with significant penetration of capitated ACOs, there has been a 30% increase in workers’ comp soft tissue injuries due to being pushed out of group health.

This will also be a problem, the WCRI discovered, in states that easily allow for repetitive trauma claims that are not traceable to a specific date.

Mr. North and Dr. Victor stated that there will also be positive impacts as well. Because of the emphasis on wellness and incentives for employers to implement wellness programs will lead to a healthier workforce, this too will benefit workers’ comp.

Finally, the ACO models, with providers being incentivized based on outcomes and quality of care, will also be something work comp would benefit from, the article stated.

The speakers addressed two questions regarding the impact of the ACA; Is the ACA leading to higher healthcare costs? And what impact do you believe the Cadillac tax will have on workers’ comp? Will we see additional cost shifting?

The answer to the first question was “…yes. ACA was intended to increase coverage, not lower costs”; and the answer to the second question was “It depends. If employers respond to the Cadillac tax by increasing co-payments and deductibles to avoid the tax, then we will likely see more cost shifting to workers’ comp.”

What does this mean for workers’ comp?

It is undeniably clear that workers’ comp is going to get more expensive as the ACA leads to higher healthcare costs, but what is not clear is what the industry is prepared to do about it, what alternatives are they willing to try and explore, and what is holding them back from doing so?

In my post, “Change for Change’s Sake: What Real Change in Workers’ Comp Looks Like”, which referenced an earlier article from Safety National, I outlined what real change would look like, what the industry needs to do, and what is holding it back.

The sad fact is that unless you have a title, attend multiple conferences, and make lots of money keeping the status quo the status quo, no one listens to you. And when someone does respond to your idea, they twist your idea into some kind of joke by inferring that you want to send injured workers to underdeveloped countries not ready for medical travel, or that you want to send them to countries that are ready for medical travelers, but they would not know about that because they have no knowledge about what is happening there.

In short, they are ignorant and uniformed about the quality of medical care available in those medical travel destinations that have been recognized as leading the way.

Instead, they pass their ignorance onto clients and others in the industry, without actually knowing the reality. Why do they do this? Because in some way, they or their friends, benefit from keeping others ignorant of alternatives, and so become hypocrites when they talk about changing the system, but all they are really doing is more of the same.

HEALTH CARE IS GLOBALIZING.

Both Mr. North and Dr. Victor said that what happens in healthcare affects workers’ comp. Or are they just lying?

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Don’t Take My Word for It

From the ‘Better Late than Never’ department comes this article written last month from one of my LinkedIn connections, Paul Binsfeld, Founder & CEO, Company Nurse, a telephonic triage injury hotline, headquartered in Scottsdale, AZ.

According to Paul, nationwide, of all dollars spent on medical costs, approximately 60% are spent on workers’ compensation benefits associated with workplace injuries, and approximately 40% are spent on disability.

The National Council on Compensation Insurance (NCCI) has found that medical costs per lost time claim have increased 56.5% over the past ten years, rom $18,400 per claim in 2003, to $28,800 in 2013. (see my articles, “Average Medical Claim Costs Still Rising for Workers’ Compensation”, “Average Medical Claim Costs Still Rising for Workers’ Compensation: 2014 Edition”, and “Lost-Time Medical Costs Approaching $30K: When Will You See the Light?”)

Paul also said that since medical costs are a significant cost driver to workers’ compensation benefits, many employers are taking steps to pro-actively manage the medical resources they use for their injured workers.

The rest of his article discusses the average costs of retail clinics, urgent care centers, and emergency rooms, and then highlights what his company can do for employers.

Nothing wrong with that. That is the business he is in, and he is marketing his business to potential clients.

But he does not address the very issue that this writer has been discussing for nearly three years now; how to get lower cost surgery for injuries common to workers’ comp?

Of course, I don’t expect him to, but you should. Because to not do so only makes the costs of workers’ comp more expensive, even if you find ways to pay less for immediate care. It’s when the meter starts running up if surgery is warranted that employers need to find alternatives for.

It’s up to you. Pay more here, or pay less somewhere else. Just don’t take my word for it.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Employers Facing Double-Digit Premium Hikes

Now that the summer is almost at an end, time to get back to the topic at hand…health care.

In an article late last week, Kathryn Mayer, Managing Editor of Benefits Selling magazine, wrote that nine in 10 employers said that they are facing increases in the premiums they pay for employee health plans.

Nearly 25%, or 1 in 4 employers are seeing rate increases in double-digits, according to research released last Thursday by Arthur J. Gallagher & Co.

Gallagher surveyed more than 3,000 US employers from dozens of industries around the country.

According to James Durkin, president of Gallagher Benefit Services, Inc.:

“Employers are examining all available options to rein in medical costs, while still offering competitive benefits packages that help them attract and retain the best employees in a tightening labor market, With the Cadillac tax due to take effect in 2018, employers are expected to turn to newer, alternative cost-control tactics.”

Employers are increasingly requiring employees to shoulder a larger share of the expense in higher deductibles, and Gallagher reported that 67% are cost-shifting [emphasis added] to employees.

Gallagher also said that in-network family plan deductibles average $3,000, while out-of-network deductibles average $4,500.

Annual deductibles for employee-only, in-network plans now average $1,200, and out-of-network deductibles are an average of $2,000.

About half of employers said they are considering changing carriers to lower costs.

Lastly, nearly all employers (97%), said they will continue to provide employer-sponsored coverage to employees.

Some of the other things Gallagher’s report said was that employers would offer health savings accounts to employees (36%), implement mandatory generic drug policies (15%), and offer reduced network access or narrow provider networks (11%). 35 % may self-insure, while 13 % might offer narrower networks in the next three years.

So, what does this mean to you?

If employers cost-shift the premium hikes to their employees, many of them might do the same, and cost-shift health care to workers’ comp, which has been discussed many times in the past.

One way Gallagher did not mention that employers should try, and why should they, because they can’t think outside of the box, is have them think outside of the border, and consider medical travel for surgery and certain medical treatments and procedures too expensive in the US, and especially if the employees cost-shift to workers’ comp.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Reduction in Benefits Not Lessening Work Comp Cost Increases for Employers

Workers’ comp benefits as a share of payroll were lower in 2013 than in any other period, as reported today in Business Insurance by Gloria Gonzalez.

According to Ms. Gonzalez, employer costs for workers’ comp continues to rise, and benefits per $100 of covered payroll fell to 98 cents in 2013, which represents a 5% drop from 2009.

A growing, post-recession workforce has resulted in employer costs rising to $1.37 per $100 of covered payroll, a 5% increase from 2009.

Total workers’ comp benefits in 2013 were $63.6 billion, while employer costs were $88.5 billion.

John Burton, professor emeritus for Rutgers and Cornell universities said in a statement reported in the article, that “the decline [benefits as a percentage of payroll declined in 39 states between 2009 and 2013] is due to a drop in workplace injuries as well as changes in many state laws that made it more difficult for workers to qualify for benefits”.

Medical benefits account for a greater share of total workers’ comp benefits, Ms. Gonzalez wrote, due to rising health care costs, with these benefits at a 50% share in 2013 compared to 29% in 2009.

Costs for employers insured through private carriers constituted $54.9 billion, or 62.1% of total costs, while self-insured employers accounted for 17.3 billion, or 13.3%, while costs to the federal government were $4.5 billion, or 5.1%.

The greatest increases in employer costs in the 2009-2013 period were in New York and California. The biggest decrease was in West Virginia.

So, despite all the changes and challenges facing workers’ comp, the cost for employers is still rising, and the industry continues to do the same things over and over again, in the vain hope that next time the costs will come down. That maybe happening for some employers, somewhere in the country, but as Ms. Gonzalez states in her article, the opposite is happening.

I’ll say it again: It’s your choice. Keep doing the same old, same old, or think outside the box and outside the border. You are only wasting more money not doing so.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.

Infographic on Most Dangerous Industries in US

Back in March, I wrote an article called, “Top 10 Causes of Workplace Injuries: How Medical Tourism Can Save Employers Money“.

Today, Michael Stack, Principal of Amaxx Risk Solutions, posted the following infographic on the most dangerous injuries in the US, that illustrates more graphically the issue I wrote about in March.

Here is the link to the infographic:

http://blog.reduceyourworkerscomp.com/2015/08/workers-comp-and-the-most-dangerous-industries-in-the-u-s/

For those of you in workers’ comp, this data is a reminder of what you deal with on a daily basis. For those in the medical travel industry, it represents areas you need to consider going after if you want to implement medical travel into workers’ comp.

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I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com. Share this article, or leave a comment below.